The Forex Market Overview

The Forex Market Overview 11 July 2008

The Usd was range bound in Asian Session after being sold-off in NY trading. EurUsd traded between 1.5760 - 1.5800 resistance while UsdJpy found slightly more direction trending upwards from 106.90 to 107.28. Rumors around Fannie & Freddie continue to distract the markets with risk appetite shaky and equity markets falling. While Paulson and Bernanke reiterated views that they were adequately capitalized the market are not so easily convinced.

In Japan consumer confidence dropped to a new record low as concerns over the domestic economy, inflation & employment all weighing on sentiment. The index slid to 32.6 in June (lowest level since Dec 01) from 33.9 in May. In addition, personal demand indicators for consumption include a -3.2% fall. Without support from the Japanese consumer, there is little chance we shall see the current pace of domestic deterioration slow in 2008. And expect the Jpy to depend on bouts of risk aversion rather then underlying fundamental for currency support.

The Gbp continues to struggle despite the MPC holding rates steady at 5.00% yesterday. The rational is that while inflation is a persistent problem, weakening domestic data, highlighted by the housing sector, suggest that there is a higher probability that next rate move will be down. While rising inflation will keep the BoE vigilant near term the fear of sliding into a full recession will keep the Bank for hiking and pressure on the Gbp.

In the US, University of Michigan’s consumer confidence index will be released today. There has not been much to be positive about, with falling home prices, surging energy costs and unemployment rising we expect there is little chance that the index will improve. In addition, the US trade deficit is expected to widen as the higher energy cost start to have a profound effect. This round of gloomy economic data, on this light calendar week should weigh on the Usd today.

Daily Forex Pivot Points
AUDUSD
R 3: 0.9670
R 2: 0.9642
R 1: 0.9618
CURRENT: 0.9611
S 1: 0.9545
S 2: 0.9477
S 3: 0.9459

EURJPY
R 3: 170.00
R 2: 169.75
R 1: 169.50
CURRENT: 169.17
S 1: 167.83
S 2: 167.13
S 3: 166.10

USDSGD
R 3: 1.3850
R 2: 1.3827
R 1: 1.3730
CURRENT: 1.3606
S 1: 1.3565
S 2: 1.3505
S 3: 1.3470

The ForexGen's provided services are all restricted and regulated by the international banking and financial regulatory standards. All our provided activities are supported by creativeness and modernization. Ambitious & motivated employees are working simultaneously to protect the customer's confidentiality. ForexGen is continuously providing the market's most competitive conditions.

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USA Financial Sector Worries

US financial sector worries. Bank of England left rates unchanged

News and Events:

The Dollar fell against the Euro on Thursday, dragged down by persistent worries over the health of US financial sector, as shares and bonds of the
country's two mortgage finance giants tumbled on capitalization fears. The yield spread premium for the larger Fannie Mae rose to its highest since before the Fed's bailout of US Investment bank Bear Stearns in March.

Investors were slightly reassured by comments by Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson in testimony to Congress that they were doing everything possible to restore calm to financial markets.

Bank of England held interest rates steady at 5% on Thursday, but analysts say rates will have to fall, making the GBP less attractive.

The ForexGen's provided services are all restricted and regulated by the international banking and financial regulatory standards. All our provided activities are supported by creativeness and modernization. Ambitious & motivated employees are working simultaneously to protect the customer's confidentiality. ForexGen is continuously providing the market's most competitive conditions.

ForexGen complies with the trade commissions in the USA, EU and Australia. Being registered by the commercial authorities in 18+ countries, we adhere to the United Nations Commission on International Trade Law (UNCITRAL).

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ForexGen is complying with all applicable international laws and all financial regulations and procedures governing its industry in order to sustain the security standards in the financial services world.

The Forex Market Overview

The Forex Market Overview 10 July 2008

The Usd was stable in Asian session as a lack of real news provided no real impetus for a directional move. EurUsd traded in a 1.5700 - 1.5750 range while UsdJpy slipped from 107.50 to 106.90. Strong Jpy buying spilled over into select carry trades with GbpJpy the hardest hit dropping from 212.30 to 211.40 while AudJpy was able to rally back from early selling to 102.70. Oil was trading at $136.50 barrel after rising above $138 after a sharp fall in U.S. stocks. Gold closed with strong gains, amid geopolitical tensions thus increasing the metals attractiveness as a safe-haven instrument; the most active Aug '08 contract up $5.30 to $928.60. Sep '08 silver +22.0 ¢ at $18.175/oz.

