Daily Forex Snapshots

Late European Session: USD Correction; Blink And You Missed It

September 22, 2009 4:18 PM CEST

G10 Advancers and Decliners vs USD

	NZD	2.18
	SEK	1.37
	AUD	1.26
	NOK	1.06
	JPY	0.89
	CHF	0.76
	GBP	0.75
	EUR	0.72
	DKK	0.71
	CAD	0.68

Global Indexes

Current Level

% Change

FTSE futures	5'166.09	+ 0.62
DAX futures	5'713.86	+ 0.80
SMI Index	6'371.55	+ 1.04
S&P 500 Index	1'067.51	+ 0.27
DJIA Index	9'786.57	+ 0.08
Nikkei 225 Futures	10'390.00	+ 0.48
Hang Seng Futures	21'692.00	+ 1.03

World Markets

Current Level

% Change

Gold	1'015.18	+ 1.14
Silver	17.17	+ 1.99
VIX	23.81	- 1.04
Crude wti	71.08	+ 1.97
USD Index	76.11	- 0.87

Todays Calender

Estimates

Country / GMT

New Zealand : GDP % q/q

-0.2

-1.0

NZD/22:45

Currency Tech

AUDUSD
R 2: 0.8860
R 1: 0.8800
CURRENT: 0.8750
S 1: 0.8595
S 2: 0.8545

USDCAD
R 2: 1.0870
R 1: 1.0770
CURRENT: 1.0720
S 1: 1.0610
S 2: 1.0525

EURJPY
R 2: 136.00
R 1: 135.90
CURRENT: 134.80
S 1: 133.90
S 2: 131.05

USDMXN
R 2: 13.570
R 1: 13.545
CURRENT: 13.2900
S 1: 13.165
S 2: 13.110

Market Brief

Equities have continued to put in a strong performance throughout the day with most major European indices up 0.5%-1% on the day. US stocks have opened higher and Asian equity futures also look buoyant; in typical fashion the USD has taken this as a cue to head lower after yesterday’s efforts, the DXY twice dipping toward the lows at 76.01 (currently 76.08). One of the biggest winners on the day is NZD which is up over 2% at 0.7235 after positive current account releases overnight, and given the sanguine outlook for NZD that has been painted today, tonight’s Q2 GDP release will be a major highlight (-0.2% exp.). The other main gainer is AUD (currently 0.8740) as the hunt for yield resumes – it seems the USD correction we’d all been anticipating may already be over.

The main data release in this session has been the Canadian Retail Sales for Jul, posting a dismal -0.6% change on the month vs. forecasts for a 0.7% rise. The drop has been attributed to lower prices at gasoline stations, but nevertheless USDCAD responded with a sharp spike upwards (currently 1.0720) and is one of the only currencies which looks to be reversing some of its gains against the USD this afternoon.

Second tier data out of the US included Housing Price Index (0.3% vs 0.5% exp.) and the Richmond Fed (14 vs 16 exp.), but both were of little impact to a market gearing up for the central bank fest tomorrow.

European Session: NZD Fired Up After Current Account Release

September 22, 2009 8:42 AM CEST

G10 Advancers and Decliners vs USD

	NZD	1.67
	AUD	1.05
	CAD	0.73
	NOK	0.65
	SEK	0.54
	JPY	0.52
	GBP	0.41
	EUR	0.35
	DKK	0.34
	CHF	0.30

Global Indexes

Current Level

% Change

Hang Seng Index	21'582.05	+ 0.51
Shanghai Index	2'921.34	- 1.54
FTSE futures	5'134.36	- 0.74
DAX futures	5'668.65	- 0.62
SMI Index	6'306.23	- 0.30
S&P future	1'062.00	+ 0.15
DJIA futures	9'738.00	+ 0.21

World Markets

Current Level

% Change

Gold	1'007.75	+ 0.40
Silver	17.01	+ 1.01
VIX	24.06	+ 0.59
Crude wti	70.04	+ 0.47
USD Index	76.47	- 0.39

Todays Calender

Estimates

Country / GMT

Canadian Retail Sales (Jul), % m/m	0.7	1.0	CAD/12:30
US: FHFA house price index, % m/m (y/y)	0.5 (-3.9)	0.5 (-5.0)	USD/14:00
New Zealand : GDP % q/q	-0.2	-1.0	NZD/22:45

Currency Tech

AUDUSD
R 2: 0.8860
R 1: 0.8800
CURRENT: 0.8715
S 1: 0.8595
S 2: 0.8545

USDCAD
R 2: 1.0870
R 1: 1.0770
CURRENT: 1.0710
S 1: 1.0610
S 2: 1.0525

EURJPY
R 2: 136.00
R 1: 135.90
CURRENT: 134.75
S 1: 133.90
S 2: 131.05

USDMXN
R 2: 13.570
R 1: 13.545
CURRENT: 13.3350
S 1: 13.165
S 2: 13.110

Market Brief

An uneventful day yesterday as currencies washed around in unison with equity markets. The data calendar did little to inspire, with US Leading Indicators having no significant impact on USD; August reading came out at 0.6% vs 0.7% exp., but there were revisions higher to the month prior (0.9% from 0.6%). The ultimate result was USD net higher on the day (DXY 76.75), spurred by speculation ahead of tomorrow’s FOMC meeting about the withdrawal of QE.

Overnight the big news was NZD which traded at its highest levels in over a year (high 0.7186, currently 0.7165); the current account actually managed to post a surplus in the second quarter, and the annualized deficit reached its narrowest level in 4 years. The NZD was also spurred higher by dairy company Fonterra Co-Operative Group announcing a 12% boost to its forecast payout to shareholder-farmers due to stronger demand. RBNZ Governor Bollard was on the wires saying the economy was having a “patchy” recovery, and we will get further indication of this tomorrow with the GDP release.

The USD has retraced much of yesterday’s gains this morning after Asian equities were broadly higher overnight, catalysed by a host of brokerage upgrades. Commodities were acutely sensitive the USD moves; gold traded below $1000 (touching a low of $955.55) at the USD’s peak yesterday, but ended the day back around the $1003.70 level and is higher after the Asian session, trading just shy of $1007.

So far today we’ve already seen the release of Switzerland’s quarterly SECO Economic Forecasts and although the economy is forecast to shrink 1.7% during 2009 (up from the 2.7% decline forecast in June), the estimates for 2010 were flipped to growth of 0.4% from a 0.4% contraction. USDCHF was a little lower after the release, currently trading at 1.0295.

Japan is still on holiday so liquidity is slightly thinner in the FX space, the main data event today is Canadian Retail Sales (Jul), the market is expecting a 0.7% print M/M vs 1.0% prior. US releases include July’s House Price Index which is expected to remain at 0.5%, however the numbers have been notoriously volatile in recent months. Richmond Fed and ABC Consumer Confidence will also feature.

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