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Dollar Selling Triggers A Tentative Break-Out From Recent Ranges
November 25, 2009 5:40 PM CET
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G10 Advancers and Decliners vs USD |
| | JPY | 0.94 |  | | | AUD | 0.84 | | | | CHF | 0.71 | | | | NOK | 0.67 | | | | CAD | 0.67 | | | | DKK | 0.65 | | | | EUR | 0.63 | | | | GBP | 0.52 | | | | NZD | 0.32 | | | | SEK | 0.32 | |
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Global Indexes |
Current Level |
% Change |
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| FTSE 100 Index | 5'365.33 | + 0.78 | | DAX Index | 5'798.52 | + 0.51 | | SMI Index | 6'432.61 | + 0.55 | | S&P 500 Index | 1'109.46 | + 0.34 | | DJIA Index | 10'469.76 | + 0.35 | | Nikkei 225 Futures | 9'410.00 | - 0.42 | | Hang Seng Futures | 22'600.00 | + 0.57 |
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World Markets |
Current Level |
% Change |
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| Gold | 1'181.43 | + 1.03 | | Silver | 18.66 | + 0.78 | | VIX | 20.22 | - 1.22 | | Crude wti | 76.04 | + 0.03 | | USD Index | 74.59 | - 0.67 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| BoJ Monetary Policy Meeting Minutes | --- | --- | JPY/23:50 | | Thu 26 Nov | --- | --- | --- | | US Public Holiday | --- | --- | --- | | Germany: Preliminary CPI, % m/m (y/y) Nov | 0.0 (0.5) | 0.1 (0.0) | EUR/AM | | M3, % y/y Oct | 0.8 | 1.8 | EUR/09:00 |
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Currency Tech |
EURUSD
R 2: 1.5200
R 1: 1.5100
CURRENT: 1.5070
S 1: 1.5000
S 2: 1.4800
GBPUSD
R 2: 1.7040
R 1: 1.6845
CURRENT: 1.6670
S 1: 1.6460
S 2: 1.6272
USDJPY
R 2: 90.60
R 1: 88.20
CURRENT: 87.70
S 1: 87.40
S 2: 87.10
AUDUSD
R 2: 0.9335
R 1: 0.9300
CURRENT: 0.9270
S 1: 0.9110
S 2: 0.9060
USDCAD
R 2: 1.0735
R 1: 1.0645
CURRENT: 1.0505
S 1: 1.0450
S 2: 1.0370
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Market Brief |
Renewed confidence in USD-selling on the back of last night’s FOMC Minutes and buoyant equity markets has finally pushed the USD down through major supports that have defined currency ranges for the past couple of weeks. EURUSD traded steadily higher through 1.5000 this morning before finally breaching 1.5045 resistance; however the quick rally through 1.5063 October highs failed just below 1.5100 and seems to carry the hallmarks of speculators triggering stop-losses rather than any genuine appetite to hold EUR, as the pair has drifted back to 1.5050 levels throughout the afternoon. The CHF also managed to pierce the psychologically important 1.0000 level during the session, touching a low of 0.9994; but once again the sell-off has been far from emphatic and the pair is now trading back towards 1.0030 prior support.
On the data front, Swedish Consumer Confidence convincingly trumped estimates with a 11.4 print against expectations for 8.5 (prior reading 7.5), but EURSEK enjoyed only a brief spike lower to 10.3080 before swift profit-taking set in, and since then the pair has rallied steadily to 10.3875 levels. Norwegian AKU Unemployment also impressed with a surprise drop to 3.1% against expectation of 3.3%, but again the currency benefitted very little from the figures, and is currently slightly lower on the day against the EUR at 8.4270. The second reading of UK Q3 GDP came out exactly in line with economists’ forecasts with a slight upward revision to -0.3% QoQ from the -0.4% initial print. Despite the YoY figures also coming in exactly in line with estimates at -5.1%, GBPUSD slumped from 1.6720 to 1.6675 as some speculative longs hoping for an upside surprise quickly exited their longs.
The afternoon’s plethora of US data has been generally positive; although this month’s Durable Goods Orders markedly missed forecasts with a -0.6% reading (+0.5% expected), the September numbers were revised up sharply from 1.0% to 2.0%. PCE measures were broadly in line or higher than forecast, both initial and continuing jobless claims fell further than estimates, and U.Mich Consumer Confidence came out at 67.4 (higher than the 67.0 forecast). Following the impressive Existing Home Sales on Monday, New Home Sales released today also smashed estimates at 6.2% MoM, and there were also upward revisions to last month’s data. The effect on the USD has been a slight retracement from the lows, but arguably little about the fundamental backdrop has changed and the FX reaction could very easily be attributed to frustrated investors cutting positions after a lack of follow-through from the technical break-outs.
With tomorrow’s US Thanksgiving holiday it is likely that exaggerated moves in thin liquidity will keep FX traders wary, but there is a limited data calendar to look forward to; headlined by BoJ Minutes, German regional CPI figures, and Eurozone M3.
