Greenspan delivers first installment of ‘Greenspan-speak’

Greenspan’s signal of further interest rate hikes in the US and an unexpected increase in housing starts figures initially bolstered the greenback in a choppy trading but made the market vigilant on the mere mention of the words “current deficit” in spite of no expression of concern by the Fed Chairman.
Traders switched over to buying Euros after drubbing it to lows of 1.2968 levels. Euro currently trades at 1.3040 facing a stiff resistance at 1.3080 with sellers at these levels likely to keep the upside capped.
Dollar also gave back its gains in a volatile trading due to renewed soaring of oil prices to a 3-week high at $48.66 a barrel as geopolitical threats loomed, in Iran this time (explosion near its nuclear reactor).
Yen was dealt a double whammy with the yield differential tilted in favour of dollar and the release of the Japanese Q4 GDP figures showing a drop of 0.5% suggesting a technical recession in the economy. Japan’s officials disappointed after release of the stagnant growth figures of the Japanese economy, diverted the heat on China exhorting them to remove the fixed peg of Yuan. But further losses for Yen are limited to the crucial 106 levels, where there’s lots of selling seen by exporters.
Markets look towards a second dose of Greenspan’s testimony to the House of Representatives today and release of other data like the E-12 industrial production, UK retail sales, US leading indicators and Philly Index.