Forex Market Overview 21 August 2008
The Usd was weaker across the board in the Asian session, as continued concerns over Fannie and Freddie weight on sentiment. The EurUsd climbed from 1.4741 to 1.4812, while the UsdJpy fell sharply from 109.90 to 108.79. The GbpUsd traded in a 1.8620 to 1.8669 range, before breaking out in late session trading. The Jpy fueled carry trades continued to come under selling pressure, as risk aversion has crept back, with the EurJpy trading down to 161.07 and the AudJpy to 95.06. Wall Street closed in the black, but Asian regional indexes have been unable to hold on to the positive momentum, with loses across the board. European stock indexes are all pointing to a lower opening, with the exception of the FTSE. Crude & Gold continued to gain ground (pressuring Usd) with wti trading at $116.83bll and gold up 0.93% to $821.28oz.
The Japanese trade balance was only 91.1bn vs. 234.9bn exp, as import value grew (18.2% y/y) driven by oil related-price increases. It's interesting to note that exports to Asia grew, while US and Europe destined exports remained weak. Machine Tool Orders dropped -8.9% vs.
-8.9% prior reading.
On the continent, the market will be watching Eurozone's PMI surveys for continued evidence of deteriorating business activity. Should the figures come in line with market expectations, this will suggest that the region is in the midst of a technical recession. Sharp declines were printed in July for both manufacturing and service PMI for the second consecutive month.
In the UK, the market will be focused on Retail Sales. With CBI's falling off the map to lows not seen since 1983 and with the BRC's measure that also fell, we expected retail sales to follow…however not to dire levels.
AUDUSD
R 3: 0.8846
R 2: 0.8797
R 1: 0.8757
CURRENT: 0.8750
S 1: 0.8626
S 2: 0.8593
S 3: 0.8503
EURJPY
R 3: 163.88
R 2: 163.10
R 1: 162.39
CURRENT: 161.04
S 1: 160.88
S 2: 160.14
S 3: 158.61
USDSGD
R 3: 1.4265
R 2: 1.4219
R 1: 1.4201
CURRENT: 1.4102
S 1: 1.4025
S 2: 1.3891
S 3: 1.3819
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