Banking stocks were under pressure as Geithner lacked clarity in the direction the new administration will take. In US share markets, the Dow Jones fell 381 points or -4.62% and the NASDAQ dropped -66 or -4.2%. However, did make some ground on the pound in the close of the day as the Sterling came of the 1.47 level to 1.45 mark.
The British Pound was one of the big losers on Tuesday, falling about 500 pips and breaking the downwards line at 1.4750/60, on its strongly bearish move to reach as low as 1.4395. The GBP is slightly oversold in the hourly chart, while it shows room for more down-slope run on the four hour chart. At the moment, the GBP/USD seems to have found some break at 1.4400.
Below there, 1.4350 and 1.4270 are next important key levels. According to the Mataf.net technical team, the Pound should continue depreciating to levels below 1.40. UK December Trade Balance improved to -7.4Bn vs. -8.1Bn previously. Looking ahead, December ILO Unemployment Rate is forecast to rise to 6.3 vs. 6.1. The Unemployment Change in January is forecast to rise to 90k vs. 77.9K previously
The Euro (EUR) came under selling pressure as EUR/JPY sales and a report concerning $400bn Russian Bank Debt took hold. The reports were discounted and the pair rallied back above 1.3000 before risk aversion became the dominate force sending the pair crashing lower.
In addition, the sterling came as high of 1.15 against the Euro before coming off to the 1.13-1.14 mark. Overall the EUR/USD traded with a low of 1.2812 and a high of 1.3074 before closing the day at 1.2875. Looking ahead, January CPI is forecast to -0.5% vs. 0.3% previously.
Gold rallied as Financial Risk flared again on banking concerns. Overall trading with a low of SD$891and high of USD$918 before ending the New York session at USD$915 an ounce.