Tuesday October 27, 2009 - 03:51:10 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 27-Oct-2009 - 0345 GMT
The equities have seen some sharp correction owing to fall in commodities. The Dow (9867.96) began the week with a fall of over 1% yesterday. Over the last two trading days, the Dow has corrected more than 2% now. There's some Support at 9850 and next at 9500 for this week.
The Asian indices too are trading lower. The Nikkei (10210.85), Shanghai (3065.25) and Hang Seng (22213.15) are all trading 1.50% lower. The Sensex (16740.50) has broken below the bullish wedge on the weekly candles which could lead to some further decline towards 16000 over the next few days/ couple of weeks.
Crude (78.66) fell sharply and closed below 79 yesterday following the fall in the US equities and strong dollar. AS mentioned earlier Support is seen at 77.50. If the current downside momentum continues, a break below 77.50 might pull it down towards 75.
Gold (1041.90) has fallen sharply from yesterday's high of 1060.80 as the dollar strengthened. As mentioned earlier strong Support is seen in the region 1030-20 which we expect to hold as the broader picture continues to remain bullish.
The Euro (1.4883) and Aussie (0.9188) has fallen sharply yesterday. Significant Support is seen in the region 1.4850-30 and 0.9120-00 for Euro and Aussie respectively. Dollar-Yen has risen from yesterday's low of 91.57. Resistance is seen at 92.50.
Euro-Yen (137.08) Cross is trading lower following the fall in the Euro. The Pound (1.6322) is ranged between 1.6250-6400 after Friday's sharp fall. Swiss (1.0174) has risen and is trading higher. Significant Resistance is seen at 1.0220.
The Korean-Won is trading near 1181 and Dollar-Rupee had opened at 46.90/92.
3M USD LIBOR was unchanged at 0.28% yesterday. The Treasuries yields rose yesterday for longer term maturities. The 2Y and 10Y yields rose 1 and 6 bps to quote at 1.01% and 3.54% respectively.
In India, the RBI is expected to announce its interest rate decision today. Though the median forecast in the market does not indicate a high expectation of a rate increase but market participants believe that the inflationary pressures should call for a rate increase. RBI Governor, Subbarao, has indicated no change in interest rates earlier.
08:30 GMT RBI Repo Rate
08:30 GMT RBI Reverse Repo Rate
08:30 GMT RBI CRR
...Actual 0.1%...Previous -0.8%
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