Daily Forex Snapshots

Dollar Loses Additional Ground across the Majors

October 14, 2008 10:41 PM CEST

G10 Advancers and Decliners vs USD

	Gbp	0.42
	Dkk	0.41
	Eur	0.39
	Chf	0.15
	Jpy	0.14
	Nzd	0.14
	Aud	-0.19
	Sek	-0.44
	Nok	-0.66
	Cad	-0.80

Global Indexes

Current Level

% Change

DJIA Index	9,362.00	- 1.54
S&P 500 Index	1,002.30	- 1.42
NASDAQ 100 Index	1,366.00	- 6.34
FTSE futures	4,399.50	+ 3.87
CAC futures	3,631.00	+ 3.40
DAX futures	5,237.00	+ 3.16
SMI Futures	6,280.00	+ 4.93

World Markets

Current Level

% Change

Crude wti	79.28	- 2.35
Gold	836.69	+ 0.44
Silver	10.94	+ 2.20
USD Index	81.36	- 0.63
VIX	55.13	+ 0.26

Todays Calender

Estimates

Country / GMT

No Major Events Scheduled

Currency Tech

AUDUSD
R 3: 0.7357
R 2: 0.7157
R 1: 0.7120
CURRENT: 0.7045
S 1: 0.6437
S 2: 0.6331
S 3: 0.6245

EURJPY
R 3: 144.61
R 2: 144.97
R 1: 141.07
CURRENT: 139.74
S 1: 134.23
S 2: 132.24
S 3: 130.62

USDSGD
R 3: 1.4980
R 2: 1.4849
R 1: 1.4794
CURRENT: 1.4612
S 1: 1.4551
S 2: 1.4489
S 3: 1.4458

Market Brief

The Usd slipped against most of the G10 currencies, despite the announcement by the US govt. to invest directly into major financial institutions. The EurUsd gained nearly 80 pips to the mid range of 1.36, while the UsdJpy experienced marginal losses of 10 pips at the high 101 level. The GbpUsd picked up roughly 100 pips to the mid 1.74 price area, which is consistent with the general trend of dollar weakness we’ve seen in recent trading. The equity markets have toggled around yesterday’s close off the highs of the session down approximately 50pts. European indexes built momentum up a bit over 2% on the DAX, CAC 40, and FTSE, while the SMI posted an exceptionally higher gain of 5%. Bond yields rose across the curve, with the 2yr around a little above 1.8% and the 10yr above 4% again. In the commodities sector, agriculture and energy sectors declined, metals saw marginal gains with gold up half a percentage point to 837.

German ZEW sentiment index dropped to -63 vs. the previous reading of -41.1, a strong symbol that the consumer confidence has deteriorated substantially. The data being released should foreshadow a weaker GDP figure, as the growth expectations are likely to decline in the near-term. The dollar has been the currency of choice regarding risk averse trades, and the rally seen in European equities led to a selloff in the Usd crosses. In the UK, CPI came in higher than expected at 0.5% vs. the projected reading of 0.4%. Although inflation ticked up, the BoE seems to be more focused on downside risk, which is tandem with the global efforts of central banks to resolve financial crisis. Our long term expectation remains dollar bullish, with a 3m price target of 1.30 on the EurUsd.

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Asian Session - Risk Appetite Slowly Recovers

October 14, 2008 9:50 AM CEST

G10 Advancers and Decliners vs USD

	AUD	3.72
	NZD	2.30
	NOK	2.25
	CAD	1.98
	SEK	1.74
	DKK	1.21
	EUR	1.18
	GBP	1.15
	CHF	0.78
	JPY	-1.00

Global Indexes

Current Level

% Change

Nikkei 225 Index	9,446.57	+ 14.15
Hang Seng Index	16,822.40	+ 3.12
Shanghai Index	2,017.40	- 2.71
FTSE 100 Index	4,437.43	+ 4.24
CAC 40 Index	3,677.96	+ 4.14
SMI Index	6,176.51	+ 3.61
DJIA futures	9,562.00	+ 0.56

World Markets

Current Level

% Change

Gold	843.87	+ 1.29
Silver	10.93	+ 2.10
VIX	54.99	- 21.38
Crude wti	83.70	+ 3.09
USD Index	81.29	- 0.73

Todays Calender

Estimates

Country / GMT

Ger ZEW Economic Sentiment (Oct)	-51.1	-41.1	GE / 9.00
Industrial Production (Aug)	1.2%,-1.6%	-0.3%,-1.7	EZ / 9.00
Monthly Budget Statement (Sep)	+$45.0bn	+$112.9bn	US / 18.00

Currency Tech

Market Brief

The Usd was significantly weaker in the Asian session, as equity markets reacted positively to the G10 central banks (& US Treasury) plan. The EurUsd traded from 1.3499 up to 1.3695, while the UsdJpy traded from 100.96 to 103.06. Even the Gbp & Aud currencies, that took a pounding in the last month, bounced back with the GbpUsd and the AudUsd rising to 1.7555 and 0.7121 respectively. The gainers in percentage terms were EM currencies, followed by commodity currencies. The JPY and CHF are the only losers versus USD overnight, as risk aversion eased. The big story was the massive comeback of the equity markets. Yesterday, the European markets started the positive trend, with the CAC 40 closing up 11.17%. Then, Wall Street following with a stellar day with the S&P, closing up 11.58%. Currently Asia equity markets are trading higher, with the Nikkei up 14.15%. Overall, the trading patterns indicate that participants are more confident of market stability. We expect this trading pattern will continue during the day in FX markets (keep your eyes on Jpy funded carry trades).

In Japan, the domestic corporate goods price index (CPGI) in September slowed to +6.8% vs. 7.2% in August y/y (slightly above exp 6.6%). The slowdown was already priced in since it was primary a result of crude oil price decline.

In the European session German ZEW investor sentiment index is expected to drop for its already low level. the severe downturn in financial market conditions, since last reading surprise uptick, should have caused a renewed decline, considering that German banks are right in the thck of thngs. ECB President Trichet will give a speech at the Economic Club of New York today at 16.15gmt

Markets trading patterns will be critical today, as the US market returns from the one day holiday. The traders will be watching a press conference by US Treasury Sec Paulson, Bernanke and the FDIC's Bair shortly before the US equity markets open. While the positive sentiment benefits the Eur in the ultra short run over the longer term, evolving rate differentials should be supportive of the US dollar, since the European countries have to address their slowing growth and must cut rates further.

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