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Daily US FX Report 1.23.13

K. Tanner

The appetite for risk increased only in the FX space ahead of the US open, but lagged in the other asset classes. Half of the core foreign currencies open up after most of them marked time on Monday. The oversold yen recovered nearly 1% and the Australian dollar rallied on expectations that the BoJ and Abe's policies will stimulate growth in Japan. The euro and franc were lifted by the strong ZEW report, but the euro failed to hold on to its gains. Even the pound opens off a five-month low, which it reached on Monday on concern over the future role of the UK in the European Union. The Asia/Pacific stock indexes ended mixed. The European bourses are divergent, while the US stock markets are lower in pre-open trading. Gold, oil and silver are barely changed.

  The short-term outlook for most of the foreign currencies is sideways to slightly bullish, though most of the gains have already been seen. The medium-term outlook for most of the foreign currencies is sideways. The LGR short-term model is short on most foreign currencies.   Good luck!