Dollar rose Friday helped by lower Crude Oil prices and Warren Buffer comments

The Dollar surged on Friday, recovering from the previous day's losses, as gloomy British growth data backed views of a slowing global economy and raised prospects of interest rate cuts outside the United States. A sharp drop in US crude oil prices to below $115 per barrel and comments by influential investor Warren Buffett that he has no bets against the Dollar also added to the US currency's upward momentum. Federal Reserve Chairman Ben Bernanke's comments that a stable Dollar and falling commodities should help slow inflation this year and next. His remarks on Friday prompted analysts to reduce expectations of a US interest rate increase this year.


News and Events:

The Dollar surged on Friday, recovering from the previous day's losses, as gloomy British growth data backed views of a slowing global economy and raised prospects of interest rate cuts outside the United States.

A sharp drop in US crude oil prices to below $115 per barrel and comments by influential investor Warren Buffett that he has no bets against the Dollar also added to the US currency's upward momentum.

UK data showed the British economy stalled on Q2, suggesting a recession might be looming, and added to the outlook of a slowing European economy. It raised the possibility of European Central Bank and Bank of England monetary easing.

EurUsd dropped to a session low of 1.4758, edging toward a six-month low hit earlier last week at 1.4631. It was last trading at 1.4788, down 0.68%. UsdJpy jumped 1.52% to 110.09. GbpUsd dropped 1.32% to 1.8517. UsdChf rose 1.06% to 1.0988.

Federal Reserve Chairman Ben Bernanke's comments that a stable Dollar and falling commodities should help slow inflation this year and next. Bernanke's remarks at an annual Fed symposium in Jackson Hole, Wyoming, prompted analysts to reduce expectations of a US interest rate increase this year, which could diminish the Dollar's appeal to investors. But analysts said even without an interest rate hike this year, the Dollar would probably continue to recover.

Persistent problems at US mortgage finance companies Fannie Mae and Freddie Mac and speculation over the future of investment bank Lehman Brothers could make the road to recovery difficult.




Today's Key Issues (time in GMT):

00:00 GBP Market Holiday
07:30 DKK August Consumer confidence -8 vs -9.7
07:30 SEK July Trade balance 8.2b (mom)
09:00 EUR June Industrial new orders -6.3% vs -4.4% (yoy)
12:30 USD July National Activity Index -0.6
14:00 USD Existing home sale 4.92m vs 4.86m
22:45 NZD Merchandise trade 4b vs 3.81b
22:45 NZD Merchandise trade – expo 3.44b vs 3.59
22:45 NZD Trade Balance Month -526m vs -223m
22:45 NZD Trade Balance Year -4.2b vs -4.48b


The Risk Today:

EurUsd: Market dropped as low as 1.4631 last week, new initial support. Further weakness will put the focus on strong support 1.4366 22nd January low. On the upside, only a return over 1.5000 and 1.5500 will release actual pressure and put key initial resistance 1.6000 into focus. Still a break up there would open the way to Trendline resistance 1.6200.

GbpUsd: Cable hit 2.0158 high 6-weeks ago and 1.8505 low last Friday. On the downside, further weakness would open the way down to 1.8395 end July 2006 low and maybe 1.8091 June 2006 low. Initial support holds 1.8414 today low. On the upside, initial resistance holds 1.8795 last week high. Former support 1.9363 holds also strong resistance. Key level holds 2.0100 resistance.

UsdJpy: Last 6-weeks recovery pushed the market up to 110.67 high. Further advance would open the way toward 111.92 early January high. On the downside, a return below 108.59 former resistance and 108.14 last week low will undermine the current advance. Profit taking might bring back down to 105 level and may open the way toward 102.73 support and 100 pivot point. Initial support holds 108.14 Thursday low.

UsdChf: Continuous Dollar strength consolidated over 1.0800 last week and hit 1.1041 6-months high on last Wednesday. Initial resistance holds 1.1107 13th February high. Strong resistance holds 1.1593 December 2007 high. On the downside, initial support holds 1.0863. Only renewed weakness below 1.0500 and 1.0375 would retest the 1.0000 pivot point and may open the way toward 0.9637 17th March low.


Resistance and Support:

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The Return of History

The fall of the euro from the heights does not mean that traders have resigned from recent currency history. Even after its unprecedented fall the united currency has only now returned to the middle of its rising trend against the dollar that has prevailed for six and a half years, since early 2002.

