Daily Forex Snapshots

Asian Session: N. Korea Missile Test Fails to Spark the Risk Aversion Trade

May 25, 2009 11:09 AM CEST

G10 Advancers and Decliners vs USD

	CHF	-0.21
	EUR	-0.33
	DKK	-0.34
	NOK	-0.38
	CAD	-0.43
	GBP	-0.45
	JPY	-0.55
	NZD	-0.65
	SEK	-0.66
	AUD	-0.67

Global Indexes

Current Level

% Change

Nikkei 225 Index	9,347.00	+ 1.31
Hang Seng Index	17,086.09	+ 0.13
Shanghai Index	2,610.01	+ 0.47
FTSE futures	4,344.00	+ 0.34
DAX Index	4,839.72	- 1.60
SMI Index	5,375.36	- 1.60
DJIA Index	8,232.00	- 0.33

World Markets

Current Level

% Change

Gold	953.25	- 0.42
Silver	14.62	- 0.40
VIX	32.63	+ 4.08
Crude wti	61.05	- 1.05
USD Index	80.29	+ 0.30

Todays Calender

Estimates

Country / GMT

UK & US Holiday	--	--	--
IFO business climate, index May	84.8	83.7	GE / 08.00
IFO current assessment, index May	84.3	83.6	GE / 08.00
IFO business expectations, index May	85.5	83.9	GE / 08.00
BoI interest rate announcement, % May 28	0.50%	0.50%	ILS / 14.30
ECB's González Parámo speaks at Club Siglo XXI in	--	--	EUR / 18.00
Corporate Service Price Index, % y/y Apr	-2.2	-2.1	JPY / 23.50

Currency Tech

AUDUSD
R 3: 0.8348
R 2: 0.8095
R 1: 0.7930
CURRENT: 0.7784
S 1: 0.7630
S 2: 0.7450
S 3: 0.7335

EURJPY
R 3: 135.57
R 2: 134.80
R 1: 133.60
CURRENT: 132.65
S 1: 130.70
S 2: 129.70
S 3: 126.60

USDSGD
R 3: 1.4748
R 2: 1.4665
R 1: 1.4555
CURRENT: 1.4489
S 1: 1.4320
S 2: 1.4270
S 3: 1.4167

Market Brief

The Usd was range bound in the Asian session as holidays in the UK and US keep trading volumes low. The EurUsd traded between 1.4043 – 1.3977, while the UsdJpy traded higher to 95.20 from 94.40, as traders sold the Yen as a knee-jerk reaction to North Korea's nuclear tests. The local news agency reported that N. Korea had conducted an underground test, followed by the firing of a short-range missile. Asian regional indexes are higher, with the Nikkei able to shrug off risk aversion selling, to close up 1.31%. The AudUsd pulled back slightly from Friday's 0.7888 high to 0.7774. Yet, we expect the commodity currency to continue to outperform in this environment (improving global fundamentals and rally in commodity prices). The possibility of a US’ ratings downgrade has prompted heated debate in recent days and is hurting the Usd. Even the White house has joined the debate with spokesman Robert Gibbs stating that the US’ AAA rating would not change. However, he didn’t provide any details on why the current administration has taken this view. Last week's EurUsd move has clearly caught many traders off guard and we believe that a slight correction should be expected this week. Eurozone economic data has been supportive of the Eur and the ECB conservative approach to unconventional easing seems to be on point. However, this week’s data will help resolve this issue. Today, the German IFO business climate index due is expected to improve further to 85 from 83.7 previously and the current assessment and expectations surveys should also show improvements.

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