Wednesday February 24, 2010 - 03:44:13 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 24-Feb-2010 - 0337 GMT
The US Markets closed lower yesterday. The Dow (10282.41) closed down by 0.97% and the Nasdaq (2213.44) closed down by 1.28%. The US Markets were in the red as a result the US Consumer Confidence Index falling to 46 (the lowest in ten months) and the US Case-Shiller Housing Index falling by 3.1% on a year-on-year basis. We continue to hold our view of a resistance near 10700-50 levels on the Dow.
The Asian Indices are mixed today. The Nikkei (10163.28) is down by 1.82%, the Shanghai (2986.70) is up by 0.14% and the HangSeng (20443.40) is down by 0.87%. The Sensex (16286.32) closed higher by 0.3% yesterday. The Sensex may rise towards 17500 if it continues to hold the support at 16000.
Crude (79.20) fell sharply yesterday failing to break above the Resistance at 81 mentioned earlier, following the fall in US Consumer Confidence and German Business Sentiment. The French Refinery strike which is expected to come to an end also eased the price. Support is seen at 77.50 which might be tested if it continues to trade below 80. The US Crude inventory data is due today.
Gold (1107.50) fell and tested 1100 in the intraday trades before closing just above 1100 yesterday. The stronger dollar and the Resistance in 1120-40 region are continuing to resist the price rise. As mentioned earlier, we might see some sideways move in the range of 1100-1150 for some time. If 1100 is broken then we might expect a little broad range of 1080-1150.
The Dollar and Yen have strengthened yesterday after some important data releases disappointed the market to bring back 'risk aversion' back in focus. The German IFO and the US COnsumer Confidence numbers yesterday were disappointing.
The Euro (1.3542) fell sharply after rising towards 1.3692. It may fall further towards 1.34 over the next couple of days. Dollar-Yen (90.19) has fallen quite a bit over the last three days and may see some consolidation above 90 today. The Euro-Yen Cross (122.13) has fallen towards 121.56 yesterday and may fall further towards 120 over the next couple of days.
The Cable (1.5452) fell from a high of 1.5576 yesterday and has found Support at 1.54. It may oscillate between 1.54-1.56 over the next few days. Dollar-Swiss (1.0810) rose after testing 1.0715 yesterday. There's strong Resistance near 1.0900-40. The Aussie (0.8928) broke above the 21-week MA briefly and the 100-DMA Resistance pushed the pair down thereafter. It may come down towards 21-DMA which is at 0.8870
USD-SGD is trading flattish at 1.4100 and USD-KRW is also trading flattish at 1155. USD-INR closed at 46.24 yesterday and may be ranged between 46.00-46.50 over the next few days.
3M USD LIBOR was unchanged at 0.25%. The yields on US Treasuries fell yesterday. The yields on 2Y and 10Y notes dropped 5 and 10 bps to quote at 0.83% and 3.70% respectively, thus making the yield curve less steep. This is some respite to the yield curve which had become extremely steep over the last couple of weeks after Fed reiterated its intention of keeping the interest rates at very low levels for an extended period.
15:00 GMT Jan US New Home Sales
...Expected 350K...Previous 342K
Jan GER IFO Business Expectations
...Actual 100.9...Previous 100.6
Jan GER IFO Business Situations
...Actual 89.8...Previous 91.2
Jan GER IFO Business Climate
...Actual 95.2...Previous 95.8
US Case Schiller
...Actual -3.1%...Previous -5.3%
US Cons Conf
...Actual 46.0...Previous 56.5
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