Very little in the Eurozone economic situation or world economic history had warranted the euro’s presence north of 1.5500. But nothing in the United States present economic condition indicates that it has broken its long term disability against the euro.

The Eurozone economies were never as immune to the sub prime contagion as dollar detractors proclaimed. And they have proven equally susceptible if not more to economic damage from high energy prices. But neither is the United States bound to respond to 325 basis points of central bank rate reductions with its usual vigor and in the normal time frame of six months to a year.

The old scenario which had the European Monetary Union (EMU) proceeding with moderate economic growth and a steady or hiking European Central Bank (ECB) paired with a recessionary America and an easing Federal Reserve has been abandoned. The new assumption has the benefit of initial proof, negative GDP in the Eurozone second quarter and positive US results, but it is essentially untested.

The American economy retains considerable known problems: the prolonged housing slump, the drag from gasoline and energy prices, the contraction of commercial credit; and several dangerous unknowns: the possibility of large failures in the financial system, a return to $140 or higher oil prices, and the degree to which the economy was bolstered by the Federal cash stimulus in the second quarter. Any one or combination of these could easily derail what positive economic momentum exists in the US. There is also the uncertainty attached to the presidential election and the candidates’ competing and quite different economic prescriptions. The proposed economic plans of each party stress voter friendly initiatives; few will be good for the dollar.

The ECB governors seem a bit surprised that mundane economic reality still applies to them. It was a scant three months ago when government and central bank officials were proclaiming their expectations for continued moderate economic growth in 2008. The Europeans have their share of problems as well. If the two major countries, Germany and France are not suffering the aftermath of a real estate bubble, that is not true of some of the smaller members, primarily Spain and Ireland. Energy costs are as great a drag on economic well being as they are in the States and they certainly have a greater effect on consumer outlook and spending. Russia, newly assertive and unmistakably threatening, sits astride European energy supplies, supplies for which there are no domestic alternatives. Finally any worldwide financial catastrophes will leave casualties in Europe, Asia, and America equally.

The change in economic outlook in the EMU has been enough to boost the dollar substantially as it put paid to unrealistic expectations for European autarky.

It is now the US economy that is expected to sustain a recovery first, or at least to grow faster than its European counterpart. Neither central bank is in a position to change its rate policy.

The ECB is constrained by inflation, its own rhetorical history, and institutional credibility. The members of the ECB governing board and President Trichet are intelligent, analytical and persuasive individuals. In setting a public inflation target they and their predecessors had to have known that a time might come when they would be forced to choose between inflation control and economic growth. That time is now. If the pending recession, which Trichet warned about six weeks ago, could not prompt an adjustment of ECB policy, another quarter of negative growth will not do so.

Likewise, the Federal Reserve cannot raise rates to combat 5.6% inflation. The US economy is weak, 2nd quarter GDP notwithstanding, with glaring vulnerabilities in finance and energy costs. For the next few months central bank rate policy is not likely to be the determining factor in the relation between the euro and the dollar.

The debunking of one unrealistic assumption in Europe does not mean another, almost equally unrealistic, the return of the US to robust growth, is about to happen. From November until February the market traded back and forth between 1.4400 and 1.4900. That is precisely the position now. A prolonged muddle could be ahead while traders wait for statistics to resolve their questions. The dollar run is not over, but its continuation will require further proof. An extension of dollar strength will have to go quite a bit further, to below 1.4000, before its six year fall against the euro can be broken. That is not a project that will be completed in the next few months.

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Weakness In Oil Prices | ForexGen Newsletter

Renewed weakness in oil prices and a break of 1.4850

News and Events:

The Dollar rallied to an almost six-month high against the Euro on Thursday amid growing concern over euro zone economic weakness and accelerating inflation in the United States.

Traders sold the Euro after reports showed contraction in the Euro zone's economy in the second quarter. The Euro zone single currency accelerated its losses and fell below 1.4800 after it broke through key technical levels, analysts said. Government data showed US consumer prices rose at twice the rate expected in July. Analysts said higher prices in the short term may help boost the case for interest rate hikes by the Federal Reserve, although they warned that over time, inflation would hurt the economy.

Oil prices are down more than $30 from a record high 145.45 hit in
July. Crude oil settled 1.26% lower on Thursday at $114.93 a barrel.

