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Monday July 16, 2007 - 09:25:52 GMT
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ACM - www.ac-markets.com
Dollar trades still near record lows vs Euro
By Jean-Claude Braha - ACM Advanced Currency Markets, Geneva, Switzerland
News and Events:
The Dollar was flat against the Euro on Friday, supported by a six-month high in US Consumer Sentiment and expectations for hawkish comments from the Fed Chairman in testimony this week. Analysts expect Ben Bernanke to tell the US Congress in monetary policy testimony on Wednesday and Thursday that the Federal Reserve is more worried about a flare up in inflation that it is that housing market turbulence may seriously damage the economy. The Dollar fell against major currencies for the sixth consecutive day, suffering the second-largest weekly decline this year, because of fears the US sub-prime mortgage crisis could frighten foreign investors away from US credit markets. The boost in Consumer Sentiment for July did little to improve the marketâ€™s perceptions of the Dollar, despite a surging US stock market. Many traders still expect benchmark US interest rates to stay on hold, while other Central Banks keep tightening monetary policy.
Analysts said gains in US stocks have partly supported the Dollar against the Yen last week and minimized the impact of earlier news about Iran on the currency pair. A report on Thursday said Iran asked Japanese buyers of its crude oil to switch payment to Yen from US Dollar as Tehran faces growing pressure from the West over its nuclear program.
Last week, ratings agencies Standard & Poorâ€™s and Moodyâ€™s Investors Services warned of downgrades to billions of Dollars in risky mortgage debt, triggering the Dollarâ€™s fall.
A public holiday in Japan thinned trading volumes in Asia. The Yen get sold against the New Zealand Dollar after data showed second-quarter Consumer Price in New Zealand rose more than expected. The NzdUsd traded up to 0.7905 this morning, its highest since it was floated in 1985. Traders said the Yenâ€™s dip suggested people were using cheap Yen again to Buy the New Zealand Dollar. Last week, the RBNZ also said it will continue to intervene in markets if it saw the currency at extreme levels.
Today's Key Issues (time in GMT):
09.00 EUR Euro-zone Consumer Price Index 0.1% vs 0.2% (MoM)
09.00 EUR Euro-zone Consumer Price Index 1.9% vs 1.9% (YoY)
09.00 EUR Euro-zone CPI - Core 1.9% vs 1.9% (YoY)
12.30 CAD May Manufacturing Shipments 0.5% vs -0.6% (MoM)
12.30 US July Empire Manufacturing 18 vs 25.8
23.50 JPY May Tertiary Industry Index 0.1% vs 1.7% (MoM)
The Risk Today:
EurUsd remains strong after having hit 1.3814 high last week and new record high. A return below 1.3750 and 1.3659 former resistances will put the actual positive trend on hold. Initial minor support holds 1.3750 former trend resistance.
GbpUsd remains strong having formed a triple top in 2.0363 to 2.0366 high range. Those levels mark the actual minor resistances. Market 2.0100 former trend resistance holds initial support. A break there will open the door back down to 2.0000 pivot point.
UsdJpy rebounded on 120.98 -121.07 low range and hit Friday 122.62 high. Renewed strength will focus on 124.15 late June high. A break toward 124.15 will reopen the way to 125.57 December 2002 high. Initial support holds 120.98 level. A break down will put 119.55 in sight.
UsdChf remains weak after the sharp drop early last week down to 1.1986 low. Yesterday was fairly unchanged. On the recent downtrend, focus shifted on 1.1996 trend low support. Former support 1.2234 marks the initial resistance.
Resistance and Support:
|EURUSD ||GBPUSD ||USDJPY ||USDCHF |
|1.4571 T ||2.0500 T ||125.57 T ||1.2472 S |
|1.3799 S ||2.0368 S ||124.15 M ||1.2325 S |
|1.3784 M ||2.0363 M ||122.59 M ||1.2234 M |
|1.3780 ||2.0345 ||121.95 ||1.2020 |
|1.3750 M ||2.0100 S ||120.98 M ||1.2019 M |
|1.3373 S ||2.0000 P ||120.78 S ||1.1996 T |
|1.3277 K ||1.9823 S ||119.55 T ||1.1881 K |
|S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot |
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