Daily Forex Snapshots

US Session: A Sharp Decrease in US CPI and Consumer Confidence Raise Doubts Among Bullish Investors

August 14, 2009 11:57 PM CEST

G10 Advancers and Decliners vs USD

	Aud	1.21
	Cad	1.02
	Nok	0.65
	Dkk	0.62
	Sek	0.60
	Chf	0.20
	Nzd	0.11
	Gbp	-0.24
	Jpy	-0.50
	Eur	-0.63

Global Indexes

Current Level

% Change

DJIA Index	9,321.40	- 0.82
S&P 500 Index	1,004.09	- 0.85
NASDAQ 100 Index	1,985.52	- 1.19
Nikkei 225 Futures	10,600.00	+ 0.09
Hang Seng Futures	20,937.00	+ 0.83
FTSE futures	4,693.50	- 1.07
SMI Futures	5,983.00	- 0.05

World Markets

Current Level

% Change

Crude wti	67.51	- 4.27
Gold	948.55	- 0.67
Silver	14.72	- 2.06
USD Index	78.73	+ 0.43
VIX	24.27	- 1.78

Todays Calender

Estimates

Country / GMT

Currency Tech

AUDUSD
R 2: 0.8695
R 1: 0.8520
CURRENT: 0.8422
S 1: 0.8180
S 2: 0.8125

USDCAD
R 2: 1.1225
R 1: 1.1075
CURRENT: 1.0869
S 1: 1.0757
S 2: 1.0633

EURJPY
R 2: 138.72
R 1: 137.85
CURRENT: 135.77
S 1: 134.10
S 2: 132.80

USDMXN
R 2: 13.225
R 1: 13.145
CURRENT: 12.875
S 1: 12.620
S 2: 12.405

Market Brief

Profit taking and thoughts of delayed recovery were mirrored in currency price action today as mixed economic data and poor earnings reports caused equities to edge lower. The EurUsd fell 111pips, hitting support at 1.416, while the UsdJpy fell 55pips to the upper-range of 94. The GbpUsd fell 80pips, bringing the cable slightly below 1.65. Equity markets fell in the U.S. but rallied in Europe, with the Dow lower by 1.34% or -125pts and the FTSE higher by 0.82% or -38.70pts. The yield curve was subjected to some flattening, with 10 and 30 year bonds at 5bps, and 5 year bonds at 6bps. Commodities were negative across the board with oil lower by $2.90bbl at $69.58bbl and gold down to $8.3oz to the lower end of $948oz.

A central theme in financial markets remains the better than expected GDP data out of France and Germany, the euphoria was short lived in today’s session as a deep drop in CPI signaled waning demand from consumers in the US. US CPI data fell 2.1% vs. 1.9% expected, which triggered a selloff in gold and sparked a rally in dollar strength. Price action in the FX market is reminiscent of the risk aversion trades which have dominated the marketplace for last several months, but there are strong signs that fundamental factors should reassume a direct relationship with financial instruments. Traders and Investors alike will probably start to position themselves on the basis of relative value and comparative returns versus near-term volatility based strategies.

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Asian Session: Euro & Pound Gain over Optimism in Euro Zone

August 14, 2009 10:28 AM CEST

G10 Advancers and Decliners vs USD

	NOK	0.67
	SEK	0.40
	JPY	0.24
	NZD	0.14
	AUD	0.10
	CAD	-0.05
	EUR	-0.07
	DKK	-0.07
	CHF	-0.10
	GBP	-0.18

Global Indexes

Current Level

% Change

Nikkei 225 Index	10,597.33	+ 0.76
Hang Seng Index	20,822,25	- 0.18
Shanghai Index	3,046.97	- 2.98
FTSE 100 Index	4,790.18	+ 0.73
DAX Index	5,432.88	+ 0.58
SMI Index	6,026.32	+ 0.66
DJIA futures	9,393.00	+ 0.05

World Markets

Current Level

% Change

Gold	956.28	+ 1.83
Silver	15.12	+ 0.56
VIX	24.71	- 2.90
Crude wti	71.00	+ 0.68
USD Index	78.45	+ 0.08

Todays Calender

Estimates

Country / GMT

Consumer price index, % m/m (y/y)Jul	0.0 (-2.1)	0.7 (-1.4)	USD / 12.30
Core CPI, % m/m (y/y)Jul	0.2 (1.6)	0.2 (1.7)	USD / 12.30
CPI nsa, indexJul	--	215.693	USD / 12.30
Industrial production, % m/m (y/y)Jul	0.1 (-13.5	-0.4,-13.6	USD / 13.15
Capacity utilization, %Jul	68.1	68.0	USD / 13.15
Michigan consumer sentiment, indexAug p	68.8	66.0	USD / 13.55

Currency Tech

Market Brief

The US Dollar was the weakest among the major currencies as it extended its decline as Advanced Retail Sales unexpectedly declined in July over concerns of mounting job losses and consumers spending less. The retail sales declined 0.1% against expectations of a rise of 0.8%. The retail sales less the auto component declined 0.6% against an expectation of a rise of 0.1% as the autos were the main beneficiary of the cash-for-clunkers program and consumers did not spend apart from autos. The other important news from the US was the initial jobless claims reading which showed that claims rose 4,000 to 558,000 from the previous revised reading of 554,000 while the total claims till date showed a figure of 6.2 million claims down 141,000 from the previous month.

The Euro and the Pound gained against the US Dollar where the dollar suffered the most during the day in the morning session as GDP reports from Germany and France showed that the Euro Zone is coming out of the recession as the Euro Zone GDP fell only 0.1% in Q1 2009 against the previous drop of 2.5% in Q1 2008. Both the Euro and the Pound continued its gains against the USD after the US economic data which proved bearish for the Dollar as the Euro moved above 1.4300 and the Pound above 1.6600. The Swiss Franc was range bound over weaker economic data as Producer Prices fell the most in 34 years and there are reports of the Swiss Bank intervening to weaken the Franc over risk of deflation as the USD/CHF neared 1.0600.

Despite the positive economic data released from the US last week regarding the manufacturing, housing and employment, the USD remains weak and unemployment looks on its course to 10% suggesting that the economy will still need time to recover as consumers still fear their safety over jobs and spending is at the lows which could halt the economic cycle of growth.

Today the important news would be the CPI reading from the Euro Zone and the US which could prove decisive over the status of the stimulus packages and whether the central banks would review the QE program in their next meetings. Also released would the University of Michigan Consumer Confidence which could help determine the status of the consumer mentality over their outlook of the economy as job cuts continue to rise despite recovery measures.

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