Wednesday August 11, 2010 - 03:36:38 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 11-Aug-2010 - 0333 GMT
The US Equities fell yesterday. The Markets opened lower and recovered about 0.5% of losses after the Fed announced some relief measures. The Dow (10644.25) was down 0.51% and the S&P (1121.06) was down 0.60%. We are still bullish on the Dow and see good chances of a rise towards 10800-900 in this week.
The Asians are mixed today. The Nikkei (9333.89) is down 2.28% over stronger Yen and weak Machinery Orders Data while the Shanghai (2593.97) is flat. In India, the Sensex (18219.99) was down 0.37% and the Nifty (5460.70) was down 0.46% yesterday. The Sensex may move up towards 18500 in the next few days.
Crude (79.96) fell breaking below 80 and then bounced back following the US Fed's decision to leave the rates unchanged. Support is seen in 80-79 region which if continues to hold might see a bounce back once again towards. However, a break below 79 might pull it down towards 78-77.
Gold (1203.10) is ranged between 1190-1210 over the last couple of day. Though an intraday break above 1200 is being seen over the last one week, lack of upside mometum is still retaining some downside pressure and the outlook is continuing to remain mixed.
The Dollar is trading weak and the Yen is trading strong following the US Fed's decision to leave the rates unchanged and its statement saying that it would reinvest the principal payments on the mortgage into long term Treasuries.
The Euro (1.3125) though has come off from yesterday's high of 1.3228, has very good Support in the broad 1.3100-3000 region which is expected to hold. Dollar-Yen (85.33) has come off from yesterday's high of 86.24 and is retaining its overall downside pressure. 85.00-84.80 is a very crucial Support region to watch for as break below it might pull it further down towards 84.00-83.50. Euro-Yen Cross (111.96) fell breaking on the downside of the range (112.70-114) and might continue its overall downtrend once again towards 110-109 in the coming days.
Dollar-Swiss (1.0512) may come down towards 1.0450 today. Aussie (0.9084) may test the Support at 0.9085-75 and come up towards 0.91250-50 today. Cable (1.5806) honoured the Support at 1.5700 and has come up from there. We may see it go up further towards 1.5850-900 in the coming sessions today.
The Asian currencies are trading weak. The Korean-Won is trading near 1176 and USD-SGD is trading near 1.3554. Dollar-Rupee has closed higher yesterday at 46.39/40 and with good Support at 46.20 we might see further rise towards 46.60.
The 3M USD LIBOR was unchanged at 0.40%. The 2Y yield was down 2 bps to quote at 0.51% while the 10Y yield was down 8 bps to quote at 2.75%.
Yesterday, the US Fed left the interest rates unchanged and has said hat it would reinvest the principal payments on the mortgage into long term Treasuries.
UK Cons Conf
...Actual 60...Previous 63
08:30 GMT UK Unemp
...Expected 7.8%...Previous 7.8%
12:30 GMT US July Trade Balance
...Expected $ -42.0 Bln...Previous $ -42.3 Bln
...Actual 0.10%...Previous 0.10%
UK July Trade Balance
...Actual $ -7.7 Bln...Previous $ -8.1 Bln
US FOMC Interest Rate
...Actual <0.25%...Previous <0.25%
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