Currency-Trading Reviews 21 Sept 2007

BillyT's Daily Forex Currency-Trading Reviews for 21 September 2007

EURO:

The euro extended recent gains vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.4120 level and was supported around the $1.4040 level. The common currency’s intraday high represented a fresh lifetime high for the pair. There was a dearth of economic data released in the U.S. today. Data released in the U.S. yesterday saw the Philadelphia Federal Reserve’s September manufacturing survey improve to 10.9. Fed Chairman Bernanke told Congress the current credit market crisis has created “significant market stress” and reiterated regulators would take steps to limit the effects from the mortgage crisis. Fed Vice Chairman Kohn today said the Fed formulates policy for the macroeconomy but added asset prices play a role in policymaking. Kohn said “"I doubt policy would have been eased this week if housing prices had continued their upward march” and surprisingly advocated inflation targeting. In eurozone news, the flash estimate for EMU-13 September manufacturing PMI fell to 53.2, its lowest level since November 2005, while the services PMI index weakened to 54.0, its lowest level since August 2005. Many traders believe these data will help tilt the European Central Bank’s policy bias from tightening to neutral or even expansionary. Also, it was reported that the eurozone’s current account surplus narrowed in July to €1.7 billion from €3.7 billion in June. ECB member Bini Smaghi verbally intervened against the euro’s rise today saying the ECB’s monetary policy must not take into account any particular exchange rate for the euro but added the ECB can decide to intervene to weaken the currency. ECB member Constancio reported “what happens in the U.S. economy will affect us,” a hint the ECB’s policy bias is likely to change. Constancio added “have no forex target, but the level of the euro is important due to its effects on inflation.” Euro bids are cited around the US$ 1.3970 level.

YEN:

The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥115.85 level and was supported around the ¥114.55 level. Technically, today’s intraday low was right around the 23.6% retracement of the move from ¥124.15 to ¥111.60. The yen has been quite volatile lately, torn between dollar bulls who believe Bank of Japan will not raise interest rates by the end of the year and yen bulls who are unwinding their short yen carry trades. Ministry of Finance official Shinohara spoke overnight and said “Foreign exchange volatility has fallen a little compared with some time ago, but it is still at high levels.” Data released in Japan overnight saw the July all-industries index off 0.4% m/m and up 1.2% y/y. Also, capital flows reported Japanese accounts sold a net ¥449.6 billion in foreign bonds last week while foreign investors were net sellers of Japanese equities for the second consecutive week last week. The Nikkei 225 stock index lost 0.62% to close at ¥16,312.61. 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 ¥162.80 level and was supported around the ¥161.10 level. The British pound and Swiss franc gained ground vis-à-vis the yen as the crosses tested offers around the ¥233.50 and ¥98.50 levels, respectively. The Chinese yuan appreciated vis-à-vis the U.S. dollar as the greenback closed at CNY 7.5036 in the over-the-counter market, down from CNY 7.5144 and the pair’s weakest close since the yuan revaluation of July 2005. People’s Bank of China Governor Zhou reported China “does not have a timetable” for making the yuan fully convertible on China’s capital account.

BRITISH POUND:

The British appreciated sharply vis-à-vis the U.S. dollar today as cable tested offers around the US$ 2.0195 level and was supported around the $2.0075 level. Technically, today’s intraday low was right around the 38.2% retracement of the move from $1.9180 to $2.0655. Liquidity conditions continued to normalize in the U.K. money markets today as the three-month sterling Libor rate fell to 6.37% from 6.39%. Traders will pay close attention to the banking system to see if a buyer emerges for troubled Northern Rock PLC. A buyout of that financial institution could lead to more sterling strength as it would imply less panicked withdrawals from the banking system. Data released in the U.K. today saw IRS pay deals remain steady at 3.5% in the three months to the end of August. Cable bids are cited around the US$ 2.0035 level. The euro came off vis-à-vis the British pound as the single currency tested bids around the ₤0.6965 level and was capped around the ₤0.7020 level.

SWISS FRANC:

The Swiss franc came off marginally vis-à-vis the U.S. dollar today as the greenback tested offers around the CHF 1.1770 level and was supported around the CHF 1.1675 level. Today’s intraday low represents the pair’s weakest showing since March 2005. Traders are debating whether or not Swiss National Bank will tighten monetary policy in December or if official Swiss interest rates have peaked. U.S. dollar offers are cited around the CHF 1.1880 level. The euro and British pound moved higher vis-à-vis the Swiss franc as the crosses tested offers around the CHF 1.6535 and CHF 2.3725 levels, respectively.

AUSTRALIAN / NEW ZEALAND DOLLAR:

The Australian dollar moved higher vis-à-vis the U.S. dollar today as the Aussie tested offers around the US$ 0.8700 figure and was supported around the $0.8605 level. Technically, today’s intraday high represents the pair’s strongest showing since 27 July. Australian dollar bids are cited around the US$ 0.8585 level. The New Zealand dollar climbed higher vis-à-vis the U.S. dollar as the kiwi tested offers around the US$ 0.7465 level and was supported around the $0.7365 level. New Zealand dollar bids are cited around the US$ 0.7275 level.

CANADIAN DOLLAR:

The Canadian dollar appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the C$ 0.9935 level and was capped around the C$ 1.0055 level. The loonie extended recent multi-decade gains, establishing a new fresh high dating back to November 1976. Data released in Canada today saw July retail sales fell 0.8% m/m with the ex-autos component off 0.3%. U.S. dollar offers are cited around the C$ 1.0090 level.


BillyT Daily Forex

*****************************************************************************
If you enjoyed this post, then you might consider subscribing to my RSS feed.If you’re a first time visitor to this then you may have noticed the cool square at the top left hand side of the blog.

Currency-Trading Reviews 20 Sept 2007

BillyT's Daily Forex Currency-Trading Reviews for 20 September 2007

EURO:

The euro appreciated vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.4070 level and was supported around the $1.3955. The common currency rocketed to a new lifetime high above the psychologically-important $1.4000 figure on speculation that Saudi Arabia is ending its ending the peg between the rial and the U.S. dollar. Notably, the Saudi Arabian Monetary Agency did not reduce interest rates this week when the Federal Reserve took the federal funds target rate lower by 50bps. Traders believe this may set off a firestorm in the Middle East and could see other oil-rich countries decouple their currencies from the U.S. dollar and ignite more selling pressure. Data released in the U.S. today saw weekly initial jobless claims fall 9,000 to 311,000 while continuing jobless claims were off 53,000 to 2.544 million. Traders are paying close attention to testimony from Federal Reserve Chairman Bernanke and U.S. Treasury Secretary Paulson about the U.S. mortgage industry today. The September Philadelphia Fed survey will be released later in the North American session. In eurozone news, the Belgian National Bank’s September consumer confidence indicator was unchanged at -2. Euro bids are cited around the US$ 1.3950 level.