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FOMC Expected Rates

FOMC Kept Rate Steady At 2% As Expected

News and Events:

The Dollar climbed to seven-week peaks against the Euro and major currencies on Tuesday, as oil prices plunged and the Federal Reserve maintained its focus on slowing persistent US inflation pressure in the economy.

Analysts said Tuesday's Fed statement was more balanced than what the market had expected, as it expressed concern about both economic growth and inflation. Another comment showed the Fed statement does not point to one clear rate path.

The drop to a three-month trough of $118 per barrel helped ease fears that high energy prices will continue to weigh on the US economy at a time consumer prices are showing an unexpectedly fast rise.

AudUsd was among the weakest performers on Tuesday, falling to a four-month low at 0.9133.

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Forex Market Overview

Forex Market Overview 04 August 2008

The Usd was broadly unchanged for Friday's close in the Asian session. The EurUsd closed at 1.5560 and is now trading at 1.5580, while the UsdJpy closed at 107.60 and is now trading at 107.80. The Jpy fueled carry trades gained slightly, with EurJpy easing up towards 168.00 and the AudJpy strengthened to 100.50. Emerging Asia was slightly stronger, with the UsdSgd falling to the 1.3690 support. The commodities are seeing a broad rally, with crude wti up 0.76% to $126.06bll and gold up 0.37% to $914.35oz (also giving the commodity bloc ccy a small bounce). Regional Asian equity markets are following Wall Street weak close across the board, with Shanghai's down -1.00%. European stock futures are pointing to a negative open lead by the FTSE down -1.17%. Ominous start to the week, where most analysis are calling for continued Usd gains.

A big week for Central Banks (and currency markets), with the Fed, RBA, BoE and ECB deciding on rates. In this event studded lineup, perhaps the most anticipated event will be the ECB accompanying statement and Trichet's subsequent comments. We have seen recent economic data in the Eurozone hit a soft patch, while commodities have sold off. The market is gambling on that in the near future the ECB will change its hawkish tune, which will push the EurUsd even lower. In addition, with increasing probability that Central Banks in the developed countries will now have room to stave out economic collapse with inflation expectations declining, the dollar seems to be in the driver's seat. Note: CFTC positioning data for the week up to July 29 points to an adjustment out of USD short positions against the G10, with only the Aud holding a significant net long position against the greenback.

In the European session, the Eurozone producer price inflation will have the markets attention. We are expecting another surge in prices across the region (currently at it highest level in 25 years). While we expect the ECB to stay hawkish, with the economy stagnating and food and energy prices softening, the interest rates will not rise again.

Daily Forex Pivot Point
AUDUSD
R 3: 0.9528
R 2: 0.9476
R 1: 0.9419
CURRENT: 0.9306
S 1: 0.9286
S 2: 0.9276
S 3: 0.9206

EURJPY
R 3: 169.73
R 2: 169.19
R 1: 168.31
CURRENT: 167.70
S 1: 166.98
S 2: 166.01
S 3: 165.33

USDSGD
R 3: 1.3850
R 2: 1.3827
R 1: 1.3728
CURRENT: 1.3721
S 1: 1.3651
S 2: 1.3606
S 3: 1.3567

Forex Market Overview

Forex Market Overview 05 August 2008

The Usd was broadly stronger in Asian session, as traders position themselves for today's FOMC rate announcement. The EurUsd slid from 1.5590 to 1.5524, while the UsdJpy took a weaker tone in the Asian afternoon, falling to 108.05 from 108.32. The AudUsd & NzdUsd continued to be sold off on the back of the RBA comments, dropping to 0.9223 and 0.7259 respectively. The Jpy fueled carry trades took a bearish tone with EurJpy pulling back from yesterday's 168.78 highs to 167.96. After a busy day of trading, the crude is current softer down -1.08% to $120.09bll, while gold closed below the psychological $900oz lvl, now trading at $887.83oz. The Asian stock markets are following Wall Street lower, with the Hang Seng down -2.23%, while European stock futures are looking at a mixed open.

In Australia , the RBA held rates at 7.25% as was widely expected. What was unexpected was the absolutely frank talk from the central bank. In today's communication, the RBA stated "with demand slowing, the board's view is that scope to move towards a less restrictive stance of monetary policy in the period ahead is increasing". We view this transparent comment as an admission that unless we witness and economic miracle in the next 4 weeks, the market should expect a 25bp cut in September. With the market now shifting expectations to a 25bp cut in September and possibility of a 50bp cut in December, we expect the Aud to continue to come under selling pressure.

