Friday December 11, 2009 - 03:39:22 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 11-Dec-2009 - 0337 GMT
The US rose on encouraging economic data yesterday. The Dow (10405.83) rose 0.67% but is still below the Resistance at 10500. We expect the range of 10250-10500 holding for the rest of the year. Data showed that the exports rose in October thus bringing down the trade deficit and weekly Jobless Claims dropped to a 52-week low.
The Asian indices, too, are trading higher on more than expected Chinese industrial output. The Shanghai (3273.62) and Nikkei (9942.07) are trading higher by 0.59% and 0.80% respectively. The Sensex (17189.31) which has been trading ranged over the last few days is finding immediate Resistance at 17250. A break of this may find Resistance near 17400-17500 till the rest of the year. To see the chart of Sensex, click on: http://www.kshitij.com/graphgallery/sensexcandle.shtml#candle
Crude (70.64) is continuing to trade lower. A break below 70 was seen in the intraday trade yesterday. If it continues to trade lower, a break below 70 might pull it down towards 69-68.50. On the upside Resistance is seen at 72. To see the Crude graph click on the following link:
Gold (1133.80) closed higher after four consecutive days of lower close. The Support in 1120-00 region held yesterday also and Gold has risen from the low of 1121.80. The broader picture continue to remain bullish and any weakness in dollar would reignite the upmove. 1075 and 1050 are the significant Support levels seen a below 1100. To see the Crude graph click on the following link:
CRUDE PRICES IN EURO and GOLD
Many of us would be curious to know what is the price of Crude in Euro terms. Although a market for Crude in Euro terms is still some years away, we have started a chart service which will publish the price of Crude in terms of both the Euro and Gold on an ongoing basis. Please take a look at
Please let us know how you liked this chart.
Quieter conditions suggest that the profit-taking seen in the first week of the month is abating. Dollar-Yen (88.72) is up for the second day today after having fallen to a low of 87.36 day before yesterday. This should provide relief to the other currencies. Euro (1.4720) is quiet for the third day now. The 1.4670-15 Support region is looking increasingly strong. As a result, the Euro-Yen Cross (130.49) has seen a good bounce from the Wednesday low of 128.78. The downside seems limited in the Cross now.
The Aussie (0.9157) is quiet today after having moved up yesterday on the good employment data. Good medium/ long term Support should be available at 0.89. With interest rate differentials favouring the Aussie and the economy performing well, it is unlikely that the Aussie will attract Sellers. The same cannot be said for the Pound (1.6309) which is trading relatively weak, below the important Resistance region near 1.64. The saving grace is that it is likely to remain in a sideways range of 1.60-68 for an extended period of time. Dollar-Swiss (1.0265) has been quiet, alongwith the Euro. Important long-term Resistance is seen at 1.0350.
USD-SGD (1.3899) came down yesterday and is quiet today. Overall trend is sideways ranged between 1.3800-3965 for the next several days. Dollar-Won, on the other hand, has inched up a bit to 1165.50 today, after having moved up a bit yesterday as well. A further rally towards 1172 might be possible. Dollar-Rupee had closed near 46.6450 yesterday and should continue to be ranged between 46.40-80 through today.
3M USD LIBOR was lowered by 1 bp to be set at 0.25% and is now at the same level as the Fed Target rate. Extended period of low interest rate regime in the US may keep the USD LIBOR lower. An extended period of sideways movement has been witnessed in history. In Japan, the LIBORs were stable at near 0.10% for over 5 years between 2001 and 2006. It would not be a surprise if if USD LIBOR moves sideways for an extended period.
The yields on US Treasuries have risen. The 2Y and 10Y yields 2 and 6 bps respectively to be quoted at 0.77% and 3.50% respectively.
12:00 GMT EU EA (16) Curr Acct Bal Q3 '09 (1st)
...Previous EUR -25.4 bln
12:00 GMT EU EA (16) Bal of Trade in services
...Previous EUR 7.4 bln
12:00 GMT EU EA (16) Curr Acct Bal as % of GDP
01:30 GMT US Nov Retail Sales
...Expected 0.6%....Previous 1.4%
Nov Australia Labour Force
...Actual 31.2K...Previous 27.2K
...Actual 0.25%...Previous 0.25%
...Actual 0.50%...Previous 0.50%
US Oct Trade Balance
...Actual $ -32.9 Bln...Previous $ -35.7 Bln
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