• USD: Lower, IMF says USD still on the strong side, G-20 pledged to maintain stimulus, low Fed yields
• JPY: Higher, Japan tops China as biggest buyer of US debt, reserves rise to a new record
• EUR: Higher, EU Sentix rises, German exports surge, strong German industrial output
• CHF: Higher, unemployment at 11 year high, consumer prices fall, rising risk of intervention
• GBP: Mixed, supported by improving risk appetite
• CAD and AUD: AUD &CAD higher, tracking stocks, risk appetite, higher crude and record price of gold

Overview     
USD traded sharply lower Monday pressured by a number of factors which included, stronger global equity markets, a pledge by the G-20 to continue with stimulus and a statement from the IMF that the USD is overvalued. The USD was also pressured by G-20 silence on USD decline. Speculation that the Fed will maintain low yields for an extended period coupled with the G-20 pledge to not withdraw stimulus until the global recovery is secure fueled demand for equities and sparked an improvement in risk appetite. The Feds Bullard said that a strong recovery is needed before the Fed tightens policy. His comments coupled with Friday's report that US unemployment rate is above 10% will encourage the Fed to maintain low yields. The USD has emerged as the global funding currency because of low US yields. The IMF says that the USD is the global funding currency and despite recent weakness may still be overvalued. EUR traded above 1.5000 supported by strong EU industrial output data and rising German exports. Commodity currencies traded higher supported by improving risk appetite, higher crude prices and a new record high in the price of gold. Risk sentiment and the direction of equity markets remain the main market drivers for the Forex trade.

Today's US data:
No major US economic data was released in today's trade.

Upcoming US data:
This week's US economic calendar includes the November 12th release of initial jobless claims for the week ending 11/07 expected at 510k compared to 512k last week. October Treasury budget will also be released on November 12th expected at -180bln compared to -155.53bln last month. On November 13th October import prices will be released along with September international trade and November University of Michigan consumer sentiment. Import prices are expected to rise 0.5% compared to 0.1% last month. The trade balance is expected to improve -30.71bln compared to -31.50bln last month. Michigan consumer sentiment is expected at 73 compared to 73.7 last month.

JPY
JPY traded mixed with gains limited by selling in cross trade and in reaction to improving risk appetite as global equity markets surge. EUR/JPY rally is attributed to report of stronger than expected EU industrial output and German trade data. AUD/JPY traded more than 1% higher with the AUD supported by rising commodity prices and improving risk appetite with gold trading at a new record high. JPY was initially supported by a statement from Japan's Finance Minister Fujii that Japan should stop relying so much on exports. In the past Japan has relied heavily on exports for growth and this has encouraged the Japanese government to pursue a weak JPY policy to increase Japan's export competitiveness. Fujii's comments may reduce the risk of intervention should the JPY continue to strengthen. There was limited reaction to report that Japan's October foreign reserves rose to a record 1.05trln. The size of Japan's foreign reserves holdings could become an issue if Japan becomes concerned about the outlook for US deficit. Current data suggest that the Japanese government has not yet moved to significantly diversify USD reserve holdings. Chinese diversification of reserves may reemerge as an issue for the Forex trade. Sunday, China's Premier Wen called on the US to keep its deficit under control to stabilize the USD exchange rate. Bloomberg reports that Japan now tops China as the best buyer of US treasuries.

This week's Japanese economic calendar includes the November 10th release of October money supply expected unchanged at 0.2%. September current account will also be released on November 10th expected at ¥1.34trln compared to ¥1.17trln. On November 11th September machine orders will be released expected at 1% compared to 0.5% last month. On November 12th October corporate goods prices will be released expected flat compared to 0.1% last month. A November 13th revised September industrial output will be released expected at 1.4% compared to 1.6%.