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European Session: Risk Sentiment and Gold Comes Roaring Back
November 25, 2009 10:17 AM CET
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G10 Advancers and Decliners vs USD |
| | AUD | 1.07 | | | | NZD | 0.80 | | | | SEK | 0.43 | | | | GBP | 0.39 | | | | NOK | 0.34 | | | | CHF | 0.31 | | | | DKK | 0.30 | | | | CAD | 0.24 | | | | EUR | 0.21 | | | | JPY | 0.19 | |
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Global Indexes |
Current Level |
% Change |
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| Nikkei 225 Index | 9,441.64 | + 0.42 | | Hang Seng Index | 22,574.93 | + 0.68 | | Shanghai Index | 3,290.17 | + 2.06 | | FTSE futures | 5,328.50 | - 0.42 | | DAX futures | 5,822.00 | + 0.79 | | SMI Futures | 6,443.00 | + 0.67 | | S&P future | 1,107.20 | + 0.37 |
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World Markets |
Current Level |
% Change |
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| Gold | 1,178,47 | + 0.77 | | Silver | 18.72 | + 1.10 | | VIX | 20.47 | - 3.26 | | Crude wti | 76.39 | + 0.48 | | USD Index | 74.92 | - 0.22 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| NBP Rate Announcement, % 26-Nov | 3.50 | 3.50 | PLN / -- | | Unemployment rate AKU, % Sep | -- | 3.2 | NOK / 09.00 | | GDP - second estimate, % q/q (y/y) Q3 | -0.3,-5.1 | -0.4,-5.2P | GBP / 09.30 | | Durable goods orders, % m/m (y/y) Oct | 0.5, -11.4 | 1.4,-19.3 | USD / 13.30 | | Core capital goods orders, % m/m Oct | -- | 1.8,-16.9 | USD / 13.30 | | Personal income, % m/m Oct | 0.2 (-2.3) | 0.0 (-2.8) | USD / 13.30 | | Personal spending, % m/m Oct | 0.5 (1.0) | -0.5 (-0.3 | USD / 13.30 | | PCE price index, % m/m (y/y) Oct | (0.1) | 0.1 (-0.5) | USD / 13.30 | | Core PCE price index, % m/m (y/y) Oct | 0.1 (1.3) | 0.1 (1.3) | USD / 13.30 | | Initial jobless claims, thous (4wk ma) 21-Nov | 500 (506) | 505 (514) | USD / 13.30 | | U/M consumer sentiment index Nov f | 67 | 66.0 p | USD / 13.30 | | New home sales, thous Oct | 408 | 402 | USD / 13.30 |
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Currency Tech |
AUDUSD
R 2: 0.9335
R 1: 0.9275
CURRENT: 0.9260
S 1: 0.9110
S 2: 0.9060
USDCAD
R 2: 1.0735
R 1: 1.0645
CURRENT: 1.0571
S 1: 1.0540
S 2: 1.0450
EURJPY
R 2: 134.45
R 1: 133.60
CURRENT: 132.47
S 1: 131.75
S 2: 131.00
USDMXN
R 2: 13.135
R 1: 13.025
CURRENT: 12.873
S 1: 12.855
S 2: 12.795
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Market Brief |
Risk appetite came back in a big way during the Asian session, as events in the US session were supportive of long risk positions. The FOMC minutes really contained no surprises, but stayed dovish despite going divergence among members. The minutes also addressed the USD decline, which said that so far the deprecation had been orderly, which the market quickly read into as permission to continue to sell the USD. The economic data yesterday were mixed, with German IFO and US consumer confidence data surprising to the upside while GDP data basically printing inline with expectations. The rally in risk correlated trades saw Spot Gold rise to $1180.00, while EURUSD is now trading slightly above the 1.5000 handle. The GBPUSD jumped nearly a figure in late Asian trading to 1.6668 from 1.6580. Yet, GBPJPY gains were compressed, as JPY fueled carry trade felt the brunt of JPY buying. In Japan, exports grew in October for the third straight month thanks to robust shipments to Asia, illustrating that a sturdy recovery in the region will prop up Japans export-driven economy for the rest of this year. AUDUSD climbed to 0.9267, as construction work done data released this morning surprised the market to the upside rising by 2.2% q/q in Q3 (consensus 0.0%). This economic release helped confirm the RBA's bullish outlook for the economy, which was reiterated by RBA Deputy Governor Battellino this morning and supports our view that the central bank will raise the cash rate by 25bp in December.
For this light calendar, pre-Thanksgiving Day markets will be watching economic data from the US . Today in the US, October’s personal income and spending figures are expected to offer further clues that the pace at which real consumption grew in Q3 is not sustainable. And finally, the latest data core durable goods suggest that the growth rate of orders has already peaked and will falter in the near term.
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