Currency-Trading Reviews 6 Oct 2007

BillyT's Daily Forex Currency-Trading Reviews for 6 October 2007

EURO:

The euro moved higher vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.4155 level and was supported around the $1.4030 level. The common currency came off after the release of stronger-than-expected

U.S.

September non-farm payrolls that saw 110,000 new jobs created last month, consistent with expectations. There was a sizable upward revision to August's jobs tallies of 91,000 jobs and that temporarily pushed the greenback higher. The unemployment rate ticked up to 4.7% and average hourly earnings were up 0.4% in September. Average hourly earnings are now up 4.1% over the past year, the highest rate since February. Federal Reserve Vice Chairman Kohn today said the Federal Open Market Committee's interest rate cut last month was "a first approximation of what might be required to keep the economy on a sustainable growth path." Kohn added the 50bps reduction in the federal funds target rate "will not be able to avert all of the weakness in the economy but that may be in train for several months." He justified the 50bps cut saying "sluggish or inadequate easing risked a weaker real economy that might cause lenders to pull back even more." The German media reported the Federal Reserve "has resisted calls from other G7 nations for joint interventions such as selling euros." G7 officials will meet soon and dealers expect the communiqué will reference the disorderly nature of exchange rate markets and/ or call for exchange rates to move in accordance with economic fundamentals. Euro bids are cited around the US$ 1.4055 levels.

YEN:

The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥117.30 level and was supported around the ¥116.35 level. Technically, today's intraday low was right around the 38.2% retracement of the move from ¥124.15 to ¥111.60. The pair reached its highest level since 15 August as traders continue to increase their risk appetite. Data released in

Japan

saw the August index of leading economic indicators fall to 30.0 from 72.7 in July while the coincident index improved to 83.3 from 70.0 in July. Other data released today saw September foreign reserves climb US$ 13.44 billion from August to US$ 945.60 billion. The Nikkei 225 stock index lost 0.16% to close at ¥17,065.04. Dollar bids are cited around the ¥114.75 level. The euro moved higher vis-à-vis the yen as the single currency tested offers around the ¥165.10 level and was supported around the ¥164.20 level. The British pound and Swiss franc climbed higher vis-à-vis the yen as the crosses tested offers around the ¥238.30 and ¥99.20 levels, respectively.

BRITISH POUND:

The British pound gained ground vis-à-vis the U.S. dollar today as cable tested offers around the US$ 2.0440 level and was supported around the $2.0300 level. Technically, today's intraday low was right around the 23.6% retracement of the move from $1.9180 to $2.0655. Data released in the

U.K.

today saw median pay settlements down to 3.2% in the three months to September from 3.3% in the three months to August. Traders await the release of Tuesday's pre-Budget report by Chancellor Darling and the Comprehensive Spending Review. Many U.K.-watchers believe Prime Minister Brown will call a general election imminently. 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 ₤0.6910 level and was capped around the ₤0.6940 level.

SWISS FRANC:

The Swiss depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the CHF 1.1855 level and was supported around the CHF 1.1740 level. Technically, today's intraday low was right around the 23.6% retracement of the move from CHF 1.2145 to CHF 1.1620l. Dollar offers are cited around the CHF 1.1885 level. The euro and British pound gained ground vis-à-vis the Swiss franc as the crosses tested offers around the CHF 1.6660 and CHF 2.4070 levels, respectively.

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Currency-Trading Reviews 5 Oct 2007

BillyT's Daily Forex Currency-Trading Reviews for 5 October 2007

EURO:

The euro moved higher vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.4155 level and was supported around the $1.4030 level. The common currency came off after the release of stronger-than-expected

U.S.

September non-farm payrolls that saw 110,000 new jobs created last month, consistent with expectations. There was a sizable upward revision to August's jobs tallies of 91,000 jobs and that temporarily pushed the greenback higher. The unemployment rate ticked up to 4.7% and average hourly earnings were up 0.4% in September. Average hourly earnings are now up 4.1% over the past year, the highest rate since February. Federal Reserve Vice Chairman Kohn today said the Federal Open Market Committee's interest rate cut last month was "a first approximation of what might be required to keep the economy on a sustainable growth path." Kohn added the 50bps reduction in the federal funds target rate "will not be able to avert all of the weakness in the economy but that may be in train for several months." He justified the 50bps cut saying "sluggish or inadequate easing risked a weaker real economy that might cause lenders to pull back even more." The German media reported the Federal Reserve "has resisted calls from other G7 nations for joint interventions such as selling euros." G7 officials will meet soon and dealers expect the communiqué will reference the disorderly nature of exchange rate markets and/ or call for exchange rates to move in accordance with economic fundamentals. Euro bids are cited around the US$ 1.4055 levels.

