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Dollar has a good day

The dollar managed to rebound during the end of the New York session as there were rumours of a mortgage rescue package by the government.  Retail Sales came in better that expected for January, coming in at 1% from its expected -0.8%.  The weekly jobless claims came in worse than expected at 623K vs. 610K.   Due out today is the February Michigan Sentiment expected at 61 from its previous 61.2.

There was a great deal of EUR/JPY selling yesterday which saw the Euro very volatile against the majors, this saw the EUR/USD go through the 1.28 support barrier.  Poor figures out of Europe again with December Industrial Production coming in at -2.6% from its expected -2.1%. 

The German GDP for the 4th quarter came in at -2.1% the worst in 20 years. Due out at 10am today is the GDP for the 4th quarter for Eurozone expected to be -1.3% vs. -0.2% previous.

Australian Dollar had a very volatile day as Employment data came in much better than expected, producing 1.2K jobs vs. -20.5K predicted.  The Unemployment Rate came in slightly worse at 4.8% vs. 4.5% predicted. However after news that the Australian Stimulus package failed in the senate the currency fell heavily against USD.

Sterling was the weakest in yesterday's session against the majors on the back of movements from the major currencies. The main news yesterday for sterling was PM Gordon Brown's questions and answers session which didn't go down too badly.