Lower

A drop in Asian equity markets is leading to spillover selling in the U.S. markets. The follow-through to the downside overnight appears to be a continuation of the sharp break from the high on Friday. Concerns over a credit rating cut in the U.K. and the lack of a bailout plan for Greece are two reasons for the selling pressure.

Firmer stock indices, gold and crude oil are indicating that trader demand for risk could be up today which could pressure the Dollar versus commodity-linked currencies.

After trading higher overnight, the trade-weighted Dollar Index has turned down as it trades near its low shortly before the U.S. opening. This may be an indication that risk sentiment is shifting toward the riskier side.

The Euro finished lower as the lack of concrete news regarding the European Union’s plan to guarantee Greece’s debt caused investors to remain nervous and skeptical that a resolution would be reached over the next few days.

U.S. equity markets are called to open lower after a volatile Asian trade triggered by a possible debt rating cut in Japan and another sign that China is serious about tightening its monetary policy.

The Dollar finished the day near its low as a late session report from the Federal Reserve helped diminish expectations for an interest rate hike. Today’s Federal Reserve minutes showed that officials were unconvinced about the strength of the recovery and that inflation should remain under control for now.

The U.S. Dollar continued its New Year slide as investors sought higher risk assets. Overnight an index representing a trade weighted basket of currencies turned it main trend down on the daily chart on a trade through 77.32. The chart pattern now suggests a correction to 76.31 to 75.80 is imminent. This move would represent a normal retracement of the entire 74.17 to 78.45 rally.

U.S. equity markets finished lower for the week after buyers failed to surface following today’s better than expected U.S. Initial Claims Report. End-of-the-year profit-taking was most likely the catalyst behind the drop in prices.

The U.S. Dollar finished the day session lower in lackluster trading with very few highlights. Profit-taking overnight led to a lower opening, but news that S&P lowered the credit rating of Spain helped the Dollar limit losses.

U.S. equity markets are called lower this morning following sell-off in Asia and Europe. The stronger Dollar is leading some investors to pare positions. Traders are trying to protect profits at the end of the year as chart patterns suggest there is more downside than upside potential at current levels.

The U.S. Dollar see-sawed most of the day, before closing lower. The lack of economic reports caused a choppy two-sided trade. In addition, many traders stayed on the sidelines or evened up position ahead of this week’s many central bank reports. In most cases the Dollar continued its strength in a follow-through rally from Friday, but failed to hold on to its gains by the close.

The U.S. Dollar is trading lower against all majors as overnight rallies in the stock indices and gold are once again pulling the Dollar lower and signaling renewed demand for higher risk assets.

The U.S. Dollar hit a 15-month low against a basket of currencies last night on the prospect the Fed will keep interest rates at low levels for a prolonged period of time. This assumption is based on last week’s Fed FOMC statement and recent comments from a Fed official suggesting that unemployment is the major concern.

December S&P and NASDAQ stock index futures finished lower for the month while the December Dow eked out a small gain. The closing price reversal tops in the S&P and NASDAQ indicate that the selling is greater than the buying at current levels and set up the possibility for a 2 to 3 month decline.

Trading ended in the stock index futures on Friday with the three major indices getting hit hard by selling pressure. Lower demand for higher risk assets was the theme today as traders took profits and failed to buy on the dips. The recent sharp rise in the equity markets has led many traders to feel that current prices are overextended given the state of the economy.

U.S. equity markets posted a strong recovery late in the trading session following a sharply lower market in the morning, but still managed to finish lower for the day. The early session break was triggered by Bank of America which reported a huge loss. Further weakness was fueled by worse than expected earnings report from General Electric.