The euro depreciated vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.4190 level and was capped around the $1.4265 level. Technically, today’s intraday high and low were right around the 23.6% and 50% retracement of the move from $1.4015 to $1.4395. The common currency moved lower after U.S. financial giant Merrill Lynch wrote down US$ 7.9 billion from earnings on account of subprime mortgage problems and said the conditions remain “uncertain.” This reflects the troubled liquidity conditions faced by global financial firms this summer and to the extent that other U.S. financial institutions are forced to write down earnings, profits will be reduced in upcoming quarters and that will zap demand for U.S. assets and the U.S. dollar. Data released in the U.S. today saw September existing home sales off 8% m/m to 5.04 million annualized units, and were off 19% y/y. Continued dislocations in the U.S. housing sector could result in a rate cut by the FOMC on 31 October. In eurozone news, the EMU-13 manufacturing PMI survey fell to 51.5 in October from 53.2 in September while the services PMI survey improved 55.6. Also, it was reported that the eurozone August current account surplus was unchanged at €3.8 billion. Euro bids are cited around the US$ 1.4045 level.
¥/ CNY
The yen moved higher vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥114.10 level and was capped around the ¥114.95 level. Traders moved back into yen overnight as growing risk aversion reduced demand for higher yielding currencies. Data released in Japan overnight saw the September merchandise trade surplus rise a stronger-than-expected 62.7% y/y to a record ¥1.638 trillion. Notably, imports declined for the first time in more than 3.5 years. U.S. automakers complained overnight that the yen is being artificially devalued by the Japanese government. The Nikkei 225 stock index lost 0.56% to close at ¥16,358.39. Dollar bids are cited around the ¥113.85/ 112.60 levels. The euro weakened vis-à-vis the yen as the single currency tested bids around the ¥162.15 level and was capped around the ¥163.90 level. The British pound and Swiss franc came off vis-à-vis the yen as the crosses tested bids around the ¥233.40 and ¥97.05 levels, respectively. The Chinese yuan appreciated via-a-vis the U.S. dollar as the greenback closed at CNY 7.4930 in the over-the-counter market, down from CNY 7.5068. This represents the first time the pair has traded with a CNY 7.4 handle since the yuan was revalued in July 2005.
₤
The British pound weakened vis-à-vis the U.S. dollar today as cable tested bids around the US$ 2.0425 level and was capped around the $2.0515 level. Technically, today’s intraday low was right around the 76.4% retracement of the move from $2.0655 to $1.9650. Cable bids are cited around the US$ 2.0270 level.The euro came off vis-à-vis the British pound as the single currency tested bids around the ₤0.6935 level and was capped around the ₤0.6960 level.
CHF
The Swiss franc appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the CHF 1.1710 level and was capped around the CHF 1.1775 level. September producer and import prices will be released on Friday. Dollar offers are cited around the CHF 1.1835/ 1.1910 levels. The euro and British pound came off vis-à-vis the Swiss franc as the crosses tested bids around the CHF 1.6690 and CHF 2.3990 levels, respectively.
A$/ NZ$
The Australian dollar appreciated vis-à-vis the U.S. dollar today as the Aussie tested offers around the US$ 0.9045 level and was supported around the $0.8935 level. The pair moved within 30 pips of establishing a new multi-decade high. Traders bought A$ on increased expectations that Reserve Bank of Australia will lift its official cash rate by 25bps to 6.75% at its 6 November rate-setting meeting. Q3 headline CPI was up 0.7% q/q, stronger-than-expected, and up 1.9% y/y. Other data released in Australia today saw October skilled vacancies off 0.9% m/m. Australian dollar bids are cited around the US$ 0.8745 level. The New Zealand dollar weakened vis-à-vis the U.S. dollar as kiwi tested bids around the US$ 0.7465 level and was capped around the $0.7600 figure. New Zealand dollar bids are cited around the US$ 0.7465 level.
C$
The Canadian dollar depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the C$ 0.9720 level and was supported around the C$ 0.9645 level. The loonie established a new multi-decade high yesterday. U.S. dollar offers are cited around the C$ 0.9860 level.