In the Eurozone retail sales, PMI and industrial production will keep the markets busy. We are expecting all three indicators to show weakness and putting pressure on the ECB to act.

In the UK , July's CIPS/Markit report on services is likely to verify that activity in the sector is slowing significantly. The index dropped sharply from 49.8 to 47.1 in June, (below the 50 level that theoretically separates contraction from expansion). We expect the GbpUsd to continue its downward market to 1.9300.

The highlight of the trading day will be the FOMC rate announcement. We are expecting the Fed to hold at 2.00%. Since they were unwilling to move higher in June we doubt conditions warrant have changed for the better. With renewed troubles in the financial markets and weakness in economic data, from our perspective the window for higher rates has closed. In addition, we expect the accompanying statement will be relatively unchanged and will disappoint the market by not taking a more hawkish tone. We still see upside inflation and downside economic risk to be basically balanced. Currently we expect the Fed to hold until 2009.

Daily Forex Pivot Points

AUDUSD

R 3: 0.9419
R 2: 0.9347
R 1: 0.9301

CURRENT: 0.9213

S 1: 0.9164
S 2: 0.9032
S 3: 0.8979

EURJPY

R 3: 169.97
R 2: 169.73
R 1: 169.19

CURRENT: 167.14

S 1: 167.32
S 2: 166.98
S 3: 166.01

USDSGD

R 3: 1.3850
R 2: 1.3827
R 1: 1.3775

CURRENT: 1.3756

S 1: 1.3651
S 2: 1.3606
S 3: 1.3567

Throughout our partnership with the industrial leaders, we are capable of delivering incomparable quality of online currency trading service.
ForexGen services are all controlled by the international banking and financial regulatory standards.
ForexGen is continuously providing the Forex market's safest trading terms & conditions. Providing professional currency trading services that meet our client's expectations is our first priority.

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ForexGen customer satisfaction is our major objective. To reach our business goals, we strive to put our client's goals in focus. We highly value our clients and always aim to exceed their expectations and cross the limitations encountered by the sophistication of the Forex trading industry.

Forex Market Overview

Forex Market Overview 06/08/2008

The Usd was slightly weaker in Asian session, as the market digested the FOMC decision to hold rates at 2.00%. The EurUsd gained from 1.5450 to 1.5509, while the UsdJpy ranged between 108.20 to 108.47. The Jpy fueled carry trades performed well, with EurJpy piercing through 168.00 support and the TryJpy reached a 7 month high at 94.11. Wall Street rallied on the Fed decision, with the Dow up 2.93% and a majority of Asian regional indexes are following. The European stock markets are looking to open higher with FTSE futures trading up 2.78%. The commodity bubble continues to deflate with crude wti trading below the psychological $120.00bll and currently at $118.83bll.

The FOMC decision to hold rates at 2.00% was really not a surprise. However, the fact that Fed member ultra hawk Plosser didn’t join Fisher in voting for a hike was notable. The lack of additional votes subtly suggests that members view the current rate level as correct and downside risks to economic growth as still fragile. The accompanying statement was little changed, with acknowledgement that commodity prices are declining, changing the last statement wording in regard to energy prices from “continued increases” to just “elevated”. With commodity prices falling and inflation expectations softening, and while the risks to US growth still persist (it would be extraordinary for the Fed to raise when payrolls are collapsing), we don’t expect the Fed to act any time soon. For this week, the fate of the Usd lies in the outcome of Thursday ECB rate decision.

AUDUSD

R 3: 0.9419
R 2: 0.9347
R 1: 0.9301

CURRENT: 0.9190

S 1: 0.9134
S 2: 0.9091
S 3: 0.9032

EURJPY

R 3: 169.73
R 2: 169.19
R 1: 168.79

CURRENT: 168.05

S 1: 166.86
S 2: 166.01
S 3: 165.33

USDSGD

R 3: 1.3850
R 2: 1.3827
R 1: 1.3817

CURRENT: 1.3779

S 1: 1.3651
S 2: 1.3606
S 3: 1.3567

Throughout our partnership with the industrial leaders, we are capable of delivering incomparable quality of online currency trading service.
ForexGen services are all controlled by the international banking and financial regulatory standards.
ForexGen is continuously providing the Forex market's safest trading terms & conditions. Providing professional currency trading services that meet our client's expectations is our first priority.

ForexGen principals:

ForexGen customer satisfaction is our major objective. To reach our business goals, we strive to put our client's goals in focus. We highly value our clients and always aim to exceed their expectations and cross the limitations encountered by the sophistication of the Forex trading industry.

EUR/USD Narrow Ranges

Euro/Dollar would trade in narrow ranges before Fed’s decision today and ECB meeting on Thursday

News and Events:

The Dollar rose against the Yen on Monday as the Oil price's drop to a three-month low and some better US economic data generated optimism about the economy outlook. But caution ahead of Tuesday's Federal Reserve meeting to decide on US interest rates saw the Dollar ease against the Euro.

Data last week showed that the US economy expanded at an annual rate of 1.9% in Q2, up from 0.9% in Q1 of 2008. That raised outlook of higher US interest rates by the end of the year. But analysts generally expect the Fed to leave its benchmark overnight lending rate steady at 2% on Tuesday and deliver a neutral statement on future policy.

Traders will also await rate decisions from the Bank of England and European Central Bank on Thursday. ECB President Jean-Claude Trichet's statement may focus on rate-raising possibility.

Throughout our partnership with the industrial leaders, we are capable of delivering incomparable quality of online currency trading service.
ForexGen services are all controlled by the international banking and financial regulatory standards.
ForexGen is continuously providing the Forex market's safest trading terms & conditions. Providing professional currency trading services that meet our client's expectations is our first priority.

ForexGen principals:

ForexGen customer satisfaction is our major objective. To reach our business goals, we strive to put our client's goals in focus. We highly value our clients and always aim to exceed their expectations and cross the limitations encountered by the sophistication of the Forex trading industry.

Forex News | Dollar News

Dollar rallied last week on better economic data and lower stress in financial markets

News and Events:

The Dollar climbed to five-week peaks against the Euro and three-week highs against the Sterling on Friday as better-than-expected economic data reduced worries about a much sharper slowdown. The Yen gained broadly helped by stress in financial markets on news that General Motors had hefty losses in Q2. That dragged US stocks lower and triggered safe-haven bids for Treasuries.

Friday's data showed that US employers eliminated 51k jobs in July, lower than market expectations for a payrolls decline of 75k. A separate report said US factory activity was unchanged in July, compared with the previous month, but above market forecasts.

Investors widely expect the Fed's policy-making Federal Open Market Committee (FOMC) to keep its benchmark federal funds rate steady at 2% when it meets on Tuesday.

Throughout our partnership with the industrial leaders, we are capable of delivering incomparable quality of online currency trading service.
ForexGen services are all controlled by the international banking and financial regulatory standards.
ForexGen is continuously providing the Forex market's safest trading terms & conditions. Providing professional currency trading services that meet our client's expectations is our first priority.

ForexGen principals:

ForexGen customer satisfaction is our major objective. To reach our business goals, we strive to put our client's goals in focus. We highly value our clients and always aim to exceed their expectations and cross the limitations encountered by the sophistication of the Forex trading industry.

Forex Market ADP Report

FX market focus on tomorrow Non-farm payrolls after ADP report gave a positive picture

News and Events:

The US dollar continued its recovery of the past ten days on Wednesday, helped by very good private sector jobs report for July and ongoing efforts from central bank officials to ease stress in financial markets. But this gain has been limited by a $4 a barrel rebound in crude oil prices after data showed an unexpected decline in US gasoline inventories last week.

Forex is focusing on tomorrow non-farm payrolls. Despite the positive employment picture from ADP Employer Services report, few analysts believe market may reverse gains on Friday's non-farm payrolls report.

Steps by the Federal Reserve, the European Central Bank and their Swiss counterpart to extend liquidity offers investment banks through January 2009 and introduce a new term auction facility also contributed to overall positive sentiment on the Dollar.

Throughout our partnership with the industrial leaders, we are capable of delivering incomparable quality of online currency trading service.
ForexGen services are all controlled by the international banking and financial regulatory standards.
ForexGen is continuously providing the Forex market's safest trading terms & conditions. Providing professional currency trading services that meet our client's expectations is our first priority.

ForexGen principals:

ForexGen customer satisfaction is our major objective. To reach our business goals, we strive to put our client's goals in focus. We highly value our clients and always aim to exceed their expectations and cross the limitations encountered by the sophistication of the Forex trading industry.

