Friday November 12, 2004 - 13:16:12 GMT
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Forex: Review of main dollar pairs.
Key influencing data due today is US October Retail sales at 13.30gmt and expected to come in at +0.1% with the ex-auto number expected at +0.6%. This is followed at 14.45 gmt with US Nov University of Michigan confidence numbers which are expected to improve to 93.00 from 91.70. The tone of the market will be dictated by the results of these numbers. Looking at the currencies, Sterling remains the laggard on a trade weighted basis due to the perception UK rates may have peaked. For the moment however, the pound against the Dollar remains within its uptrend and above its prior high and channel support at 1.8370/90. Res is located at 1.8495 and 1.8520. We need to overcome these levels to have another stab above 1.8600. The Euro also remains in its uptrend with key near term supports being the1.2845/50 low of Wednesday`s reversal day. Topside resistance lies at 1.2930/50 which shields another attempt on 1.3000. Higher US yields, an improved US payroll number and stronger US equity markets are providing a degree of support to the Dollar with a spate of soft EU data and usual official concern over the high Euro weighing on the topside. Todays weaker Q3 Euro GDP of +0.3% q/q and +1.9% y/y had little effect as these had already been discounted. Dollar Yen is capped at the 107.00/30 zone with on-going concern that an eventual China re-weighting will eventually push the Yen higher. Add to this, funds who had initiated large long Euro/Yen positions during the week on an upside breakout view, were forced to liquidate positions. The stronger Yen defied the evidence that the Japanese economy is undergoing a cyclical downturn. Q3 GDP came in much weaker than expected at just +0.1%.Dollar support levels are located at 105.55/60 and 105.25. Dollar Swiss is currently treading water with the rate remaining with the parameters of Wednesday`s upside reversal day which lie at 1.1693 and 1.1865. The latter level needs to be overcome to trigger some short term profitaking towards 1.1980/00.
Provided by CMC Group New York– Steve Hatton, Senior FX Dealer and Enis Mehmet, Head of Operations New York. For up to the moment FX market commentary, a 24 hotline is in place on 866-531-2604.
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CMC Group transacts over $1billion per day across its range of real-time online Foreign Exchange. It is one of the world’s leading online Foreign Exchange, Index and Equity Derivatives providers. Founded in 1989, CMC Group has operations in London, New York and Sydney. It is a member of the US NFA and ASIC in Australia. For further details on CMC Group visit www.cmcgroupplc.com.
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