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US Session: Dollar Weakness Persists Amid Inflation Concerns
June 02, 2009 11:32 PM CEST
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G10 Advancers and Decliners vs USD |
| | Jpy | 0.07 |  | | | Eur | 0.04 | | | | Sek | 0.04 | | | | Gbp | 0.01 | | | | Cad | 0.01 | | | | Chf | 0.01 | |  | Dkk | -0.01 | | | Nok | -0.02 | | | Aud | -0.10 | | | Nzd | -0.14 | |
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Global Indexes |
Current Level |
% Change |
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| DJIA Index | 8,740.87 | + 0.22 | | S&P 500 Index | 944.74 | + 0.20 | | NASDAQ 100 Index | 1,836.80 | + 0.44 | | Nikkei 225 Futures | 9,710.00 | + 0.01 | | Hang Seng Futures | 18,349.00 | + 0.01 | | FTSE futures | 4,469.50 | - 0.30 | | SMI Futures | 5,445.00 | + 1.72 |
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World Markets |
Current Level |
% Change |
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| Crude wti | 68.41 | - 0.25 | | Gold | 981.85 | + 0.01 | | Silver | 15.97 | + 2.37 | | USD Index | 78.45 | - 0.89 | | VIX | 29.63 | - 1.37 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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Currency Tech |
AUDUSD
R 3: 0.8583
R 2: 0.8520
R 1: 0.8378
CURRENT: 0.8082
S 1: 0.790
S 2: 0.7800
S 3: 0.7703
EURJPY
R 3: 139.75
R 2: 138.57
R 1: 137.40
CURRENT: 136.32
S 1: 133.90
S 2: 131.50
S 3: 130.73
USDSGD
R 3: 1.4748
R 2: 1.4665
R 1: 1.4580
CURRENT: 1.4415
S 1: 1.4320
S 2: 1.4270
S 3: 1.4165
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Market Brief |
The dollar continued to sell off against most of the G10 today as commodity currencies were stampeding in other direction. EurUsd’s movement was mixed and is currently hovering in the $1.39 range. The GbpUsd rallied strongly to an eight month high of $1.65 and continues rising. Equity markets started off strong but are now flattening out with the Dow up under 1% and the Dax mostly unchanged from yesterday’s close at 50.37. 10 year bond yields are down and prices have risen 1.4% . Commodities rallied in the early session with crude oil reaching a seven month high at $68.7bbl, but it has since turned around to $68.2bbl. Gold surpassed highs for the past three months reaching $988oz.
The Dollar pared some losses overnight as risk appetite continues to strengthen on signs of a global economic recovery. Hoping to add to investor optimism Treasury Secretary Timothy Geithner reported from China that “justifiable confidence in the strength…of the American Economy,” assuring there will be demand for U.S . debt. Despite Geithner’s hopefulness, Chinese central bank Governor Xiaochuan is proposing a new global currency to reduce reliance on the USD. Overall response to the update was positive though, and Treasury yields dropped following Geithner’s comments. In the UK, BoE officials said it purchased 8.07 million pounds of corporate bonds planning to buy 175 million pounds worth on Thursday. This morning sterling began to decline against the USD from a $1.6465 close yesterday, but has since surged from its position greatly on increased confidence from new data on European PMI and UK housing prices. Many anticipate the euro’s rally against the USD to end soon, although it saw a rise to $1.4281 today which was the strongest against the USD for 2009. The only currency that declined against USD was the JPY, which lost nearly 1% mainly due to increasing interest spread between US and Japan.The Canadian dollar gained against the USD last night, climbing to a high of C$1.0782 today. The positive news spurred equity and commodity markets early on. OPEC expects oil prices to reach between $80 and $90 a barrel by early next year.
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. ACMNY 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: RBA Holds Rates at 3.00%
June 02, 2009 10:45 AM CEST
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G10 Advancers and Decliners vs USD |
| | JPY | 0.05 | | | AUD | -0.17 | | | CHF | -0.26 | | | GBP | -0.35 | | | EUR | -0.41 | | | DKK | -0.43 | | | NZD | -0.56 | | | CAD | -0.60 | | | NOK | -0.94 | | | SEK | -1.69 | |
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Global Indexes |
Current Level |
% Change |
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| Nikkei 225 Index | 9,704.31 | + 0.27 | | Hang Seng Index | 18,389.08 | - 2.64 | | Shanghai Index | 2,724.30 | + 0.11 | | FTSE 100 Index | 8,721.44 | + 2.60 | | DAX Index | 5,147.86 | - 0.14 | | SMI Index | 5,436.31 | + 0.10 | | DJIA futures | 8,654.00 | - 0.39 |
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World Markets |
Current Level |
% Change |
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| Gold | 971.40 | - 0.39 | | Silver | 15.56 | - 0.21 | | VIX | 30.04 | + 3.87 | | Crude wti | 68.08 | - 0.72 | | USD Index | 79.34 | + 0.23 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| Construction PMI, index May | -- | 38.0 | GBP / 08.28 | | BoE mortgage approvals, K Apr | 41 | 39 | GBP / 08.30 | | BoE net mortgage lending, £ bn Apr | 1.0 | 0.8 | GBP / 08.30 | | BoE net consumer credit, £ bn Apr | 0.1 | 0.1 | GBP / 08.30 | | Unemployment rate, % Apr | 9.1 | 8.9 | EUR / 09.00 | | Total vehicle sales, mn (saar) May | 9.3 | 9.3 | USD / -- | | PMI, index May | -- | 49.2 | SGD / 13.30 | | Pending home sales, % m/m (y/y) Apr | 0.3 (-3.0) | 3.2 (1.1) | USD / 14.00 |