Wall Street fell over 2% as rumours abound that investment banks still have large write-downs to declare. Merrill Lynch fell over 9% after Fitch Ratings indicated that it may cut the banks debt rating. Merrill's along with other U.S. banks report earnings next week. Asian markets are mostly trading mixed this morning in a directionless session. Lenders lost ground in Australia on worries about the US financial sector, but financials came off early lows in volatile trading in Japan and Korea as the markets reversed early declines. European stocks are coming under significant selling pressure, but so far ,US index futures are still in the positive.

With the Aud looking a little vulnerable ( due to deteriorating fundamentals) today’s better then expected employment figure 29.5k vs. 25k exp (prior -19.7k) help give the currency some support.

The highlight of this data devoid day will be the BoE's interest rate announcement. It is universally expected that the MPC will hold rates at 5.00% due to worrying inflationary pressures. Economic activity in the recent month has shown clear deterioration. In addition, negative data from the housing market, industrial sector that has probably fallen into a recession and a consumer spending ready to decelerate significantly. But the BoE members at this point are still leaning to the inflation side of the story which means a strong chance of a technical recession in the UK. With economic indicators well in the region which historically the BoE would be cutting rates, we believe its just a matter of time before rates come down.

Ex Fed President William Poole in a conference yesterday stated he believes that the government-sponsored mortgage companies, Fannie Mae and Freddie Mac, are insolvent. Interesting questions maybe asked of Fed Chairman Bernanke and Treasury Secretary Paulson when they testify on the health of the financial system later today.

17.45gmt - ECB's Trichet speaks
19.30gmt - Fed's Yellen speaks

Daily Forex Pivot Points
AUDUSD
R 3: 0.9670
R 2: 0.9642
R 1: 0.9618
CURRENT: 0.9590
S 1: 0.9545
S 2: 0.9477
S 3: 0.9459

EURJPY
R 3: 169.46
R 2: 169.14
R 1: 168.90
CURRENT: 168.54
S 1: 167.83
S 2: 167.13
S 3: 166.10

USDSGD
R 3: 1.3850
R 2: 1.3827
R 1: 1.3730
CURRENT: 1.3606
S 1: 1.3565
S 2: 1.3505
S 3: 1.3470

The ForexGen's provided services are all restricted and regulated by the international banking and financial regulatory standards. All our provided activities are supported by creativeness and modernization. Ambitious & motivated employees are working simultaneously to protect the customer's confidentiality. ForexGen is continuously providing the market's most competitive conditions.

ForexGen complies with the trade commissions in the USA, EU and Australia. Being registered by the commercial authorities in 18+ countries, we adhere to the United Nations Commission on International Trade Law (UNCITRAL).

Profile regulatory information:

ForexGen is complying with all applicable international laws and all financial regulations and procedures governing its industry in order to sustain the security standards in the financial services world.

Forex News | BoE Rate

Middle-east tensions undermine US Dollar. BoE rate decision due today.

News and Events:

Dollar fall Wednesdays following a rise in oil prices and continued concerns over the financial health of banks and mortgage lenders. Wall Street fell over 2% as rumours abound that investment banks still have large write-downs to declare. Merrill Lynch fell over 9% after Fitch Ratings indicated that it may cut the banks debt rating.

An apparent attack on the US consulate in Istanbul also added to negative global sentiment toward the Dollar.

Oil was trading at $136.50 barrel after rising above $138 after a sharp fall in US stocks and growing middle-east tensions. Gold was up 0.89% to 928.40, amid geopolitical tensions thus increasing the metals attractiveness as a safe-haven instrument.
The BoE will decide interest rate policy later today with little chance of a shift in rates. Recent indicators show the UK heading towards a possible recession. The ForexGen's provided services are all restricted and regulated by the international banking and financial regulatory standards. All our provided activities are supported by creativeness and modernization. Ambitious & motivated employees are working simultaneously to protect the customer's confidentiality. ForexGen is continuously providing the market's most competitive conditions.

ForexGen complies with the trade commissions in the USA, EU and Australia. Being registered by the commercial authorities in 18+ countries, we adhere to the United Nations Commission on International Trade Law (UNCITRAL).

Profile regulatory information:

ForexGen is complying with all applicable international laws and all financial regulations and procedures governing its industry in order to sustain the security standards in the financial services world.

