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Currency Trading Update

Yesterday we speculated that contestant number 6 might be able to stage a bit of a comeback by Monday's close, as he profited off of the latest decline in GBP/JPY. However, we never expected him to leap in the rankings to end the day up over $170,000 as contestant number 2 with a currency trading portfolio balance of $777,264.03. This trader's moves have helped knock some of contestant number 1's portfolios down in the rankings, though he still has a total of 5 portfolios within the top 20 and of course, remains in the lead with a currency trading portfolio balance of $1,079,740. This may not be the case by the end of the week, though, because at the time of writing, his leading portfolio balance had fallen below the $1 million mark due to losses in a variety of EUR/USD trades.

Here's a look at the event risk on hand for the currency markets over the next 24 hours:

Asian Trading Session
*No key indicators due to be released.

European Trading Session
*No key indicators due to be released.

US Trading Session
01/14, 8:30 ET
US Advance Retail Sales (DEC) - The Commerce Department is forecasted to report that US retail sales fell negative for the sixth straight month in December. This is particularly negative because the holiday shopping season is supposed to be a boon for retailers, but even the most aggressive discounting wasn’t able to offset the impact of a deteriorating labor market, tighter credit conditions, and a year-long recession. More specifically, advance retail sales are anticipated to have contracted 1.2 percent during the month, and excluding auto sales are expected to have slumped 1.3 percent. We’ve already heard disappointing results from a variety of sources, including Mastercard’s SpendingPulse survey, which showed that holiday spending tumbled 4 percent in December from a year earlier (excluding gasoline). As a result, another contraction in advance retail sales is likely, and these may mark a rather consistent trend through the first half of 2009 as well. As we saw with US non-farm payrolls, the impact of a disappointing result may be limited, as the Federal Reserve has already cut the fed funds target to a record low range of 0.0 percent - 0.25 percent and has no room to cut further.

Terri Belkas
Currency Strategist
Forex Capital Markets LLC

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