Daily Forex Snapshots

US Session: Traders Seek Safe Haven in Dollar Denominated Assets

October 16, 2008 5:06 PM CEST

G10 Advancers and Decliners vs USD

	Nzd	0.86
	Aud	0.36
	Cad	0.07
	Chf	-0.04
	Sek	-0.08
	Gbp	-0.23
	Jpy	-0.52
	Eur	-0.69
	Dkk	-0.69
	Nok	-2.89

Global Indexes

Current Level

% Change

DJIA Index	8,367.80	- 2.45
S&P 500 Index	885.30	- 2.48
NASDAQ 100 Index	1,599.90	- 1.75
FTSE futures	3,869.50	- 5.58
CAC futures	3,174.50	- 6.05
DAX futures	4,691.50	- 3.46
SMI Futures	5,764.00	- 3.18

World Markets

Current Level

% Change

Crude wti	72.82	- 2.31
Gold	803.55	- 5.12
Silver	9.68	- 5.93
USD Index	82.49	+ 0.54
VIX	77.47	+ 11.87

Todays Calender

Estimates

Country / GMT

No Major Events Scheduled

Currency Tech

AUDUSD
R 3: 0.7239
R 2: 0.7076
R 1: 0.6800
CURRENT: 0.6690
S 1: 0.6496
S 2: 0.6331
S 3: 0.6289

EURJPY
R 3: 141.74
R 2: 139.36
R 1: 135.72
CURRENT: 134.86
S 1: 133.38
S 2: 132.24
S 3: 130.62

USDSGD
R 3: 1.5086
R 2: 1.4980
R 1: 1.4849
CURRENT: 1.4820
S 1: 1.4667
S 2: 1.4551
S 3: 1.4489

Market Brief

The Usd gained marginal strength against European currencies, but fell against some of the Majors in Asia. The EurUsd fell roughly 30 pips to the high range of 1.34, while the UsdJpy rose 100 pips seeing resistance at 101 in intraday trading. The GbpUsd fell 50 pips to the low 1.72 price area, but was mostly flat earlier in the session. Equity markets opened higher in the US with the Dow up over 100pts, however European indexes are negative with the FTSE, DAX, CAC, and SMI lower by 2-3%. Bond yields increased, with 2yr higher by 7bps, and the 10yr up 4bps. This widening is likely to be very short term, as volatility has exaggerated price behavior across asset classes. Commodities declined with gold leading the fall down 5.5% on the day, oil is slightly off yesterday’s close trading with a 73 handle.

EU leadership met to discuss further actions needed to stabilize the financial crisis. French President Sarkozy called for a coordinated response to the current situation in the region. They are looking to implement new mechanisms to unfreeze the credit markets, one of which is expanding the scope of assets eligible for collateral to be transacted in the short-term money markets. In addition, dollar liquidity will be raised through EurUsd FX swaps. The collateral expansion should carry throughout 2009 and include subordinated debt with ratings of A- and BBB-.

Initial Jobless claims came in lower than expected at 461k vs. the consensus figure 470k. Core CPI was flat vs. the estimated rise of 0.1%, thus alleviating some of the price pressure felt by consumers. Other economic indicators like the Philadelphia Fed business outlook survey came in drastically lower at -37.5 as opposed to the survey reading of -10.0. The dollar has become a safe haven currency among investors, and patterns of risk aversion will have significant effect on price behavior in the Usd vs. the majors.

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Asian Session - Equities Collapse Gives Usd Strength

October 16, 2008 10:00 AM CEST

G10 Advancers and Decliners vs USD

	JPY	0.96
	CHF	-0.19
	CAD	-0.66
	GBP	-0.80
	EUR	-0.89
	DKK	-0.97
	NZD	-1.10
	SEK	-1.27
	AUD	-1.99
	NOK	-2.85

Global Indexes

Current Level

% Change

Nikkei 225 Index	8,458.45	- 11.40
Hang Seng Index	14,785.60	- 7.58
Shanghai Index	1,922.33	- 3.62
FTSE 100 Index	3,854.75	- 5.51
DAX Index	4,575.54	- 5.90
SMI Index	5,668.20	- 4.11
DJIA futures	8,512.00	+ 0.09

World Markets

Current Level

% Change

Gold	836.75	- 1.19
Silver	10.13	- 1.59
VIX	69.25	+ 25.61
Crude wti	71.98	- 3.43
USD Index	82.60	+ 0.67

Todays Calender

Estimates

Country / GMT

Consumer Price Index (Sep)	0.1%,5.0%	-0.1%,5.4	US / 12.30
Core Consumer Price Index (Sep)	0.2%,2.5%	0.2%,2.5%	US / 12.30
Initial Jobless Claims (Oct 11th)	470k	478k	US / 12.30
Net Foreign Purchases Of US Securities (Aug)	--	-$74.8bn	US / 13.00
Industrial Production (Sep)	-0.8%	-1.1%	US / 13.15
Philly Fed Index (Oct)	-10.0	+3.8	US / 14.00
NAHB Housing Market Index (Oct)	17	18	US / 17.00
ECB’s Gonzales-Paramo on Economic Turbulence	--	--	EZ / 18.00

Currency Tech

Market Brief

The Usd was considerably stronger in the Asian session, as investors rushed to exist and the equity markets continued to tumble. The EurUsd traded down from 1.3550 to 1.3350 session lows, while the UsdJpy traded from 101.50 to 99.27 session lows. The AudUsd fell at the open to 0.6497, before recovering to 0.6800. As risk aversion defined the session price activities, carry trades and EM continued to come under significant selling pressure, with the GbpJpy at 170.41 and the UsdTry traded higher to 1.5060. VIX spiked higher trading up to 69.25 and crude slipped as fears of a global recession intensified. Weak retail sales in the US and beige book, which reinforced the weakness in US economic activity, prompted another dismal day on Wall Street (largest daily decline since the 1987 stock market crash) with S&P 500 down -9.03% . The indiscriminate, panic like selling carried over into Asia, with the Nikkei currently crashing -11.40%. We donʼt expect any break in FX trend with Usd & Jpy as gainers and Gbp, Eur, Aud, NZD bearing the brunt of the selling.

In Japan, the October's Tankan survey of business conditions significant fell in manufacturer sentiment, with the manufacturing industry index declining to -25, against the prior reading of -14. The deterioration was located in the raw materials & exporting sectors, a signal of slow global demand. In addition, the forecast remains dreary at -21 in 3 months. There was some reference to the effects of the financial market turmoil during the survey period. However, it was the real Japanese economy itself that emerged as the main area of apprehension. As we have stated in the past, as the risk aversion eases we expect the Jpy to come under selling pressure.

No major events or data releases scheduled in European session.

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