Friday January 8, 2010 - 04:50:19 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 08-Jan-2010 - 0338 GMT
The US equities ended yesterday with modest gains. The Dow (10606.86) closed 0.31% higher yesterday ahead of the US Non Farm Payrolls scheduled to be released today.
The Asian indices are trading higher. The Nikkei (10753.24) is up 0.67%. The Sensex (17615.72) had closed lower yesterday for the first time in the year 2010. The trend is still bullish and the index may rise further in the first half of 2010. On the way up, there's important Resistance near 17900-18000. It might take a while and a little correction to rise beyond this Resistance.
Crude (82.47) fell and closed lower below 83, thereby ending the ten consecutive days of higher closing. The stronger dollar and the signs of moentary policy tightening in China, the world's second largest energy consumer kept the prices lower. Support is seen in 81.20-00 region a break below which might target 80.
Gold (1126.10) has fallen breaking below 1130 as the dollar strengthend yesterday. It is now trading below the 1128 (Trendline Resistance seen on the weekly chart). Though the broader picture continue to remain bullish, the current outlook remains mixed.
Range trade between 1.4250-4450 continues in the Euro (1.4310), which has come down from yesterday's high near 1.4448. Dollar-Yen (93.28) has risen to a high near 93.79 today morning, spiking above the 200-day MA which is at 93.37. Further rise towards 95 is possible in the coming days/ weeks as Japan favours a weaker Yen. The Aussie (0.9149) has dipped back a bit after seeing a high near 0.9268 yesterday. A further dip towards 0.9050 might be possible, especially if the US Non-Farm Payrolls come in better than the expected -1K. As it is, US Unemployment might be close to peaking even though there might still be some more rise left.
The Pound (1.5930) continues to be weak and might well test lower levels such as 1.5830 or even 1.5715. Dollar-Swiss (1.0344) has seen a good bounce from yesterday's low near 1.0240 and has potential to rise further towards 1.0460 in a couple of days.
The Korean Won (1132.30) continues to be strong while the Sing Dollar has weakened slightly to 1.3978 as compared to yesterday's low of 1.3916 for the USD-SGD. China has increased the yields on its treasury bills. This might add to the already bullish sentiment for the the Asians. Dollar-Rupee had closed near 45.67 yesterday after having fallen to a low of 45.55. Sellers might be available at 45.80 while some buying interest may be seen at 45.40.
3M USD LIBOR was unchanged at 0.25%. The yields on US Treasuries rose for maturities over 1Y. The 2Y and 10Y yields quoted 6 and 3 bps higher at 1.05% and 3.85% respectively. The Bank of England has kept the interest rates unchanged in its monetary policy meeting yesterday.
In Asian, China's Central bank have hiked yields on 3M Treasury bills to contain liquidity. This is also being seen as a move towards increasing interest rates and to check the growth of "asset bubble".
10:00 GMT EU GDP Q3 '09 (Fnl)
...Expected 0.4%...Previous 0.4%
10:00 GMT EU Unemp
...Expected 9.9%...Previous 9.8%
01:30 GMT Dec US NFP
...Expected -1K...Previous -11K
12:00 GMT Nov CA Labour Force
...Expected 20.3K...Previous 79.1K
Dec Australia Trade Balance
...Actual A$ -1.70 Bln...Previous A$ -2.08 Bln
...Actual 0.50%...Previous 0.50%
EU Retail Sales
...Actual -1.2%...Previous 0.2%
EU Biz Climate
...Actual 92.0...Previous 88.8
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