BUSINESS ERA

The EUR has been uncertain in its direction lately, despite clear calls for a buy-up of this higher-yielding currency during times of mild economic optimism. Positive news from the Euro-Zone typically leads to an increase to risk appetite, which is definitely something which traders saw last week. The EUR started Friday just under 1.40 against the USD, but steadily rose above 1.41 before the end of last week's trading. The EUR even peaked around 0.8550 against the Pound, despite the moderate drop towards 0.8520 at the end of Friday's trading session.

Many of the economic indicators being released these past 2 weeks have shown that the Euro-Zone is experiencing a boost in consumer optimism. This has come about despite a growth in budget deficits and continuously shrinking manufacturing output and GDP. The people have started looking forward to better days, but the numbers still tell a bleak story. One of the primary impacts of such data is that the EUR has showed heavy signs of a comeback, but fraught with nasty downturns as its rivals make headway from periods of instability.

As for this week, the 16-nation currency has leveled-off in today's early trading sessions, but it appears to be poised for a rather sharp movement today or tomorrow. The EUR looks to be consolidating towards significant price barriers against most of its currency rivals and will either go through a massive drop or, more likely, strengthen as economic indicators continue to show a growth in optimism, and possibly a chance to poke holes in the USD's most recent gains. Traders should pay attention to the few economic indicators released today as the story is being told solely by Europe and Great Britain. With a silenced US economy, we could see much more predictable price movements from the European currencies.

JPY - Yen Declining as Consumer Spending Expected to Fall

Despite the grueling downward trend the JPY experienced last week against its currency counterparts, the Yen now appears to be flattening out. The only currency which seems to have bested the Yen in today's early morning hours is the USD which has climbed from 95.15 to the 95.50 level, with the possibility of reaching 95.80 in the coming hours. Against the EUR and GBP, the Yen has done very little in terms of price movement, consolidating towards the price of 138.90 and 157.30, respectively.

As industrial production in Japan rises for 3 consecutive months, there are some analysts who forecast a faster-than-anticipated recovery for the island economy. On the other hand, consumer spending in Japan has typically played a large part in economic growth, but these figures are expected to continue plummeting this week. Also putting mild pressure on the JPY is the fact that unemployment in Japan has finally reached over 5% and is still climbing. With such negative economic news it is hard to expect a strong recovery in the Yen anytime soon.

OIL - Oil Prices Still Failing to Stay above $70

No matter how much downward pressure there appears to be on the value of the US Dollar, the price of Crude Oil still seems to have difficulty finding support above $70 a barrel. Dropping from over $71 to as low as $69 last Friday, the price of the black gold has continued its plunge in today's early trading hours and currently sits near $68.50 a barrel.

As expectations for fuel and energy demand have been decreased these past weeks, many speculators are now beginning to price in the reality that oil prices may not find the support necessary to climb successfully above $70 in the nearest future. Without a sudden short-fall in supply, the price will no doubt reflect this reality. Traders may anticipate a series of fluctuations above and below the $70 price range as the market searches for a true range of the value of Crude Oil.