Wednesday September 23, 2009 - 03:41:13 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 23-Sep-2009 - 0337 GMT
The Dow (9829.87) and the Nasdaq (2146.30) rose 0.52% and 0.39% respectively yesterday fuelled by rebound in commodities. The Dow has Resistance at 9900 for today. To see the Trendline causing Resistance, click here: http://www.kshitij.com/graphgallery/djiacandle.shtml#candle
Asian indices are largely trading higher. The Shanghai (2897.37) is trading flat while the Nikkei is closed today and will reopen tomorrow after a 5-day long gap. The Sensex (16886.43) has closed below the Resistance at 17000 mentioned yesterday. It might consolidate below 17000 for the rest of the week. However a break would defy the channel and make it surge higher at an even accelerated pace.
Crude (71.21) has risen and is now trading above 71 following the weaker dollar and the Saudi Arabia's oil minister's comment stating that the demand for Crude is showing evidence of economic recovery. If it continues to trade higher we might see it moving up towards 73.00-50 in the coming days. The US Crude inventory data and the Federal Reserve's interest rate decision are due today.
Gold (1015.00) has risen yesterday taking support from the weak dollar thereby bringing to an end the three consecutive days of lower close. Significant Resistance is seen at 1030. The Federal Reserve's interest rate decision is due today. Though the rates are likely to remain near zero, the Fed's statement will be watched closely for the signs of economic recovery and future moves.
On the eve of the FOMC announcement today, no one wants to hold the Dollar it seems. The Dollar Index dipped to 75.87 today morning and currently trades near 76.00. The Euro (1.4815) has seen a high near 1.4840 today and has good Support at 1.47. Dollar-Yen (90.73) has fallen further and has seen a low near 90.50. Dollar-Swiss (1.0220) has made fresh lows for the year near 1.0185 today. The Aussie (0.8765) has seen a high near 0.8791. Even the Pound has risen to 1.64, up from Monday's low near 1.6135.
In the absence of credible government policies to support the Dollar, the only "Support" that can come forth will be from some traders/ hedge funds/ banks trying to protect some Option positions. Intervention is not possible.
In Asia, the Won has strengthened beyond 1200 to 1195. Dollar-Rupee NDFs are signalling further strength for the Rupee, with the second month quoting near 47.85/89 as compared to yesterday's onshore close near 47.96.
3M USD LIBOR was left unchanged at 0.29%. The yields on US Treasuries fell between 3-4 bps for maturities over 3Y. The yields on 10Y benchmark bonds were quoting at 3.45%.
The FOMC is scheduled to announce the Federal Funds rate today which is expected to be unchanged at 0-0.25%.
08:30 GMT UK BOE Minutes
...Expected 0-0-9 hold...Previous 0-0-9 hold
18:15 GMT US FOMC Interest Rate
...Expected <0.25%...Previous <0.25
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