Tuesday, December 23, 2008

EUR/USD, DJIA Continue to Drift Within Well-Defined Ranges

Whether you are looking at the currency markets or stock markets, it is clear that most assets are drifting within well-defined ranges as trading remains muted, as is typical in the financial markets around the holidays. Indeed, since the start of the week, EUR/USD has consolidated into a range of 1.3920 - 1.4000, though we did see a high of 1.4125 reached early Monday morning. Likewise, the Dow Jones Industrial Average has yet to stray from its range of roughly 8370 - 9000, despite news that American Express received preliminary approval from the US Treasury to receive $3.39 billion in TARP funds.

However, the first tranche of $350 billion has already been used to shore up financial institutions and to prevent GM and Chrysler from filing for bankruptcy, so the release of the second tranche will need be approved by Congress before American Express will receive their funding.


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