Carry Trade Returned, Focus on 5 Central Banks and NFP

Yen and Swissy were the major mover last week as carry trade returns, boosted by strength in the global market that's triggered by a serious events including Bernanke's signal of rate cut in Dec. Euro was weighed down by expectation that ECB will be on hold for a while even though inflation accelerated sharply. Sterling was mildly weaker against dollar on rate cut expectation but strengthened against other majors on carry trade. Dollar was generally firm but dropped slightly against Aussie and Kiwi. After all, a Dec rate cut from Fed is like a done deal and further easing is expected down the road in early 08. But before that, market will turn focus to five central banks meetings this week (ECB, BoE, BoC, RBA, RBNZ) and a string of important economic data from US first.

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