Daily Forex Snapshots

European Session - Dollar Back in Favor- But For How Long ?

March 11, 2008 4:34 PM CET

G10 Advancers and Decliners vs USD

	NZD	1.55
	AUD	0.97
	CAD	0.40
	NOK	0.03
	SEK	-0.03
	DKK	-0.22
	EUR	-0.25
	GBP	-0.59
	CHF	-1.39
	JPY	-1.46

Global Indexes

Current Level

% Change

FTSE 100 Index	5,716.60	+ 1.55
CAC 40 Index	4,658.40	+ 2.00
DAX Index	6,566.36	+ 1.83
SMI Index	7,210.36	+ 2.20
DJIA Index	11,961.10	+ 1.88
S&P 500 Index	1,296.40	+ 1.80
NASDAQ 100 Index	2,213.55	+ 2.03

World Markets

Current Level

% Change

Gold	974.31	+ 0.17
Silver	19.69	+ 0.10
VIX	27.80	- 5.37
Crude wti	108.06	+ 0.14
USD Index	73.39	+ 0.54

Todays Calender

Estimates

Country / GMT

BoJ MPC Minutes (Feb)	--	--	JP / 23.50
GDP (Q4 Final) q/q(Ann.)	+0.6%(+2.3	+0.9%(+3.7	JP / 23.50
DCGPI (Feb)	0.3%(+3.3%	0.2%(+3.0%	JP / 23.50
Current Account (Jan) Adj.	¥1932bn	¥1855bn	JP / 23.50

Currency Tech

USDJPY
R 3: 108.67 T
R 2: 106.51 S
R 1: 104.22 S
CURRENT 103.26
S 1: 101.42 M
S 2: 101.24 S
S 3: 100.00 K

GBPUSD
R 3: 2.0577 T
R 2: 2.0447 S
R 1. 2.0140 M
CURRENT 2.0008
S 1: 2.0000 P
S 2: 1.9727 M
S 3: 1.9630 K

EURUSD
R 3: 1.5600 T
R 2: 1.5500 M
R 1: 1.5396 S
CURRENT 1.5299
S 1: 1.5280 M
S 2: 1.5000 K
S 3:1.4500 P

S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot

Market Brief

The Euro is reeling. The Pound is stumbling. These currencies are not linked in any fashion but seem to be affected by the same alarms bells President Trichet of the ECB signaled yesterday. His statement underlined the trials and tribulations the Eurozone economy will have to face if the excessive volatility in the market were to continue. Without really mentioning president Trichet was underscoring the problems the strong euro was having on exports from this region. This has been viewed by markets as a clear step away from the official stance of the ECB which has always been keen in combating the inflationary juggernaut. Analyst have been viewing this as a way conjuring markets to quiet a little without having the ECB coming out with an arsenal of measures, which would require the support of the other central banks- none the least the Fed. This policy stance is in part a reaction to market indicators that have always acted negatively over the recent crisis when central banks seek to qualm fears of investors all the while hiding their own anxieties. It is also a reaction by the ECB to unintentional exasperation by the Fed on letting the dollar continue its slide. Trichet still seems devoted to fight inflation despite yesterday’s comments. Investors view this policy with much frustration as there still does not appear to be a clear direction as to what will constitute a priority to the ECB in the long run.

Much of this conclusion can be attributed to the BOE. UK banks are facing increasing difficulties in borrowing money which have many investors and analyst thinking that the BoE could be pressured to inject massive cash into the markets. There were signs that the BoE could be in close consultation with the Fed to coordinate policy concerning liquidity questions. But nothing came out of the G10 central bankers meeting yesterday in Basel. The only news to grind on was the possibility that the BoE would roll over the £10bn loans of three months against a wide list of collaterals issued in late December. This could relieve a lot of strain in the money markets and refrain the BoE to act on other classical measure. The pound did drop against the dollar on the announcement of this possibility

