Daily Forex Snapshots

European Session - US Sentiment Index Down Again

March 25, 2008 5:37 PM CET

G10 Advancers and Decliners vs USD

	NOK	1.84
	SEK	1.53
	CHF	1.24
	EUR	1.15
	DKK	1.14
	NZD	0.91
	AUD	0.84
	GBP	0.69
	JPY	0.55
	CAD	0.05

Global Indexes

Current Level

% Change

FTSE 100 Index	5,676.30	+ 3.29
CAC 40 Index	4,678.39	+ 3.19
DAX Index	6,509.18	+ 2.99
SMI Index	7,213.54	+ 2.90
DJIA Index	12,548.64	+ 1.51
S&P 500 Index	1,349.88	+ 1.53
NASDAQ 100 Index	2,326.75	+ 3.04

World Markets

Current Level

% Change

Gold	930.13	+ 1.62
Silver	17.45	+ 2.40
VIX	25.73	- 3.34
Crude wti	101.15	+ 0.28
USD Index	72.34	- 0.84

Todays Calender

Estimates

Country / GMT

Retail Sales (Jan)	1.9%	1.1%	MX / 20.30
ABC Consumer Confidence (mar 23)	--	-31	US / 21.00

Currency Tech

USDJPY
R 3: 110.10 T
R 2: 105.00 S
R 1: 101.22 M
CURRENT 100.55
S 1: 100.00 P
S 2: 95.74 S
S 3: 95.00 T

GBPUSD
R 3: 2.0577 T
R 2: 2.0447 S
R 1: 2.0100 P
CURRENT1.9915 K
S 1: 1.9736 M
S 2: 1.9337 S
S 3: 1.9105 K

EURUSD
R 3: 1.6000 K
R 2: 1.5904 S
R 1: 1.5832 M
CURRENT 1.5540
S 1: 1.5528 S
S 2: 1.5000 K
S 3: 1.4500 P

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

Market Brief

US consumer confidence index dropped to 64.5 which is it’s lowest since March 2003. Figures with regard to Conference Board’s forward-looking expectation fell to 47.9 which is its lowest level in 34 years. These numbers clearly show that recession fears are all but settled. Today’s figure shows that the consumer’s outlook is very pessimistic and suggests that there will be more weakening in the months to come. The Fed will in all probability view these numbers as a queue to act on interest rates by lowering them further still. Many analyst are calling these figures very weak and expect the labor market to weaken for a length of time still difficult to assess.

The data does not bode well for the dollar. Ten days ago we had the University of Michigan consumer sentiment index publish figures which hadn’t been seen for over 16 years. And before that we had the Case-Schiller house price index, which reflect the price in 20 major cities across the US, falling to 10.7 per cent. Clearly the housing market crisis has yet to peter out and is still creating mayhem in the minds of American consumers. Uncertainties around household throughout America are growing. Despite this string of bad news the European government bonds remained lower. This is because of a persistent rumor that major central banks are considering buying mortgage backed securities from investors. This announcement has weighed heavily on bonds on both sides of the duck pond.

Asian Session - Usd Euphoria Declines

March 25, 2008 9:49 AM CET

G10 Advancers and Decliners vs USD

	NOK	1.40
	SEK	1.06
	DKK	0.83
	EUR	0.81
	CHF	0.75
	AUD	0.69
	NZD	0.46
	CAD	0.41
	GBP	0.37
	JPY	0.33

Global Indexes

Current Level

% Change

Nikkei 225 Index	12,745.22	+ 2.12
Hang Seng Index	22,424.32	+ 6.23
Shanghai Index	3,629.62	+ 0.01
CAC futures	4,710.50	+ 3.63
DAX futures	6,598.50	+ 3.12
DJIA futures	12,559.00	+ 0.15

World Markets

Current Level

% Change

Gold	925.55	+ 1.11
Silver	17.39	+ 2.09
VIX	27.73	- 3.34
Crude wti	100.30	- 0.55
USD Index	72.48	- 0.67

Todays Calender

Estimates

Country / GMT

Retail Sales (Jan) m/m	1.4%	0.6%	CA / 12.30
Retail Sales less auto (Jan)	0.5%	-0.4%	CA / 12.30
Consumer Confidence (Mar)	73.5	75.0	US / 14.00
Richmond Fed Manufact. Index (Mar)	-5	-5	US / 14.00
House Price Index (Jan) m/m	--	-0.2%	US / 14.00
Retail Sales (Jan)	1.9%	1.1%	MX / 20.30

Currency Tech

AUDUSD
R 3: 0.9290
R 2: 0.9226
R 1: 0.9162
CURRENT: 0.9139
S 1: 0.9073
S 2: 0.8879
S 3: 0.8953

EURJPY
R 3: 159.22
R 2: 157.96
R 1: 157.03
CURRENT: 156.20
S 1: 155.16
S 2: 153.02
S 3: 151.72

USDSGD
R 3: 1.4136
R 2: 1.4046
R 1: 1.3940
CURRENT: 1.3812
S 1: 1.3741
S 2: 1.3696
S 3: 1.3500

Market Brief

Usd was weaker in Asian sessions as traders returned from Easter to question the greenback's euphoria of last week. Eurusd rose to 1.5573 and UsdJpy fell to 100.08. The Usd inability to rally, especially given the positive existing home sales which rebounded yesterday by 2.9% to 5,030,000 in Feb, is a harbinger of near term Usd weakness. Signs of global slowdown should offer some support to the USD, particularly as market have priced in a probability that other central banks might ease their rates in teh short term. This global easing cycle had been predicted at the start of 2008. However we still see further economic weakness and the possibility of real interest rate going negative in the US which would be a heavy burden for the dollar to bear. In the short term the Usd will be vulnerable to any poor data or news. While many of the strategists are calling for Usd strength we expected the market to challenge one more time the 1.58-1.60 lvls before the trend shifts to a prolonged move downwards for reasons mentioned above.

On Friday Acting BoJ Governor Shirakawa said that the handling of the recent global financial market turmoil was his top priority. He also mentioned that he had no predetermined monetary policy. The markets are currently pricing in a 15bp cut over the next 12 months. There could be more pricing in of rate cuts should officials agree on a coordinated response at the G7 gathering on April 12-13.

The European markets should be subdued due to a lack of data as markets participants wait for US and CA releases. In Canada we are expecting a rebound in Retail Sales which should keep the Cad in positive territory. Nonetheless the over all feeingl is that the softer commodity prices and exposure to the US economy will keep the currency on the defensive. In the US consumer confidence will garner the markets attention. Speculation and positioning suggests that the market expects a fair low figure.

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