The Forex Market Overview

The Forex Market Overview 9 July 2008

The Usd was weaker in Asian session as news that Iran had tested 9 surface to surface missiles spooked the market. Eurusd trade up from 1.5660 to 1.5728 while UsdJpy slipped from 107.50 to 107.02. Risk sentiment had already been on shaky ground after the Lehman report on Fannie and Freddie and with rising tensions in the region the missile test (actually facts were a little vague) had traders quick to respond. Crude prices rallied back above the $137.00bll mark. Reassurance from Fed Chairman Ben Bernanke that the central bank will keep assisting financial markets in these turbulent times also helped both the Dollar and equities . In Mr. Bernankes prepared remarks yesterday stating that ``The Federal Reserve is strongly committed'' to financial stability and is ``considering several options, including extending the duration of our facilities for primary dealers beyond year-end,'' did help relieve some pressure.

US Stocks were sharply higher Tuesday, led by banks and transports as oil and natural gas prices retreated. The major indexes finished around their best levels for the session. Asian markets are trading higher this morning on the strength of Wall Street's finish overnight. The Shanghai stocks rose as investors plunge on bargain buying amid the steep recent losses and also on speculation that the Chinese government might need to provide support to the market. USD slipped in Asia after it was reported that Iran had test fired nine long and medium range missiles which could possibly strike as far as Israel. Gold closed lower, pressured by a strong dollar and falling crude prices ; the most active Aug '08 contract down $5.50 to $923.30. Sep '08 silver +3.5 ¢ at $17.955/oz.

In Japan machinery orders for May came in much better than expected at 10.4% vs. 5.5% exp while Core orders also strengthened, rising 5.1% vs. 3.4% exp. However while the BoJ expectations (and ours) has continued economic deterioration well entrenched, with markets trading on risk we could see short periods of Jpy strength (but we see those as opportunity to build short Jpy positions).

In Australia consumer sentiment fell -6.7% which was much weaker the Junes -2.0% reading. The number is at its lowest level since 1992 and doesn’t bode well for speculators expecting the RBA to continue higher (and maintain its neutral stance). AudUsd trade down from 0.9549 to 0.9480 on the disappointing data. We will be watching for a sell off in the commodities caused by the global slowdowns and mounting evidence that the RBA will need to shift towards a growth bias before we begin to look for opportunities to sell Aud.

In the UK consumer confidence in June dropped to 61 its lowest since the survey was launched in 2004. In addition the expectations index on the labor market & economy also fell to a new low of 64. Just more evidence that the BoE will need to address the growth side of the story sooner then later.

In European session today, markets will be watching Eurozone GDP (q1 final release) and UK external trade. Euro-zone GDP in Q1will give us a better suggestion of the composition of growth by income while markets will be watching for price change on import prices rather then change in deficit.

Daily Forex Pivot Points
AUDUSD
R 3: 0.9670
R 2: 0.9642
R 1: 0.9565
CURRENT: 0.9501
S 1: 0.9477
S 2: 0.9460
S 3: 0.9409

EURJPY
R 3: 169.45
R 2: 169.15
R 1: 168.62
CURRENT: 168.62
S 1: 167.13
S 2: 166.10
S 3: 166.00

USDSGD
R 3: 1.3850
R 2: 1.3827
R 1: 1.3730
CURRENT: 1.3635
S 1: 1.3565
S 2: 1.3506
S 3: 1.3470

The ForexGen's provided services are all restricted and regulated by the international banking and financial regulatory standards. All our provided activities are supported by creativeness and modernization. Ambitious & motivated employees are working simultaneously to protect the customer's confidentiality. ForexGen is continuously providing the market's most competitive conditions.

ForexGen complies with the trade commissions in the USA, EU and Australia. Being registered by the commercial authorities in 18+ countries, we adhere to the United Nations Commission on International Trade Law (UNCITRAL).

Profile regulatory information:

ForexGen is complying with all applicable international laws and all financial regulations and procedures governing its industry in order to sustain the security standards in the financial services world.

Dollar Rose On Bernanke

Dollar rose on Bernanke comments and Crude Oil drop

News and Events:

The Dollar rose on Tuesday as Bernanke said the Fed was considering extending the duration of the central bank's facilities for primary dealers into 2009 calming fresh credit concerns and encouraged investors to snap up US stocks.

Markets expectations of tighter US monetary policy by year-end were boosted by Federal Reserve Bank of Richmond President Jeffrey Lacker's comments that withdrawing some of the stimulus as risks to the economy diminished made eminent sense. Interest rate futures have fully priced in a 25bp hike in the fed funds rate by year-end. The benchmark overnight lending rate is currently at 2% after it was slashed by 325bp since September.

