Daily Forex Snapshots

US Session: Risk Aversion Boosts Demand for the Dollar after Worse-Than-Expected Payroll Number

July 02, 2009 5:51 PM CEST

G10 Advancers and Decliners vs USD

	Jpy	0.59
	Gbp	-0.62
	Chf	-0.84
	Cad	-0.94
	Eur	-0.94
	Dkk	-0.95
	Nok	-1.15
	Aud	-1.53
	Nzd	-1.60
	Sek	-2.26

Global Indexes

Current Level

% Change

DJIA Index	8,340.59	- 1.92
S&P 500 Index	904.01	- 2.10
NASDAQ 100 Index	1,803.92	- 2.27
Nikkei 225 Futures	9,480.00	- 0.51
Hang Seng Futures	18,125.00	- 1.63
FTSE futures	4,208.50	- 2.00
SMI Futures	5,355.00	- 1.96

World Markets

Current Level

% Change

Crude wti	66.99	- 3.35
Gold	930.36	- 1.11
Silver	13.40	- 2.56
USD Index	80.22	+ 0.75
VIX	28.22	+ 7.63

Todays Calender

Estimates

Country / GMT

No Major Events Scheduled

Currency Tech

AUDUSD
R 3: 0.8375
R 2: 0.8263
R 1: 0.8150
CURRENT: 0.8026
S 1: 0.8025
S 2: 0.7985
S 3: 0.7930

EURJPY
R 3: 139.20
R 2: 138.33
R 1: 136.46
CURRENT: 136.34
S 1: 135.04
S 2: 134.35
S 3: 133.00

USDSGD
R 3: 1.4800
R 2: 1.4748
R 1: 1.4649
CURRENT: 1.4490
S 1: 1.4454
S 2: 1.4385
S 3: 1.4334

Market Brief

The dollar strengthened across the board as the worse-than-expected non-farm payroll number prompted traders to steer away from high-yields. The EurUsd continues its losing streak thanks to the dollar strength, dipped 160pips from yesterday’s high to 1.40 as downward momentum was represented by declining RSI. The GbpUsd fell 100pips and consolidated around 1.63, registered a three-day drop of 300pips or 2.4%. The UsdJpy slid 70pips to 96.1 as traders steered away from risk appetite. The worse-than-expected payroll number eroded near-term positive sentiment and weighed on equity markets, with the Dow plummeted 154ppts or 1.83% the FTSE down 96ppts or 2.22%. Yields are lower across the curve, with the 2yr yield slipped .04 to .99% and the 10yr down .04 to 3.4% due to the flight-to-safety play. Commodities tumbled across the board, with oil declined $2 or 3.48% to $66bbl and gold edged down by $10 or 1.12% to $930oz.

Risk aversion is on traders’ menu today. The dollar strengthened against majors as the payroll number dampened prospects for a recovery. ECB kept rates unchanged at 1% as forecasted. The euro extended its losses against the dollar after ECB President Jean-Claude Trichet said the euro-zone economy will remain weak until year end. Euro-zone unemployment touched a 10-year high of 9.5%, further boosted the euro selloff against the dollar. US non-farm payroll dropped 467k vs. 363k forecasted while the unemployment rate rose to 9.5% vs. 9.6% forecasted, sending 2yr yields lower to .99% after the data came out. Given these data, traders presaged a strong recovery is unlikely to emerge in the absence of sustainable growth.

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Asian Snap: China revives the reserve currency debate and pushes for more Forex diversification – NFP’s and ECB rate decision loom.

July 02, 2009 10:31 AM CEST

G10 Advancers and Decliners vs USD

	CAD	-0.245
	JPY	-0.263
	NOK	-0.394
	EUR	-0.431
	DKK	-0.433
	CHF	-0.591
	AUD	-0.680
	GBP	-0.934
	NZD	-1.033
	SEK	-1.403

Global Indexes

Current Level

% Change

Nikkei 225 Index	9876.15	- 0.64
Hang Seng Index	19178.05	- 1.09
Shanghai Index	3060.25	+ 1.73
FTSE 100 Index	4291.32	- 1.14
DAX Index	4820.82	- 1.73
DJIA futures	8402	- 0.55
Nasdaq futures	1471.25	- 0.51

World Markets

Current Level

% Change

Gold	937.78	- 0.32
Silver	13.71	- 0.33
VIX	26.22	- 0.49
Crude wti	69.12	- 0.27
USD Index	79.99	+ 0.47

Todays Calender

Estimates

Country / GMT

Euro Zone Unemployment rate	9.4%	9.2%	EUR / 09:00
ECB Rate Decision	1.00%	1.00%	EUR / 11:45
US Change in Non-Farm Payrolls	-365K	-345K	USD / 12:30
US Unemployment Rate	9.6%	9.4%	USD / 12:30

Currency Tech

Market Brief

Vice foreign minister He Yafei said yesterday that he wasn’t aware that China had asked the issue of a global reserve currency to be on the agenda for next week’s G8 summit. This saw the dollar drop, sending the EURUSD to a high of 1.4201. Despite the consternation at the minister’s misinformation his comments on the need for a more stable and potentially non-sovereign global reserve currency ignited debate on the matter – this isn’t much of a surprise as China is the largest holder of foreign exchange reserves and U.S Treasuries.

Focus today is on the NFP’s (12:30 GMT) and ECB rate decisions (11:45 GMT). Currency markets have been quite jittery as dollar driven moves show an inherent “tug of war” between the risk adverse and the risk takers. ADP report came in at -473K yesterday while consensus was at -395K – Consensus for the NFP’s is at -365K with some economists expecting as much as -425K. A weaker number would be bullish dollar as it would reaffirm the plight of the risk adverse. Riksbank cut it’s rates this morning by 25bps – another sign that we haven’t seen the end of this recession. The ECB is largely expected to keep it’s rates at 1.00%.

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