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Currency Tech |
AUDUSD
R 3: 0.8583
R 2: 0.8520
R 1: 0.8378
CURRENT: 0.8082
S 1: 0.790
S 2: 0.7800
S 3: 0.7703
EURJPY
R 3: 139.75
R 2: 138.57
R 1: 137.40
CURRENT: 136.32
S 1: 133.90
S 2: 131.50
S 3: 130.73
USDSGD
R 3: 1.4748
R 2: 1.4665
R 1: 1.4580
CURRENT: 1.4415
S 1: 1.4320
S 2: 1.4270
S 3: 1.4165
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Market Brief |
The Usd was stable in the Asian session, as traders took a short pause on selling the greenback. The EurUsd traded down to 1.4102 from 1.4180, while the UsdJpy stuck in cloud covering traded in a tight range to 96.80 to 96.50. Yesterday, the S&P climbed to a 6 month high, while 10yr Treasuries closed at 3.67% up significantly from Friday. While Credit default swaps are stable and 10yr TIP spread widen (signaling inflation), it seems that the risk of US default is not an issue but higher inflation is clearly a core driver. In regard to the US, the market is expecting a combination of stronger growth but higher inflation and a weaker Usd. EUR trading, as the alternative to USD, appears to be benefiting from anxiety over the suitability of US monetary and fiscal policy as economic conditions improve. Treasury Secretary Geithner appears to have soothed Chinese officials over the USD outlook. With proactive comments such a stating Chinese USD denominated financial assets were “safe” and he “believe in a strong dollar” himself. We are wondering how creditable these comments really are given recent policy decisions and the uncertain economic outlook.
In Australia , the RBA left the cash rate unchanged at 3%, as was widely expected. The accompanying statement was slightly dovish with the key phrase statement "nonetheless, the prospect of inflation declining over the medium term suggests that scope remains for some further easing of monetary policy, if needed". However, right now Usd behavior and global inflation risks will be more central for Aud price action than domestic conditions. With yesterday's better than expected PMI, signaling China's economy continues to rebound and commodity in demand, we expect the AUD to continue to outperform.
Today’s data calendar is devoid of top tier data or events – UK mortgage approvals, US pending homes sales and a speech from Dallas Fed President Fisher are the highlights.
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US Session: Investor Capital Flows Freely into Equities and Commodities as the Dollar Depreciates
June 02, 2009 2:51 AM CEST
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G10 Advancers and Decliners vs USD |
| | Jpy | 0.43 | | | | Cad | 0.02 | | | Chf | -0.09 | | | Dkk | -0.13 | | | Eur | -0.13 | | | Nok | -0.13 | | | Gbp | -0.15 | | | Aud | -0.38 | | | Sek | -0.38 | | | Nzd | -0.53 | |
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Global Indexes |
Current Level |
% Change |
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| DJIA Index | 8,721.44 | + 2.60 | | S&P 500 Index | 942.87 | + 2.58 | | NASDAQ 100 Index | 1,828.68 | + 3.06 | | Nikkei 225 Futures | 9,770.00 | + 0.81 | | Hang Seng Futures | 18,690.00 | + 0.01 | | FTSE futures | 4,483.00 | + 2.11 | | SMI Futures | 5,353.00 | + 0.01 |
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World Markets |
Current Level |
% Change |
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| Crude wti | 67.96 | - 0.90 | | Gold | 974.68 | - 0.06 | | Silver | 15.52 | - 0.48 | | USD Index | 79.17 | + 0.03 | | VIX | 30.04 | + 3.87 |
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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: 0.8379
R 2: 0.8150
R 1: 0.8097
CURRENT: 0.8072
S 1: 0.7800
S 2: 0.7700
S 3: 0.7630
EURJPY
R 3: 139.35
R 2: 138.55
R 1: 137.40
CURRENT: 134.87
S 1: 131.50
S 2: 130.73
S 3: 129.70
USDSGD
R 3: 1.4748
R 2: 1.4665
R 1: 1.4580
CURRENT: 1.4392
S 1: 1.4320
S 2: 1.4270
S 3: 1.4165
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Market Brief |
The dollar tumbled to its lowest level this year against most of the G10 as improving equity markets and surging commodity prices revealed signs of an abating recession and sparked fears of inflation. Stock indexes rose in the US and Europe with the Dow up 2.34% or 198pts and the SPX higher by 2.50% or 22.98pts. The dollar index fell .8% to its lowest level this year after the government pledged an additional 30 billion to GM following the carmaker’s bankruptcy; taxpayers are concerned about being a major shareholder in the company.
The Sterling surged against the dollar rising over 200pips trading slightly over 1.64, establishing a new range for the pair. UK home prices paused for the first time in 20 months, providing further support that housing sector may be some light stabilization. In addition, UK manufacturing beat expectations at 45.4 vs. 44.0. The euro fell after policy makers announced they will declare additional measures to spark growth on June 4th. Euro PMI for May: 40.7, slightly higher than provisional estimate of 40.5. and much better than expected at 36.8 for April, the largest monthly jump in 12-year history.
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. ACMNY 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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