Daily Forex Snapshots

European Session - New Highs Against The Usd

March 14, 2008 5:32 PM CET

G10 Advancers and Decliners vs USD

	JPY	0.98
	CHF	0.89
	EUR	0.31
	DKK	0.30
	SEK	0.23
	GBP	0.10
	NZD	0.04
	NOK	0.02
	CAD	-0.02
	AUD	-0.12

Global Indexes

Current Level

% Change

FTSE 100 Index	5,623.40	- 1.21
CAC 40 Index	4,587.21	- 0.92
DAX Index	6,442.66	- 0.89
SMI Index	7,128.85	- 1.69
DJIA Index	11,968.26	- 1.46
S&P 500 Index	1,292.12	- 1.77
NASDAQ 100 Index	2,221.86	- 1.84

World Markets

Current Level

% Change

Gold	998.70	+ 0.39
Silver	20.57	+ 0.26
VIX	30.77	+ 12.75
Crude wti	110.17	- 0.14
USD Index	71.92	- 0.21

Todays Calender

Estimates

Country / GMT

Rate Announcement

7.50%

MX / 15.00

Currency Tech

AUDUSD
R 3: 0.9600
R 2: 0.9499
R 1: 0.9473
CURRENT: 0.9425
S 1: 0.9315
S 2: 0.9276
S 3: 0.9148

EURJPY
R 3: 159.22
R 2: 159.15
R 1: 157.96
CURRENT: 156.46
S 1: 155.55
S 2: 154.88
S 3: 154.07

USDSGD
R 3: 1.4063
R 2: 1.3983
R 1: 1.3926
CURRENT: 1.3836
S 1: 1.3783
S 2: 1.3696
S 3: 1.3500

Market Brief

Usd was weak in European session as pressure mounted from all directions.Economic data was mixed many analyst expected. In the US the inflation rate was the mildest in 6 months while in Europe the Eurozone inflation rate was up 3.3 per cent. In February, the highest since the Euro was launched. These news, however, were overshadowed by the announcement that Bear Stearns had to require help from the Federal government and JP Morgan Chase & Co to bail them out. The announcement was made 30 minutes before markets opened and sent shares swooning and the dollar reeling.

The dollar’s decline was such that it went below parity against the Swiss franc at .9996 on the Zurich exchange. This is a landmark. In 1971 the greenback was worth about four francs. The dollar was under siege against many of the major currencies. The weakness of the dollar is exasperated by the bleak outlook investors have on the US economy and the fizzing out of what was a potential concerted action by the major central banks to buy dollars. Investors are rather speculating on tough anti-inflationary measures which will weigh heavier on the dollar’s dire performance over this week.

Markets are now on an expectation mood: waiting to see how the crisis with the BoJ will conclude and how the major central banks will decide to face the inevitable whirlpool of the US economy. Traders and analyst together are now evaluating what is been programmed in the vanguard.

Asian Session - Broad Usd Weakness

March 14, 2008 9:40 AM CET

G10 Advancers and Decliners vs USD

	JPY	0.75
	CHF	0.66
	DKK	0.15
	SEK	0.13
	EUR	0.12
	NOK	0.11
	GBP	0.11
	NZD	-0.01
	CAD	-0.02
	AUD	-0.17

Global Indexes

Current Level

% Change

Nikkei 225 Index	12,241.60	- 1.54
Hang Seng Index	22,226.99	- 0.33
Shanghai Index	3,962.67	- 0.21
FTSE futures	5,694.50	- 1.22
DAX futures	6,507.50	- 0.10
SMI Futures	7,248.00	- 0.60
DJIA futures	12,075.00	- 0.59

World Markets

Current Level

% Change

Gold	996.71	+ 0.18
Silver	20.67	+ 0.73
VIX	27.29	+ 0.25
Crude wti	109.99	- 0.30
USD Index	71.89	- 0.27

Todays Calender

Estimates

Country / GMT

CPI (Feb Final)	0.3%(+3.2%	(+3.2%)p	EZ / 10.00
Core CPI (Feb)	+1.7%	+1.7%	EZ / 10.00
Labour Costs (Q4)	+2.6%	+2.5%	EZ / 10.00
Consumer Price Index (Feb)	+0.3%(+4.2	+0.4%(+4.3	US / 12.30
Core Consumer Price Index (Feb)	0.2%(+2.4%	0.3%(+2.5%	US / 12.30
Labor Markets Productivity (4Q) q/q	-0.3%	0.2%	CA / 12.30
U. Michigan Confidence (Mar)	69.3	70.8	US / 14.00
Rate Announcement	7.50%	7.50%	MX / 15.00

Currency Tech

Market Brief

Usd was broadly weaker in Asian session as the greenback was very near historical highs again in most of the G10 currencies. This has been a volatile week for the Fx markets (as well as equities and commodities) and with additional rumor swirling of a coordinated central bank fx intervention, today should be no different. Generally we would just discount this rumor as market jitters but in the last 6 months “word on the street” has been eerily accurate. Specifically the inter-meeting 75bp Fed cut. So while the conditions are not right for a major coordinated intervention, we need to be particularly diligent.

In Australia Employment for Feb rose by a strong 36.7k and unemployment rate fell from 4.1% to 4.0% which is a 33-year low. This data should keep rate hike expectations for May alive. RBA Governor Stevens fervently defended the bank's current Monetary Policy in light of headline inflation being at the bottom half of the RBA 2-3% target for most of 2007. Stevens implied that the RBA should focus on the underlying trends in the inflation, such as wage and commodity prices, and not wait until pressures showed up in the indictors.

In Japan the rhetoric surrounding the appreciation in Jpy ver prevalent and we should expect a lot more in the near future. Finance Minister Nukaga said he is watching FX moves closely and that he agrees with the G7 view that extreme FX movements are unwanted. Nukaga made this statement as UsdJpy slipped to a low of 99.78, the first time UsdJpy has dropped below 100.00 in 12 years.

Thursday ECB President Trichet stated he is concerned by extreme FX movements. However, he didnt mention the euro implicitly, and pointed to the fact that US reaffirmation for a strong dollar is in America's interest. There is nothing original or unexpected in Trichet's rhetoric and the Eur strength continues to be unreceptive to verbal intervention by policymakers.

Markets will be watching key inflation data from the Eurozone and US. Both regions figures should reflect that global trend in prices. On the continent we expect CPI to stay elevated as energy prices continued to increase. This will keep the ECBs hawkish tone well entrenched for the near term which in turn will support the Eur. In the US we are expecting increases in both headline and core as oil prices surge above $105.00brl. And with Gasoline above the $4.00 a gallon as the summer driving season gets underway this should put pressure on headline for months to come. Should CPI tick up substantially we could see some support for the Usd as the Fed will have to adjust to fighting inflation.

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