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* USD: Higher, supported by safe haven demand /Ukraine debt downgrade, existing home sales fall 5.3%
* JPY: Lower, January exports fall sharply, downside limited by gains in cross to Europe
* EUR: Lower , pressured by Ukraine downgrade, record drop in German GDP, weaker Dow
* GBP: Lower, UK GDP contracts most in 28 years, EU officials express concern about weak GBP
* CAD and AUD: AUD and CAD lower, pressured by risk aversion, S&P sees more debt downgrades



Overview

USD traded higher supported by report that Japan's January exports dropped sharply, UK GDP posted the biggest contraction in 28 years, German GDP posted its biggest GDP contraction on record and S&P downgraded the Ukraine debt rating. S&P warning that more debt downgrades are likely rattled equity markets and supported USD on safe haven demand. The USD extended its rise after the release of US existing home sales supported by safe haven flows as US equity markets slide. US January existing home sales fall 5.3%, a 1.1% rise was expected. USD extended today’s rise post release of US existing home sales decline, tracking a drop in US equities. Risk appetite improved Tuesday and global equity markets rallied in reaction to comments by Fed GDP Bernanke that US banks may not need to be nationalized. Global equity market gains were limited by report that S&P sees more sovereign debt downgrades in 2009 and by concern about deepening US recession as January existing home sales drop sharply. EIA Petroleum inventories for the week ending in February 20th rise 700K, a 2.2 Billon rise was expected. The EIA report supported crude prices. Firmer crude prices failed to boost demand for commodity currencies as USD is supported by safe haven flows. AUD and CAD traded lower pressured by the return of risk aversion.

On February 26th, US initial jobless claims for the week ending in 2/21 will be released expected at 630 K. January durable goods and February new home sales will also be released on February 26th. January durable goods are expected at -2.5% compared to -3% last month. New home sales are expected at 330 K compared to 331K last month. On February 27th, Q4 GDP will be released expected at -4.5% compared -3.8% last quarter. February University of Michigan consumer sentiment and Chicago PMI will also be released on February 27th. University of Michigan sentiment is expected at 60 compared to 61.2 last month. Chicago PMI is expected at 33.8 compared to 33.3 last month. Based on today's USD rally, negative US economic data continues to support the USD with USD price direction tracking US equities and risk sentiment.

source: http://www.fxstreet.com