Forex Market Overview

Forex Market Overview 08 July 2008

The Usd weakened in Asian session as risk aversion crept back into the market. EurUsd jumped to 1.5753 before retracing to 1.5700 support while UsdJpy fell from the 107.33 highs to 106.83. Risk appetite declined as a research report arguing that Freddie and Fannie would need additional capital, circulated in the market sending US and Asian stocks down and 2 year yields fell by 8bps. Carry trades also felt the effect of the sentiment shift with EurJpy falling sharply to 167.83 from 168.61 and AudJpy trading down to 101.90. Whether its pressure from the G8 summit which began yesterday (leaders have continuously stressed the need for action on food & energy cost) or reaction to deteriorating global growth but either way crude closed down to $141.64bbl. Gold closed lower; the most active Aug '08 contract down $4.80 to $928.80. Sep '08 silver -45.0 ¢ at $17.920/oz.

Asian markets trading down this morning amid concerns that the credit market losses will widen and inflation will further slowdown the global economic growth. Japan's Inpex Holdings declined driven by weakness in the energy sector. Kookmin Bank, South Korea's largest, tumbled the most in almost four months following a broker downgrade. G8 has stated that the global economy faces uncertainty and downside risks mainly posed by the sharp rise in oil prices. It also made a small indication that they wanted to see the Chinese Yuan appreciate to help reduce global financial imbalances. No statement on FX so far.

Yesterday dreadful manufacturing and industrial output which both fell well below expectations should continue to weigh on the Gbp. And in Asian session BCC Quarterly Economic Survey highlighted slowing economic activity and rising price pressures. We are now seeing significant deterioration in multiple UK sectors (and at a faster pace then anticipated) which will eventually create a significant dilemma for the BoE. According to the British Chamber of Commerce the economy looks very likely to fall into recession as sales of services and manufactured goods fell sharply in the second quarter. The BCC Index fell to its lowest number since 1992 as a serious slowdown in the property market and rising inflation has seen a dramatic decline in confidence.While Nationwide and DCLG housing prices should show additional weakness we are expecting the MPC to hold at 5.00% this week.

12.00gmt - Fed’s Bernanke Speaks (but no Q&A)

Daily Forex Pivot Point
AUDUSD
R 3: 0.9827
R 2: 0.9670
R 1: 0.9640
CURRENT: 0.9526
S 1: 0.9512
S 2: 0.9560
S 3: 0.9590

EURJPY
R 3: 169.46
R 2: 169.15
R 1: 168.63
CURRENT 167.53
S 1: 167.13
S 2: 166.10
S 3: 166.00

USDSGD
R 3: 1.3850
R 2: 1.3827
R 1: 1.3730
CURRENT: 1.3634
S 1: 1.3565
S 2: 1.3506
S 3: 1.3470

The ForexGen's provided services are all restricted and regulated by the international banking and financial regulatory standards. All our provided activities are supported by creativeness and modernization. Ambitious & motivated employees are working simultaneously to protect the customer's confidentiality. ForexGen is continuously providing the market's most competitive conditions.

ForexGen complies with the trade commissions in the USA, EU and Australia. Being registered by the commercial authorities in 18+ countries, we adhere to the United Nations Commission on International Trade Law (UNCITRAL).

Profile regulatory information:

ForexGen is complying with all applicable international laws and all financial regulations and procedures governing its industry in order to sustain the security standards in the financial services world.

Dollar Is Mixed Against US Stocks

Dollar is mixed against US stocks recovery and renewed credit worries.

News and Events:

Lehman Brother cautioned on Monday that accounting changes could force Fannie Mae and Freddie Mac to raise capital at a difficult time. Both
Shares plunged, dragging US financial shares and the broader stock market down.

The Dollar got some support from comments by San Francisco Federal Reserve Bank President Janet Yellen that inflation was starting to outweigh the risk of a deteriorating US economy. Yellen's remarks indicated that the Fed could be leaning toward raising interest rates.
Such a step would help narrow the interest rate differential between the Dollar and the Euro, in the wake of the European Central Bank's 25bp rate hike to 4.25% last Thursday.

The ForexGen's provided services are all restricted and regulated by the international banking and financial regulatory standards. All our provided activities are supported by creativeness and modernization. Ambitious & motivated employees are working simultaneously to protect the customer's confidentiality. ForexGen is continuously providing the market's most competitive conditions.

