Daily Summary on USD, EUR, GBP, JPY, AUD and CAD

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USD - The dollar is headed higher this morning against the majority of its counterparts after the release of encouraging US trade data. The current account deficit narrowed by more than forecast, led by an uptick in exports and an increase in income surplus. The gap shrank to $117.4B from $133.6B in the previous reading, beating out the consensus forecast for a shortfall of $125B. However, the data is a lagging indicator with continued weakness in both Europe and Asia likely weighing on the export industry heading into the end of the year. A separate report showed that international demand for US assets unexpectedly surged last month with overseas concerns driving demand for "safe-haven" assets. These safety capital flows may only strengthen further in the months ahead as investors' focus shifts back across the Atlantic to the Eurozone's struggling member states. Nevertheless, the dollar's gains will remain tempered in the near term as investors discount the depreciative effects of the newly announced QE3 program. While "Operation Twist" - the program under which the Fed swaps out short-dated securities for longer dated ones - is set to expire at the end of the year, most investors suspect the Fed will continue buying US Treasuries, further depressing US debt yields.

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