Quiet Start to the Year

Its been a quiet start in the morning so far. Though the markets did begin yesterday, it has to be said that the official start for the new trading year has to be today as most of the markets around the world were closed for the holidays yesterday. The London market was closed and the NY market was closed as well.There were only a few Asian and European markets that were open and so the liquidity continued to be thin as we had been seeing in December.

It is only today that many traders and fund managers are expected to return back to their seats after the long holidays and they might try and do a bit of trading today and so we should be able to see some decent liquidity today which will help us to find out the direction and the overall theme in the markets for this month. For the past 2 weeks, we have been seeing a correction in the dollar strength but these moves were done during thin markets and so they are not to be considered as a true indicator of the actual trend. We believe that the dollar strength will return today and affect the markets all over the world.

Looking ahead to today, we have the Manufacturing PMI data from the UK and the US and these will be viewed closely by the traders to see if there is any weakness in any of this data. If the data is as per expectations, then expect the markets to trade with an overall bias towards the USD which could place the pairs like the EURUSD and GBPUSD under severe pressure and if the stock markets continue their bullish tone, then we could see the yen continue to weaken as well.

 
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