Daily Forex Snapshots

European Session - US Retail Sales Tanks

March 13, 2008 4:10 PM CET

G10 Advancers and Decliners vs USD

	JPY	1.73
	CHF	0.93
	CAD	0.78
	GBP	0.67
	AUD	0.66
	NZD	0.51
	EUR	0.44
	DKK	0.43
	SEK	0.28
	NOK	-0.26

Global Indexes

Current Level

% Change

FTSE 100 Index	5,634.70	- 2.45
CAC 40 Index	4,568.60	- 2.73
DAX Index	6,416.34	- 2.77
SMI Index	7,143.86	- 1.39
DJIA Index	11.908.35	- 1.66
S&P 500 Index	1,286.31	- 1.71
NASDAQ 100 Index	2,205.78	- 1.39

World Markets

Current Level

% Change

Gold	996.72	+ 1.40
Silver	20.73	+ 2.82
VIX	29.37	+ 7.88
Crude wti	110.90	+ 0.89
USD Index	71.91	- 0.68

Todays Calender

Estimates

Country / GMT

Manufactoring Activity (q4)

-2.1%

NZ / 21.45

Currency Tech

USDJPY
R 3: 110.10 T
R 2: 108.00 K
R 1: 105.00 S
CURRENT 100.20
S 1: 100.00 S
S 2: 99.77 S
S 3: 94.60 K

GBPUSD
R 3: 2.1165 T
R 2: 2.0583 S
R 1: 2.0468 S
CURRENT: 2.0354
S 1: 2.0100 K
S 2: 2.0000 P
S 3: 1.9630 K

EURUSD
R 3: 1.6000 S
R 2: 1.5800 S
R 1: 1.5623 S
CURRENT: 1.5580
S 1: 1.5283 M
S 2: 1.5000 K
S 3: 1.4500 P

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

Market Brief

Pressure on the Usd eased in European session but the greenback is clearly not out of the woods yet. A collapsing retail sales which fell by a sizeable 0.6% m/m in February is just more evidence that US economy is in a recession. This indicator goes right to the heart of the consumer and increases the probability that consumption and GDP will contract in q1. Only to make the matter worse, the decline was seen across the board. If history is any predictor of events once a recession begins the economy deteriorate rapidly. And the US is moving downwards like in a classical pattern. Weakness in the labor markets apparent in Feb figures will squeeze income and spending showing up in consumer indicators such as retail sales.

We are currently predicting a 75bp Fed cut next week, especially since the $200b liquidity injection had little lasting effect. Fed Funds are showing rate stabilization at 1.75bp by mid year however we are expected the Fed to go lower. As the US economic conditions worsen in the weeks to come we expect this curve to adjust downwards to the 1.00 – 1.25bp lvl which is not currently priced into the Usd.

Asian Session - Dollar Falls on Likely US Rate Cut

March 13, 2008 10:03 AM CET

G10 Advancers and Decliners vs USD

	JPY	1.95
	CHF	.96
	GBP	.50
	DKK	.35
	EUR	.36
	NOK	.21
	CAD	.17
	SEK	.10
	AUD	.14
	NZD	-.25

Global Indexes

Current Level

% Change

Nikkei 225 Index	12,433.44	- 3.33
Hang Seng Index	22,445.81	- 4.17
Shanghai Index	3,971.26	- 2.43
FTSE futures	5,765.00	+ 1.24
DAX futures	6,494.00	- 1.65
SMI Futures	7,253.00	+ 1.43
DJIA futures	11.992.00	- 1.09

World Markets

Current Level

% Change

Gold	988.23	+ 0.54
Silver	20.38	+ 1.09
VIX	27.22	+ 3.26
Crude wti	109.91	- 0.01
USD Index	72.06	- 0.48

Todays Calender

Estimates

Country / GMT

Import Price Index (MoM) (Feb)	0.8%	1.7%	US/12:30
Initial Jobless Claims(Mar 8)	355k	351k	US/12:30
Retail Sales (MoM)(Feb)	0.2%	0.3%	US/12:30
SNB Interest Rate Decision	2.75%	2.75%	CH/13:00

Currency Tech

AUDUSD
R 3: 0.9421
R 2: 0.9385
R 1: 0.9333
CURRENT: 0.9308
S 1: 0.9147
S 2: 0.9122
S 3: 0.9006

EURJPY
R 3: 161.41
R 2: 159.22
R 1: 158.94
CURRENT: 158.45
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: 1.3873
S 1: 1.3827
S 2: 1.3800
S 3: 1.3696

Market Brief

Yesterday saw a concerted action by the major central banks to address the persistent problems in the financial markets. The US Federal Reserve announced that it would inject in the bond market $200bn while the ECB and the Swiss National Bank decided to increase the size of currency swaps put in action in December. On first glance it appears like the Fed is shifting away from traditional measures towards more specific remedies that are aimed at the problems. However, the two year swap spreads only marginally narrowed which shows that the measures were more a relief than a full fledged cure. The market reacted rather cautiously. While it recognized the utility and pertinence of these measures it also knows that one swallow does not make a summer.

Moreover, the markets had to contend with ECB director Trichet's comments stressing again that amid the present circumstances in the market the euro's strength could be detrimental to growth prospects. Knowing Trichet's staunch stand on inflation such repeated remarks confused investors who are yet to gauge the relative importance of inflationary pressure vis-à-vis growth prospective.

Having said this, the dollar had yet another bad trading session and the euro went to challenge again record highs. The euro rose to $1.5525 and also challenged the yen at Y158.65. The pound was also relatively feeble against the European currency as it moved back to £.7661.

the dollar's rally of Tuesday was almost completely wipped out as many investors still expect the Fed to be tempted to act on interest rates in the near future since the concerted action mentioned would more and more be viewed only as a palliative. This feeling was shared across the markets and continents and activated a sell off in the markets late in the session. The reaction was also coupled by talk that Eastern fund managers were heavily selling the greenback together with an announcement from Jordan that is was planning to reduce its portion of dollars in its reserves. The over all trend is still bearish - for the moment. For how long is still a moot question.

ACM Advanced Currency Markets SA (hereinafter referred as ACM) is a professional financial intermediary, directly regulated by the Swiss Federal Department of Finance, Anti Money Laundering Control Authority. As forex specialist, ACM provides only currency trading via highly professional forex trading software. All customers are aware that this information or any part thereof has been prepared without taking account of your objectives, financial situation and/or needs. This information is not intended as personalized investment advice and does not constitute a recommendation. It is not an offer or solicitation of any offer to purchase or sell any financial instrument. The analysis is based on the information which ACM finds reliable and accurate, but ACM does not assume any responsibility for any material nor for the transactions made on the basis of the information or the estimates of the analysis. ACM cannot guarantee that these forecasts will materialize and cannot be held liable in any way for direct, indirect and/or consequential loss arising from any use of this information, document or its content. All opinions and estimates constitute ACM analysis as of the data and are subject to change without notice. ACM does not warrant the accuracy or completeness of information contained herein, such information is subject to change and is not intended to influence your investment decisions. Past performance is not a reliable indicator of future performance.