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US Session-Usd Gains on Eurozone Economic Weakness
August 26, 2008 5:32 PM CEST
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G10 Advancers and Decliners vs USD |
| | Cad | 0.65 |  |  | Chf | -0.29 | | | Jpy | -0.47 | | | Dkk | -0.53 | | | Eur | -0.54 | | | Sek | -0.56 | | | Aud | -0.70 | | | Nok | -0.70 | | | Gbp | -0.74 | | | Nzd | -0.99 | |
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Global Indexes |
Current Level |
% Change |
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| DJIA Index | 11,420.00 | + 0.32 | | S&P 500 Index | 1,273.00 | + 0.52 | | NASDAQ 100 Index | 1,896.50 | + 0.08 | | FTSE 100 Index | 5,496.00 | - 0.33 | | CAC 40 Index | 4,383.00 | + 0.53 | | DAX Index | 6,379.00 | + 0.95 | | SMI Index | 7,092.30 | + 0.42 |
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World Markets |
Current Level |
% Change |
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| Crude wti | 116.63 | + 1.32 | | Gold | 828.88 | + 0.84 | | Silver | 13.71 | + 1.59 | | USD Index | 77.18 | + 0.50 | | VIX | 20.61 | - 1.72 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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Currency Tech |
AUDUSD
R 3: 0.8814
R 2: 0.8693
R 1: 0.8650
CURRENT: 0.8553
S 1: 0.8513
S 2: 0.8505
S 3: 0.8488
EURJPY
R 3: 164.41
R 2: 163.93
R 1: 163.11
CURRENT: 161.23
S 1: 160.19
S 2: 160.14
S 3: 158.61
USDSGD
R 3: 1.4540
R 2: 1.4401
R 1: 1.4333
CURRENT: 1.4241
S 1: 1.4179
S 2: 1.4118
S 3: 1.4031
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Market Brief |
The Usd showed considerable strength in the early trading session based on negative economic data out of the Eurozone. The EurUsd fell over 150 pips to the 1.46 level, while the UsdJpy rose 44 pips to the high 109 price. The GbpUsd experienced substantial losses trading with a 1.83 handle, down 182 pips on heavy selling. Equity futures are negative to flat in the US and Europe, as the market braces for additional losses in the financial and housing sector. Bond buying continues with the UK 10yr yield tighter by 10 bps, which is representative of the current economic situation in the region. Commodities continued yesterday’s decline with oil trading at 113 and gold lower at 819. Volatility started to pick up again with the VIX trading above $20, until volume returns t the markets we are likely to see more price swings similar to what we observed in G3 currencies.
In the Eurozone, German GDP came in line with expectations at -0.5% (QoQ). The annualized reading is still positive at 1.7%, but the retraction in growth implies that the economic condition is deteriorating in Germany. In addition, the German Ifo Business Climate Index came in lower than expected at 94.8 vs. the consensus figure of 97.1. The combination of negative quarterly GDP growth and a decline in the German Ifo index, initiated a significant movement to the downside on the EurUsd. We expect the pair to stay rangebound between 1.44-1.47 based on the growing pessimism in the Eurozone economy. BBA mortgage approvals held last month’s levels at 22.4k, this is a historical low and symbolic of tight liquidity in the credit markets. The UK is embattled with negative growth data via last week’s GDP reading, and extended weakness in the housing sector. Our desk holds a bearish view on the cable, looking for support near the 1.80 level in the next 3 months and resistance near 1.85.
It is still unclear whether the US financial markets have entered a recovery phase because of mixed economic data, as well as weakness in both the financial and housing sectors. The credit markets have been an indicator of directional movements in the currency prices. CDS spreads have traded at historical levels, with the banking sector showing heightened risks. Bond Traders have been ahead of the curve with yields consistently moving ahead of economic data giving some insight to directional movements in the market. The Case and Schiller HPI index reported better than expected data at -15.92% vs. the consensus figure of -16.20%. In addition, consumer confidence rose to 56.9 vs. 51.9 exp, providing further support to the dollar rally. Our long term outlook for the Usd is for extended strength, but we are mindful of obstacles which may arise in the short-term regarding vulnerability in the credit sector.
