The doubts about the ability of the stock market to hold its recent correction gains contain the current market sentiment currently supporting the greenback and the gold which suffered from the recent optimism wave of holding assets taking risk back again.

The gold has fallen below 900$ yesterday touching the intermediate support of last month at 889$ before getting back again above it and trading right now above 910$. The gold upside trend is still strong amid the current quantitive easing policies of the Fed which lowered the interest rate to .25%and BOE which lowered the interest rate to .5% indicating its ability and readiness to buy further governmental gilts for affording the government required funds for stimulating the ailing economy in UK.

The gold is getting support from another side from miss confidence in the business spending returns currently amid the strong pace of the recession forces currently which causes losing jobs and dovish market consuming spending.

So, the single currency could find support versus the greenback and the British pound after the European finance ministers refusing of new stimulation packages refusing in the beginning of this week as this policy can increase the supplied money and widening the budget deficit which reached 192.78b$ in US as what we have seen yesterday which can threat the total economy creditability and the currency buying value.

The repatriations of March of each year could underpin the Japanese yen which is getting support from the risk aversion sentiment with the greenback on its very low level of interest rate which is just .1% currently. At this time of each year by the ending of March the funds of the Japanese investors comes back to Japan for accounting proposals as the end of the financial year of the Japanese which contain the market sentiment at this part of the year supporting the Japanese yen which got buying from the Japanese exporters capped the greenback from getting above 100 versus it last week driving it to lower than 96 today.

There was no data to move the currency market in the recent few days but we wait today for the release of US retails sales of Feb which is expected to fall by .4% monthly and tomorrow for  the US trade balance deficit which is expected to be shrunk to 38.2b$ in Jan.

Best wishes

FX Consultant

Walid Salah El Din

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