Daily Forex Snapshots

Asian Session - Markets Calm after FOMC

June 26, 2008 9:56 AM CEST

G10 Advancers and Decliners vs USD

	NOK	0.63
	SEK	0.47
	EUR	0.43
	DKK	0.43
	AUD	0.36
	CHF	0.29
	CAD	0.26
	GBP	0.21
	JPY	0.15
	NZD	-0.09

Global Indexes

Current Level

% Change

Nikkei 225 Index	13,822.32	- 0.05
Hang Seng Index	22,559.79	- 0.33
Shanghai Index	2,901.85	- 0.10
FTSE futures	5,691.50	+ 0.22
DAX futures	6,633.50	- 0.80
CAC futures	4,498.00	- 1.02
DJIA futures	11,778.00	- 0.24

World Markets

Current Level

% Change

Gold	886.30	- 0.08
Silver	16.78	- 0.03
VIX	21.14	- 5.70
Crude wti	133.85	- 0.52
USD Index	72.93	+ 0.01

Todays Calender

Estimates

Country / GMT

Business Investment (Q1 Final) q/q(y/y)	-1.4%(+3.7	-1.4%(+3.7	UK / 9.30
MPC Testifies to Treasury Committee on Inflation R	--	--	UK / 9.45
GDP (Q1 3rd Estimate) (q/q Ann.)	1.0%	0.9%p	UK / 13.30
Initial Jobless Claims (Jun 21st)	375k	381k	US / 13.30
GDP qoq (annual)	1.0%	0.9%	US /13.30
Personal Consuption (1q F)	1.0%	1.0%	US / 13.30
Core PCE qoq (1q F)	2.1%	2.1%	US / 13.30
Help Wanted Index (May)	19	19	US / 14.15
Existing Home Sales (May)	4,950k	4,890k	US / 15.00

Currency Tech

AUDUSD
R 3: 0.9655
R 2: 0.9648
R 1: 0.9604
CURRENT: 0.9578
S 1: 0.9490
S 2: 0.9448
S 3: 0.9405

EURJPY
R 3: 171.00
R 2: 170.00
R 1: 169.15
CURRENT: 169.13
S 1: 166.77
S 2: 166.00
S 3: 165.51

USDSGD
R 3: 1.3850
R 2: 1.3827
R 1: 1.3730
CURRENT: 1.3666
S 1: 1.3635
S 2: 1.3580
S 3: 1.3554

Market Brief

Usd was stable in the Asian session after being sold off in response to the FOMC meeting. EurUsd ranged between 1.5660 and 1.5685 while UsdJpy trended upwards from 107.75 to 108.05. Carry trades continued to exhibit strong momentum with EurJpy finally breaking thru 168.80 resistance, climbing to 169.40 and AudJpy followed that trend by breaking thru 103.48 resistance, reaching new highs at 103.69. In addition, given the fact that the EurJpy has historically proven to be a good indicator of risk appetite we expect continued demand of yield driven currency trades.

US stocks ended higher Wednesday after oil prices fell and the Fed left rates unchanged at 2%. The major indexes retreated from their post-FOMC highs in late-afternoon trading, with the Dow barely closing in positive territory. Asian markets trading higher this morning after the Fed said downside risks to growth appear to have diminished and gave no signs that it will raise interest rates anytime soon. Sony & Nintendo led the advancers. Oil prices pulled back after an unexpected increase in crude stockpiles but pared their losses after the Fed statement; the Aug '08 contract was down $2.45 to $134.55. Gold prices closed lower on the back of lower oil prices; the most active was the Aug '08 contract down $9.30 to $882.30. We also saw Sep '08 silver -13.2 ¢ at $16.607/oz.

Yesterday the Fed left rates unchanged at 2.00% and the statement showed the downside risks have diminished slightly and upside inflation risks have increased. Overall the statement had a less hawkish tone then what the market was expecting and failed to indicate that the fed is in any real hurry to begin hiking rates. As expected Fisher voted for an immediate hike (on the record saying the fed shouldn’t have moved below 3.5%). What was interesting and perhaps the strongest signal to the market that rate expectation have become over done was Plossers vote to hold rates along with the majority. In addition, the lack of assessment by the Fed of how inflation measured against growth ie which measurement would steer the Fed monetary policy suggested again that members are in no rush to hike given the unsettled domestic condition. With both rate cuts and hikes off the table in the near term much depends on economic data. We currently are not expecting much for the US and believe data will point to an economy just getting by but with significant downside risk. This should keep the Usd under pressure and we are watching for EurUsd to begin creeping upwards.

While data out of New Zealand has little monetary policy effect, a wider Current account deficit was not what official were hoping for (declined to 2.160bn deficit in Q1 from 3.410bn in Q1). Account deficit GDP ratio at 7.8%. Net income deficits worsened while exports outstripped imports.

Austria data was mixed with Conference Board indicators printed higher then expected at 0.3% vs. -0.4% while job vacancies rose 3.4% after a drop in April of -2.5%.

In the UK five members of the MPC will testify to the treasury committee on May inflation report (not a position we envy). This should be a good time for the markets to receive some clarity regarding how seriously the members are considering a rate hike. Especially given last weeks mixed communications signals. But overall we expect that we will see a diverse view of how each member views the inflation verse growth situation.

ACM Advanced Currency Markets SA (hereinafter referred as ACM) is a professional financial intermediary, directly regulated by the Swiss Federal Department of Finance, Anti Money Laundering Control Authority. As forex specialist, ACM provides only currency trading via highly professional forex trading software. All customers are aware that this information or any part thereof has been prepared without taking account of your objectives, financial situation and/or needs. This information is not intended as personalized investment advice and does not constitute a recommendation. It is not an offer or solicitation of any offer to purchase or sell any financial instrument. The analysis is based on the information which ACM finds reliable and accurate, but ACM does not assume any responsibility for any material nor for the transactions made on the basis of the information or the estimates of the analysis. ACM cannot guarantee that these forecasts will materialize and cannot be held liable in any way for direct, indirect and/or consequential loss arising from any use of this information, document or its content. All opinions and estimates constitute ACM analysis as of the data and are subject to change without notice. ACM does not warrant the accuracy or completeness of information contained herein, such information is subject to change and is not intended to influence your investment decisions. Past performance is not a reliable indicator of future performance.