Risk Disclaimer:
Although every investment involves some degree of risk, the risk of loss in trading off-exchange forex contracts can be substantial. Therefore if you are considering trading in this market, you should be aware of the risks associated with this product so you can make an informed decision prior to investing. The material presented here is not to be construed as trading advice or strategy. ACMUSA makes a strong effort to use reliable, expansive information, but we make no representation that it is accurate or complete. In addition, we have no obligation to notify you when opinions or data in this material change.
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Asian Session - Usd Stronger Despite Growing Pressure on Crude
August 26, 2008 10:21 AM CEST
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G10 Advancers and Decliners vs USD |
| CAD | -0.09 | | | NOK | -0.39 | | | JPY | -0.55 | | | SEK | -0.58 | | | DKK | -0.58 | | | EUR | -0.58 | | | GBP | -0.58 | | | CHF | -0.66 | | | AUD | -1.17 | | | NZD | -2.04 | |
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Global Indexes |
Current Level |
% Change |
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| Nikkei 225 Index | 12,778.71 | - 0.77 | | Hang Seng Index | 21,160.80 | + 0.26 | | Shanghai Index | 2,350.08 | - 2.62 | | FTSE futures | 5,439.00 | - 1.36 | | DAX futures | 6,292.00 | - 0.42 | | SMI Futures | 7,032.00 | - 0.38 | | DJIA futures | 11,392.00 | + 0.07 |
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World Markets |
Current Level |
% Change |
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| Gold | 820.00 | - 0.23 | | Silver | 13.46 | - 0.25 | | VIX | 20.97 | + 11.48 | | Crude wti | 115.58 | + 0.40 | | USD Index | 77.18 | + 0.49 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| IFO current assessment, index | 104.6 | 105.7 | GE / 8.00 | | IFO business expectations, index | 90.4 | 90.0 | GE / 8.00 | | IFO business climate, index | 97.2 | 97.5 | GE / 8.00 | | BBA mortgage approvals, K | -- | 28.0 | UK / 8.30 | | BBA net mortgage lending, £ bn | -- | 3.8 | UK / 8.30 | | Consumer confidence, index | 53.0 | 51.9 | US / 14.00 | | New home sales, thous. saar | 525k | 530k | US / 14.00 | | House price index % | -0.9 ,-5.6 | -0.3 ,-4.8 | US / 14.00 |
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Currency Tech |
AUDUSD
R 3: 0.8814
R 2: 0.8693
R 1: 0.8650
CURRENT: 0.8553
S 1: 0.8513
S 2: 0.8505
S 3: 0.8488
EURJPY
R 3: 164.41
R 2: 163.93
R 1: 163.11
CURRENT: 161.23
S 1: 160.19
S 2: 160.14
S 3: 158.61
USDSGD
R 3: 1.4540
R 2: 1.4401
R 1: 1.4333
CURRENT: 1.4241
S 1: 1.4179
S 2: 1.4118
S 3: 1.4031
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Market Brief |
The Usd was slightly stronger in the Asian session, despite mounting pressure on crude prices. Comments from the Iranian energy minister kept crude oil prices firm hovering around $115bbl. He stated that OPEC would probably discuss ways of preventing crude oil prices from continuing its downward trend (with focus on oversupply), when the group meets in September. In addition, new tropical storm warnings in the Gulf of Mexico have traders anxious over potential supply disruptions. Given the thin calendar today the tight correlation between Crude & Usd will keep the market particularly focused. The EurUsd weakened from 1.4779 to 1.4691, while UsdJpy found support on the 22dma trade up from 109.20 to 109.83. The AudUsd fell sharply from 0.8640 to 0.8572, as worries surrounding credit market turmoil had traders selling high yielders. The Asian equity markets are lower across the board, with Shanghai down -3.22% and European equity markets are poised to follow downwards. Crude is currently stable hovering around $115.00bbl and gold is down -0.40%.
In New Zealand, Julyʼs trade deficit was worse than expected at -$781m vs. -$526m. The surprise was stronger imports, which rose mainly due to oil. The NzdUsd declined from 0.7048 to 0.6902.
