Monday October 26, 2009 - 03:36:07 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 26-Oct-2009 - 0331 GMT
Last week most of the equities were mixed. The Dow (9972.18), the Nasdaq (2154.47) and the Nikkei ended flat last week. Whereas Shanghai and Sensex ended +1% and -3% respectively over previous week. The emerging economies seem to be decoupling away from the Dows and the Nikkeis.
Today, the Asian indices are trading mixed. The Nikkei (10382.89) is trading higher by 0.97%, while the Shanghai (3085.20) is trading lower by 0.73%. The Sensex (16810.81) had seen some correction last week and may see some more correction this week.
Crude (80.00) has fallen from Friday's high of 81.78. Immediate Support is seen at 79.50, a break below which might pull it down towards 77.50. The overall outlook continues to remain bullish for a target of 88-90.
Gold (1056.90) is continuing to consolidate between 1045-1070. The overall picture continues to remain bullish With strong Support in the region 1030-20 and we might see a break of this range (1045-70) on the upside targeting 1150-1200 over the next few weeks.
The Dollar has taken a beating against the Yen in early Asian trade today. Dollar-Yen (91.65) has fallen from a high of 92.20 seen earlier in the morning. Euro (1.5040) has moved up a bit, but faces important Resistance in the 1.5060-99 region. The Euro-Yen Cross (137.85) has come off a bit, pulled down by the fall in Dollar-Yen. The Aussie (0.9254) has lost some ground compared to last week's high near 0.9330.
The Pound (1.6287) languishes after the sharp dive following the worse than expected UK GDP numbers last week. Further losses are possible. Dollar-Swiss (1.0064) trades a little lower, tracking the current strength of the Euro.
The Asians are trading relatively strong, tracking the Yen's strength today. The Sing Dollar and Korean Won trade near 1.3925 and 1177.50 respectively. Dollar-Rupee had closed near 46.5050 on Friday and is expected to trade indecisively between 46.20-80 this week.
3M USD LIBOR has been unchanged at 0.28% and has been at this level over the last 1 month as it allows for some narrowing of differential between different time frames. To see the chart and the 6M USD LIBOR approaching the 3M USD LIBOR, click on: http://www.kshitij.com/graphgallery/usdlib.shtml#usd
While the LIBOR differentials between different time periods seem to be narrowing for the USD and the GBP, the same cannot be said of the EUR and the YEN. To see the LIBOR charts of each of these currencies, click below:
...Actual 0.1%...Previous -0.8%
Sep GER IFO Business Climate
...Actual 91.9...Previous 91.3
UK GDP Q3 '09 (Adv)
...Actual -0.4%...Previous -0.6%
July US Existing Home Sales
...Actual 5.57 Mln...Previous 5.09Mln
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