Forex - Dollar rose against the Yen boosted by higher US stocks.

Forex News and Events: The Dollar rose against Yen on Thursday boosted by sharp gains in US stocks as risk aversion slowed after worldwide measures to help ease the global credit crisis. The yen tends to rise in times of increased risk aversion as investors unwound risky carry trades funded using the Japanese currency's low interest rates to buy assets in higher-yielding units. Yesterday, UsdJpy rose 2.09% to 101.42. EurJpy also gained 2.49% to 136.79. EurUsd was up 0.39% at 1.3490. UsdChf ended only up 0.09% to 1.1345 after posting intraday 1.1491 high. GbpUsd rose 0.84% to 1.7338, partly boosted by Bank of England easier conditions for British financial firms to borrow from the central bank. Aud and Nzd also rose against Yen, respectively up 6.8% to 69.06 and 4.96% to 62.27. AudUsd and NzdUsd also rose respectively 4.6% to 0.6863 and 2.74% to 0.6140. Higher-yielding currencies such as the Australian and New Zealand Dollars gained with improving money market conditions helping support both units. US stocks closed sharply higher in another volatile trading day. But Thursday's upward trend in stocks helped elevate the Dollar against the Yen. In the money market, most interbank loan rates fell amid more drastic steps by Central Banks to provide funds, improve bank balance sheets, and free up credit lines to cash-strapped firms. However, the cost of funding was still prohibitive. The Libor premium over anticipated policy rates rose as growing fears of recession affirmed expectations of interest rate cuts from central banks worldwide.

Today's Key Issues (time in GMT): 09:00 EUR August Euro-zone Eurostat trade -€6b vs -€2.3b 12:30 USD September building permits 850k vs 857k 13:30 USD September Housing starts 880k vs 895k 13:55 USD October University of Michigan conditions prelim. 74 vs 75 13:55 USD October University of Michigan expectations prelim. 63 vs 67.2 13:55 USD October University of Michigan sentiment prelim. 65.5 vs 70.3

The Risk Today: EurUsd Market drove back below 1.3500 pivot level this week. Market rose yesterday 0.39% to 1.3490. On the upside, only a return over 1.4000 and 1.5000 will release actual pressure and may put key initial resistance 1.6000 into focus. Still a break up there would open the way to Trendline resistance 1.6200. Resistance holds 1.4002 former trendline support. Initial resistance holds 1.3769 Tuesday high. On the downside, renewed weakness will focus on 1.3056 support (retracement of 0.8231 – 1.6039 advance). Initial support holds 1.3259 Friday low. GbpUsd Last week market dropped as low as 1.6786 strong support. It recovered Tuesday at 1.7631 intraday high. On the upside, strong resistance holds 1.7697 last week high ahead of 1.8304 former support. But renewed downtrend may look for 1.6568 November 2003 low and 61.8% retracement of 1.3682–2.1161 advances). Following supports are 1.4560 trendline and 1.3682 March 2001 low. UsdJpy Downtrend started in September is still running and hit 97.91 low last Friday. Tuesday market 103.07 rebound marks initial resistance. On the further upside, recovery over 105 pivot point will put focus again on 108 and 110.67 15th August high. On the downside, renewed pressure may open the way to 95.75 17th March low. Current downtrend will stand below 103 upper trendline resistance. UsdChf Market posted 1.1491 high yesterday. Further advance may open the way to 1.1596 December high and strong resistance. Initial support holds 1.1129 last Friday low. On the downside, only weakness below 1.0692, 22nd September low, would give direction down to 1.0500 and 1.0375. Such a move may look for 1.0013 15th July low in front of 0.9637 17th March low.

Resistance and Support: EURUSD GBPUSD USDJPY USDCHF 1.5000 P 1.9363 S 110.67 T 1.2153 T 1.4867 S 1.8304 M 105.00 S 1.1596 S 1.3769 M 1.7697 S 103.07 M 1.1491 M 1.3480 1.7340 101.30 1.1360 1.3360 T 1.6786 M 100.00 P 1.1129 M 1.3259 M 1.6568 S 97.91 M 1.0692 S 1.3056 T 1.4560 T 95.75 T 1.0005 K S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot