BillyT's Forex Daily Currency-Trading Reviews for 25 July 2007

BillyT's Forex Daily Currency-Trading Reviews for 25 July 2007

EURO:

The euro depreciated vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.3710 level and was capped around the $1.3830 level. Technically, today’s intraday low was right around the 50% retracement of the move from $1.3565 to $1.3850. The common currency came off as traders reduced their demand for non-U.S. securities and increased their investments in U.S. assets with higher credit ratings such as U.S. Treasuries. The shakeout in the U.S. credit markets continues with subprime mortgage woes at the forefront. Data released in the U.S. today saw June existing home sales off 3.8% to 5.75 million units. Traders await the release of the Federal Reserve’s Beige Book later in the North American session. In eurozone news, German H1 long-term unemployment benefits were off 400,000 and European Central Bank President Trichet characterized the recent correction in credit markets as “healthy.” Euro bids are cited around the US$ 1.3635 level.

YEN:

The yen came off vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥120.65 level and was supported around the ¥119.80 level. Technically, today’s intraday high was just below the 38.2% retracement of the move from ¥115.15 to ¥124.15. Many traders the yen will begin to appreciate across the board on account of increased risk-aversion and widening spreads. The U.S. subprime mortgage sector’s woes are resulting in increased demand for yen and weaker equity markets. Data released in Japan overnight saw the June trade surplus increase to ¥1.227 trillion, up 53.4% y/y. The Nikkei 225 stock index lost 0.80% to close at ¥17,858.42. Dollar bids are cited around the ¥119.65/ ¥118.60 level. The euro lost ground vis-à-vis the yen as the single currency tested bids around the ¥165.00 figure and was capped around the ¥166.30 level. The British pound and Swiss franc lost ground vis-à-vis the yen as the crosses tested bids around the ¥246.25 and ¥99.05 levels, respectively. In Chinese news, the yuan’s central parity rate was fixed at CNY 7.5596 vis-à-vis the U.S. dollar, down from CNY 7.5725

BRITISH POUND:

The British pound fell sharply vis-à-vis the U.S. dollar today as cable tested bids around the US$ 2.0505 level and was capped around the $2.0630 level. Technically, today’s intraday low was right around the 23.6% retracement of the move from $2.0055 to $2.0655. A government poll released today saw public one-year consumer price inflation expectations up to +2.5% in July, the latest indication that Bank of England Monetary Policy Committee members must remain vigilant against inflation. Data released in the U.K. today saw May average earnings up 4.4% y/y. Traders await Nationwide house prices for July tomorrow. Cable bids are cited around the US$ 2.04255 level. The euro came off vis-à-vis the British pound as the single currency tested bids around the £0.6680 level and was capped around the £0.6715 level

SWISS FRANC:

The Swiss franc lost ground vis-à-vis the U.S. dollar today as the greenback tested offers around the CHF 1.2165 level and was supported around the CHF 1.2020 level. Technically, today’s intraday high was just above the 38.2% retracement of the move from CHF 1.2470 to CHF 1.1960. Traders await the release of the KOF leading indicator on Friday. Dollar offers are cited around the CHF 1.2220 level. The euro and British pound moved higher vis-à-vis the Swiss franc as the crosses tested offers around the CHF 1.6685 and CHF 2.4965 levels, respectively.


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