Thursday March 10, 2005 - 11:23:14 GMT
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FOREX: US OPEN MARKET POINTS 03-10-05
Euro Plodding Purposefully Back to All Time Highs
The relentless rise of the EUR/USD continued tonight as the pair reached a nine week high hitting the 1.3450 level in European markets before slightly paring back its gains. At the risk of sounding like a broken record, the same concerns - oil, a massive Trade deficit and new concerns that Fed may curtail its rate tightening program earlier than the market expected - continue to pressure the greenback.
Tonight’s eco data out of Euro-land is mildly supportive with French Industrial Production printing slightly above expectations at 0.2% versus 0.1% expected while German Current Account reported a surplus of 6.6 Billion euros versus consensus of 1.3 Billion. At this point the euro is trading on pure momentum as dollar bearish sentiment has completely overtaken the FX market. Surprisingly enough our proprietary Speculator Sentiment Index has not even come close to overbought levels suggesting that euro may have further to rally.
Tonight’s German export numbers which rose 6.1% versus expectations of 3.8% indicate that market has reason to worry that Friday’s US Trade Balance deficit could indeed report worse than expected results. Overall, this week is shaping up very much like last with major resolution coming once more on Friday. The best strategy under the circumstances, may be to stand aside until the number prints at `13:30 GMT tomorrow. Should the Trade Balance surprise and report better than market consensus we could see a partial retrace of the euro long trade. On the other hand if the Trade Balance confirms the euro bulls worst suspicions a retest of the pair’s all time high at 1.3659 set on the last day of last year is quite probable.
FX Spot Overnight
- EUR chugging along to 3450 before trading back to 3400
- JPY hovers around 104 supported by importers
- GBP below 9300 awaiting BOE decision
- CHF at 1540 as dollar sentiment worsens
- 12:00 GMT – (07:00 AM EST) GBP BOE Rate Decision Expected 4.75% Previous 4.75%
- 13:30 GMT – (08:30 AM EST) CAD Capacity Utilization Rate (4Q) Expected 85.6% Previous 85.7%
- 13:30 GMT – (08:30 AM EST) CAD Labor Productivity q/q (4Q) Expected -- Previous -0.3%
- 13:30 GMT – (08:30 AM EST) USD Initial Jobless Claims (MAR 5) Expected 310K Previous 310K
- 15:00 GMT – (10:00 AM EST) USD Wholesale Inventories Jan Expected 0.6% Previous 0.4%
- 19:00 GMT – (02:00 PM EST) USD Monthly Budget Statement Feb Expected -100.0B Previous 96.7B
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