Wednesday December 23, 2009 - 03:35:53 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 23-Dec-2009 - 0334 GMT
The Dow closed 0.49% higher at 10464.93 despite the downward revision in the Q3 GDP Final numbers to 2.2% against an expectation of 2.7%. The outlook for Q4 might be tempered a bit and with Consumer Spending also revised downwards, the talk about monetary tightening might ease up a bit. The Dow seems to be gearing up for a rally towards 10750 or even 11000 in the New Year.
Japan is on holiday today. Most of the other Asian indices are flat, trading within -0.26% and +0.45%. The Shanghai trades near 3053. The Nifty had closed at 4985 yesterday. Remember, there is a crucial Support at 4905.
Crude (74.62) fell yesterday after the OPEC left the supplies unchanged. However, the Support at 72.80 mentioned yesterday held very well and Crude has risen from the low of 72.72 breaking above the Resistance at 74.10. The expectations that the EIA's US Crude inventories data release due today will show a drop in inventories has supported the rise. To see the Support on the Crude graph click on the following link:
Gold (1088.50) is continuing to trade below 1100. The stronger dollar is keeping up the downside pressure on the Commodity. As mentioned earlier we might see a fall towards 1070-50 in the coming days. As the broader outlook remains bullish we can expect a bounce back from 1050 levels. To see the Gold graph click on the following link:
Further gains in the Dollar, especially against the Yen. Dollar-Yen (91.70) is trading well above the 91.15 level which was a crucial resistance till a couple of days ago. Good chances of a rise towards 93.50 now. The Euro (1.4245) is on a losing streak and has slipped further today to a low near 1.4217. The Euro-Yen Cross (130.75) is trading higher due to the strong rise in USD-JPY.
The Aussie (0.8756) is also weak, as is the Pound (1.5945) which has plunged below 1.60 today. The tide seems to be turning a bit between the Euro and the Aussie, with the Aussie weakening a bit against the Euro, given that the Euro has already been battered quite a lot. Dollar-Swiss (1.0497) is trading just below the psychological figure of 1.05 and the Swiss Franc is not looking as weak as the other currencies.
Among the Asians, the Sing Dollar (1.4106) has weakened further today, withe the USD-SGD seeing high near 1.4128. Dollar-Won (1182.60) is trading relatively high only, but just below the range high near 1190-91. Dollar-Rupee had closed at 46.80 yesterday. The NDFs have been quoted near 46.83-88 for the near term. Look for a range of 46.60-47.10 for some days.
The 3M & 6M LIBOR remained unchanged at 0.25% and 0.43% respectively. The 2Y and 10Y yields rose 4 and 6 bps respectively to quote at 0.90% and 3.75% respectively.
09:30 GMT UK BOE Minutes
...Expected 0-0-9 hold...Previous 0-0-9 hold
01:30 GMT US Nov Personal Income
...Expected 0.4%...Previous 0.2%
01:30 GMT US Nov PCE Price Index M/M
...Expected 0.6%...Previous 0.7%
01:30 GMT CA GDP
...Expected 0.3%...Previous 0.4%
15:00 GMT Nov US New Home Sales
...Expected 442K...Previous 430K
UK GDP Q3 '09 (Fnl)
...Actual -0.2%...Previous -0.3%
US GDP Q3 '09 (Fnl)
...Actual 2.2%...Previous 2.8%
US Existing Home Sales
...Actual 6.54 Mln...Previous 6.09 Mln
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