Technical Outlook at 1230 GMT (EDT + 0400)
(Bid Price) (Today’s Intraday Range)
EUR/ USD 1.4250 1.4266, 1.4188
USD/ JPY 114.26 114.95, 114.12
GBP/ USD 2.0487 2.0516, 2.0426
USD/ CHF 1.1729 1.1774, 1.1717
AUD/ USD 0.9007 0.9047, 0.8935
USD/CAD 0.9675 0.9721, 0.9643
NZD/USD 0.7532 0.7601, 0.7476
EUR/ JPY 162.83 163.89, 162.14
EUR/ GBP 0.6955 0.6960, 0.6936
EUR/ CHF 1.6715 1.6735, 1.6692
GBP/ JPY 234.15 235.70, 233.40
CHF/ JPY 97.43 97.59, 97.03
Support Resistance Support Resistance
L1. 1.3515 1.4200 114.55 116.55
L2. 1.3415 1.4270 112.55 117.85
L3. 1.3245 1.4365 111.60 119.35
GBP/ USD USD/ CHF
L1. 1.9915 2.0340 1.1800 1.1640
L2. 1.9805 2.0460 1.1740 1.1560
L3. 1.9530 2.0655 1.1650 1.1430
AUD/ USD USD/ CAD
L1. 0.8270 0.8765 0.9850 1.0340
L2. 0.8160 0.8850 0.9760 1.0485
L3. 0.7940 0.8990 0.9640 1.0550
NZD/ USD EUR/ JPY
L1. 0.6985 0.7545 157.25 161.70
L2. 0.6760 0.7630 154.50 164.45
L3. 0.6640 0.7730 149.25 168.95
EUR/ GBP EUR/ CHF
L1. 0.6855 0.7010 1.6400 1.6685
L2. 0.6790 0.7070 1.6325 1.6790
L3. 0.6705 0.7140 1.6240 1.6900
GBP/ JPY CHF/ JPY
L1. 228.15 235.20 95.90 99.55
L2. 226.80 238.95 94.50 100.25
L3. 221.05 239.60 92.20 101.85
SCHEDULE
Wednesday, 24 October 2007
all times GMT
(last release in parentheses)
0100 Australia October DEWR skilled vacancies (0.1% m/m)
0130 Australia Q3 consumer prices (1.2% q/q)
0130 Australia Q3 consumer prices (2.1% y/y)
0700 Eurozone European Central Bank member Gonzalez-Paramo speaks
0800 Eurozone August current account (€1.7 billion)
0800 Eurozone October PMI, manufacturing (53.2)
0800 Eurozone October PMI, services (54.2)
1100 US MBA mortgage applications
1400 US September existing home sales (5.50 million)
1400 US September existing home sales (-4.3%)
2000 NZ Reserve Bank of New Zealand official cash rate
2200 Italy European Central Bank official Draghi speaks
2350 Japan Net foreign equities investment
2350 Japan Net foreign bonds investment
2350 Japan September corporate services price index (1.0% y/y)
Thursday, 25 October 2007
all times GMT
(last release in parentheses)
0645 France October business confidence (110)
0800 Germany October Ifo, business climate (104.2)
0800 Germany October Ifo, current assessment (109.0)
0800 Germany October Ifo, expectations (98.7)
0830 UK September BBA house purchase loans
1230 US Weekly initial jobless claims
1230 US Continuing jobless claims
1230 US September durable goods orders (-4.9%)
1230 US September durable goods orders, ex-transportation (-1.8%)
1400 US September new home sales (795,000)
1400 US September new home sales (-8.3% m/m)
2330 Japan October Tokyo-area CPI (-0.2% y/y)
2330 Japan October Tokyo-area CPI, core (-0.3% y/y)
2330 Japan September nationwide CPI (-0.2% y/y)
2330 Japan September nationwide CPI, core (-0.1% y/y)\
2350 Japan September industrial production (3.5% m/m)
2350 Japan September industrial production (4.4% y/y)
Friday, 26 October 2007
all times GMT
(last release in parentheses)
0000 Australia August leading index (0.3%)
0610 Germany November GfK consumer confidence survey (6.8)
0715 CH September producer and import prices (0.3% m/m)
0715 CH September producer and import prices (2.7% y/y)
0800 Eurozone September M3 money supply (11.6% y/y)
1230 Canada October business conditions orders (6)
1400 US October University of Michigan consumer sentiment (82.0)
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