Daily Forex Snapshots

US Session: Revival of Risk Aversion Ignites Yen and Dollar Strength

July 06, 2009 6:42 PM CEST

G10 Advancers and Decliners vs USD

	Jpy	1.04
	Nzd	0.13
	Cad	-0.06
	Chf	-0.12
	Eur	-0.32
	Dkk	-0.35
	Aud	-0.56
	Gbp	-0.66
	Sek	-1.05
	Nok	-1.21

Global Indexes

Current Level

% Change

DJIA Index	8,190.00	- 0.62
S&P 500 Index	891.78	- 0.52
NASDAQ 100 Index	1,774.95	- 1.20
Nikkei 225 Futures	9,600.00	+ 1.04
Hang Seng Futures	17,934.00	+ 1.14
FTSE futures	4,163.50	- 0.79
SMI Futures	5,342.00	+ 0.26

World Markets

Current Level

% Change

Crude wti	64.26	- 3.70
Gold	925.03	- 0.78
Silver	13.30	- 0.77
USD Index	80.55	+ 0.12
VIX	30.15	+ 7.87

Todays Calender

Estimates

Country / GMT

No Major Events Scheduled

Currency Tech

AUDUSD
R 3: 0.8160
R 2: 0.8109
R 1: 0.8008
CURRENT: 0.7895
S 1: 0.7851
S 2: 0.7825
S 3: 0.7790

EURJPY
R 3: 134.94
R 2: 133.61
R 1: 132.97
CURRENT: 132.69
S 1: 132.69
S 2: 131.43
S 3: 127.00

USDSGD
R 3: 1.4800
R 2: 1.4748
R 1: 1.4649
CURRENT: 1.4538
S 1: 1.4454
S 2: 1.4385
S 3: 1.4334

Market Brief

The dollar benefited from an extended bout of risk aversion as Investors and Traders alike pare back risk. The dollar and the Yen rallied across the G10 a typical trend in an environment of greater risk aversion. The Sterling fell as much as 200pips to the low range of 1.61, but has since recovered to the 1.62 level. The Euro slipped nearly 70pips finding support at 1.39 prices have consolidated a bit but the general trend of bearishness.

Investors and Traders are looking for evidence that an economic recovery is “real” and in the near-future before supporting any further rally in asset classes that benefit from higher risk appetite. A key indicator outside of corporate earnings will be employment data, as we are still seeing a heightened level of sensitivity to non-farm payrolls and the unemployment rate. “This is the only recession since the Great Depression to wipe all job growth from the previous business cycle,” Heidi Shierholz (Economic Policy Institute). Expectations for consumer spending and GDP growth are tied very closely to patterns in US employment .

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Asian Session – Yen gains on reports global recovery will falter – stocks decline.

July 06, 2009 10:36 AM CEST

G10 Advancers and Decliners vs USD

	JPY	0.717
	DKK	-0.406
	CAD	-0.418
	EUR	-0.428
	CHF	-0.445
	NZD	-0.584
	SEK	-0.685
	AUD	-0.921
	NOK	-1.242
	GBP	-1.283

Global Indexes

Current Level

% Change

Nikkei 225 Index	9680.87	- 1.38
Hang Seng Index	17979	- 1.23
Shanghai Index	3124.6	+ 1.18
FTSE 100 Index	4180	- 1.32
DAX Index	4630	- 1.65
DJIA futures	8280	- 2.63
Nasdaq futures	1796	- 2.67

World Markets

Current Level

% Change

Gold	924.68	- 0.81
Silver	13.07	- 2.39
VIX	27.95	+ 6.60
Crude wti	64.27	- 3.69
USD Index	80.71	+ 0.32

Todays Calender

Estimates

Country / GMT

US - ISM Non-Manufacturing composite (JUN)

USD / 14:00

Currency Tech

Market Brief

The BoJ governor Shirakawa’s comments this morning were watched very closely as he expressed a somewhat optimistic view of the current economic and financial situation in Japan. This said, tight funding and a very protective stance by local banks with regards to lending still made credit conditions very “tight”. These comments come after the Tankan survey released last week showed Japanese business sentiment had improved less than expected but that the corporate finance market was righting itself. The survey also showed that financial conditions for large institutions rose 5 points to 1 – the first improvement in 2 years.

On June the 8th Alcoa unofficially starts off the Q2 earnings season. Markets are worried that the rally that started in March was simply a bear market rally, a correction before we head lower. U.S VP Biden said yesterday that the Obama administration had misjudged the depth of the crisis as they had projected unemployment to peak at 8% if the $787Bn bill was passed – 8% has come and gone we are now at 9.6% - the highest rate in half a century.

In the current market conditions we see a return of risk aversion. This will benefit both the Yen and Dollar as they continue to benefit from their haven status. Last week ECB president Trichet said “A strong dollar is in the interests of the U.S.A”. Consumers continue to be the main focus – higher unemployment, dismal consumer confidence will stifle the recovery everyone was hoping for.

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