Rate Cuts around the world lifts mood
08/12/08
last week’s currency trading review
The Dollar was mixed this week as stocks and data conflicted. Equities remained on the rebound but economic data kept the USD under pressure against other safe haven currencies. On Monday the NBER declared that the US economy has been in a recession for the past year. The Non Farm Payrolls showed a staggering fall of –533K in November. The Unemployment rate jumped to 6.7% from 6.5%. Nov ISM manufacturing dropped to 36.2 indicating a deep contraction in that sector. The Euro ended slightly firmer but was under pressure at the lower end of the range for sometime. Support at 1.2600 proved resilient though and the stock rally on Friday allowed the Euro to bounce. Eurozone data showed further deterioration to with the November PMI surveys falling further to 35.6 (manufacturing) and the Q4 GDP fell -0.2%. The EUR/USD gained 0.25% closing at 1.2721, after opening the week at 1.2689. The Japanese Yen strengthened on the US recession news and confirmation that the Eurozone was in recession. Modest rallies in Global stocks had little effect and the USD/JPY weakness kept crosses low. The BoJ announced measures to improve corporate bond trading which had stalled in recent times. The USD/JPY fell 2.89% closing at 92.84 after opening at 95.52. The GBP fell heavily after the strong recovery the week before. Data was relentlessly weak with PMIs at 31.8 (construction) 40(services) and 34.4 (Manufacturing). The GBP/USD fell 4.69% closing at 1.4676 after opening at 1.5395. The AUD fell as the global outlook deteriorated and the US showed 25 year low monthly Unemployment change. Also Weighing heavily was the sharp drop in Oil to near $41 a barrel. The AUD/USD closed down 1.5% at 0.6447 after opening at 0.6544.
The forex trading week preview
In the States light data week with Retail Sales the highlight. On Tuesday we have October pending home sales seen gaining 4% vs. -4.6% previously. On Thursday we have October Trade Balance expected at -52.5 vs. -56.5 Bn in September. Weekly Jobless claims are seen falling to 509K vs. 525K previous. On Friday we have November PPI expected at -2.0%. November Retail Sales are forecast to drop -2.2% vs. -1.7% previously. Finally December Consumer Confidence is seen at 55.3 vs. 55 previously. We will provide our previews and reviews of these data releases in the daily summary.
In the Eurozone On Monday Trichet speaks at the European Parliament. On Tuesday the Eurozone Zew Survey is seen at -58 vs. -54 previously. On Friday the October Industrial Production is seen at -0.3% vs. -1.6% in September. In the UK On Tuesday the RICS House Price Balance is expected at -83% vs. -82% previously. Also on Tuesday the Manufacturing Production in October is seen falling -0.7% vs. -0.8% previously. On Thursday we have the Bank of England Quarterly Inflation Attitudes Survey is released. We will provide our previews and reviews of these data releases in the daily summary.
In Japan On Monday the Current Account is expected at 1.04T Yen vs. 1.49T previously. ON Tuesday the Q3 GDPis expected to be downgraded to -0.2% vs. -0.1%. On Wednesday October Machine Orders are expected to fall -4% vs. 5.5% previously. We will provide our previews and reviews of these data releases in the daily summary.
In Australia light data week with Tuesday’s Speech by RBA Governor Stevens the first major event. On Thursday the November Unemployment rate is expected to increase to 4.4% from 4.3% previously with a change of -15K jobs. We will provide our previews and reviews of these data releases in the daily summary.
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
|
EUR/USD |
1.2333 |
1.2423 |
1.2725 |
1.2800 |
1.2848 |
|
USD/JPY |
90.93 |
91.59 |
92.75 |
93.39 |
93.47 |
|
GBP/USD |
1.4214 |
1.4468 |
1.4700 |
1.4753 |
1.4815 |
|
AUD/USD |
0.6232 |
0.6291 |
0.6470 |
0.6487 |
0.6536 |
|
XAU/USD |
725.00 |
741.53 |
758.00 |
786.00 |
830.00 |
·Euro – 1.2725
Initial support at 1.2423 (Nov 21 reaction low) followed by 1.2333 (Oct 28 low). Initial resistance is now located at 1.2800 (Dec 5 low) at followed by 1.2848 (Nov 27 high)
·Yen – 92.75
Initial support is located at 91.59 (Dec 5 low) followed by 90.93 (Oct 24 low). Initial resistance is now at 93.39 (Dec 5 high) followed by 93.47 (Dec 4 high).
·Pound – 1.4700
Initial support at 1.4468 (Dec 4 trend low) followed by 1.4214 (Range projection). Initial resistance is now at 1.4753 (Dec 5 high) followed by 1.4815 (Dec 4 high).
·Australian Dollar – 0.6470
Initial support at 0.63291 (Dec 5 low) followed by the 0.6232 (Nov 24 low). Initial resistance is now at 0.6487 (Dec 5 high) followed by 0.6536 (Dec 4 high).
·Gold – 758
Initial support at 741 (Dec 5 low) followed by 725.4 (Nov 14 low). Initial resistance is now at 786.50 (Dec 2 high) followed by 830 (Nov 25 high).