YEN:

The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥114.90 level and was capped around the ¥116.10 level. The U.S. dollar crumbled across the board and the New York Board of Trade’s U.S. Dollar Index plunged to its lowest level since September 2002 and is now trading with a 78 handle. Data released in Japan overnight the saw large companies’ business sentiment diffusion index rebound to +6.2 in Q3 from -0.9 in Q2. This is the government’s index and not the Bank of Japan’s tankan survey but it nonetheless represents an improvement in sentiment. The yen posted gains on many of its crosses too and this partially reflects the fact that the Federal Reserve’s rate cut is likely to see other central banks move from a tightening bias to a neutral or easing bias, thus leading to more unwinding of the short yen carry trade. The Nikkei 225 stock index climbed 0.20% to close at ¥16,413.79. Dollar bids are cited around the ¥113.70 level. The euro came off vis-à-vis the yen as the single currency tested bids around the ¥161.35 level and was capped around the ¥162.40 level. The British pound and Swiss franc moved lower vis-à-vis the yen as the crosses tested bids around the ¥230.70 and ¥97.90 levels, respectively. The Chinese yuan lost marginal ground vis-à-vis the U.S. dollar as the greenback closed at CNY 7.5144 in the over-the-counter market, up from CNY 7.5135. Data released in China saw the Q3 bank industry prosperity index hit a record high at 70.6% while the Q3 entrepreneur confidence index receded to 77% from 83.4% in Q2. People’s Bank of China reported that household satisfaction with consumer prices is at a record low.

BRITISH POUND:

The British appreciated sharply vis-à-vis the U.S. dollar today as cable tested offers around the US$ 2.0135 level and was supported around the $1.9970 level. Sterling recouped some recent losses after testimony from Bank of England Governor King quelled speculation that he would be ousted in response to the central bank’s delayed response to the global liquidity crisis and its impact on the U.K. banking sector. King made it clear the BoE does not intend to provide a complete bail-out to the U.K. money market. King also reported that existing legislation such as the Market Abuses Directive reduces his “preferred” measure of finding a “covert lender of last resort” for troubled financial institutions such as Northern Rock PLC. Liquidity conditions improved marginally in the U.K. money market today with the three-month sterling Libor rate falling to 6.39% from 6.55 and the overnight and one-week rates down 7bps and 15bps, respectively. BoE yesterday announced it will offer ₤10 billion to the interbank market via next week’s three-week repurchase agreement. Bank of England Monetary Policy Committee member Barker today reported the U.K. housing market “remains relatively robust.” Data released in the U.K. today saw August retail sales rise 0.6% m/m while the CBI’s revealed a positive output balance level of +17%, up from +13% in July. Also, August provisional annual M4 money supply growth rose to 13.5% from 13.0% in July while August gross mortgage lending fell to ₤32.2 billion from ₤34.1 billion in July. Cable bids are cited around the US$ 1.9920 level. The euro moved higher vis-à-vis the British pound as the single currency tested offers around the ₤0.7005 level and was supported around the ₤0.6975 level.

SWISS FRANC:

The Swiss franc appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the CHF 1.1695 level and was capped around the CHF 1.1845 level. The pair reached its lowest level since March 2005. Data released in Switzerland today saw August producer and import prices expand more than expected, up 0.3% m/m and 2.7% y/y. The August trade surplus widened to CHF 637.1 million and the indicator for economic expectations indicator fell 21.6 points to -26.7 in September. U.S. dollar offers are cited around the CHF 1.1880 level. The euro and British pound weakened vis-à-vis the Swiss franc as the crosses tested bids around the CHF 1.6445 and CHF 2.3505 levels, respectively.

AUSTRALIAN / NEW ZEALAND DOLLAR:

The Australian dollar moved higher vis-à-vis the U.S. dollar today as the Aussie tested offers around the US$ 0.8660 level and was supported around the $0.8550 level. The pair reached its highest level since 27 July. Data released in Australia today saw August new home sales fall 8.6% m/m, the lowest level since January. Australian dollar bids are cited around the US$ 0.8430 level. The New Zealand dollar gained ground vis-à-vis the U.S. dollar as the kiwi tested offers around the US$ 0.7450 level and was supported around the $0.7325 level. Data released in New Zealand today saw the annual current account deficit expand slightly in Q2. New Zealand dollar bids are cited around the US$ 0.7275 level.

CANADIAN DOLLAR:

The Canadian dollar appreciated sharply vis-à-vis the U.S. dollar today as the greenback tested bids around the C$ 0.9995 level and was capped around the C$ 1.0155 level. The last time the pair reached parity prior to today was November 1976. Data released in Canada saw July wholesale sales rose 2.0% m/m while wholesale inventories were up 0.6%. U.S. dollar offers are cited around the C$ 1.0155 level.


BillyT Daily Forex
*****************************************************************************
If you enjoyed this post, then you might consider subscribing to my RSS feed.If you’re a first time visitor to this then you may have noticed the cool square at the top left hand side of the blog.

BillyT's Daily Forex Currency-Trading Reviews for 18 September 2007

BillyT's Daily Forex Currency-Trading Reviews for 18 September 2007

EURO:

The euro appreciated vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.3890 level and was supported around the $1.3825 level. Traders awaited the Federal Open Market Committee’s interest rate decision later in the North American session with most expecting a 25bps monetary expansion. A sizable minority, however, continue to call for a 50bps reduction in the federal funds target rate to provide the financial markets with some additional liquidity in the wake of the ongoing credit market shakeout. A 25bps cut would take the federal funds target rate lower to 5.00% and many traders also believe the Fed will again lower the discount rate to make it less expensive for financial institutions to borrow funds. As always, the Fed’s policy statement will be scrutinized closely to try and decipher policymakers’ policy bias and policy actions in the future. The big question on traders’ minds is whether or not the FOMC will need to lower interest rates again after today or if this will represent a one-time reduction in the federal funds target rate. Data released in the U.S. today saw the August producer price index fall 1.4% m/m, the sharpest decline since October 2006, while core prices were up 0.2%. Over the past year, core prices have been up 2.2%, consistent with expectations. Other data released in the U.S. saw foreign demand for long-term U.S. securities decline sharply in July to US$ 19.2 billion from a revised US$ 97.3 billion in June and well below expectations. These data evidence waning foreign demand for long-term U.S. assets during early in Q3. The decline was partially offset by demand for short-term assets as total net foreign capital inflows printed at US$ 103.8 billion, up from US$ 34.4 billion in June. Other U.S. data saw the number of U.S. house foreclosure filings double in August from one year ago and up 36% m/m, the latest indication of the impact the subprime mortgage crisis is having on homeowners. In eurozone news, European Central Bank member Weber expressed “some concern” with the development of oil and food prices in Germany. Data released in Germany today saw the September ZEW economic expectations index fall sharply to -18.1 from -6.9 in August, more-than-expected. Euro bids are cited around the US$ 1.3620 level.

YEN:

The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥115.85 level and was supported around the ¥114.80 level. Technically, today’s intraday low was right around the 61.8% retracement of the move from ¥109.00 to ¥124.15. The pair reached its highest level since 5 September on growing expectations that Bank of Japan will not raise the overnight call rate this year from its current +0.50% level. Nikkei reported the U.S. subprime mortgage shakeout and political instability in Japan may limit the central bank’s ability to push rates higher over the next few months. BoJ’s Policy Board will announce its latest interest rate decision tomorrow. Traders await the outcome of this Sunday’s LDP presidential election to determine who the next Prime Minister of Japan will be with most Japan-watchers anticipating Fukuda will assume the top slot. Data released in Japan saw the July tertiary index fall 0.5% m/m, the third decline in seven months. The Nikkei 225 stock index lost 2.02% to close at ¥15,801.80. Dollar bids are cited around the ¥113.70 level. The euro moved higher vis-à-vis the yen as the single currency tested offers around the ¥160.85 level and was supported around the ¥158.80 level. The British pound and Swiss franc moved higher vis-à-vis the yen as the crosses tested offers around the ¥231.55 and ¥97.55 levels, respectively. The Chinese yuan weakened marginally vis-à-vis the U.S. dollar as the greenback closed at CNY 7.5228 in the over-the-counter market, up from CNY 7.5227. Credit Suisse predicted China is likely to tighten monetary policy further this year. The European Union criticized China’s foreign exchange reforms noting they have had “no impact” on the yuan’s exchange rate vis-à-vis the euro.

