Daily Forex Snapshots

European Session - BoC cuts 50bp

March 04, 2008 4:23 PM CET

G10 Advancers and Decliners vs USD

	CHF	0.68
	NOK	0.52
	JPY	0.49
	DKK	0.17
	SEK	0.17
	GBP	0.15
	EUR	0.13
	CAD	-0.55
	NZD	-0.56
	AUD	-0.87

Global Indexes

Current Level

% Change

FTSE 100 Index	5,751.70	- 1.15
CAC 40 Index	4,695.58	- 0.99
DAX Index	6,606.92	- 1.24
SMI Index	7,312.77	- 1.23
DJIA Index	12,160.39	- 0.80
NASDAQ 100 Index	2,246.06	- 0.55
S&P 500 Index	1,321.75	- 0.72

World Markets

Current Level

% Change

Gold	981.75	- 0.19
Silver	20.22	- 0.56
VIX	26.28	- 0.98
Crude wti	102.10	- 0.32
USD Index	73.73	+ 0.03

Todays Calender

Estimates

Country / GMT

AiG Performance of Service (feb)	--	54.9	AU / 22.00
Capital Spending (q4)	-2.1%	-1.2%	JP / 23.50

Currency Tech

USDJPY
R 3: 110.10 T
R 2: 108.00 K
R 1: 105.00 S
CURRENT 102.99
S 1: 102.61 M
S 2: 101.68 S
S 3: 101.22 T

GBPUSD
R 3: 2.0100 S
R 2: 2.0000 P
R 1: 1.9976 M
CURRENT 1.9867
S 1: 1.9762 T
S 2: 1.9630 K
S 3: 1.9105 S

EURUSD
R 3: 1.5300 K
R 2: 1.5239 M
R 1: 1.5229 M
CURRENT 1.5208
S 1: 1.5144 M
S 2: 1.5000 K
S 3: 1.4500 P

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

Market Brief

FX markets were eerily quiet in European session considering the past volatility. After a short spike in EurUsd on the economic release the pair settled into 1.5203 – 1.5231 range. Data painted the unwelcome combination of Euro Zone slowing GDP growth and increasing prices pressure. The annual GDP growth rate was cut to 2.2% from 2.3% representing the slowest pace in two years. And on the other side producer prices inflation figures rose to 4.9% from 4.3% a significant build up in price pressure. While at some point the ECB will have to address slowing growth the strength of prices means that a near term cut is off the table.

The Bank of Canada cut 50bp to 3.50% in Mark Carney first monetary policy meeting as governor. In addition the statement “further monetary policy stimulus is likely to be required in the near term,” cemented the fact that more cuts are forthcoming.

15.00gmt - Fed's Kohn testifies to senate panel
18.00gmt - Fed's Fisher speaks in London
18.00gmt - Fed's Mishkin speaks
22.00gmt - RBA's Edey speaks

Asian Session - RBA Hikes to 7.25%

March 04, 2008 9:39 AM CET

G10 Advancers and Decliners vs USD

	JPY	0.35
	CHF	0.14
	GBP	0.12
	NOK	0.10
	SEK	0.05
	DKK	-0.05
	EUR	-0.05
	CAD	-0.39
	NZD	-0.51
	aud	-1.13

Global Indexes

Current Level

% Change

Nikkei 225 Index	12,992.28	+ 0.01
Hang Seng Index	23,213.69	- 1.57
Shanghai Index	4,335.45	- 2.31
FTSE futures	5,781.50	- 0.86
CAC futures	4761.50	+ 0.17
SMI Futures	7,380.00	- 1.92
DJIA futures	12,227.00	- 0.20

World Markets

Current Level

% Change

Gold	981.80	- 0.19
Silver	20.27	- 0.34
VIX	26.28	- 0.98
Crude wti	102.08	- 0.36
USD Index	73.73	+ 0.03

Todays Calender

Estimates

Country / GMT

CIPS/RBS Report on Construction (Feb)	53.0	53.9	UK / 9.30
Producer Price Index (Jan)	0.8%(+4.9%	0.1%(+4.3%	EZ / 10.00
GDP (Q4 Breakdown) q/q(y/y)	0.4%(+2.3%	0.4%(+2.3%	EZ / 10.00
Bank of Canada Rate Announcement	3.63%	4.00%	CA / 14.00

Currency Tech

AUDUSD
R 3: 0.9578
R 2: 0.9555
R 1: 0.9500
CURRENT: 0.9304
S 1: 0.9265
S 2: 0.9122
S 3: 0.9006

EURJPY
R 3: 161.05
R 2: 160.20
R 1: 157.55
CURRENT: 156.61
S 1: 155.95
S 2: 154.87
S 3: 154.05

USDSGD
R 3: 1.4220
R 2: 1.4151
R 1: 1.4063
CURRENT: 1.3916
S 1: 1.3898
S 2: 1.3865
S 3: 1.3800

Market Brief

Usd was steady in Asian session as markets await a slew of Central Bank rate decisions. AudUsd fell to a five day low to 0.9265 as RBA Governor Stevens comments follow a 25bp hike to 7.25% were deemed dovish. The hike was widely expected as inflationary pressures have been building in the Austrian economy. But the market had anticipated the CB would signal additional tightening but not the reserved tone the governor took stating “tentative evidence that some moderation in household demand is beginning to occur”. This language suggests that the RBA is willing to wait and watch. But with GDP growth q4 probably remaining strong around 3.6% (the figure will be released tonight) the RBA might be pressured to move up one more time in 2008. We believe that the Aud will be supported by renewed rate expectations while benefiting from one of the highest rates in the developed economies.

In Japan as expect the rhetoric surrounding the recent appreciation in the Jpy has increased exponentially. "I'm really concerned about the recent abnormal strengthening of the yen against the dollar," Economy Minister Hiroko Ota stated at a news conference today. "The strong yen is hurting the profits of Japanese corporations." While Finance Minister Fukushiro Nukaga said at a separate news conference "we will keep watching movements in foreign exchange rates from now on.” Given the tone and frequency of these statements, some form of intervention is a very likely. In addition the strong Jpy has increased speculation that the next move by the BoJ will be a cut.

The Bank of Canada is expected to cut rate by 25bp today but there is growing evidence that the CB goes for 50bp instead. With GDP growth slowing to only 0.8% in q4, released yesterday, the BoC will be temped to take a more aggressive policy stance. And the fact that headline CPI stood at a 2.2% in Jan. while core was at a tame 1.3%, the CB has more room to maneuver.

On the Continent eurozone GDP growth for q4 should confirm that the region ended last year on the soft side. It seems that domestic household remained inactive and thrifty.

14.00gmt - Fed's Bernake speaks
15.00gmt - Fed's Kohn testifies to senate panel
18.00gmt - Fed's Fisher speaks in London
18.00gmt - Fed's Mishkin speaks
22.00gmt - RBA's Edey speaks

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