Daily Forex Snapshots

US Session: Dollar Strength Returns Gaining Across Most of the G10

February 25, 2009 10:38 PM CET

G10 Advancers and Decliners vs USD

	Aud	-0.69
	Chf	-0.87
	Jpy	-0.88
	Nzd	-0.94
	Dkk	-1.03
	Eur	-1.04
	Cad	-1.18
	Nok	-1.27
	Sek	-1.70
	Gbp	-1.95

Global Indexes

Current Level

% Change

FTSE futures	3,857.50	+ 1.59
CAC futures	2,731.00	+ 0.76
DAX futures	3,907.50	- 0.12
SMI Futures	4,643.00	- 0.39
Nikkei 225 Futures	7,520.00	+ 0.54
Hang Seng Futures	12,940.00	+ 1.09
S&P future	764.30	- 0.59

World Markets

Current Level

% Change

Crude wti	40.86	+ 2.25
Gold	970.10	+ 0.77
Silver	13.94	+ 1.46
USD Index	87.35	+ 0.53
VIX	45.70	+ 0.46

Todays Calender

Estimates

Country / GMT

No Major Events Scheduled

Currency Tech

AUDUSD
R 3: 0.6852
R 2: 0.6643
R 1: 0.6590
CURRENT: 0.6529
S 1: 0.6449
S 2: 0.6333
S 3: 0.6249

EURJPY
R 3: 129.72
R 2: 126.12
R 1: 125.20
CURRENT: 124.30
S 1: 124.06
S 2: 123.83
S 3: 119.41

USDSGD
R 3: 1.5500
R 2: 1.5407
R 1: 1.5341
CURRENT: 1.5281
S 1: 1.5280
S 2: 1.5243
S 3: 1.5184

Market Brief

The dollar rallied against its counterparts in Europe, but fell short against the higher yielding currencies. The EurUsd dropped over 100pips to the low range of 1.27, while the UsdJpy approaches 98 as a level of resistance. The GbpUsd experienced a sharp decline of 250pips falling through 1.43 to the low 1.42 price area. Equity markets were positive in the US, but mixed in Europe. The Dow moved higher by less than 1% or 35pts, while the DAX dropped 1.2% or 49pts at the close. We are seeing strong bond selling with the 2yr back above 1% and the 10yr at 2.9% up 15bps in intraday trading. This movement in interest markets signals a slight turn in risk appetite, which has been atypical with the trend of dollar strength. Commodities were mixed with crude oil up 6% at $42bbl, and gold at $946oz down 1.7%.

The disagreement among the Eurozone begins, as the idea of issuing a uniform Eurobond was shot down by ECB Member Axel Weber. German authorities complemented the statements by Weber, asserting their stance that formation of the European bond will not happen. This reaction isn’t a surprise considering that Germany would probably carrying most of the debt burden and is already showing signs of stress lending funds to its Central European neighbors. The Euro should suffer based on the inability for the region to create a coordinated rescue effort, we are going to refocus our efforts in gauging the depth of the downside. In the UK, GDP came in slightly better than expected at -1.5% vs. -1.6%, but was not enough to protect the currency from a major sell-off. UK exports dropped faster than anticipated at -5.9%, which is consistent with drop in growth. Nationwide house prices are scheduled to be released tomorrow, which should also register a negative reading of approximately -1.3%. The Sterling was sharply lower on deep selling pressure, come major desk claim there is no volume behind the moves but I am inclined to believe that this is fundamental selling based on coverage of cable by Industry Analysts.

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Asian Session: Markets show timid signs of optimism after Bernanke and Obama speeches.

February 25, 2009 11:13 AM CET

G10 Advancers and Decliners vs USD

	NZD	1.361
	SEK	1.351
	AUD	1.318
	GBP	0.781
	CHF	0.545
	EUR	0.418
	DKK	0.395
	CAD	0.289
	NOK	0.286
	JPY	-0.364

Global Indexes

Current Level

% Change

Nikkei 225 Index	7461	+ 2.65
Hang Seng Index	13005	+ 1.61
Shanghai Index	2206	+ 0.27
FTSE 100 Index	3853	+ 0.98
DAX Index	3942	+ 1.21
DJIA futures	7289	- 0.21
Nasdaq futures	1161	- 0.22

World Markets

Current Level

% Change

Gold	955.85	- 0.71
Silver	13.74	0.00
VIX	45.49	- 13.55
Crude wti	40.02	+ 0.15
USD Index	86.79	- 0.11

Todays Calender

Estimates

Country / GMT

US Exisiting home sales (JAN)	4.79M	4.74M	USD / 15:00
US Exisiting home sales	1.1%	6.5%	USD / 15:00
US Bernanke gives monetary policy	-	-	USD / 15:00

Currency Tech

Market Brief

The reassurances by Fed Secretary Ben Bernanke yesterday in front of the Senate Banking committee and President Obama at his keynote speech rallied sentiment in the markets, Asia posted gains and Europe opened higher as well. Markets saw a glimmer of hope in the frank yet reassuring tone both speeches struck – taking well to Bernanke’s statement that bank nationalizations wouldn’t be necessary. President Obama’s Keynote speech focused on “rebuilding” the U.S economy saying “We will rebuild, we will recover, and the United States of America will emerge stronger than before”.

Yen “sell” recommendations from some major banks have pushed the currency lower. However we have just crossed the 38.20% retracement on the 110.59 – 87.06 bear move that has transpired in the last 6 months. Some economists feel that repatriation isn’t over, and despite the dire economic situation (exports down 49% YoY).

The EURUSD was supported on EURJPY strength – culminating just below 1.2900 before retracing. A re-focus of European financial woes could see the dollar regain its already bolstered position. Further bad economic news out of Japan continues to weigh on the currency, briefly breaking the 97.00 resistance on USDJPY then bouncing back. AUD and NZD strong gainers against the dollar on encouraging numbers.

German and British GDP numbers are out today, -2.1% and -1.9% respectively. Bernanke speaks again in front of Housing panel while existing home sales are the main Data out of the U.S.

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