Wednesday September 30, 2009 - 03:40:53 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 30-Sep-2009 - 0339 GMT
The Dow (9742.20) and the Nasdaq (2124.04) fell 0.48% and 0.31% respectively followed by lack of consumer confidence which came in at 53.1 lower than the expectation of 57. This has also cast doubts over any decent increase in Personal Income and Consumption scheduled for tomorrow. Later during the week, there is NFP on Friday which will set the trend for the market going forward.
Asian indices are trading flat except the Shanghai (2780) which is trading higher by 1% and the Taiwan (7515) by 1.15%. Nikkei (10106.78) has important Support at 9800. The Sensex (16852.91) had closed 0.96% higher yesterday and it continues to trade in a medium term range, in an upward moving channel visible on the weekly candles. There's Resistance at 17050 for the week and Support at 16400. To see the chart of Sensex, click on: http://www.kshitij.com/graphgallery/sensexcandle.shtml#candle
Crude (66.98) closed below 67 yesterday as the US Consumer confidence slipped to 53.1 against the expected increase of 57.0. It is trading in a range of 65.00-67.50 for some time. A breakout on either side of this range would determine the further direction on move. The US Crude inventory data is due today.
Gold (992.50) is continuing to trade below 1000. As mentioned earlier significant Support is seen in the region 980-975 and if it holds we might see a rise above 1000 in the coming days. A break below this Support region is not looking likely now, as much strength is not seen on the downmove. The ADP employment data and the Final second quarter GDP are due today.
Yesterday's corrective fall in the Asian-European hours for most non-Dollar currencies has given way to a fresh rise in the US hours yesterday and in Asia today. The Euro (1.4625) has risen from a low of 1.4526 while the Aussie (0.8792) has surged from a low near 0.8676. Some Resistance is seen at 0.8840 today. Dollar-Yen (89.75) is dipping again after rallying to 90.40 in early Asian trade today. It had seen a low near 88.24 on Monday. The overall trend remains bearish.
The Pound (1.6023) too has rallied a bit over the last two days, coming up from Monday's low near 1.5769. Unlike the other currencies, however, the Pound itself is in a downtrend against the Dollar. Meaning, its probably the weakest currency around. Dollar-Swiss (1.0340) found Resistance for its short-covering rally at 1.0405 yesterday. Fresh dips/ falls might be forthcoming.
The Korean Won has seen a tremendous surge today and trades near 1178, up 6% from 1253 at the beginning of September. However, there is an important Support coming up for the Dollar in the 1179-69 region. The Sing Dollar (1.4142) has also recovered from its corrective dip of the last few days. Like the Won, though, it faces some Resistance at 1.4100-4080.
3M USD LIBOR was set 1 bp higher at 0.29%. The yields on US Treasuries have risen modestly. The 10Y benchmark yields have risen 2 bps to quote at 3.30%. There are whispers from various corners that the FED might now want to increase rates to fight inflation as the economy transitions from recession to recovery.
12:30 GMT US GDP Q2 '09 (Fnl)
...Expected -1.2%...Previous -1.0%
12:30 GMT CA GDP
...Expected 0.4%...Previous 0.1%
UK GDP Q2 '09 (Fnl)
...Actual -0.6%...Previous -0.7%
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