The US government showed a $83.6 bln deficit for the month of December versus a $48.3 surplus a year ago. The fiscal 2009 year-to-date deficit is $485 bln, larger than the deficit for all of 2008. tax receipts slumped to $237.8 from $277 bln last December. Feel better?
Risk aversion has caught fire in afternoon trade with EUR/USD continuing its slide along with cable. EUR/JPY, GBP/JPY and all the commodity currencies versus the JPY are falling hard as well. EUR/USD trades at 1.3145, USD/JPY at 89.10 and cable at 1.4480.
1.3080 is very important support for EUR/USD below the market. The frantic year-end rally accelerated dramatically once that level was broken back in mid-December as the Fed prepared to crank up the printing presses.