The dollar hit intraday highs against the euro and yen Tuesday after the U.S. Commerce Department reported the U.S. trade deficit contracted by the most in 12 years during November.
The U.S. deficit in international trade of goods and services plunged by 28.7% to USD40.44 billion, compared with economists' estimates for a USD51 billion short fall in November.
Currency markets are weary heading into the European Central Bank meeting Thursday after Standard & Poor's threatened to downgrade the sovereign credit ratings of Spain and Greece. Traders failed to boost the euro on Germany's announcement of a second fiscal stimulus plan, valued at EUR50 billion.
US dollar is overbought in my opinion, we are seeing a huge rally in AUDUSD and EURUSD this morning (Asia time). Its hard to make a call right now if the sudden weakness in US dollar is sustainable, but my system has already signal buy for both AUDUSD and EURUSD.
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