Tuesday October 26, 2004 - 10:13:18 GMT
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Forex: US OPEN MARKET POINTS 10/26/2004
An unsurprisingly quiet session in Asia and Europe tonight as EUR/USD and USD/JPY consolidate their massive gains and dealers try to square up their positions. The soft eco-data from both regions offers dealers a small opportunity to cover some of the shorts they had to print during yesterday’s furious rally in which the euro gained 170 points, the yen 120 points and sterling 190 points. In Japan, the Small Business Confidence survey reported at 49.5 slightly lower than the 49.8 expected. The non-manufacturing component slipped to 48.5 – a new low for the year indicating that the economic situation on the ground may be worse than the market thinks. In Europe, the Current Account for August turns negative for the first time this year, registering at –€0.4Bn as exports stagnate while imports rise 4.2% mainly due to escalating oil prices.
While the eco data temporarily stalls the “anti-dollar” rally, jitters over the geo-political situation in the US persist. According to Bloomberg, “An AP-Ipsos Public Affairs poll found that 60 percent of 1,000 voters, both Republicans and Democrats, said they were concerned the outcome of the election won't be clear on Nov. 3, and 48 percent said it's likely the results will be challenged in court.” Aside from the Gallup poll - which was the least accurate poll in the 2000 election - all other polls are showing a race that is narrowing to within basis points. The Rasmussen poll which is the only one to carry the results to a decimal point showed Bush 47.6%-Kerry 47.2% on October 24 and Kerry 48.4%-Bush 46.4% on October 25.
With the Presidential race so close less that a week from election day, the possibility of a legal conflict becomes more probable by the hour. Therefore, any negative eco data from Japan, Euro-land or UK this week will only serve a temporary reprieve for USD bulls, as greenback will remain hostage to political worries over the election which will hopefully be resolved conclusively on November 3rd.
FX Spot Overnight
- EUR loses the 2800 handle as Current Account prints negative
- JPY tries to challenge 107 but sold back to 106.80 in back and forth action
- GBP falls to 8370 as CBI data prints as weak as expected
- CHF stays below 1.2000 on strong demand
11:00GMT – (7:00 AM EST) CAD Consumer Price Index m/m (SEP) Expected 0.2%, Previous –0.2%
11:00GMT – (7:00 AM EST) CAD Consumer Price Index y/y (SEP) Expected 1.8%, Previous 1.9%
11:00GMT – (7:00 AM EST) CAD CPI Excluding Core 8 m/m (SEP) Expected 0.2%, Previous –0.2%
11:00GMT – (7:00 AM EST) CAD CPI Excluding Core 8 m/m (SEP) Expected 1.4%, Previous 1.5%
14:00GMT – (10:00 AM EST) USD Consumer Confidence (OCT) Expected 94.0, Previous 96.8
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