Monday April 11, 2005 - 10:40:53 GMT
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FOREX:US OPEN MARKET POINTS 04-11-05
Eco Data Buoys Yen and Cable
Better than expected Current Account Surplus which declined only by 1.5% versus expectations of a fall of 10% finally pushed the yen below the 108 level tonight for the first time in a week. The Current Account surplus reached a 12 month high, but the growth wasnít spurred by sales of goods which actually declined by 20.4% but by a much smaller services deficit and a whopping •1.08 Trillion income surplus. Several analysts noted that the numbers actually reflect a weak demand at home as Japanese savings are persistently being recycled abroad.
While the Japanese eco data may have provided a modest boost in overnight trading, future USD/JPY price action is much more likely to be dominated by US fundamentals namely the US Trade deficit figures due out tomorrow at 12:30 GMT. The market expects little improvement anticipating a deficit of -$58 Billion which would put US at a record annual pace of $700 billion yearly gap.
UK Trade Balance data also reported better than expected results tonight printing at -4809M GBP against a consensus of -5050M GBP with UK consumers curbing import demand by 1.3%. The pound responded in turn by catapulting above the 1.8900 level.
If global data tells us anything itís that consumers, burdened by the high price of oil, clearly retrenched in February. This hardly serves as supportive evidence to dollar bulls. On the contrary, the possibility of negative surprise in US Trade Balance data is quite high, which would once again raise concerns about structural soundness of the US economy. These worries may explain the uniform strength of the majors against the dollar in tonightís trading.
FX Spot Overnight
- EUR takes out Fridayís high and trades 2960
- JPY below 108 1st time in a week
- GBP above 8900 on better trade data
- CHF sees inflows on structural concerns about US economy trading 1950
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