Daily Forex Snapshots

Asian Session - USD Weakens

April 08, 2008 10:15 AM CEST

G10 Advancers and Decliners vs USD

	CHF	0.68
	JPY	0.66
	EUR	0.47
	DKK	0.44
	SEK	0.45
	NOK	0.33
	AUD	-0.11
	GBP	-0.29
	CAD	-0.37
	NZD	-0.45

Global Indexes

Current Level

% Change

Nikkei 225 Index	13,250.43	- 1.48
Hang Seng Index	24,392.54	- 0.74
Shanghai Index	3,612.54	+ 0.35
FTSE futures	5,988.00	- 0.51
CAC futures	4,908.00	- 0.75
SMI Futures	7,505.00	- 0.72
DJIA futures	12,551	- 0.40

World Markets

Current Level

% Change

Gold	921.18	+ 0.12
Silver	17.89	- 0.44
VIX	22.42	- 0.13
Crude wti	108.85	- 0.22
USD Index	72.09	- 0.15

Todays Calender

Estimates

Country / GMT

Housing Starts (mar)	222.5k	256.9k	CA / 13.15
Pending Home Sales Index (Feb)	-1.0%	0.0%	US / 15.00
Fed Minutes Released (18th Mar Meeting)	--	--	US / 19.00

Currency Tech

AUDUSD
R 3: 0.9354
R 2: 0.9290
R 1: 0.9285
CURRENT: 0.9261
S 1: 0.9177
S 2: 0.9100
S 3: 0.9024

EURJPY
R 3: 163.16
R 2: 162.28
R 1: 161.72
CURRENT: 160.95
S 1: 159.48
S 2: 159.30
S 3: 158.55

USDSGD
R 3: 1.4136
R 2: 1.4046
R 1: 1.3940
CURRENT: 1.3803
S 1: 1.3741
S 2: 1.3696
S 3: 1.3500

Market Brief

Usd came under significant pressure in early Asian session although no specific reason could be attributed for the move. EurUsd spiked from 1.5720 to 1.5790 with speculation that the catalyst was a large position from a major bank triggering stops and/or trader pricing in the more hawkish ECB comments of Thursday. Risk appetite continued to increase as efforts by central banks to inject liquidity and thwart systemic risk created a growing sense of optimism that the financial markets have stabilized.

Shirakawa's parliamentary hearing for his nomination for BoJ governorship lacked any specifics on his view of monetary policy but he nonetheless stated that the BoJ must review all risk “without having any preconceptions”. We expect the BoJ to hold rates tomorrow at 50% and unlikely to signal any easing just yet. Recently politics have overshadowed economic policy and the BoJ will have to get comfortable with its new leadership before moving in a particular direction (although the market is roughly pricing in a 14bp cut over the next twelve months).

Today trading focus will be the Fed’s minutes for the March 18th 75bp cut meeting. The final vote moved rates to 2.25% but there was clearly some opposition to easing the rates to that extent. Both Fisher and Plosser voted against the decision, preferring what the accompanying statement called “less aggressive action.” What exactly was meant by less aggressive is still moot. Could it have meant a 50bp, a25bp or should the Fed have left the rates unchanged? the questions remains as of yet unanswered. In addition the hawkish nature of the statement points to a Fed which might becoming more aware of the inflation risks. While much depends on the upcoming economic data and development in the financial sector these minutes should give us good direction of the Fed policy.

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