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US Session: Dollar Loses Ground Against Majors As Commodities and Equities Rise
August 27, 2009 10:42 PM CEST
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G10 Advancers and Decliners vs USD |
| | Aud | 1.30 |  | | | Cad | 1.19 | | | | Nzd | 0.95 | | | | Chf | 0.95 | | | | Jpy | 0.93 | | | | Eur | 0.82 | | | | Dkk | 0.81 | | | | Nok | 0.67 | | | | Sek | 0.38 | | | | Gbp | 0.24 | |
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Global Indexes |
Current Level |
% Change |
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| DJIA Index | 9,543.52 | + 0.04 | | S&P 500 Index | 1,028.12 | + 0.01 | | NASDAQ 100 Index | 2,024.43 | + 0.01 | | Nikkei 225 Futures | 10,520.00 | + 0.09 | | Hang Seng Futures | 20,285.00 | + 0.76 | | FTSE 100 Index | 4,891.50 | + 0.09 | | SMI Index | 6,165.00 | - 0.21 |
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World Markets |
Current Level |
% Change |
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| Crude wti | 71.21 | - 0.31 | | Gold | 947.43 | + 0.20 | | Silver | 14.31 | - 0.21 | | USD Index | 78.47 | - 0.21 | | VIX | 24.95 | + 0.12 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| No Major Events Scheduled | | | |
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Currency Tech |
AUDUSD
R 2: 0.8520
R 1: 0.8475
CURRENT: 0.8301
S 1: 0.8125
S 2: 0.7925
USDCAD
R 2: 1.1347
R 1: 1.1225
CURRENT: 1.0985
S 1: 1.0793
S 2: 1.0633
EURJPY
R 2: 137.85
R 1: 135.15
CURRENT: 133.40
S 1: 132.10
S 2: 131.00
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Market Brief |
A Rebound in Crude oil and equities paired the dollar’s gain against euro for the past four days and boosted the strength in commodity currencies declined against the euro. As of 2:43 p.m. in New York, the Cad advanced to $1.0859, the most against USD in two weeks and the Krone gained as crude oil rose. The dollar slipped by 0.9% versus the Swiss franc to 0.9453, the weakest level this year, and dropped 0.9% to 93.45 yen, which is the lowest level since July 22. The euro gained 0.8% versus the dollar to $1.4346. The Dow harvested 37.71 points to 9,581.23, reaching the eighth straight rallying day. The 10-year Treasury notes fell, pushing the yield up 0.3 point to 3.46%.
US GDP shrank at a 1% annual rate from April to June, while corporate earnings rose by 5.7% from the first three months of the year, the most since the first quarter of 2005. Consumer spending fell less than anticipated to 1%, but more than a 0.6% increase in the prior quarter. European seasonally adjusted retail sales number fell to 47.1 from 47.3 in July, culminating to a 15th month decline in August as rising unemployment, which has increased to a 10-year high of 9.4%, is continuing eating into consumer spending. However, consumer confidence gained more than economists forecast in July on signs the region’s worst economic recession in six decades is easing. If more bad economic news turns out to be better than the even worse market expectations, investor confidence will be buoyed and the risk appetite story may continue adding pressure to the dollar, while fundamental story waiting in peace, which will be awakened and support the dollar when the real good news consistently hit the market.
Risk Disclaimer:
Although every investment involves some degree of risk, the risk of loss in trading off‐exchange forex contracts can be substantial. Therefore if you are considering trading in this market, you should be aware of the risks associated with this product so you can make an informed decision prior to investing. The material presented here is not to be construed as trading advice or strategy. ACMNY makes a strong effort to use reliable, expansive information, but we make no representation that it is accurate or complete. In addition, we have no obligation to notify you when opinions or data in this material change.
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European Session: Financial Markets Restructuring Eurozone Liquidity Tight and New Funding Currencies Become of Interest as Investors Look for Opportunities.
