Forex Market Overview

Forex Market Overview 15 August 2008

The Usd was slightly stronger in the Asian session, as commodities, specifically precious metals, weakened. The Gold fell below $800oz for the first time this year and silver followed right behind down a whopping -11.00%. The EurUsd slipped from 1.4803 to 1.4754, while UsdJpy trended higher from 109.57 to 110.34. The GbpUsd continued to come under selling pressure on the back of BoE inflation report, dropping steadily from 1.8710 to 1.8628. The commodity bloc gave up much of their gains over the past few days, with the AudUsd continuing to slide from 0.8732 to 0.8635. Wall Street closed higher yesterday and Asia regional indexes are all positive, with the exception of the Hang Seng down 0.84%. European stock futures are pointing to a higher opening.

In New Zealand, retail sales declined 1.5% q/q slightly better than the -1.8% expected fall. However, the drop was the largest on record and the second consecutive quarter of declines. The Nzd advanced on the news, but then reversed as the market released this figure just pointing to a continued economic weakness. We are still expecting the RBNZ to cut 25bp at the next meeting (in a string of cuts), which should continue to weigh on the Nzd sentiment

With no major events or data scheduled for European session, the market will have to wait for the US session. With Industrial Production, Capacity Utilization and Consumer confidence on the docket, the market will have their hands full. The Michigan confidence might have benefited from a modest recovery in equities and decline in gasoline prices. However, the housing markets will still weigh on the consumer.

Daily Forex Pivot Point
AUDUSD
R 3: 0.8952
R 2: 0.8846
R 1: 0.8797
CURRENT: 0.8629
S 1: 0.8625
S 2: 0.8593
S 3: 0.8513

EURJPY
R 3: 165.59
R 2: 164.41
R 1: 163.88
CURRENT: 162.56
S 1: 162.01
S 2: 161.39
S 3: 160.14

USDSGD
R 3: 1.4265
R 2: 1.4219
R 1: 1.4159
CURRENT: 1.4164
S 1: 1.4025
S 2: 1.3891
S 3: 1.3819

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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

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