YEN:

The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥117.30 level and was supported around the ¥116.35 level. Technically, today's intraday low was right around the 38.2% retracement of the move from ¥124.15 to ¥111.60. The pair reached its highest level since 15 August as traders continue to increase their risk appetite. Data released in

Japan

saw the August index of leading economic indicators fall to 30.0 from 72.7 in July while the coincident index improved to 83.3 from 70.0 in July. Other data released today saw September foreign reserves climb US$ 13.44 billion from August to US$ 945.60 billion. The Nikkei 225 stock index lost 0.16% to close at ¥17,065.04. Dollar bids are cited around the ¥114.75 level. The euro moved higher vis-à-vis the yen as the single currency tested offers around the ¥165.10 level and was supported around the ¥164.20 level. The British pound and Swiss franc climbed higher vis-à-vis the yen as the crosses tested offers around the ¥238.30 and ¥99.20 levels, respectively.

BRITISH POUND:

The British pound gained ground vis-à-vis the U.S. dollar today as cable tested offers around the US$ 2.0440 level and was supported around the $2.0300 level. Technically, today's intraday low was right around the 23.6% retracement of the move from $1.9180 to $2.0655. Data released in the

U.K.

today saw median pay settlements down to 3.2% in the three months to September from 3.3% in the three months to August. Traders await the release of Tuesday's pre-Budget report by Chancellor Darling and the Comprehensive Spending Review. Many U.K.-watchers believe Prime Minister Brown will call a general election imminently. 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 ₤0.6910 level and was capped around the ₤0.6940 level.

SWISS FRANC:

The Swiss depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the CHF 1.1855 level and was supported around the CHF 1.1740 level. Technically, today's intraday low was right around the 23.6% retracement of the move from CHF 1.2145 to CHF 1.1620l. Dollar offers are cited around the CHF 1.1885 level. The euro and British pound gained ground vis-à-vis the Swiss franc as the crosses tested offers around the CHF 1.6660 and CHF 2.4070 levels, respectively.

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Currency-Trading Reviews 4 Oct 2007

BillyT's Daily Forex Currency-Trading Reviews for 4 October 2007

EURO:

The euro appreciated vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.4150 level and was supported around the $1.4065 level. As expected, the European Central Bank kept interest rates unchanged with the refinancing rate steady at 4.00%. ECB President Trichet reiterated price risks remain to the upside and noted money and credit growth remains vigorous but conspicuously dropped "accommodative" to characterize the ECB's current monetary policy stance. Moreover, Trichet noted there is growing uncertainty over eurozone growth prospects but predicted inflation will remain above 2.0% through early 2008. Trichet also referred to his remarks earlier in the week wherein he said

YEN:

The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥116.25 level and was capped around the ¥116.75 level. The pair retraced some of its recent gains and continues to orbit the ¥116.40 level, representing the 38.2% retracement of the move from ¥124.15 to ¥111.60. Bank of

BRITISH POUND:

The British pound gained ground vis-à-vis the U.S. dollar today as cable tested offers around the US$ 2.0425 level and was supported around the $2.0275 level. As expected, Bank of England's Monetary Policy Committee kept its headline repo rate unchanged at 5.75% and did not issue any policy statement. Minutes from today's MPC meeting will be released on 17 October and traders will closely scrutinize the minutes to determine if any policymakers voted to reduce interest rates. Data released in the

SWISS FRANC:

The Swiss appreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the CHF 1.1815 level and was supported around the CHF 1.1735 level. Technically, today's intraday high was just below the 38.2% retracement of the move from CHF 1.2145 to CHF 1.1620. Dollar offers are cited around the CHF 1.1885 level. The euro and British pound came off vis-à-vis the Swiss franc as the crosses tested bids around the CHF 1.6595 and CHF 2.3900 levels, respectively.