BRITISH POUND:

The British gained ground vis-à-vis the U.S. dollar today as cable tested offers around the US$ 1.9995 level and was supported around the $1.9880 level. Technically, today’s intraday low was right around the 23.6% retracement of the move from $2.0655 to $1.9650. Data released in the U.K. today saw the August headline consumer price index fall to 1.8%, the lowest rate since February 2005. Notably, this means CPI is below the level Bank of England expected it would be when it released its quarterly inflation report one month ago. Sterling was bid on news the U.K. government has provided a blanket guarantee on all bank deposits following the continuation of panicked withdrawals from U.K. home lender Northern Rock. Bank of England provided financial institutions with ₤4.4 billion in reserves to contend with short-term liquidity issues via a two-day repo. Many dealers now believe the central bank will be forced to lower interest rates in the near future. CBI reduced its 2008 GDP forecast for the U.K. to 2.2% from 2.4%. Cable bids are cited around the US$ 1.9805 level. The euro moved lower vis-à-vis the British pound as the single currency tested bids around the ₤0.6940 level and was capped around the ₤0.6975 level.

SWISS FRANC:

The Swiss franc depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the CHF 1.1890 level and was supported around the CHF 1.1855 level. Technically, today’s intraday high was right around the 23.6% retracement of the move from CHF 1.1800 to CHF 1.1920. Data released in Switzerland today saw Q2 industrial production up 6.7% q/q and 9.8% y/y. Swiss National Bank President Roth spoke yesterday and intimated interest rates may have peaked. Dollar offers are cited around the CHF 1.1960 level. The euro and British pound appreciated vis-à-vis the Swiss franc as the crosses tested offers around the CHF 1.6490 and CHF 2.3745 levels, respectively.

AUSTRALIAN / NEW ZEALAND DOLLAR:

The Australian dollar gained ground vis-à-vis the U.S. dollar today as the Aussie tested offers around the US$ 0.8375 level and was supported around the $0.8275 level. Technically, today’s intraday low was right around the 50% retracement of the move from $0.8870 to $0.7675. Data released in Australia today saw August merchandise imports rise to A$ 16.924 billion from A$ 15.247 billion in July. Reserve Bank of Australia Governor Stevens called on Australian banks to disclose their exposures to the U.S. subprime mortgage crisis more fully. Australian dollar bids are cited around the US$ 0.8160 level. The New Zealand dollar moved higher vis-à-vis the U.S. dollar as the kiwi tested offers around the US$ 0.7095 level and was supported around the $0.7005 level. New Zealand dollar bids are cited around the $0.6985 level.

CANADIAN DOLLAR:

The Canadian dollar extended recent gains vis-à-vis the U.S. dollar today as the greenback tested bids around the C$ 1.2000 figure and was capped around the C$ 1.0285 level. The pair reached its lowest level in a couple of decades and many traders are now talking about parity between the two currencies. August CPI data will be released in Canada tomorrow. U.S. dollar offers are cited around the C$ 1.0430 level.


BillyT Daily Forex
*****************************************************************************
If you enjoyed this post, then you might consider subscribing to my RSS feed.If you’re a first time visitor to this then you may have noticed the cool square at the top left hand side of the blog.

BillyT's Forex Daily Currency-Trading Reviews for 13 September 2007

BillyT's Forex Daily Currency-Trading Reviews for 13 September 2007

EURO:

The euro strengthened vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.3925 level and was supported around the $1.3860 level. The common currency established a new lifetime high and then yielded gains during the North American session. The Federal Reserve injected US$ 21 billion in liquidity today one day after it added US$ 13.5 billion to the banking system. Most traders believe the Federal Open Market Committee will reduce the federal funds target rate between 25bps and 50bps next Tuesday on account of the slowness in the U.S. housing sector and turmoil in the credit markets. Fed Chairman Bernanke will testify before the House on 20 September about the U.S. subprime mortgage meltdown. Data released in the U.S. today saw weekly initial jobless claims rise 4,000 to 319,000 while continuing jobless claims fell 6,000 to 2.585 million. Traders are paying close attention to any evidence that the U.S. labour market continues to worsen following August’s 4,000 jobs contraction as reported in last week’s non-farm payrolls tally. In eurozone news, the European Central Bank reported it will act in a “firm and timely” manner to counter price risks in its monthly bulletin. The ECB is expected to lift its main refinancing rate target by +25bps before the end of the year. Germany’s IfW research institute lowered its German 2007 GDP forecast to 2.7% from 3.2%. EMU-13 Q2 provisional employment was up 0.5% q/q and 1.7% y/y. Euro bids are cited around the US$ 1.3620 level

YEN:

The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥115.45 level and was supported around the ¥114.10 level. Traders dumped yen following yesterday’s resignation of Prime Minister Abe and his subsequent hospitalization on concerns that his successor may not carry forward Japan’s economic reform agenda. During his short stint in office, Abe has tightened fiscal policy and a reversal away from that could see more Japanese government bonds issued. Dealers also moved out of yen after a report emerged that Japan’s government will downgrade its assessment of its economy this month on account of weaker consumer spending and capital investments. Many traders believe Bank of Japan’s Policy Board next +25bps rate hike to +0.75% is being pushed back further with a possibility one will not emerge by the end of 2007, but perhaps by the end of Japan’s fiscal year at the end of March 2008. Around this time, BoJ Governor Fukui will leave office and the markets perceive him as wanting to lift rates before he leaves office. The Nikkei 225 stock index climbed 0.15% to close at ¥15,821.19. Dollar bids are cited around the ¥112.55 level. The euro appreciated vis-à-vis the yen as the single currency tested offers around the ¥160.35 level and was supported around the ¥158.55 level. The British pound and Swiss franc moved higher vis-à-vis the yen as the crosses tested offers around the ¥234.05 and ¥97.25 levels, respectively. The Chinese yuan appreciated sharply vis-à-vis the U.S. dollar as the greenback closed at CNY 7.5105 in the over-the-counter market, down from CNY 7.5216, a new post-revaluation low. Data released in China today saw actual foreign direct investment up 11.9% y/y in August while industrial value-added output was up 18.4% y/y between January and August.

BRITISH POUND:

The British pound came off vis-à-vis the U.S. dollar today as cable tested bids around the US$ 2.0235 level and was capped around the $2.0300 level. Traders continue to pare back their expectations that Bank of England’s Monetary Policy Committee will lift the repo rate by another +25bps to 6.00% by the end of the year. BoE’s inflation expectations survey was released today and remained steady at 2.7% despite the sizable decline in July’s inflation rate. The view that the MPC is on hold with interest rates was reaffirmed after RICS reported the first decline in house prices for the first time in nearly two years. BoE reported it will offer banks more flexibility regarding the amount of reserves they maintain with the central bank. The three-month sterling Libor rate fell to 6.88% today but is still 113bps above the BoE’s 5.75% repo target rate – the latest evidence of funding difficulties in the money market. Cable bids are cited around the US$ 2.0160 level. The euro slumped vis-à-vis the British pound as the single currency tested bids around the ₤0.6840 level and was capped around the ₤0.6875 level.

