Thursday November 26, 2009 - 03:40:06 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 26-Nov-2009 - 0337 GMT
The Dow (10464.40) and the Nasdaq (2176.05) rose nearly 0.30% each yesterday on better economic data that showed increased consumer spending, falling jobless claims and higher new home sales. The markets sentiments reflect encouragement of recovery though sluggish because of rising unemployment which is far better than a double-dip recession. The US is on a holiday today because of Thanksgiving Day.
The Asian indices are trading lower despite rise in commodities. While the Nikkei and All Ordinaries are trading flat, the Shanghai (3268.61), Hang Seng (22374.20), All Ordinaries (4737.40) are trading lower between 0.50%-1.00%. The Sensex may see some correction today on cues from Asian peers. The Shanghai and Nikkei have very good Support at 3200 and 9250 respectively.
Crude (77.46) has risen sharply yesterday following the weaker dollar and the less than expected increase in the US Crude inventories. The EIA's data release showed an increase of 1 million barrels in US Crude inventories against the expected 1.4 million barrels. If it contuinues to trade higher we might see a rise towards 79.00-50 in the coming days.
Gold (1192.50) is trading strong as the dollar continues to weaken thereby increasing the metal's hedge value. We might see a rise towards 1200-20 in the coming days. Though we might expect some profit booking at 1200 (the psychological Resistance) levels, the current strength on its upmove is keeping up the bullish sentiment for a target of 1250 or even 1300 in the coming weeks/months.
Solid Dollar bashing. The Euro (1.5111) broke out of its 6-week range yesterday and should now be on its way to test 1.5240. The Aussie (0.9254) has plenty of room on the upside towards 0.9450. Dollar-Yen (87.22) saw a sharp decline below 88.00 yesterday to hit a low near 87.16. The Euro-Yen Cross (131.73) has seen a Day-Close below the 200-day MA yesterday, for the first time since May. It is to be seen whether it is pulled down further by Dollar-Yen or not.
The Pound (1.6709) has also been lifted by the anti-Dollar wave and could well see 1.6775 today. Dollar-Swiss (0.9947) trades below Parity. The last time USD-CHF traded below Parity was in March-April 2008.
There do not seem to be any takers for the Dollar in Asia either. USD-SGD (1.3797) has seen a fresh 2009 low near 1.3777 today. Dollar-Won (1153.50) hasn't seen a fresh low, but trades weak nevertheless. Dollar-Rupee had closed at 46.20 yesterday and has decent chances of falling below 46.20 today. Remember, a Week-Close below 46.20 will be very bearish.
3M USD LIBOR was set at 0.26%. The yields on US treasuries were little changed. The 2Y and 10Y yields were quoting near 0.74% and 3.27% respectively. The 10Y yields are near an important trend Support. The 3M T-Bills are trading as low as 0.04%. It had turned negative last week. To see the chart of US yields, click on: http://www.kshitij.com/graphgallery/usdsin00.shtml#sin00
UK GDP Q3 '09 (Pre)
...Actual -0.3%...Previous -0.4%
US Oct Personal Income
...Actual 0.2%...Previous 0.2%
US Oct PCE Price Index M/M
...Actual 0.2%...Previous 0.1%
Oct US Durable Goods Orders
...Actual -0.6%...Previous 2.0%
Oct US New Home Sales
...Actual 430K...Previous 405K
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