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Currency-Trading Reviews 3 Oct 2007

BillyT's Daily Forex Currency-Trading Reviews for 3 October 2007

EURO:

The euro weakened vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.4140 level and was capped around the $1.4200 figure. Traders do not expect the European Central Bank to change monetary policy tomorrow but will pay close attention to remarks from ECB President Trichet. Two key items that Trichet may comment on include the euro's recent appreciation and its implications for actual intervention versus the heightened verbal intervention that European officials have been brandishing lately. Also, traders want to know if the ECB's policy bias has shifted from hawkish closer to neutral on account of the recent turmoil in the financial markets. Any sense of hawkishness in Trichet's remarks could easily see a strong bid in the market for the euro. In U.S. news, the September non-manufacturing ISM business index fell to 54.8 from 55.8 in August. The new orders index fell back while the prices index for service posted strong growth to 66.1. The greenback was pressured after ADP's National Employment Report noted 58,000 private-sector jobs were added last month, up from a revised 27,000 in August. A significant amount of job losses were cited in the housing, construction, and financial services industries on account of the subprime mortgage meltdown in Q3. Similarly, the Challenger layoff report "pointed to a disturbing ramp up in financial services year-over-year layoffs." Many economists are focusing on new jobs growth around 100,000 when the September non-farm payrolls report is released on Friday. In eurozone news, EMU-13 August retail sales were up +0.1% m/m and +1.0% y/y, weaker-than-expected, while the EMU-13 September services PMI survey fell back to 54.2 from 58.0 in August. Euro bids are cited around the US$ 1.4120/ 1.4055 levels.

YEN:

The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥116.70 level and was supported around the ¥115.55 level. Stops were reached above the ¥116.55 level, representing the 50.0% retracement of the move from ¥109.00 to ¥124.15 as the greenback reached its strongest level since 27 August. Traders cited increasing risk appetite and a renewal of the short yen carry trade as two factors that led to intraday weakness in the yen. Traders await remarks from Bank of Japan Deputy Governor Iwata overnight. The Nikkei 225 stock index gained 0.90% to close at ¥17,199.89. Dollar bids are cited around the ¥114.80 level. The euro gained ground vis-à-vis the yen as the single currency tested offers around the ¥165.30 level and was supported around the ¥163.55 level. The British pound and Swiss franc gained ground vis-à-vis the yen as the crosses tested offers around the ¥237.80 and ¥235.85 levels, respectively. In Chinese news, traders are speculating the U.S. dollar could weaken soon and trade with a CNY 7.4 handle.

BRITISH POUND:

The British pound weakened vis-à-vis the U.S. dollar today as cable tested bids around the US$ 2.0340 level and was capped around the $ 2.0440 level. Sterling has moved lower for three consecutive days and traders are very curious to see how Bank of England Monetary Policy Committee's interest rate decision materializes tomorrow. The central bank took the rare step of not changing rates at their September meeting and releasing a statement regarding their decision. The MPC is faced with the task of balancing concerns about inflationary pressures against growing signs the housing market and overall economy are cooling. Most traders do not expect the MPC will reduce interest rates tomorrow but could move closer to a neutral bias. Data released in the U.K. today saw the September services PMI survey fall to 56.7, its lowest print since August 2006. Also, the BRC September shop price index was up 0.2% m/m and 0.4% y/y. The three-month sterling Libor interbank rate scaled back to 6.24% today from 6.26% yesterday while the overnight fixing rate remained steady at 5.81%. Cable bids are cited around the US$ 2.0270 level. The euro moved higher vis-à-vis the British pound as the single currency tested offers around the ₤0.6960 level and was supported around the ₤0.6930 level

SWISS FRANC:

The Swiss lost ground vis-à-vis the U.S. dollar today as the greenback tested offers around the CHF 1.1780 level and was supported around the CHF 1.1710 level. U.S. dollar offers are cited around the CHF 1.1825 level. The euro and British pound gained ground vis-à-vis the Swiss franc as the crosses tested offers around the CHF 1.6665 and CHF 2.4005 levels, respectively.

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Currency-Trading Reviews 2 Oct 2007

BillyT's Daily Forex Currency-Trading Reviews for 2 October 2007

EURO:

The euro weakened vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.4140 level and was capped around the $1.4235 level. Stops were hit below the $1.4170 level, representing the 23.6% retracement of the move from $1.3825 to $1.4280. European financial and monetary officials continue to jawbone over the common currency's relative strength and this verbal intervention is leading to a weaker currency. Spanish deputy finance minister Vegara today said "not all the necessary adjustment should come through the euro/ dollar exchange rate…There are important agents like the yen and yuan that should also have some of the responsibility of the adjustment of the so-called world financial imbalances." This verbal intervention follows similar comments from officials like Trichet and Juncker yesterday. Recent volatility in the markets up the chances that the upcoming Group of Seven finance ministers' meeting will include a statement about disorderly exchange rates, particularly as more European officials are intervening. Data released in the eurozone today saw EMU-13 August unemployment print at 6.9%, unchanged from July's level, while EMU-13 August PPI was up 0.1% m/m and 1.7% y/y. In U.S. news, Redbook retail sales were up +0.3% m/m in the first four weeks of September. Traders await the release of September non-farm payrolls data on Friday with most economists expecting about 100,000 new jobs were created. Some dealers believe the Federal Open Market Committee will reduce the federal funds target rate by 25bps at the end of October while others believe the FOMC will lower the federal funds target rate by 25bps or 50bps in December. Euro bids are cited around the US$ 1.4120/ 1.4055 levels.

YEN:

The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥115.90 level and was supported around the ¥115.25 level. Dollar bulls are eyeing the ¥116.35/55 levels as the pair's next upside target. The mixed Bank of Japan quarterly Tankan survey that was released yesterday did not help the yen's cause as there was little to change the view that the central bank is likely to leave the overnight call rate unchanged at +0.50% for the foreseeable future. Many traders believe the BoJ will not lift the target rate by +25bps to +0.75% before the end of the year. Japanese economic data as of late has been fairly strong but the changing political environment and international financial market turmoil are working against central bank officials who want to move rates higher now. Data released in Japan overnight saw the September monetary base up 0.7% y/y, the second consecutive monthly rise. The Nikkei 225 stock index climbed 1.19% to close at ¥17,046.78. Dollar bids are cited around the ¥114.55 level. The euro moved lower vis-à-vis the yen as the single currency tested bids around the ¥163.65 level and was capped around the ¥164.85 level. The British pound and Swiss franc came off vis-à-vis the yen as the crosses tested bids around the ¥234.90 and ¥98.30 levels, respectively. In Chinese news, traders continue to speculate People's Bank of China will tighten monetary policy at least one more time by the end of the year.

BRITISH POUND:

The British pound came off vis-à-vis the U.S. dollar today as cable tested bids around the US$ 2.0365 level and was capped around the $2.0445 level. Technically, the paid continues to orbit the $2.0415 level, representing the 76.4% retracement of the move from $2.0655 to $1.9650 level. Bank of England conducted a section auction of £10 billion to inject liquidity into the three-month interbank money market but failed to attract bids. The three-month sterling Libor rate fell to 6.26% from 6.28% yesterday. Traders are talking about media reports that U.K. banks are instead bidding on liquidity from the European Central Bank. It is being reported that U.K. banks bid on a "substantial part" of the €190 billion lent in the ECB's variable rate tender last week. Data released in the U.K. today saw September construction PMI fall to 60.3 from 64.8 in August. Cable bids are cited around the US$ 2.0270 level. The euro moved lower vis-à-vis the British pound as the single currency tested bids around the £0.6930 level and was capped around the £0.6970 level.

SWISS FRANC:

The Swiss lost ground vis-à-vis the U.S. dollar today as the greenback tested offers around the CHF 1.1775 level and was supported around the CHF 1.1675 level. Stops were reached above the CHF 1.1745 level, representing the 23.6% retracement of the move from CHF 1.2145 to CHF 1.1620. Credit Suisse lifted its 2007 GDP forecast to 2.5% from 2.2% and kept its 2008 GDP forecast unchanged at 1.9%. Similarly, the Swiss government raises its 2007 GDP forecast to 2.6% from 2.3. The Swiss government also reported that September CPI was up 0.1% m/m and 0.7% y/y. U.S. dollar offers are cited around the CHF 1.1825 level. The euro and British pound gained ground vis-à-vis the Swiss franc as the crosses tested offers around the CHF 1.6660 and CHF 2.4020 levels, respectively.

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Currency-Trading Reviews 1 Oct 2007

BillyT's Daily Forex Currency-Trading Reviews for 1 October 2007



EURO:

The euro weakened vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.4210 level and was capped around the $1.4280 level. The common currency reached another new lifetime high before paring some recent gains. The verbal intervention from eurozone officials grew louder over the weekend and today. European Central Bank President Trichet said the ECB notes with “extreme attention” that U.S. officials have reiterated the U.S.’s long-standing strong-dollar policy. Similarly, European Union Commissioner for Economic and Monetary Affairs Alumnia said he “looks forward to the next G7 statement,” implying officials may mention exchange rates in their communiqué. Also, the European Commission reported it is “concerned” about the euro’s strength while eurogroup chairman Juncker reported “The strong euro, as long as it stays on its path, tends to worry us a lot.” Data released in the eurozone saw final September final manufacturing PMI print at 53.2, unchanged from the previous estimate and its lowest showing since November 2005. Also, German September manufacturing PMI printed at 54.9. In U.S. news, the September ISM manufacturing activity index weakened to 52.0 from 52.9 in August and 53.8 in July. The prices paid index fell to 59.0 in September from 63.0 in August and the new orders, production, and inventories indices all decelerated. Traders are eyeing this Friday’s September non-farm payrolls report with many economists expecting about 100,000 jobs were added to the economy last month. Traders will also pay close attention to revisions for July’s and August’s non-farm payrolls tallies. Federal Reserve Chairman Greenspan spooked the markets by saying “Disinflationary pressures are gradually dissipating and inflationary pressures are beginning to mount.” Many traders believe the Federal Open Market Committee will reduce the federal funds target rate by 25bps at the end of the month while other traders see a 25bps or 50bps move lower in December. Euro bids are cited around the US$ 1.4120 level.

YEN:

The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥116.05 level and was supported around the ¥114.70 level. Technically, today’s intraday low was right around the 61.8% retracement of the move from ¥109.00 to ¥124.15. The quarterly Bank of Japan Tnkan survey that was released overnight saw confidence among large manufacturers remain flat for the second consecutive quarter in Q3 with the headline reading at +23. Companies are forecasting renewed weakness in Q4 and results for smaller manufacturers and non-manufacturers were not as strong as expected. Additionally, the combined capital expenditures plans in the “all-industries” category is expected to improve to 4.9% in the year to March 2008, above the 3.1% that was anticipated in the June Tankan survey. Most traders believe the Tankan data will not have a major impact on Bank of Japan’s monetary policymaking with most traders seeing less than a 50% chance the central bank will lift the overnight call rate by 25bps to +0.50% by the end of the year. Other data released in Japan overnight saw August average overall income rise +0.1% y/y in August, the first rise in nine months. The Nikkei 225 stock index climbed 0.36% to close at ¥16,845.96. Dollar bids are cited around the ¥114.55 level. The euro moved higher vis-à-vis the yen as the single currency tested offers around the ¥165.05 level and was supported around the ¥163.70 level. The British pound and Swiss franc gained ground vis-à-vis the yen as the crosses tested offers around the ¥236.95 and ¥99.30 levels, respectively. In Chinese news, China formally launched its state-owned foreign reserves investment company that will be responsible for managing about US$ 200 billion in foreign reserves. China recently announced its foreign reserves totaled US$ 1.4 trillion at the end of August.

BRITISH POUND:

The British pound came off vis-à-vis the U.S. dollar today as cable tested bids around the US$ 2.0375 level and was capped around the $2.0495 level. Sterling pared some of its recent gains following last week’s strong move higher. Many data were released in the U.K. today. First, August final M4 money supply was up an annualized 13.5%. Second, August consumer lending fell to ₤9.5 billion from ₤10.0 billion in July. Third, Hometrack reported U.K. September house prices were unchanged m/m for the second consecutive month and were up +5.0% y/y. Fourth, the U.K. September CIPS manufacturing PMI survey fell back to 55.1 from 55.7 in August. Fifth, Bank of England reported Q2 housing equity withdrawal fell back to ₤10.0 billion from a revised ₤13.1 billion in Q1. BoE also noted that the number of mortgage approvals fell to 109,000 in August from 115,000 in July and net mortgage lending fell to ₤8.5 billion from ₤8.9 billion during the same time frame. Liquidity conditions continue to improve in the U.K. money market sector as the three-month sterling Libor rate fell to 6.28% from 6.30% on Friday and the overnight fixing rate fell to 5.80% from 6.00% on Friday. Cable bids are cited around the US$ 2.0270 level. The euro moved lower vis-à-vis the British pound as the single currency tested bids around the ₤0.6945 level and was capped around the ₤0.6980 level.

SWISS FRANC:

The Swiss lost appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the CHF 1.1720 level and was supported around the CHF 1.1620 level. Data released in Switzerland today saw September PMI fall to 57.6 from 65.1 in August. U.S. dollar offers are cited around the CHF 1.1760 level. The euro and British pound moved higher vis-à-vis the Swiss franc as the crosses tested offers around the CHF 1.6665 and CHF 2.3970 level, respectively.


BillyT Daily Forex
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