FX Overnight Briefing

Financial News - US & Far East

- U.S. closed President day
- Oil higher
- Aussie higher with minutes from RBA and positive attitude in market
- Oil kept high level

Today's Main Events

- SEK: CPI
- USD: FED's Stern speaks
- USD: NAHB housing market index

American Timezone:

U.S. Stocks

Closed due to President day

Oil higher

Crude oil rose for a fourth day after Iran's oil minister said OPEC may reduce production when it meets next month

Far East Timezone:

Aussie higher, with minutes from RBA and positive attitude in market

The dollar held steady against the yen and the euro on Tuesday, while high-yielding currencies climbed as recovering stocks and signs of credit market stability encouraged investors to return to carry trades.

The Australian dollar struck a three-month high versus the U.S. currency after a report showed the Reserve Bank of Australia debated a hefty 50 basis point rate hike at its meeting earlier this month when it delivered a 25 basis point increase.

The RBA left the door open for more interest rate rises from the current 11-year high of 7% to cool the country's inflation pressures, with the market expecting another hike next month.

The revival of carry trades -- in which investors borrow the low-yielding yen to fund purchases of higher-yielding currencies and assets -- also helped push the New Zealand dollar to a seven-month peak against the U.S. dollar. But European currencies struggled. The euro has come under pressure on expectations the European Central Bank will lower interest rates this year.

Sterling fell following Sunday's announcement that Britain had decided to nationalise ailing bank Northern Rock, fueling worries about the health of other UK financial institutions and the economy.

Oil kept high level

Oil steadied on Tuesday as the market grappled with worries over an economic slowdown in the United States and supply concerns from Venezuela and Nigeria.

U.S. light crude for March delivery was down 16 cents at USD 95.95 a barrel by 0126 GMT on the Globex electronic trading platform, from USD 96.11 at 1812 GMT.

Nikkei rose

Japan's Nikkei average rose 1.12 % on Tuesday, led by exporters such as Canon Inc on a weaker yen

Jyske Markets - FX Research