Monday August 31, 2009 - 03:38:40 GMT
Share This Story
FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 31-Aug-2009 - 0332 GMT
Dow (9544.20) and Nasdaq (2028.77) though closed mixed on Friday, both were up by 0.4% for the week. The better than expected economic data released is keeping up the hopes that the recession is ending.
In Asia, Nikkei (10497.19) is trading down by 0.35%. Shanghai (2716.097) has broken below the significant Support at 2800 and is now trading lower by 5.05%. Sensex (15922.34) and Nifty (4732.35) has closed stronger for the week near their respective Resistances at 16100 and 4750. As Asian indices are trading weak we might expect these Resistances to hold today.
Crude (72.63) is continuing to trade above 72 following the better than expected US economic data released last week which is keeping the hopes of an end to the recession. If it continues to trade higher we might see it testing the Resistance at 75. On the downside Support is seen at 70.
Gold (957.20) has broken above 950. A strong break above 960, the upper end of the range (930-960) might take it up towards the next Resistance seen at 970. While 960 holds, a pull back towards 950-945 can be seen.
Sharp fall in Dollar-Yen (92.75) to a low near 92.50 today, breaking below the previous Support at 92.85. Has brought the Euro (1.4300) down from Friday's high near 1.4389. The Aussie (0.8405) has also come off from Friday's high near 0.8472 but is holding up relatively well. Then Yen has gained on the election victory of the DPJ (Democratic Party of Japan) over the LDP (Liberal Democratic Party).
The Pound (1.6245) has lost ground again today and could dip towards 0.6150. Dollar-Swiss (1.06) has risen a bit from Friday's low near 1.0540, but remains weak overall. Although the surge in the Yen raises casts a doubt on "risky" trades/ currencies, the relative strength of the Aussie and Swissy suggest people are not overly keen on jumping onto the Dollar. Perhaps the relatively muted response to Yen's strength is because the election results were a foregone conclusion for the last several weeks.
Dollar-Won (1245) is steady near Friday's levels and even has chances of falling during the week. In Dollar-Rupee, the NDFs are not perky at all, quoting near 48.65/70 and 48.76/81 for 1-week and 1-month.
With US Yields starting to come off and USD Libors being lower than JPY Libors, the US Dollar seems set to become the official "funding currency"of the world. This is a huge change from a time when the US used to receive funding and did not provide funding.
US Yields have been easing for some weeks now and could dip another 25 bp from here. The 5-Yr and 10-Yr yields quote near 2.43% and 2.43% respectively. Take a look at
3-mth US Libor is 0.3475%, compared with 0.7956% on Euro and 0.39% on Yen. Only the Swiss Franc is lower at 0.31%.
11:00 GMT IN GDP Q1'09-'10
12:30 GMT CA GDP
UK GDP Q2 '09 (Adv)
...Actual -0.7%...Previous -0.8%
US June Personal Income
...Actual 0.0%...Previous -1.1%
US June PCE Price Index M/M
...Actual 0.2%...Previous 0.6%
Forex Trading News
Daily Forex Market News
Forex news reports can be found on the forex research
headlines page below. Here you will find real-time forex market news reports
provided by respected contributors of currency trading information. Daily forex
market news, weekly forex research and monthly forex news features can be found
Real-time forex market news reports and features providing
other currency trading information can be accessed by clicking on any of the
headlines below. At the top of the forex blog page you will find the latest
forex trading information. Scroll down the page if you are looking for less
recent currency trading information. Scroll to the bottom of fx blog headlines
and click on the link for past reports on forex. Currency world news reports
from previous years can be found on the left sidebar under "FX Archives."