The highlight of the European session will be German IFO business climate. With German PMIs considerably lower than market consensus in recent months, the risk is skewed to the downside. A reading below consensus will cement worries that the engine of Euro zone growth is grinding to a halt and will pressure the EurUsd.
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Late US Session-Dollar Finished Moderately Higher Across the G10
August 26, 2008 12:54 AM CEST
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G10 Advancers and Decliners vs USD |
| | Aud | 0.16 | | | | Cad | 0.11 | | | | Jpy | 0.06 | | | | Nzd | 0.06 | | | | Chf | 0.03 | | | | Sek | 0.02 | | | | Eur | 0.01 | | | | Dkk | 0.01 | | | | Nok | 0.01 | | | Gbp | -0.03 | |
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Global Indexes |
Current Level |
% Change |
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| DJIA Index | 11,392.00 | + 0.07 | | S&P 500 Index | 1,267.20 | + 0.06 | | NASDAQ 100 Index | 1,895.50 | + 0.03 | | FTSE 100 Index | 5,514.00 | 0.00 | | CAC 40 Index | 4,360.00 | - 1.04 | | DAX Index | 6,319.00 | - 0.68 | | SMI Index | 7,059.00 | - 0.70 |
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World Markets |
Current Level |
% Change |
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| Crude wti | 115.26 | + 0.13 | | Gold | 822.48 | + 0.06 | | Silver | 13.32 | - 1.33 | | USD Index | 76.80 | + 0.01 | | VIX | 20.97 | + 11.48 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| No Major Events Scheduled | | | |
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Currency Tech |
AUDUSD
R 3: 0.8846
R 2: 0.8797
R 1: 0.8757
CURRENT: 0.8643
S 1: 0.8626
S 2: 0.8593
S 3: 0.8503
EURJPY
R 3: 163.88
R 2: 163.10
R 1: 162.39
CURRENT: 162.06
S 1: 160.88
S 2: 160.14
S 3: 158.61
USDSGD
R 3: 1.4265
R 2: 1.4219
R 1: 1.4201
CURRENT: 1.4192
S 1: 1.4025
S 2: 1.3891
S 3: 1.3819
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Market Brief |
The Usd began to gain strength in the late trading session, but the recent momentum in the currency is beginning to stabilize. The EurUsd fell 41 pips to the mid 1.47 level, while the UsdJpy rose marginally remaining at the low 109 price. The GbpUsd slipped several pips to the downside trading with a 1.85 handle, as there is no recent data to support a recovery in the near-term. Equity markets closed lower in the US, with the Dow in particular down 241pts as credit concerns reemerge as a mounting concern. Commodities were mixed in today’s trading session, with oil flat at 115 and gold marginally lower at 819. Bond Markets are pointing towards a serious retraction in risk appetite, with yields tighter in govt. securities traded in the US and Europe. The 10yr bond decreased between 8 and 10bps throughout the major countries in the Eurozone.
There is a large proportion of data suggesting that housing crisis will persists into the latter end of 2009. With that said, the Fed will be in a different position to raise rates in an environment of deteriorating growth. It will be critical to ascertain the depth of the downturn experienced in Europe. The market will be very cognizant to German GDP figures which are scheduled to be released tomorrow morning, as well as UK housing data towards the end of the week. The EurUsd is likely to stay rangebound between 1.45-1.48 in the near-term, with our expectations pointing to a price target closer to the lower end of the range based on a string of negative data projected from the Eurozone this week. Traders are determining which economy is likely to stay in a recessionary state the longest, at which point a true price will be discovered based on fundamentals hinting a recovery.
Risk Disclaimer:
Although every investment involves some degree of risk, the risk of loss in trading off-exchange forex contracts can be substantial. Therefore if you are considering trading in this market, you should be aware of the risks associated with this product so you can make an informed decision prior to investing. The material presented here is not to be construed as trading advice or strategy. ACMUSA makes a strong effort to use reliable, expansive information, but we make no representation that it is accurate or complete. In addition, we have no obligation to notify you when opinions or data in this material change.
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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.
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