SWISS FRANC:

The Swiss franc lost ground vis-à-vis the U.S. dollar today as the greenback tested offers around the CHF 1.1890 level and was supported around the CHF 1.1800 figure. The pair earlier reached its lowest level since April 2005 before moving higher. As expected, Swiss National Bank tightened monetary policy today, its eighth consecutive interest rate rise in less than two years. SNB lifted its three-month Libor target band by 0.25% to 2.25% - 3.25% and the central bank will target the middle of that band, or 2.75%. Most SNB-watchers believe the SNB focused on upward pressures in GDP and inflation. In making the policy shift, the SNB also asserted its independence, especially after the ECB’s and BoE’s recent decisions to keep rates unchanged. Another major reason why the SNB lifted rates is on account of the relatively stong euro/ Swiss franc exchange rate. SNB reported “The volatility of the exchange rate can increase rapidly... participants in the Swiss franc credit market and entrepreneurs should always be aware of the exchange rate risks.” The SNB now sees 2007 inflation around 0.7%. Data released in Switzerland today saw August corporate bankruptcies up 19.1% y/y. Dollar offers are cited around the CHF 1.2120 level. The euro and British pound appreciated vis-à-vis the Swiss franc as the crosses tested offers around the CHF 1.6495 and CHF 2.4095 levels, respectively

BillyT Daily Forex

BillyT's Forex Daily Currency-Trading Reviews for 12 September 2007

BillyT's Forex Daily Currency-Trading Reviews for 12 September 2007

EURO:

The euro strengthened vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.3895 level and was supported around the $1.3825 level. The common currency established a fresh lifetime high as traders reacted to remarks from U.S. Treasury Secretary Paulson who indicated the current financial market problems may last longer than the Asian and Russian financial crises of the 1990s. Further pressure on the U.S. is likely to materialize on account of growing pressure on the Federal Reserve to reduce interest rates next Tuesday. The federal funds futures market is pricing in between 25bps and 50bps of easing by the Federal Open Market Committee next week on account of subprime mortgage and housing sector problems. In eurozone news, European Central Bank President Trichet yesterday testified that monetary policy remains on the “accommodative side” and most dealers believe the ECB will lift the repo rate by +25bps by the end of the year. Data released in the eurozone today saw July industrial production up 0.6% m/m and 3.7% y/y. Also, EMU-13 labour costs were up 2.5% y/y in Q2. Euro bids are cited around the US$ 1.3620 level.

YEN:

The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥114.35 level and was supported around the ¥113.75 level. Prime Minister Abe resigned today and the Liberal Democratic Party is set to name his successor on 19 September with Taro Aso looking like the most likely replacement. Abe’s resignation may be mildly yen-negative as will likely make it more difficult for Bank of Japan Governor Fukui to lift the overnight call rate to by +25bps to +0.75%. Many data were released in Japan overnight. First, the August wholesale goods price index rose 1.9% y/y, exceeding forecasts and the 42nd consecutive monthly rise. Second, August consumer confidence fell to its lowest level in 32 months, printing at 44.0 from July’s 44.4 tally. Third, August revised machine tool orders were up 12.6% y/y. Fourth, the July current account surplus gained 4.5% y/y, below forecasts. The Nikkei 225 stock index lost 0.50% to close at ¥15,797.60. Dollar bids are cited around the ¥112.55 level. The euro appreciated vis-à-vis the yen as the single currency tested offers around the ¥158.75 level and was supported around the ¥157.75 level. The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥231.00 figure while the Swiss franc appreciated vis-à-vis the yen and tested offers around the ¥96.50 level. The Chinese yuan appreciated vis-à-vis the U.S. dollar as the greenback closed at CNY 7.5216 in the over-the-counter market, down from CNY 7.5232. Data released in China saw the M2 money supply up 18.09% at the end of August and these data will likely result in additional pressure on People’s Bank of China to tighten monetary policy again this year. Also, August retail sales were up 17.1% y/y, August wholesale prices were up 6.5% y/y, and August property prices in 70 cities were up 8.2% y/y

BRITISH POUND:

The British pound came off vis-à-vis the U.S. dollar today as cable tested bids around the US$ 2.0285 level and was capped around the $2.0365 level. Sterling reached its highest level since 9 August. Bank of England Governor King again defended the central bank’s reaction to the global credit market instability. King reported “The current turmoil, which has at its heart the earlier under-pricing of risk, has disturbed the unusual serenity of recent years, but, managed properly, it should not threaten our long-term economic stability” and conceded the problems have “clouded” the U.K.’s economic outlook. King’s remarks were partly responsive to the ongoing spike in three-month sterling Libor rates that have market borrowing costs at 6.90%, a full 115bps above BoE’s headline 5.75% target rate. Most traders are significantly paring back their expectations for another rate hike from the BoE this year. Data released in the U.K. today saw the August claimant count rate at 2.6%, the lowest level since April 2005 with the ILO unemployment rare steady at 5.4%. Also, average earnings growth including bonuses was up 3.5% in the three months to July. Cable bids are cited around the US$ 2.0160 level. The euro moved higher vis-à-vis the British pound as the single currency tested offers around the ₤0.6840 level and was supported around the ₤0.6805 level.

SWISS FRANC:

The Swiss franc gained ground vis-à-vis the U.S. dollar today as the greenback tested bids around the CHF 1.1815 level and was capped around the CHF 1.1895 level. The pair has not been this week since April 2005 and the CHF 1.1740 level remains a key target for dollar bears. Swiss National Bank’s interest rate decision will be released tomorrow and many expect the central bank will lift its three-month Swiss franc Libor target by 25bps. Other traders, however, believe the SNB will keep rates on hold, much as other major global central banks have done recently. One reason why the SNB could lift rates is to prevent the Swiss franc from being sold-off further vis-à-vis the euro. Data released in Switzerland today saw the country’s 2006 current account surplus escalate to CHF 74 billion from CHF 63 billion in 2005. Dollar offers are cited around the CHF 1.2120 level. The euro moved higher vis-à-vis the Swiss franc as the crosses tested offers around the CHF 1.6465 level while the British pound came off vis-à-vis the Swiss franc and tested bids around the CHF 2.3995 level.

AUSTRALIAN / NEW ZEALAND DOLLAR:

The Australian dollar moved higher vis-à-vis the U.S. dollar today as the Aussie tested offers around the US$ 0.8430 level and was supported around the $0.8325 level. Data released in Australia overnight saw the September Westpac consumer index up 4.2%. Australian dollar bids are cited around the US$ 0.8130 level. The New Zealand dollar moved higher vis-à-vis the U.S. dollar as the kiwi tested offers around the US$ 0.7155 level and was supported around the US$ 0.7045 level. New Zealand dollar bids are cited around the US$ 0.6760 level.

CANADIAN DOLLAR:

The Canadian dollar made strong gains vis-à-vis the U.S. dollar today as the greenback tested bids around the C$ 1.0355 level and was capped around the C$ 1.0445 level. Bank of Canada Governor Dodge characterized the central bank’s current 4.50% base rate as “appropriate.” He added “The actions that we took to provide liquidity to support the smooth operation of financial markets did not in any way signal a change in our monetary policy.” U.S. dollar offers are cited around the C$ 1.0655 level.


