USD Is Stronger Today

Usd was marginally stronger in Asian session however markets continued to discounted the G7 communiqué and stronger US Retail Sales. Asian equity markets continue to trade in the green and European equity futures look to open above fair value. A good sign for growing risk appetite and carry trades. ECB's Mersch commented yesterday that the ECB doesn't have much room to cut rates this year. Mercsch's statement was unexpectedly hawkish in comparison to Trichet increased emphasis on growth risks last week. This punctuates the fact that the ECB is still very much committed to price stability ahead of growth concerns. We expect the Eur to stay supported in the near term and will be looking for a test of 1.5910. In Europe markets will be focused on the German Zew survey which should provide additional evidence that financial market sentiment is improving. The DAX has been performing relatively well since March as economic news encouraged the Eur. Howeve, while its level is still elevated it has not appreciated further. In the UK today's highlight will be the release of the CPI and RPI figures. We expected both figures to creep up further which will complicate the BoEs dilemma further. Market will very much be poised to trade depending which way inflation is heading and how subsequent effect on interest rate will be affected. In the US Empire State index and NAHB will be the day's final focus. Both looking to continue downwards at the fundamentals in the US have not marketable improved.

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Quiet Open To Week

ForexGen lacked motivation in a quiet Asian session. EurUsd bounced around 1.5761 -1.5817 levels while UsdJpy trended sharply upward from 98.82 to 100.18. Friday ended on a mixed note with stock markets weaker due to some weak US data (Michigan index) and energy and commodities price declined slightly. Over the weekend WSJ reported that Treasury Secretary Paulson would announce today "sweeping structural changes in the way the government monitors financial markets" giving the Fed broader authority to secure "market stability." While we are skeptical of giving the Fed such broad powers with very little oversight we are bracing for a resurgence of risk appetite and will be focused on short Jpy trades this week. On this theme the BoJ Tankan report Tuesday will be of interest. Listening to comments last week it seems that the leadership vacuum has created a lack of unity on how to deal with the combination of growing price risk and slowing economy. While currently the BoJ has not officially adapted an easing bias the market is still pricing in 14bp cut within the next 12 months. JPY remains in favor due to risk aversion and declining carry appetite but these themes could come under pressure this week. Another currency on our watch list this week is Gbp. BoE's King is also scheduled to speak. During the MPC testimony on the Feb inflation report last week the members were more pessimistic regarding the UK economy then previously. In addition, King voiced clear inflation risks, with CPI around 3%, however due to the extent of the economic downturn, he commented MPC is more inclined to cutting rates. We still believe that market hasn't fully pricing in a full easing cycle by the BoE with rates slipping to 4.00% by end 2008 so the Gbp has additional room to depreciate.

ForexGen provides its institutional clients with incomparable professional and individualized trading services. As a professional online trading service, ForexGen provides several facilities for all kinds of traders. Our corporate and managed trading service performance are based on respect and appreciation which is only achieved by offering intelligent high end trading tools for secure investment. ForexGen is the easiest and fastest gateway for the corporate traders to perform successful trading, which provides a unique institutional investor professional facilities and highly qualified individualized services for the international customer. ForexGen provides advanced online trading software with full corporate trading services. A rich choice of managed accounts are also available, please check our Managed Account Section

ForexGen delivers what traders want: instant order execution, lowest spreads, flexible starting capital, fast deposits and withdrawal, a local support in more than 18 countries, and most of all, solid funds security.

Winning in trading depends on using the right strategy and controlling all the moves. Trading strategies are discussed in details at ForexGen Academy.

ForexGen Announced That USD Euphoria Declines

USD was weaker in Asian sessions as traders returned from Easter to question the greenback's euphoria of last week. Eurusd rose to 1.5573 and UsdJpy fell to 100.08. The Usd inability to rally, especially given the positive existing home sales which rebounded yesterday by 2.9% to 5,030,000 in Feb, is a harbinger of near term Usd weakness. Signs of global slowdown should offer some support to the USD, particularly as market have priced in a probability that other central banks might ease their rates in teh short term. This global easing cycle had been predicted at the start of 2008. However we still see further economic weakness and the possibility of real interest rate going negative in the US which would be a heavy burden for the dollar to bear. In the short term the Usd will be vulnerable to any poor data or news. While many of the strategists are calling for Usd strength we expected the market to challenge one more time the 1.58-1.60 lvls before the trend shifts to a prolonged move downwards for reasons mentioned above. On Friday Acting BoJ Governor Shirakawa said that the handling of the recent global financial market turmoil was his top priority. He also mentioned that he had no predetermined monetary policy. The markets are currently pricing in a 15bp cut over the next 12 months. There could be more pricing in of rate cuts should officials agree on a coordinated response at the G7 gathering on April 12-13.
The European markets should be subdued due to a lack of data as markets participants wait for US and CA releases. In Canada we are expecting a rebound in Retail Sales which should keep the Cad in positive territory. Nonetheless the over all feeingl is that the softer commodity prices and exposure to the US economy will keep the currency on the defensive. In the US consumer confidence will garner the markets attention. Speculation and positioning suggests that the market expects a fair low figure.

ForexGen provides its institutional clients with incomparable professional and individualized trading services. As a professional online trading service, ForexGen provides several facilities for all kinds of traders. Our corporate and managed trading service performance are based on respect and appreciation which is only achieved by offering intelligent high end trading tools for secure investment. ForexGen is the easiest and fastest gateway for the corporate traders to perform successful trading, which provides a unique institutional investor professional facilities and highly qualified individualized services for the international customer. ForexGen provides advanced online trading software with full corporate trading services. A rich choice of managed accounts are also available, please check our Managed Account Section

ForexGen delivers what traders want: instant order execution, lowest spreads, flexible starting capital, fast deposits and withdrawal, a local support in more than 18 countries, and most of all, solid funds security.

Winning in trading depends on using the right strategy and controlling all the moves. Trading strategies are discussed in details at ForexGen Academy.