Monday February 22, 2010 - 03:44:21 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 22-Feb-2010 - 0340 GMT
The US markets closed higher over the last week. The Dow (10402.35) closed about 3.00% higher and the Nasdaq (2243.87) closed about 2.76% higher. The markets closed higher last week on account of better investor sentiments and upbeat corporate earnings. On the Dow, an immediate resistance is visible near 10700-750, which if tested, can drag it down to 9800.
The Asian indices are trading mixed today. The Nikkei (10443.59) is up 3.16% on account of a smaller-than-estimated increase in U.S. consumer price index, decreasing the possibilities of an upward revision of the interest rates by the Federal Reserve in the near future. On the Nikkei, a resistance is seen at near 10600-50 levels, which if tested can drag it down to 9700-50. The Shanghai (3007.26) is trading lower by about 0.31% after a weeklong holiday. The Sensex (16191.63) is expected to open higher today following the global markets.
Crude (80.67) has risen sharply breaking above 80 on Friday and is continuing to trade strong. The concerns about the fuel supplies due French refinery strikes and Iran's nuclear program supported the price rise. If the current upside momentum continues, we might see 82.50 in the coming days.
Gold (1127.20) has risen and is now trading in the Resistance region 1120-40 region mentioned earlier. The weaker dollar and better than expected economic data release on Firday supported the price rise. We might expect the Commodity to be ranged between 1100-50 for some time.
Dollar strengthened against most major currencies on Thursday last week after the Fed increased the 'discount rate' by 25 bps to 75 bps fuelling concerns that the Fed may increase interest rates soon. It gave up most of the gains by Friday after the US inflation numbers which showed that the inflation wasn't strong enough to increase interest rates soon.
Last week, the Euro (1.3647) rose from an intra-week low of 1.3445 and may rise further towards 1.3750 today. Dollar-Yen (91.59) has come off a bit after rising towards 92.14 last week. There's 200-DMA Resistance at 92.21 which may hold and may see the pair coming down towards 91.00. The Cable (1.5485) has come off from a low of 1.5345 last week.
Dollar-Swiss (1.0747) may come down towards 1.0650 over the next couple of days as the Resistance at 1.09 looks strong enough. Aussie (0.9017) has found Resistance from the 21-week MA (0.9048) last week and may attempt a break this week which will lead to a rise towards 0.92.
USD-SGD and USD-KRW is trading lower today at 1.4074 and 1148.90 respectively. Dollar-Rupee had closed at 46.30 last week and may open lower today on stronger equities.
3M USD LIBOR has remained unchanged at 0.25%. The US Treasury yields have closed flat on Friday. Last week has seen the yields rise after the increase in discount rate announced by the Fed last week. The 2Y and 10Y yields were last quoted at 0.92% and 3.79% respectively.
No major data release today
US Jan Core CPI (MoM)
...Actual -0.1%...Previous 0.1%
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