USA Financial System Problems

Forex market believe the worst of the problems in the US financial system are not yet over

News and Events:

The Dollar fell near a record low against the Euro as investors believe the worst of the problems in the US financial system are not yet over. While the Dollar has recovered somewhat after better results than expected from big financial institutions such as Citigroup, JPMorgan Chase and Bank of America, investors are awaiting more earnings reports this week.

With the economy suffering as the credit crisis hits the housing market and banks, expectations for the Federal Reserve to raise interest rates before the end of the year to curb inflation pressures are fading quickly, hurting the dollar.

The market's focus remains on a rescue plan for troubled US mortgage finance giants Fannie Mae and Freddie Mac. On Monday, US Treasury Secretary Henry Paulson said in an interview with CNBC that confidence in US capital markets and the US economy was the most important thing to support a strong Dollar.

The Euro may gain against the Yen as Japanese Investors ship more funds into higher-yielding currencies for better returns, with traders watching whether the single currency tops Monday's record high and reaches the 169.92 level. 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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Forex Market Overview

Forex Market Overview 22 July 2008

Usd was slightly weaker in Asian session on light trading and higher oil prices. EurUsd traded up to 1.5930 from 1.5832 while UsdJpy slipped from 106.93 to 106.32. The GbpUsd continued to outperform despite mounting bearish sentiment climbing above the 2.000 handle to 2.0039. AudUsd consolidated around the 0.9750 level while Nok is beginning to regain its forward momentum, with UsdNok pushing lower to 5.0550. Crude prices paired back gains made in US session, with wti $130.50bbl which had pressured US equities lower on the day. Asian stock indexes are trading lower, with the exception of the Nikkei which is up 2.56%. European stock futures are looking to buck downward the trend and are all currently trading higher. VIX continues to decline, as risk appetite increased helping push yield slightly lower.

Japan’s All industry Index came in line with expectations at 0.4% m/m but lower than the prior 0.85 reading. Supermarket Sales jumped 0.9% vs. -1.1% prior reading.

With a light economic calendar this week, the market will be extra sensitive to comments from policy makers. Today’s comments from ECB members Bini-Smaghi and Liebscher sounded less hawkish than usual and downplayed the risk to economic growth. However, Bini admitted that the European recovery might take longer than forecast while the ECB’s July 3rd hike is beginning to take effect producing “visual benefits”. In regard to US officials, despite the potential of hawkish sounding rhetoric we don’t believe the Fed has the maneuverability to tighten without some signals of stability in housing sector, financial markets and perhaps most importantly, labor markets. Should the FX markets react to a hawkish comment, we would see this as an opportunity to sell Usd.

No major events or data scheduled for release in the UK or Europe .

12.30gmt - Fed's Plosser speaks on economic outlook

Daily Forex Pivot Points
AUDUSD
R 3: 0.9895
R 2: 0.9849
R 1: 0.9818
CURRENT: 0.9760
S 1: 0.9675
S 2: 0.9664
S 3: 0.9597

EURJPY
R 3: 171.07
R 2: 170.00
R 1: 169.92
CURRENT: 169.61
S 1: 168.25
S 2: 166.01
S 3: 165.33

USDSGD
R 3: 1.3717
R 2: 1.3661
R 1: 1.3565
CURRENT: 1.3519
S 1: 1.3452
S 2: 1.3399
S 3: 1.3300

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.

Oil Slide And Wells Fargo Results

FX market Dollar fears receded after Oil slide and Wells Fargo results

News and Events:

Investor attention remains focused on the turmoil around Fannie and Freddie and fears about more credit losses at regional banks drove the Dollar sharply lower a day ago, with the Euro hitting a record high at 1.6037. But concerns about the US financial sector receded a bit on Wednesday after Wells Fargo, the fifth-largest US bank, raised its dividend despite a 23% decline in profit caused by bad loans.

Federal Reserve Chairman Ben Bernanke reiterated to a House of Representatives panel on Wednesday that the risks to US growth have increased along with upside inflation risks, mirroring remarks he made a day earlier before the Senate.

Analysts said FX investors were increasingly certain of at least one Fed rate hike before the year is out. US short-term interest rate futures are pricing in a 76% chance that the Fed raises interest rates from their current 2% by December.