BillyT Daily Forex

BillyT's Forex Daily Currency-Trading Reviews for 11 September 2007

BillyT's Forex Daily Currency-Trading Reviews for 11 September 2007

EURO:

The euro strengthened vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.3840 level and was supported around the $1.3775 level. Traders await remarks from Federal Reserve Chairman Bernanke from Berlin later today. Comments from Fed officials yesterday evidenced a wide range of opinions concerning the effects of the current global credit crunch on the U.S. economy. Fed Governor Mishkin reported that if “heightened uncertainty” leads to further pullbacks in household and business spending, “it poses an important downside risk to economic activity.” The Federal Open Market Committee convenes one week from today and many traders believe the Fed will reduce the federal funds target rate by up to 50bps. In contrast to Mishkin’s remarks, Dallas Fed President Fisher suggested a steady course of action would be sensible saying “having a steady hand rather than an itchy trigger finger” is what guides him. Fisher added “I set aside the passions of the moment and the conventional wisdom in the markets and keep a steady focus on the Fed's mission. Conducting monetary policy is not a popularity contest.” Data released in the U.S. today saw the July trade balance narrow to –US$ 59.2 billion, down 0.3% from the upwardly revised –US$ 59.4 billion in June. In eurozone news, the European Commission reduced its EMU-13 growth forecast to +2.8% from its previous projection of +2.9%. Likewise, the EC now sees 2007 inflation at 2.0% compared with earlier forecasts of 1.9%. Also, the German August wholesale price index was up 0.5% m/m and up 2.5% y/y. Euro bids are cited around the US$ 1.3620 level.

YEN:

The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥114.05 level and was supported around the ¥113.35 level. Bank of Japan released a report today that indicated recent credit market turmoil is “unlikely to significantly affect the stability of Japan's financial system.” Data released in Japan overnight saw July core private sector machinery orders rise at their fastest pace since October 2003. Most traders believe Bank of Japan’s Policy Board will lift the overnight call rate by +25bps to +0.75% by the end of the year. Data to be released tonight include the corporate goods price index, current account, and trade balance. The Nikkei 225 stock index gained 0.71% to close at ¥15,877.67. Dollar bids are cited around the ¥112.55 level. The euro moved higher vis-à-vis the yen as the single currency tested offers around the ¥157.55 level and was supported around the ¥156.30 level. The British pound and Swiss franc gained ground vis-à-vis the yen as the crosses tested offers around the ¥231.65 and ¥96.10 levels, respectively. The Chinese yuan came off vis-à-vis the U.S. dollar as the greenback closed at CNY 7.5232 in the over-the-counter market, up from CNY 7.5214. Data released in China saw the August consumer price index up 6.5% y/y, the highest level since December 1996. These data will likely result in additional monetary tightenings from People’s Bank of China again this year. Other data released today saw the August trade surplus print at US$ 24.97 billion, up from US$ 24.36 billion in July.

BRITISH POUND:

The British pound appreciated vis-à-vis the U.S. dollar today as cable tested offers around the US$ 2.0335 level and was supported around the $2.0235 level. Money market turmoil continues in the U.K. as the three-month sterling Libor rate rose to 6.90375%, some 115bps above the central bank’s repo target rate. Most traders expect Bank of England’s Monetary Policy Committee will lift the repo rate by +25bps to +6.00% by the end of the year. Data released in the U.K. today saw the July trade balance worsen more than expected to -₤7.1 billion from June’s -₤6.5 billion pace. Cable bids are cited around the US$ 2.0160 level. The euro moved higher vis-à-vis the British pound as the single currency tested offers around the ₤0.6810 level and was supported around the ₤0.6795 level.

SWISS FRANC:

The Swiss franc gained ground vis-à-vis the U.S. dollar today as the greenback tested bids around the CHF 1.1840 level and was capped around the CHF 1.1895 level. Traders await Swiss National Bank’s interest rate decision on Thursday and many believe the SNB may postpone their next monetary tightening. Dollar offers are cited around the CHF 1.2120 level. The euro and British pound gained ground vis-à-vis the Swiss franc as the crosses tested offers around the CHF 1.6400 and CHF 2.4120 levels, respectively

AUSTRALIAN / NEW ZEALAND DOLLAR:

The Australian dollar moved higher vis-à-vis the U.S. dollar today as the Aussie tested offers around the US$ 0.8290 level and was supported around the $0.8235 level. NAB’s August survey of business sentiment fell to +10 from +12. Australian dollar bids are cited around the US$ 0.8130 level. The New Zealand dollar moved higher vis-à-vis the U.S. dollar as the kiwi tested offers around the US$ 0.6985 level and was supported around the US$ 0.6920 level. New Zealand dollar bids are cited around the US$ 0.6760 level.

CANADIAN DOLLAR:

The Canadian dollar made strong gains vis-à-vis the U.S. dollar today as the greenback tested bids around the C$ 1.0425 level and was capped around the C$ 1.0530 level. Data released in Canada today saw the July trade surplus fall to C$ 3.66 billion, down from June’s C$ 4.33 billion level. Other data released today saw August housing starts rise 5% to an annualized 226,500. U.S. dollar offers are cited around the C$ 1.0655 level.

BillyT Daily Forex

BillyT's Forex Daily Currency-Trading Reviews for 10 September 2007

BillyT's Forex Daily Currency-Trading Reviews for 10 September 2007

EURO:

The euro strengthened vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.3815 level and was supported around the $1.3765 level. The common currency reached its strongest level since 8 August as traders continued to react to Friday’s weak U.S. August non-farm payrolls report that saw 4,000 jobs lost last month and sizable downward revisions to June’s and July’s tallies. Also, positive remarks from multiple European Central Bank officials over the weekend and today emboldened the common currency further. ECB President Trichet indicated there are strong indications the global economy will continue to expand despite the global credit crisis and said “"We will certainly remain alert at the global level.... This is no time for complacency.” Trichet added “When markets are embarking on significant corrections, there are also episodes of hectic behaviour, elements of overshooting in term of size of correction and also in terms of volatility. It's certainly the sentiment of central bankers who are around the table that bailing out bad investors would be the worst thing to do.” Similarly, ECB member Noyer added “Our fundamental analysis remains rather positive. There is no reason at this stage to think that euro zone growth will be significantly affected by the current disturbances on financial markets.” Data released in the eurozone today saw French industrial production rise 1.3% m/m. In U.S. news, Atlanta Fed President Lockhart spoke today and reported Friday’s U.S. payrolls report “should be evaluated with recently positive reports in retail sales. I’m processing this information along with other timely information as I prepare for next week Federal Open Market Committee meeting.” San Francisco Fed President Yellen and Federal Reserve Governor Mishkin are scheduled to speak later in the day. Philadelphia Fed President Plosser on Friday on Saturday said “I believe disruptions in financial markets can be addressed using the tools available to the Fed without necessarily having to make a shift in the overall direction of monetary policy.” Most traders believe the Fed will reduce the federal funds target rate by up to 50bps on 18 September. Euro bids are cited around the US$ 1.3620 level.

