Wednesday February 3, 2010 - 03:39:37 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 03-Feb-2010 - 0337 GMT
The Dow (10296.85) and the Nasdaq (2190.06) rose a percent each on better than expected Pending Home Sales data as the sector worst hit by recession showed signs of improvement. The Dow has risen over the last two days after finding Support near 10000 last week. On the upside, it faces Resistance near 10500 this week.
The Asian indices are following the US markets and are trading mostly in the green. The rise in Asians has also been helped by rise in commodities. The Nikkei (10400.60) is trading 0.28% higher and the Hang Seng (20391.11) is trading 0.60% higher; but the Shanghai (2912.64) is trading 3/4th of a percentage lower this morning and well below the 3000 mark. Having broken below the 3000, it may fall towards 2750. The Sensex (16163.44) continued to show weakness yesterday as well. It fell 1.18% yesterday and is likely to trade sideways over the next few days on Support of 15900.
Crude (76.81) is keeping up its upside momentum and closed above 77 yesterday. The optimism on economic recovery, weaker dollar and tension in Nigeria following the militant's attack are supporting the price rise. Technically speaking the bounce back seen this week has honoured the Bull Channel Support on the weekly chart therby increasing the chances of a rise above 80 once again. The US Crude inventory data is due today.
Gold (1111.50) is continuing to trade above 1100. The demand and weaker dollar is supporting the price rise. Immediate Resistance is seen at 1120 a break above which might see 1140 on the upside in the coming days.
A bit of a dip for the Dollar against some of the Majors today. The Euro (1.3958) has risen past 1.3940 and had seen a high near 1.3980 yesterday. Dollar-Yen (90.35) has seen a dip to 90.27 today. With the Euro-Yen (126.10) having Support at 125 and looking like it can rise towards 127, the Euro may gain while the Yen may weaken. The Aussie (0.8849) has also recovered a bit after having fallen to a low near 0.8780 yesterday after the RBA declined to raise rates. It seems the rise in Equities is again having a positive impact on the Majors.
The Pound (1.5987) is bouncing a bit from Friday's low near 1.5850 and might see stronger levels ahead as the market appears to be in a broad sideways range. UK Consumer Confidence is due today and the BOE meeting (apart from the ECB meeting) is slated for tomorrow. Dollar-Swiss (1.0560) has an important Support at 1.0540 toay. whether it breaks or holds will set the trend for the rest of the day.
The Sing Dollar has weakened to 1.4102 after having dipped to 1.4065 earlier today. The earlier esistance at 1.41 seems to be giving way. The Won (1152) is stronger with the USD-KRW coming down off Resistance at 1170. Dollar-Rupee had dipped to 46.21 at the Close yesterday and has some chances of dipping to 46.10-00 today. The NDFs are quoting near 46.21/26.
3M USD LIBOR was unchanged at 0.25%. The yields on US Treasuries too were flat. The 2Y and 10Y yields were quoting at 0.85% and 3.64% respectively.
The RBA has kept interest rates unchanged at 3.75% yesterday as against expectations of a 25 bps rate increase. The BoE and the ECB are scheduled to be held tomorrow. The EU verdict on Greece Budget is slated to be announced today.
Jan Australia Trade Balance
...Actual A$ -2.25 Bln...Previous A$ -1.73 Bln
00:01 GMT UK Cons Conf
......Expected 70...Previous 69
10:00 GMT EU Retail Sales
...Expected 0.4%...Previous -1.2%
13:15 GMT US ADP Emp
...Expected -41K...Previous -84K
AUD RBA Interest Rate
...Actual 3.75%...Previous 3.75%
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