Monday January 10, 2005 - 10:16:45 GMT
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FOREX: US OPEN MARKET POINTS 01-10-05
The Dollar’s Almost Done
The 1.3000 figure is just too tempting for dealers to pass up and we wouldn’t be surprised if sometime this week they made an attempt to run stops clustered at that level. However, having gained over 500 points in the last 5 days the dollar rally is getting tired and any euro-positive news or dollar-negative surprises should act as a perfect excuse to start a retrace move in the EUR/USD.
Tonight, the euro is enjoying support from better than expected German Current Account data which printed at €8.5 Billion versus expectations of only €6.3 Billion. The large surplus, due to a surprising jump in exports, stands in stark contrast to the massive US Current Account deficit and serves to remind the FX market that the reasons for euro’s rise against the dollar remain in place.
With Japan closed for “Adults Day” holiday, the only other action in the market comes from London where the pound has found a bottom for the time being buoyed by merger speculation between Wells Fargo and Barclay’s. The monthly PPI data reported a surprisingly tame –0.4% versus expectations of 0.1%, but some of the bearish effect was offset by the ODPM House Prices survey which registered a 13.8% increase versus projections of 12.1% gain. Outside of London prices rose more than 15% and while that data alone is not likely to force the Bank of England to raise rates, it will most probably also prevent the MPC from considering lowering them in the near future.
FX Spot Overnight
- EUR regains 3100 on good CA data
- JPY below 104.50 on very quiet trade with Japanese markets closed
- GBP rallies to 8750 on M and A speculation
- CHF drops through 1800 as dollar retrace begins
- 12:00GMT – (08:30 AM EST) CAD Building Permits m/m (NOV) Expected –0.5% Previous 2.0 %
- 15:00GMT – (10:00 AM EST) USD Wholesale Inventories (NOV) Expected 0.7% Previous 1.1%
- 15:00GMT – (10:00 AM EST) USD Wholesale Sales (NOV) Expected 0.8% Previous 1.6%
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