Amid Heightened Banking Fears

The dollar and yen benefited from another bout of heightened risk-aversion, rallying sharply against the euro and sterling as a result of safe-haven flows. Both currencies will likely continue to reap the rewards from growing apprehension over the banking system and the extent and duration of the global economic recession. 

The economic calendar today was light, with the release of the NAHB housing survey, which drifted lower to 8 in January versus 9 a month earlier. The housing index fell to its lowest level on record, with expectations of home sales over the next 6 months at 17 in January versus 16 from December. The Thursday session will see December building permits, housing starts and weekly jobless claims. Building permits are estimated to slip to 610k units, down from 615k units in November. Housing starts are also seen falling, down to 610k units versus 625k units a month prior. Meanwhile, weekly jobless claims are estimated to edge higher to 540k from 524k.