Daily Forex Snapshots

Asian Session- Dollar Stagnates Meanwhile Euro Awaits

May 16, 2008 11:04 AM CEST

G10 Advancers and Decliners vs USD

	JPY	.48
	CHF	.55
	NOK	.55
	CAD	.29
	DKK	.43
	EUR	.42
	SEK	.25
	GBP	.25
	NZD	1.30
	AUD	.91

Global Indexes

Current Level

% Change

Nikkei 225 Index	12,219.48	- 0.23
Hang Seng Index	25,618.86	+ 0.41
Shanghai Index	3,624.23	- 0.36
DAX futures	7,188.50	+ 1.13
CAC futures	5,031.50	+ 0.90
SMI Futures	7,713.00	+ 0.42
DJIA futures	12,998.00	+ 0.02

World Markets

Current Level

% Change

Gold	883.43	+ 0.20
Silver	16.83	+ 0.75
VIX	16.30	- 7.70
Crude wti	124.51	+ 0.31
USD Index	73.18	- 0.23

Todays Calender

Estimates

Country / GMT

Housing Starts (YoY)(Apr)

935.000k

.947M

US/12:30

Currency Tech

USDJPY
R 3: 111.92 K
R 2: 110.10 T
R 1: 105.70 M
CURRENT 104.84
R 1: 103.39 M
R 2: 100.00 P
R 3: 95.74 K

GBPUSD
R 3: 2.0447 S
R 2: 2.0100 P
R 1: 1.9800 S
CURRENT 1.9446
S 1: 1.9391 M
S 2: 1.9337 S
S 3: 1.9105 K

EURUSD
R 3: 1.6200 T
R 2: 1.6000 K
R 1: 1.5571 M
CURRENT 1.5439
S 1: 1.5285 M
S 2: 1.5000 K
S 3: 1.4500 P

Market Brief

Markets were set back to trends set few weeks ago. The euro strengthened, the pound remained under pressure, the dollar dwindled and, in Asia, the Kiwi faltered.

The New Zealand dollar’s drop was caused by poor data of their retail sales. It clearly showed that the state of the economy is worsening month by month which clearly implies that the Reserve Bank of New Zealand will cut rates. Currently they stand at 8.25 per cent. Many analysts are predicting that this figure could fall to 6.75 per cent by years’ end. The housing market and the consumer spending are both showing signs of dereliction and this is prompting financial operators to remain bearish vis-à-vis the kiwi for the long run.

The dollar also had to grapple with opaque data. Industrial production showed sign of lagging. The Fed still has to set a clear path as to what it feels will have to be the priority in the month to come: suppress inflationary swelling in the economy or buckle to revamp an economy that keeps prompting toxic signs of deterioration.

The conundrum is also facing the ECB. The Euro advanced over the day precisely because inflationary signs seem to be gaining the upper hand in the euro zone. Nonetheless there were some worrying signs of slowdown as shown by the economic sentiment index which has pushed Jean-Claude Trichet to underline that the growth might not be as flourishing as some are picturing it to be.

The over all performance of both the dollar and the euro, whose inverted correlation had been the principle attraction of the market, could be reviewed, not by their respective central bankers, but by investors their appraisal of the technical level reached now by both currencies. This will have to be done in the wake of swinging prices of commodities, whose prices are more determined by fundamental news. The clash of perspectives will be an interesting collusion to follow in the weeks to come.

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