Dollar Mixed, Bonds Up on Final Trading Day

U.S. 10-year Treasury bond prices rallied towards recent 3-year record highs, despite positive numbers from the U.S. Bonds recently hit yearly highs on general negative economic sentiment towards the U.S. Traders are bearish on the U.S. economy right now due to a weak housing market and a still-unraveling credit and liquidity crisis. Bonds typically rise on negative economic news and fall on positive sentiment, so it's clear that traders have positioned themselves defensively heading into the new year.

The yen rallied versus the euro and the dollar today, and the dollar also surged against the euro. The dollar has been struggling versus the euro in the past months on general negative sentiment, also stemming from the credit/housing problems. The dollar is trade just off all-time record lows against the euro, and many traders are looking for more dollar losses heading into 2008.

Crude oil futures were basically flat today. Oil is trading just off all-time record highs below $100. Crude trading was very light in volume today, on the last trading day of 2007. Natural gas futures rose 1.5%.

Gold futures fell about 0.7% today on dollar strength. Gold normally trades inversely to the dollar and with crude, and today traders focused on dollar strength. Traders sold gold in favor of a rising dollar. Copper futures fell about 1%.

Grains were higher today. Soybeans rose 0.7%, and corn rallied 1%.