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 17 July 2008

Usd has been able to hold gain in the Asian session as risk appetite slowly crept back into the markets. EurUsd was range bound between 1.5801 – 1.5868 while UsdJpy bounced around the 104.70 - 105.30 levels. Jpy fueled carry trades saw renewed buying with AudJpy and EurJpy trending upward to 102.76 and 166.73. EM currencies also got a boost with UsdMxn and EurPln sliding to 10.2200 and 3.2083. The Usd was help as oil prices dropped sharply as EIA data showed an unexpected rise in inventories.

The Fed minutes released yesterday were perhaps slightly more hawkish then the market had anticipated. While members were clearly apprehensive with placing inflation worries over growth concerns, the minutes did state "the next change in the stance of policy could well be an increase in the funds rate". Note, that given the rapid evolution of events, these minutes are old news and therefore the weight we attached should be limited. Especially considering at the time of the FOMC meeting there was a general feeling that the US was stabilizing (which we know now is not the case). With yesterdays sharp increase in Junes headline inflation (5.0% vs. 4.5% exp) the Fed will have to stay diligent but given the downside risk to growth it would be irresponsible for the Fed to tighten. We expected the pause in Usd volatility will be short lived as uncertainty around domestic economic conditions, inflation and unsettled GSEs position are still very much outstanding.

With no major data to be released in the UK, Eurozone todays movement will be purely based on sentiment and positioning. A good way to guage what the fx market is thinking. In addition, keep an eye on other assets classes such as the equity market and energy prices for directional confirmation.

Daily Forex Pivot Points
AUDUSD
R 3: 0.9895
R 2: 0.9850
R 1: 0.9817
CURRENT: 0.9767
S 1: 0.9709
S 2: 0.9664
S 3: 0.9597

EURJPY
R 3: 169.67
R 2: 168.95
R 1: 166.85
CURRENT: 167.16
S 1: 165.23
S 2: 164.75
S 3: 163.60

USDSGD
R 3: 1.3717
R 2: 1.3660
R 1: 1.3565
CURRENT: 1.3517
S 1: 1.3451
S 2: 1.3399
S 3: 1.3300

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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Forex Market Overview

Forex Market Overview 16 July 2008

Usd was range bound in Asian session as markets pause from dollar selling to evaluate current pricing. However we are anticipating another busy and volatile day. EurUsd bounced between the 1.5866 - 1.5932 while UsdJpy continued to slide from 105.12 to 104.27. With risk aversion reaching elevated levels, carry trades have suffered with EurJpy dropping to 165.80 and AudJpy falling to 101.77. With concerns over the credit market mounting, it is no surprise that VIX has climbed to 28.54 and fx implied vols are following. Currently, European equities are mixed but US index futures are pointing to the upside, due primarily to the sell off in crude, which is trading at wti 138.95bll.

The EurUsd reached an all time high yesterday, ahead of Bernanke's testimony, but was able to recover slightly as oil prices took a dive (on slowing global growth concerns). Interesting to note, Bernanke gave no indication that the Fed was going to follow the ECB and raise rates anytime soon. It seems after a brief period of stability the US might still slip into a recession in the second half of the year. With payrolls declining, housing prices tanking, equity markets falling, latest GSE crisis and energy prices elevated the down side risk to the US economy having become apparent once again. Given these risks should Trichet and the ECB come out with a more explicit hawkish comments on inflation we should see the EurUsd entrench itself above the 1.6000.

In Australia, Westpac leading index continued to drop, hitting 0.0% vs. the 0.4% prior reading. RBA Governor Stevens speech today was undecidedly dovish. Clarifying the fact that the RBA feels that the current interest rate level is sufficient to combat domestic inflation. Stating "It is understandable that pressure on underlying inflation, particularly from domestic sources, has also been somewhat greater. Monetary policy had to respond to that." The AudUsd fell to 0.9750 on the news but was able to rally back on Usd selling.

Given our statement above regarding Eurzone inflation, today's reading of second estimate of CPI inflation will be critical. We are expecting headline to rise to a new record high of 4.0% as rising energy price are having a clear effect on prices. Core should stay below the 2.0% price stability ceiling, however, should pressure on core increase we would expect the ECB to maintain their hawkish tone and fx market to push Eur higher.

