The USD gained ground in Asian trading Monday with the EUR, AUD and GBP coming off the morning highs. Signs of a stronger USD move higher were also evident in the USD/JPY which saw the currency pair trade to the highest levels since December 15th and possibly poised for a short squeeze higher. Traders suggested that year-end flows were behind the USD weakness in December, and the USD is poised to gain ground in the new year, with increasingly bad news emerging out of the economies in Europe and Asia. Asian stocks were mixed with Australian stocks lower but Hong Kong, Singapore and Seoul stocks rising. Profit-taking emerged in oil and gold after the strong gains on Wednesday with oil dropping under $43 and gold losing almost $10 to $874.50.

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