YEN:

The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥114.00 figure and was supported around the ¥112.60 level. Technically, today’s intraday low was right around the 76.4% retracement of the move from ¥109.00 to ¥124.15. The yen weakened after the release of weaker-than-expected Q2 GDP data that saw economic output fall 0.3% last quarter, primarily on account of weak capital expenditures. These data alone will render it more likely that Bank of Japan’s Policy Board will find it more difficult to raise interest rates in the near future from their current 0.50% level. Many traders believe the central bank will lift the overnight call rate by +0.25% to +0.75% by the end of the year. Other data released today saw outstanding loans by Japanese banks rise 0.5% y/y in August while the M2+CD money supply rose 1.8% y/y. Also, the economy watchers survey receded to 44.1 in August, its lowest level since June 2003. The Nikkei 225 stock index shed 2.22% to close at ¥15,764.97. Dollar bids are cited around the ¥112.55 level. The euro gained ground vis-à-vis the yen as the single currency tested offers around the ¥157.35 level and was supported around the ¥155.15 level. The British pound and Swiss franc moved higher vis-à-vis the yen as the crosses tested offers around the ¥231.45 and ¥96.00 levels, respectively. The Chinese yuan appreciated strongly vis-à-vis the U.S. dollar as the greenback closed at CNY 7.5214 in the over-the-counter market, down from CNY 7.5395. Data released in China today saw the August producer price index up 2.6% y/y. People’s Bank of China Governor Zhou reported he is concerned about inflation. China’s new state-controlled foreign exchange management agency, the China Investment Co Ltd, is likely to being operations this week.

BRITISH POUND:

The British pound appreciated vis-à-vis the U.S. dollar today as cable tested offers around the US$ 2.0330 level and was supported around the $2.0260 level. Technically, today’s intraday low was right around the 61.8% retracement of the move from $2.0655 to $1.9650. Data released in the U.K. today saw August manufacturing input prices decline for the second consecutive month while output prices notched their smallest gain in nine months. Input prices fell 0.5% m/m and July’s tally was downwardly revised to -0.8%. On an annualizes basis, input prices were up 0.7% after July’s 0.3% decline and the core component was up +0.1% m/m and +1.8% y/y. Producers’ output prices were up 0.1% m/m and 2.5% y/y. Core output prices were up 0.2% m/m and 2.4% y/y. For the most part, these data are unlikely to pressure Bank of England to tighten monetary policy further though most traders expect the Monetary Policy Committee will lift the repo rate by +25bps to 6.00% by the end of the year. Prime Minister Brown today reported discipline on public sector pay rises is “essential” to counter domestic inflationary pressures. Other data released in the U.K. today saw DCLG July annual house price inflation up 12.4%, its highest level since March 2005. Cable bids are cited around the US$ 2.0160 level. The euro gained ground vis-à-vis the British pound as the single currency tested offers around the ₤0.6800 figure and was supported around the ₤0.6780 level.


SWISS FRANC:

The Swiss franc gained ground vis-à-vis the U.S. dollar today as the greenback tested bids around the CHF 1.1840 level and was capped around the CHF 1.1875 level. Today’s range was very tight ahead of this week’s interest rate decision by Swiss National Bank. Most traders believe Swiss National Bank will keep monetary policy unchanged this week while a minority believes SNB will lift its three-month Swiss franc Libor rate target by +25bps. The European Central Bank’s recent decision to keep rates unchanged will likely result in no change at the SNB. The KOF economic research central lifted its 2007 GDP growth forecast to 2.6% from 2.4% with the unemployment rate forecast lower at 2.8% from 2.9%. Dollar offers are cited around the CHF 1.2120 level. The euro and British pound came off vis-à-vis the Swiss franc as the crosses tested bids around the CHF 1.6330 and CHF 2.4025 levels, respectively.

AUSTRALIAN / NEW ZEALAND DOLLAR:

The Australian dollar slumped vis-à-vis the U.S. dollar today as the Aussie tested bids around the US$ 0.8170 level and was capped around the $0.8270 level. Technically, today’s intraday high was right around the 50% retracement of the move from $0.8870 to $0.7675. Data released in Australia today saw the number of Australian dwellings financed in July off 4.1% m/m to 63,599. Australian dollar bids are cited around the US$ 0.8130 level. The New Zealand dollar moved higher vis-à-vis the U.S. dollar as the kiwi tested offers around the US$ 0.6970 level and was supported around the US$ 0.6825 level. New Zealand dollar bids are cited around the US$ 0.6760 level.

CANADIAN DOLLAR:

The Canadian dollar gained marginal ground vis-à-vis the U.S. dollar today as the greenback tested bids around the C$ 1.0525 level and was capped around the C$ 1.0590 level. Canadian data scheduled for release tomorrow include housing starts, housing prices, and international trade. U.S. dollar offers are cited around the C$ 1.0655 level.

BillyT Daily Forex

BillyT's Forex Daily Currency-Trading Reviews for 7 September 2007

BillyT's Forex Daily Currency-Trading Reviews for 7 September 2007

EURO:

The euro strengthened vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.3775 level and was supported around the $1.3665 level. The common currency rocketed to its highest level since 9 August after the release of much weaker-than-expected U.S. August non-farm payrolls data that saw 4,000 jobs lost last month – a stark contrast to expectations for about 110,000 in new jobs creation. Additionally, the combined jobs growth for June and July were downwardly revised by 81,000. The unemployment rate held steady at 4.6% and average hourly earnings were up +0.3%. Today’s jobs numbers will likely increase the pressure on the Federal Open Market Committee to lower the federal funds target rate when policymakers convene on 18 September. Some of the job losses last month were clearly related to the turbulence in U.S. and global credit markets that was caused by the subprime mortgage shakeout in the U.S. Today’s data will elevate the sense of panic in the market and will render it more difficult for the Fed to maintain an inflation-minded policy bias. Yesterday, Atlanta Fed President Lockhart said he has not seen “hard or soft data that provide conclusive signs that housing problems are spilling over into the broad economy.” Dallas Fed President Fisher said recent data have been “rather positive” and St. Louis Fed President Poole reported “I don't think we should take for granted that the economy is going to nosedive.” In eurozone news, European Central Bank member Weber said the markets need to pay closer attention to how central banks are responsive to economic data. Data released in the eurozone today saw German industrial production up 0.1% m/m and 4.6% y/y while the German July current account surplus narrowed to €14.1 billion. Euro bids are cited around the US$ 1.3620 level.

YEN:

The yen came appreciated sharply vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥114.30 level and was capped around the ¥115.65 level. The pair moved to its lowest level this week after stops were hit below the ¥114.55 level, representing the 23.6% retracement of the move from ¥124.15 to ¥111.60. Data released in Japan overnight saw the revised July index of leading economic indicators fall to 70.0 while the coincident index backed off to 66.7. It was also reported that August foreign reserves printed at US$ 932.16 billion. Finance minister Nukaga spoke today and intimated the government may seek to boost the consumption tax. The Japanese government bond market is pricing in no interest rate increase by Bank of Japan when policymakers meet on 18-19 September. The global credit glut does not seem to be having a major impact on Japan at this time but many traders believe the BoJ may wait until closer to the end of the year before lifting the overnight call rate by +0.25% to +0.75%. The Nikkei 225 stock index shed 0.83% to close at ¥16,122.16. Dollar bids are cited around the ¥112.55 level. The euro came off vis-à-vis the yen as the single currency tested bids around the ¥157.10 level and was capped around the ¥158.25 level. The British pound and Swiss franc weakened vis-à-vis the yen as the crosses tested bids around the ¥231.70 and ¥95.60 levels, respectively. The Chinese yuan came off marginally vis-à-vis the U.S. dollar as the greenback closed at CNY 7.5395 in the over-the-counter market, up from CNY 7.5384. A government official indicated CPI will likely remain elevated until October. People’s Bank of China member Fan Gang reported “If there is a (yuan) revaluation, purchasing power may increase. But if the revaluation leads to a reduction of jobs or employment...then the number of people who have consuming power will get less.” Another report estimated China’s foreign exchange reserves are approaching US$ 1.4 trillion.