August 27, 2009 4:34 PM CEST
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G10 Advancers and Decliners vs USD |
| | Aud | 0.80 | | | | Cad | 0.49 | | | | Jpy | 0.46 | | | | Nzd | 0.23 | | | | Sek | 0.09 | | | | Eur | 0.04 | | | | Nok | 0.01 | | | | Dkk | 0.01 | |  | Chf | -0.07 | | | Gbp | -0.29 | |
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Global Indexes |
Current Level |
% Change |
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| DJIA futures | 9,554.00 | + 0.29 | | S&P future | 1,029.10 | + 0.22 | | Nasdaq futures | 1,640.00 | + 0.21 | | FTSE futures | 4,891.50 | + 0.09 | | CAC futures | 3,667.00 | + 0.10 | | DAX futures | 5,507.50 | - 0.36 | | SMI Futures | 6,165.00 | - 0.21 |
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World Markets |
Current Level |
% Change |
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| Crude wti | 71.21 | - 0.31 | | Gold | 947.43 | + 0.20 | | Silver | 14.31 | - 0.21 | | USD Index | 78.47 | - 0.21 | | VIX | 24.95 | + 0.12 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| No Major Events Scheduled | | | |
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Currency Tech |
AUDUSD
R 2: 0.8520
R 1: 0.8475
CURRENT: 0.8301
S 1: 0.8125
S 2: 0.7925
USDCAD
R 2: 1.1347
R 1: 1.1225
CURRENT: 1.0985
S 1: 1.0793
S 2: 1.0633
EURJPY
R 2: 137.85
R 1: 135.15
CURRENT: 133.40
S 1: 132.10
S 2: 131.00
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Market Brief |
The dollar was mixed against the majors losing ground against the Aussie, Kiwi, Cad, and Yen. The UsdJpy has been a central focus in FX Trading mainly due to the discussions regarding the timing of a revival in the carry trade. Due to the low interest rate environment the dollar is becoming a cheaper funding currency than the yen, but this phenomenon is probably unlikely to last as the US and other G10 members will revert into a tightening phase when risk appetite rises. The UsdJpy fell 64pips through 94 to 93.63, while the EurUsd fell 28pips to the low range of 1.42. The GbpUsd dropped nearly 100pips approaching new ranges to the downside with support building at 1.61. Equity markets are negative in the US and Europe, with the Dow down nearly 1.00% to 9475 and the DAX the experiencing the steepest fall today of about 1.00% as well to 5467. Yields look mostly unchanged on the UST curve, with the 2yr rate holding ground above 1.00% and the 10yr at 3.42%. Commodities are lower across the board with oil down 1.72% to 70bbl and gold sliding below $950oz to $943oz.
Eurozone M3 data was released at its lowest reading on record of 3.0%, which raises concerns regarding flow of credit in the region particularly Germany. The ECB aired to the conservative side in regards to unconventional monetary policy measures, and its probable that liquidity may be a serious issue that needs to be readdressed by the central bank. The lack of volume has protected any strong trends from building across asset classes, but these fundamental issues with lack of available credit can cause more damaging effects to the Eur once Traders re-enter markets in September.
Risk Disclaimer:
Although every investment involves some degree of risk, the risk of loss in trading off‐exchange forex contracts can be substantial. Therefore if you are considering trading in this market, you should be aware of the risks associated with this product so you can make an informed decision prior to investing. The material presented here is not to be construed as trading advice or strategy. ACMNY makes a strong effort to use reliable, expansive information, but we make no representation that it is accurate or complete. In addition, we have no obligation to notify you when opinions or data in this material change.
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Asian Session: Yen and dollar gain on risk aversion as China pledges to curb credit expansion.
