Australian Dollar

For the second night in a row, China, and specifically its currency rate which saw the Yuan weaken once more, preoccupied investors - and certainly those who had bet on endless strenghtening of the Chinese currency - however this time it appeared more "priced in, and after trading as low as 2000, the SHCOMP managed to close modestly green, which however is more than can be said about the Nikkei which ended the session down 0.5%. Still, the USDJPY was firmly supported by the 102.00 "fundamental" fair value barrier and as a result equity futures, which had to reallign from tracking the AUDUSD to the old faithful Yen carry, have been propped up once more and are set to open at all time highs. If equities fail to breach the record barrier for the third time in a row and a selloff ensues after the open in deja vu trading, it will be time to watch out below if only purely for technical reasons.

A look at the price action among the major currencies for the week ahead. 

Overview of the events and data that will be of interest to investors. 

The US dollar lost ground against all the major currencies last week.  It looks poised for additional near-term weakness.  

A technical look at the currencies.  The phase that has characterized the first few weeks of the year has ended and a new one has begun.

Nine Event Risks for the week ahead:  identified, discussed and assessed.

Despite all the problems discussed here at ZH, the US dollar has is staging a come back.  Read about where it may go in the period ahead.  

With analysts preferring gloss over the massive bellwether stock earnings misses, focus on non-GAAP manufactured releases, and cling optimistically to hopes that weak performance, inclement weather, and volatile currency fluctuations will all go away soon and that the future looks rosy. However, as Bloomberg's Richard Yamarone notes, the US economy continues to cling to an historical subpar growth and CEO comments hardly support any hope for a change.

Overview of the price action in the foreign exchange market.  

Overview of the dollar's outlook against the major currencies, without a preconceived notion that the US is in some kind of terminal decline.  

Technical outlook for the several of the most actively traded currencies.  

A look at the technical condition of the fx market, interest rate differentials, central bank developments and the data due out in the week ahead.  

The recent strength of the euro and sterling seemed to evaporate, while the yen and dollar-bloc currencies recovered.  Is this a major trend change or was it simply reflecting some position adjustment in a thin market? 

The world has depended on Chinese and American stimulus for years, and, as Caixin's Andy Xie notes, one implication of their tightening is a slowing global economy in 2014.

Dolllar weakess is largely concentrated against euro and sterling and those handful of currencies that move in their orbits.  The US dollar is firm against the dollar-bloc and yen and many emerging market currencies.