Although rising tide of the US Dollar rally has sunk many boats today, CAD has been the worst performer among majors. A double whammy of disappointing data (trade and PMI numbers both weakened dramatically last month) from Canada has caused the loonie to lose over 1% on the day against USD, GBP, MXN and others. AUD and NZD have also lost ground to USD but at a more moderate pace. Meanwhile, USD has been the class of the field after the country posted a smaller (better) than expected trade deficit. A strengthening economy combined with last night’s soft support Janet Yellen’s confirmation as Fed Chair and comments from San Francisco President Williams that QE3 will likely be over by the end of the year provide more evidence to suggest this era of big monetary stimulus is winding down, clearing away some of the factors that have been weighing down USD. Stocks rebounded in the US and Europe today. Spain and Italy led the way, breaking out to new highs on anticipation that their economies may start to finally rebound in 2014, building on the encouraging signs of late 2013 particularly in Spain. A positive German employment report and the US trade data also helped to boost spirits and enable other major indices to claw back some of their recent losses. This week may progressively get more active with monthly China data on the way along with US payroll reports tomorrow and Friday and European central bank meetings on Thursday. Economic News US trade balance ($34B) vs street ($40B) Canada trade balance ($0.9B) vs street ($0.1B) Canada Ivey PMI 46.3 vs street 54.5 vs previous 53.7 Germany retail sales 1.6% vs previous (0.2%) Germany unemployment chnge (15K) vs street (1K) Germany unemployment rate 6.9% as expected Upcoming significant announcements include: 7:00 am GMT Germany trade balance street €18.0B 9:00 am GMT Italy unemployment rate street 12.5% 10:00 am GMT Eurozone retail sales previous (0.1%) 10:00 am GMT Eurozone unemployment rate street 12.1% 11:00 am GMT Germany factory orders previous 1.9% 8:15 am EST US ADP payrolls street 200K 2:00 pm EST US FOMC minutes

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