August 27, 2009 11:15 AM CEST
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G10 Advancers and Decliners vs USD |
| | JPY | 0.688 | | | | AUD | 0.217 | | | | SEK | 0.146 | | | | CHF | 0.064 | | | | NOK | 0.060 | | | | DKK | 0.052 | | | | EUR | 0.041 | | | CAD | -0.010 | | | GBP | -0.221 | | | NZD | -0.264 | |
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Global Indexes |
Current Level |
% Change |
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| Nikkei 225 Index | 10473.97 | - 1.56 | | Hang Seng Index | 20242.75 | - 1.04 | | Shanghai Index | 2946.39 | - 0.71 | | FTSE 100 Index | 4900.89 | + 0.21 | | DAX Index | 5526.53 | + 0.08 | | DJIA futures | 9539 | + 0.25 | | Nasdaq futures | 1638.25 | + 0.11 |
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World Markets |
Current Level |
% Change |
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| Gold | 944.33 | - 0.13 | | Silver | 14.234 | - 0.73 | | VIX | 24.95 | + 0.12 | | Crude wti | 71.23 | - 0.28 | | USD Index | 78.58 | - 0.06 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| US GDP | -1.5% | -1.0% | US / 12:30 | | US GDP (Price index) | 0.2% | 0.2% | US / 12:30 | | JPY Jobless rate | 5.5% | 5.4% | JPY / 23:30 | | JPY National CPI | -2.2% | -1.8% | JPY / 23:30 |
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Currency Tech |
AUDUSD
R 2: 0.8520
R 1: 0.8475
CURRENT: 0.8301
S 1: 0.8125
S 2: 0.7925
USDCAD
R 2: 1.1347
R 1: 1.1225
CURRENT: 1.0985
S 1: 1.0793
S 2: 1.0633
EURJPY
R 2: 137.85
R 1: 135.15
CURRENT: 133.40
S 1: 132.10
S 2: 131.00
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Market Brief |
Markets initially started the session sideways but this quickly changed as the Chinese government’s website published an article saying it would curb excessive credit expansion. More specifically this meant over-capacity in manufacturing industries such as Steel production and Cement. Furthermore the government said it would increase “guidance” over parts of the coal, glass and power industries said the State council on their website. This, coupled with more strenuous controls on stock and bond sales are all measures the government hopes will put an accent on solid growth and cut out unnecessary credit expansion that could hinder the long term well being of the economy.
The IMF expects the Chinese economy to grow by up to 8.5% this year, while the worldwide figure stands at 2.5%.
The market’s reaction to this news was a very poignant one. As we mentioned in our newsletter yesterday, investors expected a return to risk aversion – the reasons are diverse, but mainly on the waning of the ‘doping effects’ of the earnings season. However, the Chinese release has maximized this effect; we saw a general rally of the Yen crosses (AUDJPY -1.28%, USDJPY -0.95%, EURJPY -0.96%). We expect some correction on last night’s moves but the general theme is defiantly risk adverse.
While commodities have slumped on the back of this return to risk aversion, Gold has risen, most probably on fundamental demand as the global economy picks up. We do see a wedge forming – strong indication of an imminent directional move.
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ACM Advanced Currency Markets SA (hereinafter referred as ACM) is a professional financial intermediary, directly regulated by the Swiss Federal Department of Finance, Anti Money Laundering Control Authority. As forex specialist, ACM provides only currency trading via highly professional forex trading software. All customers are aware that this information or any part thereof has been prepared without taking account of your objectives, financial situation and/or needs. This information is not intended as personalized investment advice and does not constitute a recommendation. It is not an offer or solicitation of any offer to purchase or sell any financial instrument. The analysis is based on the information which ACM finds reliable and accurate, but ACM does not assume any responsibility for any material nor for the transactions made on the basis of the information or the estimates of the analysis. ACM cannot guarantee that these forecasts will materialize and cannot be held liable in any way for direct, indirect and/or consequential loss arising from any use of this information, document or its content. All opinions and estimates constitute ACM analysis as of the data and are subject to change without notice. ACM does not warrant the accuracy or completeness of information contained herein, such information is subject to change and is not intended to influence your investment decisions. Past performance is not a reliable indicator of future performance.
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