Asian Session - Chinese CPI Jumps

March 11, 2008 10:10 AM CET

G10 Advancers and Decliners vs USD

	NZD	0.67
	AUD	0.56
	CAD	0.44
	SEK	0.35
	NOK	0.31
	DKK	0.18
	EUR	0.15
	GBP	-0.14
	CHF	-0.20
	JPY	-0.22

Global Indexes

Current Level

% Change

Nikkei 225 Index	12,658.28	+ 1.00
Hang Seng Index	22,969.05	+ 1.16
Shanghai Index	4,165.88	+ 0.47
FTSE futures	5,623.50	- 1.11
CAC futures	4,601.50	+ 0.57
SMI Futures	7,068.00	- 1.49
DJIA futures	11,829.00	+ 0.42

World Markets

Current Level

% Change

Gold	971.10	- 0.17
Silver	19.65	- 0.10
VIX	29.38	+ 6.87
Crude wti	107.83	- 0.06
USD Index	73.00	+ 0.01

Todays Calender

Estimates

Country / GMT

CLG House Prices (Jan)	7.5%	9.1%	UK / 9.30
ZEW Economic Sentiment Index (Mar)	-40.0	-39.5	GE / 10.00
ZEW Economic Sentiment Index (Mar)	-42.0	-41.4	EC / 10.00
Trade Balance (Jan)	-$59.5bn	-$58.8bn	US / 12.30
New Housing Price Index (Jan) m/m	0.2%	0.1%	CA / 12.30
Int'l Mechandise trade Balance (Jan)	c$2.6	c$2.4	CA / 12.30
Food Prices (Feb) m/m	--	0.4%	NZ / 21.45
BoJ MPC Minutes (Feb)	--	--	JP / 23.50
GDP (Q4 Final)	+0.6%(+2.3	+0.9%(+3.7	JP / 23.50
DCGPI (Feb)	0.3%(+3.3%	0.2%(+3.0%	JP / 23.50

Currency Tech

AUDUSD
R 3: 0.9385
R 2: 0.9313
R 1: 0.9313
CURRENT: 0.9212
S 1: 0.9147
S 2: 0.9122
S 3: 0.9006

EURJPY
R 3: 159.22
R 2: 158.41
R 1: 157.73
CURRENT: 156.7
S 1: 155.59
S 2: 154.88
S 3: 154.07

USDSGD
R 3: 1.4152
R 2: 1.4063
R 1: 1.3983
CURRENT: 1.3893
S 1: 1.3827
S 2: 1.3800
S 3: 1.3696

Market Brief

Usd was range bound in Asian session as concern over the state of the global economic system spread. Financial stocks pulled US equities lower but Asian stock markets were able to buck the downward trend. We expect to see the Usd to come under pressure as the US works through their recessionary fever. Crude continued to move higher with wti at 107.90. Interestingly gold has reversed from its high.

In Japan’s BoJ governor nominee Muto in front of parliament clarified his personal view of the current situation stating “signs of a US economic slowdown are intensifying and downside risks to the global economy are rising [while] Japan's economy is at a critical stage as it faces various risks at home and abroad". These comments have a clear political agenda. Currently the opposition to Muto is still vigorous and this could put the BoJ's monetary policy in limbo for a while. This is certainly unwelcomed news for an economy which needs a strong hand right now.

In China the CPI spiked to a 12 year high of 8.7% vs, exp. 8.0%. While the main contributors to this rise remain food and energy costs which were exacerbated by supply shortage and crop dammage caused by storms in January and February, the government has put the fight against inflation on the top of the agenda. Given the level of concern surrounding this release the PBoC will be allowed to use all of its monetary policy tools including increased CNY flexibility to help release the pressure.

Going into Europe the market will be watching the ZEW survey which is expected to slip further after a fall at the start of 2008. The figure which has stabilized is good news for the Euro zone. Economic new for the region has been encouraging lead by PMI which suggest a decent GDP figure and a solid rise in GE industrial production.

In the UK BRC Retail Sales Monitor probably fell on weaker consumer demand predicated by the fall in CBI.

14.00gmt - Fed's Kroszner speaks
14.30gmt - US trsy Paulson speaks

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