Previous session overview

The dollar reversed its overnight decline Monday, with the euro and the U.K. pound slipping into negative territory versus the greenback as demand for stocks and other riskier assets wilted.

The euro continued to hover just above the CHF1.4620 area against the Swiss franc, near the levels suspected of prompting intervention by the Swiss National Bank to weaken the franc in the past.

The ICE U.S. Dollar Index, which tracks the greenback against a trade-weighted basket of currencies, was at 80.468 from 80.571.

Demand for risk whetted by the strong U.S. jobs report Friday, favorable developments in Greece and positive data from Japan had lifted the euro and other risk sensitive currencies earlier Monday.

Over the weekend, French President Nicholas Sarkozy helped provide the reassurance the market had been seeking that other euro-zone countries will come to Greece's aid.

After talks in Paris Sunday with Greek Prime Minister George Papandreou, the French president said major euro-zone members will do what is needed to ensure that Greece isn't isolated and that precise measures for helping the country are being discussed.

Japan also provided good news, reporting that its current-account surplus for January was sharply higher at JPY899.8 billion as exports continued to rise. The market had been looking for the surplus to come in lower, at JPY783.9 billion.

Market expectation

EURUSD skids to fresh lows for the session around USD1.3610 area now as the earlier reported demand interest around USD1.3625 is absorbed. Area of USD1.3600 said to hold bids but stops being mentioned below.

GBPUSD - Low prints seen around USD1.5032 thus far with cable remaining heavy after skidding sharply on stop-loss driven sales in the last hour and as talk of Gilt coupon payment impact also makes the rounds. Pair steadies on modest demand around current level but seen risking a test of USD1.5000 as sentiment shifts against the pound again. All that said, flows not overly impressive in the current down move, traders say.

USDJPY gains elsewhere allow the greenback to nudge higher vs yen, lifting to JPY90.45 area now and thus just a couple of pips through the level where earlier semi-official name supply capped the pair. Offers expected still at JPY90.50.

Disclaimer: the data made available by Dukascopy (Suisse) SAis for informational purposes only. Publication of this data by Dukascopy (Suisse) SA does not constitute provision of investment advice and Dukascopy (Suisse) SA assumes no responsibility with regard toany information, forecast or recommendation herein contained and assumes no responsibility with regard toany losses resulting from any activities conducted the basis of this data, including any investment decisions.

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