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US Session: Dollar Strengthens on China’s Central Bank’s Comment, Easing Concerns on the Dollar Reserve Status
June 29, 2009 10:17 PM CEST
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G10 Advancers and Decliners vs USD |
| | Sek | 1.57 |  | | | Nzd | 0.78 | | | | Nok | 0.73 | | | | Gbp | 0.25 | | | | Eur | 0.16 | | | | dkk | 0.14 | | | | Chf | 0.05 | | | | Aud | 0.03 | |  | Cad | -0.43 | | | Jpy | -0.85 | |
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Global Indexes |
Current Level |
% Change |
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| DJIA Index | 8,529.98 | + 1.09 | | S&P 500 Index | 927.15 | + 0.90 | | NASDAQ 100 Index | 1,843.57 | + 0.90 | | Nikkei 225 Futures | 9,870.00 | + 0.50 | | Hang Seng Futures | 18,574.00 | + 0.19 | | FTSE futures | 4,245.50 | + 0.93 | | SMI Futures | 5,434.00 | + 1.10 |
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World Markets |
Current Level |
% Change |
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| Crude wti | 71.56 | + 3.47 | | Gold | 938.05 | - 0.17 | | Silver | 13.88 | - 1.46 | | USD Index | 79.86 | - 0.02 | | VIX | 25.35 | - 2.24 |
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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: 0.8375
R 2: 0.8263
R 1: 0.8120
CURRENT: 0.8018
S 1: 0.7790
S 2: 0.7703
S 3: 0.7630
EURJPY
R 3: 139.20
R 2: 138.33
R 1: 135.35
CURRENT: 133.75
S 1: 131.43
S 2: 129.70
S 3: 126.98
USDSGD
R 3: 1.4800
R 2: 1.4748
R 1: 1.4649
CURRENT: 1.4557
S 1: 1.4515
S 2: 1.4425
S 3: 1.4385
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Market Brief |
The dollar traded in the positive territory against most majors after China’s central bank Governor Zhou Xiaochuan ruled out any “sudden” change in the central bank’s reserve policy, easing concerns over the dollar reserve status. The EurUsd pared early losses and traded upward, gaining 5pips from the previous session after a report showed improvements in euro-zone’s economic sentiment. The UsdJpy registered 50pips gain as positive data from Europe prompted investors to move into higher-yields. The GbpUsd continues to trade within the upper range, testing 1.66. Equity markets rose in the US and Europe, with the Dow higher by 0.9% or 76pts and the FTSE up by 1.26% or 27pts. The 10yr bond rose 0.02 to 3.5%, reckoned with a stronger dollar. Commodity prices were mixed, with oil surged by 2.89% or $2 to $71oz and gold edged down by 0.4% or $3.8 to $937oz.
Central bank statements and economic data will be in focus today. The week began with a swift turn in the dollar strength, which rose against most majors and snapped the dollar’s three-day decline. China’s central bank Governor Zhou Xiaochuan said the central bank will remain its current foreign-currency reserves policy towards the dollar and refrain from any “sudden” change, easing concerns over central banks around the world diversifying out of dollar-dominated reserves. The Bank for International Settlements (BIS), a forum for the world’s central banks, said on Monday that central banks need to focus on solving fundamental problems in the economy rather than giving temporary fixes, dampening expectations that the recession is over. The BIS also indicated that unplugging stimulus measures too soon may be even more risky, albeit with stimulate economic growth may not be sustainable. Economic indicators continue to be closely watched as investors trade on the green shoots theory for a recovery. Japanese industrial output rose 5.9% vs. 6.9% forecasted, a third-monthly rise, showing signs of a recovery. The euro-zone’s economic sentiment index rose to 73.3 vs. 70.8 forecasted, also a third-monthly rise, which coincided with the Japanese data of another slew of green shoots.
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Asian Session: China and Brazil discuss bypassing the dollar for international trade – currency markets remain slow.
June 29, 2009 11:25 AM CEST
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G10 Advancers and Decliners vs USD |
| GBP | -0.075 | | | NZD | -0.177 | | | JPY | -0.338 | | | SEK | -0.363 | | | CAD | -0.406 | | | EUR | -0.525 | | | DKK | -0.5414 | | | AUD | -0.659 | | | CHF | -0.707 | | | NOK | -0.734 | |
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Global Indexes |
Current Level |
% Change |
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| Nikkei 225 Index | 9783.47 | - 0.95 | | Hang Seng Index | 18548 | - 0.28 | | Shanghai Index | 2975.31 | + 1.61 | | FTSE 100 Index | 4252.82 | + 0.28 | | DAX Index | 4784 | + 0.16 | | DJIA futures | 8365 | - 0.10 | | Nasdaq futures | 1476 | - 0.05 |
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World Markets |
Current Level |
% Change |
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| Gold | 939.83 | + 0.02 | | Silver | 14.035 | - 0.36 | | VIX | 25.93 | - 1.63 | | Crude wti | 68.92 | - 0.35 | | USD Index | 80.057 | + 0.22 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| EUR Zone Industrial Confidence | -32 | -34 | EUR / 09:00 | | USD Chicago Fed National Activity | - | - | USD / 12:30 | | USD Dallas Fed Manufacturing Activity | - | - | USD / 14:30 | | GBP Consumer confidence survey | -25 | -27 | GBP / 23:01 | | JPY Nomura Manufacturing Purchasing Manager | - | 46.6 | JPY / 23:15 | | JPY Job to applicant ratio | 0.45 | 0.46 | JPY / 23:30 | | JPY Household spending | -1.5% | -1.3% | JPY / 23:30 | | JPY Jobless Rate | 5.2% | 5.0% | JPY / 23:50 |
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Currency Tech |
AUDUSD
R 3: 0.8375
R 2: 0.8263
R 1: 0.8120
CURRENT: 0.8018
S 1: 0.7790
S 2: 0.7703
S 3: 0.7630
EURJPY
R 3: 139.20
R 2: 138.33
R 1: 135.35
CURRENT: 133.75
S 1: 131.43
S 2: 129.70
S 3: 126.98
USDSGD
R 3: 1.4800
R 2: 1.4748
R 1: 1.4649
CURRENT: 1.4557
S 1: 1.4515
S 2: 1.4425
S 3: 1.4385
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Market Brief |
The BIS’ annual general meeting this weekend saw the emergence of talks between China and Brazil on how to bypass the dollar for trade between the two countries. The premise for this agreement is to limit the importance of the U.S dollar as the dominant global reserve currency, one analyst saying the substantial debt the U.S had incurred during the crisis that originated on it’s shores would be a “heavy burden on the dollar”. As a consequence the long-term outlook by major financial institutions has shifted – strong dollar in the short/medium term but definite dollar weakness as we pull clear of these current economic woes. Initial talk along these lines spoke of the IMF’s SDR replacing the dollar as a global reserve currency, now it seems the focus has shifted to limiting the dollars importance by favoring more direct swap methods.
Japan industrial production numbers rose for the third straight month as inventory cuts late last year and earlier this year left a void as massive production cuts in the wake of the Lehman brothers meltdown left demand for Japanese products at an all-time low. While many see sentiment improving, the long hard road to recovery has only begun. With elections expected to take place in August further instability in the political system could stunt economic growth further.
Commodities have traded higher in recent sessions as the dollar slides. Gold’s rapid decline from it’s June highs saw it bounce off the $900 support before losing momentum at around $950. As the global economy improves commodities will continue to soar as demand will push prices higher, this said – continued risk aversion could also be a driving force for commodities such as Gold and Silver. Crude is trading just below the $70 handle – ahead of U.S driving season.
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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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