Wednesday March 3, 2010 - 03:44:14 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 03-Mar-2010 - 0340 GMT
The US equities closed flat after trading higher for major part yesterday. The markets over the last few days are being driven higher by renewed optimism signalled by rising corporate merger activities. There are also signs of easing concerns over Greece budget deficit which could keep the markets buoyant over the next few days. The Dow (10405.98) has Resistance near 10520 which may be tested this week.
The Asian equities are mostly trading higher today. The Nikkei (10253.83) is up 0.31% while the Shanghai (3070.38) and the Hang Seng (20912.64) are trading flat. The Sensex (16772.56) rose over 2% yesterday. It has Resistance near 17500 which may be tested over the course of next couple of weeks.
Crude (79.79) tested the Resistance at 81 once again yesterday. The Commodity is ranged between the Support at 77.50 and Resistance at 81 over the last few days. A breakout of this range would determine the further direction of move for the Commodity. The US Crude inventory data release is due today.
Gold (1133.20) has risen sharply yesterday taking Support from the weaker dollar and is now trading in the Resistance region 1120-40 region. A breakout of this Resistance region might see further rise towards 1150-60 in the coming days. Support is seen at 1100.
Dollar has lost further ground against most currencies over yesterday and today, on profit-taking within an overall uptrend. The Euro (1.3630) has met expected Resistance at 1.3655 today. Dollar-Yen (88.65) has seen a drop today and the tight trading range of the last three days seems to be giving way to the downside. The Euro-Yen Cross is stable near 120.88, but has come up well from yesterday's low near 119.77. The Yen is reported to be strengthening because Japanese companies are reportedly repatriating larger sums home to take advantage of lowered tax rates on such repatriation.
The Pound (1.5065) is recovering for the second day today after having fallen to a low near 1.4781 on Monday on the AIG-Prudential deal. Dollar-Swiss (1.0735) has come off from yesterday's high near 1.0889 reflecting gains in the Euro. The Aussie (0.9040) has moved up and is looking biddish now, with chances of further upside towards 0.9140, reflecting better commodity prices and better equity prices. The RBA had increased rates by 25bp yesterday. The interest rate advantage lies with the Aussie. Take a look at
In Asia, the Korean Won is strong at 1140.40, but the USD-KRW has Support at 1130. USD-SGD (1.4010) has weakened sharply yesterday, breaking the medium uptrend it was in over the last few weeks. A further dip towards 1.3960 is a possibility now. Dollar-Rupee had closed at 46.01 yesterday and might dip a bit towards 45.90-80 as Indian Equities are likely to rise further.
The 3M USD LIBOR was unchanged at 0.25%. The US yields, too, traded flat. The 2Y and 10Y benchmark yields were quoting near 0.79% and 3.61% respectively.
The RBA has increased interest rates yesterday by 25 bps to 4.00%. The BoC had kept interest rates unchanged at 0.25%. BoE and ECB are scheduled to meet tomorrow.
AU GDP QoQ(4th Quarter)
...Actual 0.9%...Previous 0.3%
00:01 GMT UK Cons Conf
...Expected 71...Previous 73
10:00 GMT EU Retail Sales
...Expected -0.3%...Previous 0.1%
13:15 GMT US ADP Emp
...Expected -9K...Previous -22K
...Actual 4.9%...Previous 5.2%
AUD RBA Interest Rate
...Actual 4.00%...Previous 3.75%
CH GDP QoQ(4th Quarter)
...Actual 0.7%...Previous 0.5%
...Actual 0.25%...Previous 0.25%
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