ForexGen complies with the trade commissions in the USA, EU and Australia. Being registered by the commercial authorities in 18+ countries, we adhere to the United Nations Commission on International Trade Law (UNCITRAL).

Profile regulatory information:

ForexGen is complying with all applicable international laws and all financial regulations and procedures governing its industry in order to sustain the security standards in the financial services world.

Forex Market Overview

Forex Market Overview 07 July 2008

Usd is stronger against every major currency in the Asian session as speculation grows that the G8 meeting will focus on record high oil prices. EurUsd continued to decline from Thursdays sell-off, sliding to 1.5623 (on rumors that German bonds were to be redeemed rather then re-invested) while UsdJpy traded to 107.52 (7 day high). GbpUsd dropped from 1.9820 to 1.9722 as the market began to once again question the stability of the UK underlying economy. Carry trades gained on renewed Jpy selling and declining risk aversion, pushing EurJpy to 168.07 and AudJpy 103.12. The tight correlation between oil & Usd has lessened slightly in recent day with wti stable around the 143.50bll level while the Usd has taken a bullish tone. After the long weekend in the States, investors have been able to take stock and decide how to react to the Trichet statement that followed the ECB raising rates and the U.S. payroll numbers last Thursday.

Trading was still subdued despite the Usd strength with investors looking for more clues on the U.S. economic situation and to see if the Federal Reserve will be in a position to raise interest rates any time soon. Many will look towards comments from Fed officials over the coming days and in particular to Chairman Bernanke who may give some support to the Dollar during the week ahead.

Asian markets mostly trading higher this morning. Bargain hunters have taken the Nikkei from a 0.5% morning loss to a 1.0% afternoon gain as the market hopes to break its streak of 12 consecutive declines. Banks and exporters were popular choices. But, volumes were thin since the US was closed 4-Jul and could therefore not provide any direction. Chinese banks and airlines led Hong Kong and Shanghai up, but banks led a fall in Sydney over concerns about global credit markets. Also, miners and metals fell in Sydney.

BoJ Governor Shirakawa spoke saying said that global inflationary risks were growing and Japan's economy was slowing due to high energy and commodity prices. A very familiar script and preparing the market for the BoJs growth forecast downgrade expected this week.

A light calendar today will have the markets focused on the UKs Industrial production. The abrupt decline in the output balance of the June CIPS/RBS report on manufacturing suggests that output will soon be collapsing. We have already seen the Gbp come under significant selling pressure and expected the GbpUsd to continued to trade down (in choppy trading) to the 1.9300 mid term.

Daily Forex Pivot Point
AUDUSD
R 3: 0.9829
R 2: 0.9700
R 1: 0.9670
CURRENT: 0.9576
S 1: 0.9580
S 2: 0.9535
S 3: 0.9514

EURJPY
R 3: 170.00
R 2: 169.45
R 1: 169.15
CURRENT: 167.99
S 1: 167.13
S 2: 166.10
S 3: 166.00

USDSGD
R 3: 1.3850
R 2: 1.3827
R 1: 1.3730
CURRENT: 1.3647
S 1: 1.3565
S 2: 1.3505
S 3: 1.3470

The ForexGen's provided services are all restricted and regulated by the international banking and financial regulatory standards. All our provided activities are supported by creativeness and modernization. Ambitious & motivated employees are working simultaneously to protect the customer's confidentiality. ForexGen is continuously providing the market's most competitive conditions.

ForexGen complies with the trade commissions in the USA, EU and Australia. Being registered by the commercial authorities in 18+ countries, we adhere to the United Nations Commission on International Trade Law (UNCITRAL).

Profile regulatory information:

ForexGen is complying with all applicable international laws and all financial regulations and procedures governing its industry in order to sustain the security standards in the financial services world.

Dollar Edges

Dollar edged up ahead of G8 comments and last week Oil record high

News and Events:

The Dollar edged up to a one-week high versus a basket of major currencies on Monday, on speculation that comments from G8 officials could push Oil prices further away from last week's record highs.

The Greenback also continued to benefit from a neutral European Central Bank tone, which reduced expectations of further rate hikes after last Thursday's move to 4.25%.

Oil hit 145.85 high on Thursday ahead of G8 meeting in Japan. Crude prices show a close negative correlation with the Dollar because the United States is a heavy energy.

Investors have started to take the view that risks to growth and concern about the financial sector will prevent the Fed from raising the fed funds rate from 2% for now.

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