BRITISH POUND:

The British pound appreciated vis-à-vis the U.S. dollar today as cable tested bids around the US$ 2.0325 level and was supported around the $2.0160 level. Technically, today’s intraday low was right around the 50% retracement of the move from $2.0655 to $1.9650. The NIESR think tank estimated that GDP growth eased to 0.7% in the three months to August from 0.8% in the three months to July. Also, it was reported that U.K. construction output rose y/y in Q2. Traders are paying very close attention to U.K. money markets were the three-month sterling Libor deposit rate moved higher to 6.89%, 114 basis points above Bank of England’s 5.75% target rate. This is the greatest spread in some twenty years and underscores the premium being paid for interbank credit in reaction to the global liquidity crisis. Cable bids are cited around the US$ 2.0160 level. The euro moved higher vis-à-vis the British pound as the single currency tested offers around the £0.6785 level and was supported around the £0.6760 level.

SWISS FRANC:

The Swiss franc gained ground vis-à-vis the U.S. dollar today as the greenback tested bids around the CHF 1.1895 level and was capped around the CHF 1.2025 level. Technically, today’s intraday high was just above the 50% retracement of the move from CHF 1.1815 to CHF 1.2215. Dollar offers are cited around the CHF 1.2120 level. The euro and British pound came off vis-à-vis the Swiss franc as the crosses tested bids around the CHF 1.6385 and CHF 2.4145 levels, respectively.

AUSTRALIAN / NEW ZEALAND DOLLAR:

The Australian dollar gained marginal ground vis-à-vis the U.S. dollar today as the Aussie tested offers around the US$ 0.8310 level and was supported around the $0.8255 level. The pair reached its highest level since 27 August. Data released in Australia today saw the performance of construction index recede to 48.4. Australian dollar bids are cited around the US$ 0.8130 level. The New Zealand dollar moved lower vis-à-vis the U.S. dollar as the kiwi tested bids around the US$ 0.6885 level and was capped around the US$ 0.6935 level. Data released in New Zealand today saw the Q2 value of building construction off 0.5% q/q. New Zealand dollar bids are cited around the US$ 0.6760 level.

CANADIAN DOLLAR:

The Canadian dollar gained marginal ground vis-à-vis the U.S. dollar today as the greenback tested bids around the C$ 1.0475 level and was capped around the C$ 1.0535 level. Data released in Canada today saw the August net change in employment print at +23,300 with the unemployment rate steady at a 33-year low of 6.0%. Year-to-date, around 232,000 new jobs have been created. U.S. dollar offers are cited around the C$ 1.0655 level.

BillyT Daily Forex

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

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

EURO:

The euro strengthened vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.3705 level and was supported around the $1.3635 level. Technically, today’s intraday high was just below the 23.6% retracement of the move from $1.3260 to $1.3850. As expected, European Central Bank kept its main refinancing rate unchanged at 4.00%. ECB President Trichet reported policymakers will act in a “firm and timely manner” to keep inflation below its 2.0% annual target ceiling rate. Trichet also added the ECB will “very closely” monitor price risks over the coming months, noted monetary policy remains on the “accommodative side,” and said policymakers have not ruled out additional tightening by the end of the year. Data released in the eurozone today saw German July manufacturing orders off 7.1% m/m. In U.S. news, the Federal Reserve injected US$ 31.25 billion in temporary reserves today, its latest attempt to provide additional liquidity to the credit markets. Data released in the U.S. today saw Q2 non-farm productivity upwardly revised to an annualized 2.6% growth rate from 1.8%, the highest level since Q3 2005. On the flip side of the coin, unit labour costs fell to their lowest level in one year, reduced to +1.4% from +2.1% and up 4.9% y/y. Anecdotal evidence from U.S. retailers were released today and suggested retail sales were solid last month. Other data released in the U.S. today saw the August ISM services index print at 55.8, unchanged from July’s print. Also, weekly initial jobless claims fell 19,000 to 318,000 while continuing jobless claims rose to 2.598 million. The Fed’s Beige Book was released yesterday and noted “limited” reports of financial markets problems affecting the general economy outside of real estate. Euro bids are cited around the US$ 1.3620 level.

YEN:

The yen came off marginally vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥115.55 level and was supported around the ¥114.80 level. The yen was pressured on traders found little impetus to unwind short yen carry trades. Many traders believe the decisions by major central banks this week to keep interest rates unchanged will pressure Bank of Japan’s Policy Board to keep borrowing costs unchanged for the time being. The most likely scenario probably involves a +25bps increase in the overnight call rate to +0.75% by the end of the year. Data released in Japan overnight cam August machine tool orders up 12.3% y/y. Also, capital flows data reported that foreigners sold a net ¥52.5 billion in Japanese bonds last week. The Nikkei 225 stock index gained 0.61% to close at ¥16,257.00. Dollar bids are cited around the ¥114.55 level. The euro gained ground vis-à-vis the yen as the single currency tested offers around the ¥157.90 level and was supported around the ¥156.75 level. The British pound and Swiss franc gained ground vis-à-vis the yen as the crosses tested offers around the ¥234.00 and ¥96.00 figures, respectively. The Chinese yuan appreciated vis-à-vis the U.S. dollar as the greenback closed at CNY 7.5384 in the over-the-counter market, down from CNY 7.5497. People’s Bank of China announced it will lift banks’ reserve requirements on deposits by 0.5%, effective on 25 September. Most traders believe PBOC will tighten monetary policy further this year and today’s action represented the seventh tightening this year. Chinese President Hu told President Bush China will liberalize the yuan further

BRITISH POUND:

The British pound appreciated vis-à-vis the U.S. dollar today as cable tested bids around the US$ 2.0265 level and was supported around the $2.0140 level. Technically, today’s intraday low was right around the 50% retracement of the move from $2.0655 to $1.9650. As expected, Bank of England kept its benchmark repo rate unchanged at 5.75%. Notably, BoE issued its first statement to an unchanged interest rate decision in more than eight years. The central bank reported it is too early to determine how recent financial market turmoil will impact the availability of credit but stressed its mandate to keep interest rates in line to meet the government’s inflation target. The BoE’s August quarterly inflation report had made it clear that an additional +25bps of monetary tightening would be forthcoming. Three-month sterling Libor rose to 6.88% today, 113bps above the BoE’s target rate – the greatest spread in twenty years and an indication of the premium banks are paying to secure funding. Cable bids are cited around the US$ 2.0090 level. The euro moved higher vis-à-vis the British pound as the single currency tested offers around the £0.6775 level and was supported around the £0.6740 level.

SWISS FRANC:

The Swiss franc gained ground vis-à-vis the U.S. dollar today as the greenback tested bids around the CHF 1.1990 level and was capped around the CHF 1.2060 level. Technically, today’s intraday high was right around the 38.2% retracement of the move from CHF 1.2470 to CHF 1.1815. Data released in Switzerland today saw the August unemployment rate tick up to 2.6% from 2.5% in July. Dollar offers are cited around the CHF 1.2120 level. The euro and British pound moved higher vis-à-vis the Swiss franc as the crosses tested offers around the CHF 1.6460 and CHF 2.4415 levels, respectively.

