Daily Forex Snapshots

US Session: Bear Market Rally On Positive US & European Economic Data

August 21, 2009 11:28 PM CEST

G10 Advancers and Decliners vs USD

	Eur	0.50
	Jpy	0.21
	Gbp	0.01
	Nok	-0.26
	Aud	-0.42
	Chf	-0.43
	Cad	-0.54
	Dkk	-0.55
	Nzd	-0.85
	Sek	-1.50

Global Indexes

Current Level

% Change

DJIA Index	9,505.96	+ 1.67
S&P 500 Index	1,026.13	+ 1.86
NASDAQ 100 Index	2,020.90	+ 1.59
Nikkei 225 Futures	10,350.00	+ 0.67
Hang Seng Futures	20,138.00	+ 0.72
FTSE futures	4,840.50	+ 1.84
SMI Futures	6,141.00	+ 1.67

World Markets

Current Level

% Change

Crude wti	73.95	+ 1.42
Gold	953.85	+ 1.40
Silver	14.18	+ 1.79
USD Index	78.08	- 0.41
VIX	25.01	- 0.32

Todays Calender

Estimates

Country / GMT

No Major Events Scheduled

Currency Tech

AUDUSD
R 2: 0.8520
R 1: 0.8478
CURRENT: 0.8265
S 1: 0.8125
S 2: 0.7925

USDCAD
R 1: 1.1345
R 1: 1.1225
CURRENT: 1.0868
S 1: 1.0790
S 2: 1.0633

EURJPY
R 2: 137.85
R 1: 135.15
CURRENT: 133.94
S 1: 132.10
S 2: 131.60

USDMXN
R 2: 13.145
R 1: 13.075
CURRENT: 12.865
S 1: 12.789
S 2: 12.620

Market Brief

Positive economic data out of the Euro zone and United States managed to lift investors’ desire for riskier assets, pushing equity markets higher. The EurUsd rose 73pips, finding support at 1.432, while the UsdJpy fell 32pips to 94.50. The GbpUsd appreciated 50pips, bringing the cable to the upper-range of 1.65. Equity markets rose in the U.S. and Europe, with the Dow higher by 1.45% or 136pts and the FTSE up by 1.43% or 66pts. The yield curve experienced some flattening, with the 10 and 30 year bonds up 12 and 9bps respectively. Commodities were higher across the board with oil up by $.44bbl at $73.39bbl and gold up $13.4oz approaching the mid-range of $954oz.

Today’s price action took most of its direction from uplifting economic data out of the Euro zone as PMI surveys noticeably beat expectations. The PMI Services flash was at 49.5 versus estimates of 46.5 and the composite PMI index reached a key level of 50 versus estimates of 48.3. Both readings were at 15 month high’s and the composite reading indicates a move away from a contraction in Euro zone private sector activity. Investor optimism took higher risk currencies like the euro and sterling up over 100pips against the dollar reaching high’s of 1.4375 and 1.6622.

Adding further impetus to the risk rally, Federal Reserve Chairman Ben Bernanke remarked that the global economy had bottomed out and is now beginning to emerge and recover from the economic crisis. At the same time, the release of US existing home sales confirmed a 7.2% increase in July to 5.24mln units versus estimates of a rise to 5.0mln, taking the dollar and yen 0.6% and 0.8% lower against the euro. Commodity currencies like the Kiwi moved higher after Prime Minister John Key said he felt New Zealand would be able to emerge from the recession by the end of 2009 and that because of limited inflation pressure, there is currently no need to raise interest rates. In addition, NYMEX crude futures for October delivery rose by a moderate $1.23bbl above $74bbl, supporting a 62pip rise of the Canadian dollar to C$1.080.

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European Session: USD Drops vs. Yen as Initial Jobless Claims unexpectedly rises

August 21, 2009 10:32 AM CEST

G10 Advancers and Decliners vs USD

	SEK	0.55
	CHF	0.53
	JPY	0.44
	EUR	0.39
	DKK	0.36
	NOK	0.35
	CAD	0.14
	GBP	-0.15
	NZD	-0.17
	AUD	-0.25

Global Indexes

Current Level

% Change

Nikkei 225 Index	10,238.20	- 1.39
Hang Seng Index	20,199.02	- 0.63
Shanghai Index	2,960.77	+ 1.68
FTSE 100 Index	4,767.68	+ 0.23
DAX Index	5,322.54	+ 0.21
SMI Index	6,073.11	+ 0.68
DJIA futures	9,314.00	- 0.06

World Markets

Current Level

% Change

Gold	940.75	+ 0.01
Silver	13.88	- 0.39
VIX	25.09	- 4.45
Crude wti	72.79	- 0.16
USD Index	78.23	- 0.22

Todays Calender

Estimates

Country / GMT

"Flash" manufacturing PMI, index Aug	47.5	46.0	EUR / 7.58
"Flash" services PMI, index Aug	46.3	45.7	EUR / 7.58
"Flash" composite PMI, index Aug	47.8	47.0	EUR / 7.58
Fed Chairman Bernanke speaks on "Reflections on a	--	--	USD / 14.00
Existing home sales, mn Jul	4.97	4.89	USD / 14.00

Currency Tech

Market Brief

The US Dollar continued its fall backed by rising equity markets as Chinese equities started its rebound after the 4% decline on Wednesday. AIG said that it plans to repay the money borrowed from the US government which also helped push the equity markets higher. Leading indicators posted a reading of a rise of 0.6% backed by improvements in job sector and positive equity markets while the Philadelphia Fed manufacturing activity showed a positive reading at 4.2 against an expectation of -2.0 and better than the previous reading of -7.5 as new orders received increased. This data shows that the manufacturing sector has gained the most majorly boosted by the auto sector where the cash-for-clunkers program has helped the most.

Also released was the Initial Jobless claims reading which showed that the new claims rose 15,000 unexpectedly to 576,000 while the total claims till date rose 2,000 to 6.241 million. The mortgage delinquencies rose 9.24% up from 9.12%, the highest in till date.

The Pound fell yesterday being the weakest among the majors after the UK government posted a deficit of 8 Billion pounds, the highest till date to lows of 1.6451 after positive retail sales boosted the Pound to 1.6606 as the retail sales rose by 0.4% while the annual rate rose to a 14 month high of 3.3%.

Upcoming releases for today, we have the PMI Manufacturing and Services data from the Germany and the Euro Zone while the US will release the Existing Home Sales data at 1400 GMT. The Home sales data could be a factor in determinign the breakout levels for the major pairs as continued weakness in the housing market is dominant as unemployment rate still holds the key to economic growth.

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