US data will be covered in US report

14.00gmt - Fed Chairman Bernanke delivers semi-annual testimony on monetary policy and the economy before the House
18.00gmt - Fed's Hoenig speaks on "Monetary Policy and the Economic Outlook"

Daily Forex Pivot Points
AUDUSD
R 3: 0.9923
R 2: 0.9895
R 1: 0.9849
CURRENT: 0.9776
S 1: 0.9708
S 2: 0.9664
S 3: 0.9597

EURJPY
R 3: 169.67
R 2: 168.94
R 1: 166.86
CURRENT: 165.76
S 1: 165.70
S 2: 164.76
S 3: 163.60

USDSGD
R 3: 1.3717
R 2: 1.3661
R 1: 1.3565
CURRENT: 1.3465
S 1: 1.3452
S 2: 1.3399
S 3: 1.3300

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.

USA Financial And Housing Sectors

Dollar stays weak near record lows on concerns about health of financial and housing sectors.

News and Events:

The Dollar rose from a near record low against the Euro on Monday after the United States announced an emergency plan to restore confidence in mortgage finance companies Fannie Mae and Freddie Mac. The plan helped calm market concerns about the health of the US financial and housing sectors, since the two companies fund half of all US mortgages.

Billionaire investor George Soros told Reuters on Monday that government debt accumulation coupled with a U.S. recession leaves the Dollar vulnerable. Analysts said the Dollar's recovery would depend on whether the U.S. initiatives were enough to calm investors' concerns about the financial health of Fannie Mae and Freddie Mac.

Investors will also be watching to see how the latest developments affect Fed Chairman Ben Bernanke's views on monetary policy and the economic outlook when he testifies before the Senate Banking Committee on Tuesday. Money markets have scaled back their expectations for monetary policy tightening from the Fed and now don't expect it to start hiking until the final months of the year.

The Forex Market Overview

The Forex Market Overview 14 July 2008

The Usd continued to come under significant selling pressure in Asian session as the bearish dollar sentiment carried over the weekend. EurUsd gapped at the open, quickly trading to 1.5971, however Gbp/Usd which rallied at the open was unable to sustain the upwards momentum and traded lower from 1.9914 to 1.9823. Commodity currencies traded basically sideways with Aud/Usd jumping between 0.9670 to 0.9711 and Usd/Cad moving slightly upward from 1.0070 to 1.0118. Jpy fueled carry trades performed slightly better as the Jpy had a weak tone. Aud/Jpy traded up to 103.21 and Try/Jpy moved to 87.624.

In a massive move to restore the markets confidence in Fannie and Freddie Trsy Sec. Paulson said that the US Federal government would buy or finance almost half of the $12 trillion of U.S mortgage market. Specifically, Pauslon stated, he would ask the Fed to increase credit lines extended to GSEs, seek Congressional approval to buy equity in the GSE's and expand the Feds role in defining the regulatory structure for the GSEs (specifically their future capital requirements). While the markets are still digesting the statement, a change of policy towards clear “bailout” by the government should help the equity market, risk appetite andUsd intraday

The BoJ began is two day monetary policy meeting today and are expect to hold rates at 0.50%.

New Zealand reported a dismal retail sales figure (m/m) at -1.2% vs. -0.1% exp. but grew Ex Autos 0.7% vs. 0.5% exp (likely lifted by food price inflation). Clearly higher energy cost, deteriorating economic expectations and weak labor market has wrecked consumer confidence and this downward trend doesn’t seem to be ending near term. Today’s poor growth figure will now place the emphasis on tomorrow CPI figure as a key factor to when the RBNZ begins cutting rates. Should the figure come in softer than the q/q 1.4% expected reading, we could see a decline unwinding of long NZD positions.

In a light calendar day markets will be watching UK Junes producer prices. It will be interesting to see if the decline in business activity has halted producer’s ability to pass on their increased costs. We don’t think so however, especially given the fact that energy has continued to move up and sustained these elevated levels for an extended period of time. Most likely, producers price increases are being pass to the consumer which the MPC won’t be happy about.

Daily Forex Pivot Points
AUDUSD
R 3: 0.9923
R 2: 0.9792
R 1: 0.9718
CURRENT: 0.9678
S 1: 0.9597
S 2: 0.9546
S 3: 0.9477

EURJPY
R 3: 171.88
R 2: 170.00
R 1: 169.63
CURRENT: 169.28
S 2: 167.83
S 2: 167.13
S 3: 166.09

USDSGD
R 3: 1.3850
R 2: 1.3827
R 1: 1.3729
CURRENT: 1.3554
S 1: 1.3553
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.

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).

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.