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Currency Trading Update

The leader in the currency trading portion of the Million Dollar Portfolio Challenge has made a killing trading EUR/USD, and by using two separate portfolios, he now holds the top two spots. It is the leading portfolio, though, that essentially ensures that he will remain a frontrunner for at least a few days, as his closing balance of $870,924 on Monday is more than $300,000 higher than the balances of the rest of the traders in the top 20.
Here are the indicators that may be worth watching over the next 24 hours:

Asian Trading Session
01/06/09, 19:30 ET
Australian Retail Sales (NOV) - Retail sales in Australia are forecasted to have grown 0.1% during November, confirming that 2008 was a year of lackluster consumption for the economy. Any increases are likely to be solely the result of spending on food, as sales of apparel, household goods, and at restaurants have been consistently weak throughout the second half of the year. Regardless, a reading in line with or more than expectations could lead the Australian dollar to rise overnight, but if the index unexpectedly falls negative, the currency could tumble as the markets will shift to price in greater potential for a rate cut by the Reserve Bank of Australia during their next meeting in February.

European Trading Session
01/07/09, 03:55 ET
German Unemployment Change (DEC) - The German unemployment change for the month of December is forecasted to rise by 10,000, which would mark the first increase in claims for jobless benefits since January 2006. This nominal change shouldn't impact the unemployment rate, which is anticipated to hold steady at 7.5%. Nevertheless, a rise in claims in line with or more than expected could trigger declines for the euro, which has already been under pressure as the markets bet the European Central Bank will cut rates next Thursday. However, it is worth noting that the impact of such releases tend to be very short-lived.

US Trading Session
01/07/09, 07:30 ET - 08:15 ET
US Challenger Job Cuts, ADP Employment Change (DEC) - While these are not typically market-moving reports, they will be worth watching as they may help to handicap the results of Friday's non-farm payrolls report. Challenger Job Cut are likely to show that companies laid off a greater number of workers in December from a year earlier, while the ADP Employment Change is forecasted to reflect the most job losses in the private sector since at least 2001. Such results would suggest that US non-farm payrolls may have indeed plunged another half-million or more during December alone.

Terri Belkas
Currency Strategist
Forex Capital Markets LLC

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