Daily Forex Snapshots

US Session: Concerns of a Market Correction Lead to Heightened Risk Aversion

July 07, 2009 9:45 PM CEST

G10 Advancers and Decliners vs USD

	Jpy	0.45
	Chf	-0.15
	Eur	-0.29
	Aud	-0.29
	Dkk	-0.30
	Cad	-0.31
	Nzd	-0.42
	Nok	-0.58
	Gbp	-0.80
	Sek	-1.07

Global Indexes

Current Level

% Change

DJIA Index	8,245.82	- 0.95
S&P 500 Index	890.63	- 0.90
NASDAQ 100 Index	1,765.72	- 1.21
Nikkei 225 Futures	9,670.00	+ 0.31
Hang Seng Futures	9,670.00	+ 0.28
FTSE futures	4,150.50	- 0.37
SMI Futures	5,330.00	- 0.23

World Markets

Current Level

% Change

Crude wti	62.67	- 2.16
Gold	930.24	+ 0.57
Silver	13.25	- 0.19
USD Index	80.53	+ 0.20
VIX	29.87	+ 3.00

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: 0.7967
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: 132.34
S 1: 132.00
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 financial markets took a turn for the worse supporting further dollar strength in an attempt by Investors to scale back risk. The EurUsd fell 62pips to the low range of 1.39, struggling to breach the 1.40 level in recent trading and should serve as a psychological resistance point in the near-term. The UsdJpy fell 60pips also back below 95 consistent with the pattern of risk aversion driving price action in the marketplace. Equity markets were negative in Europe and the US, with the Dow weaker by 1.63% or 134pts. Commodities retreated across sector with oil off 1.86% at $62.86bbl and gold marginally higher at $926oz or .14%. Bond yields fell 6bps at the 10 and 30yr points in the UST curve, representing some level of demand in the later maturities as investors prepare for further pullback in riskier assets.

The economic calendar is relatively light this week, but corporate earnings season is in full gear. Major Dow components Exxon and Chevron corp. dropped more than 1% in tandem with oil prices which have slumped for the fifth straight day. Some investors stated concern that expectations for a recovery in global economy may have been exaggerated. The cautious optimism that enabled the S&P500 to rally more than 40% in recent month is beginning to dissipate, making the way for increased dollar strength. The Usd has been resilient over the last several months, while off its highs versus the majors there is serious potential for a resurgence in dollar strength.

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Asian Session – Asian Stocks have hard time mimicking yesterday’s U.S market jump on strong ISM numbers, dollar rises amid risk aversion – RBA keeps rate at 3.00%.

July 07, 2009 9:45 AM CEST

G10 Advancers and Decliners vs USD

	NZD	0.715
	AUD	0.461
	NOK	0.126
	SEK	0.125
	CAD	0.045
	DKK	0.007
	EUR	0.003
	CHF	-0.059
	GBP	-0.088
	JPY	-0.102

Global Indexes

Current Level

% Change

Nikkei 225 Index	9647.79	- 0.34
Hang Seng Index	18097.08	+ 0.65
Shanghai Index	3111.56	- 0.42
FTSE futures	4166	- 0.73
DAX futures	4669	+ 0.15
DJIA futures	8259	- 0.22
Nasdaq futures	1437	- 0.28

World Markets

Current Level

% Change

Gold	924.13	- 0.09
Silver	13.225	- 0.34
VIX	29	+ 3.76
Crude wti	64.25	+ 0.31
USD Index	80.5	+ 0.16

Todays Calender

Estimates

Country / GMT

UK Industrial Production (May)	0.20%	0.50%	UK / 08:30
UK Manufacturing Production	0.20%	0.50%	UK / 08:30
GER Factory Orders	0.50%	0.00%	DE / 10:00
US ABC Consumer confidence	-50	-51	US / 21:00

Currency Tech

Market Brief

Japan’s Nikkei 225 was down 0.2, with South Korea’s Kospi composite up 0.2% and Australia’s S&P Index/ASX 200 off 0.3%. China’s Shanghai composite was down 0.6% as Asia failed to show any will to move, volumes remained slow as the world awaits the developments in the G8 summit set to start tomorrow in L’Aquila Italy. US ISM non-manufacturing index rose to 47% from 44% in May – sending stock markets on a rally and the Dollar tumbling as a result.

Investors are afraid to be excessively long the dollar ahead of the G8 as one of the reported themes will be the U.S and its global reserve currency status. Officials from India, China and now Russian President Medvedev have voiced concern about the Greenback’s role as the global reserve currency. Interestingly enough these three countries are the largest holders of foreign exchange reserves (which mostly comprise of USD). President Medvedev went on to say that although the current system is flawed “there is no alternative to the U.S. Dollar or the European Currency”.

The RBA kept rates at 3.00% as economic indicators show that the 4.25% cut in a 6 month period, A$12Bn handouts to households and a A$22Bn commitment to job creation (infrastructure spending) has boosted the economy. This said, RBA Governor Stevens didn’t rule out further cuts if unemployment continued to rise. His comments about why Australia fared so well in this crisis outlined it’s limited exposure to the credit markets and strong ties with China – the economic powerhouse largely expected to pull Asia and the world out of this current downturn.

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