AUSTRALIAN / NEW ZEALAND DOLLAR:

The Australian dollar escalated higher vis-à-vis the U.S. dollar today as the Aussie tested offers around the US$ 0.8280 level and was supported around the $0.8185 level. Technically, today’s intraday high was right around the 50% retracement of the move from $0.8865 to $0.7675. Data released in Australia today saw the August unemployment rate hold steady at 4.3% while the number of employed people rose 31,900. Australian dollar bids are cited around the US$ 0.8160 level. The New Zealand dollar moved higher vis-à-vis the U.S. dollar as the kiwi tested offers around the US$ 0.6935 level and was supported around the US$ 0.6835 level. Data released in New Zealand today saw the ANZ Bank’s World Commodity Price Index rise for the twelfth month in a row, up 1.4% m/m and 36.3% y/y. New Zealand dollar bids are cited around the US$ 0.6760 level.

CANADIAN DOLLAR:

The Canadian dollar gained marginal ground vis-à-vis the U.S. dollar today as the greenback tested bids around the C$ 1.0505 level and was capped around the C$ 1.0580 level. Data released in Canada today saw July building permits decline to -11.3% while the August Ivey purchasing managers’ index rallied to 58.5 from 54.6 in July. U.S. dollar offers are cited around the C$ 1.0655 level.

BillyT Daily Forex

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

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

EURO:

The euro moved lower vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.3570 level and was capped around the $1.3625 level. Technically, today’s intraday high was just above the 23.6% retracement of the move from $1.2865 to $1.3850. Data released in the U.S. today saw ADP private sector jobs climb 38,000 in August, the smallest monthly ADP job increase in more than four years and below expectations. These data suggest that Friday’s U.S. non-farm payrolls tally for August could be on the weak side and possibly below the 110,000 estimate projected by many economists. It was also reported that Challenger job cuts were up 85.2% m/m in August to 79,459, a reflection of the dire employment situation in the U.S. mortgage and housing sectors. A weak employment report this week will increase pressure on the Federal Reserve to deliver additional monetary expansion at the Federal Open Market Committee meeting on 18 September. Other data released in the U.S. today saw July pending home sales fall 12.2% m/m to their lowest level in nearly six years. In eurozone news, traders await tomorrow’s European Central Bank interest rate decision and accompanying remarks from ECB President Trichet. Most traders believe the ECB will keep the refinancing rate at 4.0% and believe the ECB will lift rates by +25bps by the end of the year. Many money market traders conclude the ECB is not providing sufficient cash to the interbank market because market conditions remain elevated. Data released in the eurozone today saw the EMU-13 August PMI services index print at 58.0 while EMU-13 July retail sales were up 0.1% m/m and 0.5% y/y. Euro bids are cited around the US$ 1.3530 level.

YEN:

The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥115.40 level and was capped around the ¥116.45 level. Technically, today’s intraday high was right around the 38.2% retracement of the move from ¥124.15 to ¥111.60. The Japanese government reported that U.S. subprime woes are not having a major impact on the Japanese economy but warned the short yen carry trade could unwind if global problems become exacerbated. The Nikkei 225 stock index lost 1.60% to close at ¥16,158.45. Dollar bids are cited around the ¥114.55 level. The euro came off vis-à-vis the yen as the single currency tested bids around the ¥156.75 level and was capped around the ¥158.65 level. The British pound and Swiss franc depreciated vis-à-vis the yen as the crosses tested bids around the ¥231.90 and ¥95.20 levels, respectively. The Chinese yuan was unchanged vis-à-vis the U.S. dollar as the greenback closed at CNY 7.5497 in the over-the-counter market. Goldman Sachs reported China is likely to raise interest rates twice by the end of the year to counter inflation.

BRITISH POUND:

The British pound came off vis-à-vis the U.S. dollar today as cable tested bids around the US$ 2.0040 level and was capped around the $2.0160 level. Technically, today’s intraday high was right around the 50% retracement of the move from $2.0655 to $1.9650. Data released in the U.K. today saw the PMI services sector survey improve to 57.6 from 57.0 in July. Also, REC August wage pressures eased in August and Nationwide August consumer confidence moved lower. Additionally, BRC reported August shop prices were unchanged m/m and up 0.4% y/y and RICS reported house affordability has fallen to its lowest level in seventeen years. All eyes are on the Bank of England Monetary Policy Committee tomorrow with policymakers expected to keep its headline repo rate at 5.75%. The BoE today announced measures to inject liquidity into the money market by raising its aggregate reserves target by 6%. This follows a major spike in three-month sterling Libor market rates to more than 100bps above BoE’s target rate of 5.75%. The BoE pledged to offer additional liquidity as needed but warned it has little influence over long-dated maturities. BoE reported “Those (longer-dated) spreads have risen significantly in all major financial markets since August 9, reflecting the difficulty of valuing a variety of asset-backed instruments which, for the moment, has reduced liquidity. The sources of these problems does not, therefore, lie in a lack of central bank liquidity.” Cable bids are cited around the US$ 1.9915 level. The euro came off vis-à-vis the British pound as the single currency tested bids around the £0.6750 level and was capped around the £0.6770 level.

SWISS FRANC:

The Swiss franc appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the CHF 1.2045 level and was capped around the CHF 1.2135 level. Technically, today’s intraday high was right around the 50% retracement of the move from CHF 1.2470 to CHF 1.1815. The August unemployment rate will be released tomorrow. Dollar offers are cited around the CHF 1.2220 level. The euro and British pound weakened vis-à-vis the Swiss franc as the crosses tested bids around the CHF 1.6445 and CHF 2.4295 levels, respectively.

AUSTRALIAN / NEW ZEALAND DOLLAR:

The Australian dollar slumped vis-à-vis the U.S. dollar today as the Aussie tested bids around the US$ 0.8180 level and was capped around the $0.8285 level. Technically, today’s intraday high was just above the 50% retracement of the move from $0.8865 to $0.7675. As expected, Reserve Bank of Australia kept its cash target rate at 6.50%. Data released in Australia today saw the performance of services index recede to 51.6 in August. Australian dollar bids are cited around the US$ 0.8160 level. The New Zealand dollar came off vis-à-vis the U.S. dollar as the kiwi tested bids around the US$ 0.6860 level and was capped around the $0.6970 level. New Zealand dollar bids are cited around the US$ 0.6760 level.

CANADIAN DOLLAR:

The Canadian dollar depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the C$ 1.0565 level and was supported around the C$ 1.0480 level. As expected, Bank of Canada left its overnight rate unchanged at 4.50%. Prior to the global liquidity crisis, many traders believe BoC would lift rates another +25bps. Notably, BoC omitted the phrase some “modest further” tightening of rates may be necessary and added it “will continue to closely monitor evolving economic and financial developments.” Most traders construed BoC’s statement to be a little more dovish than expected. U.S. dollar offers are cited around the $1.0705 level.

BillyT Daily Forex

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

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

EURO:

The euro moved lower vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.3550 level and was capped around the $1.3625 level. Technically, today’s intraday low was just below the 50% retracement of the move from $1.3260 to $1.3850. Traders are readying for this Friday’s August non-farm payrolls data in the U.S. with most forecasts focusing on job growth around 110,000 workers. A weaker-than-expected non-farm payrolls number will add to the view that the recent global credit slump and job losses in the U.S. mortgage industry are impacting the overall economy more-than-expected. The most likely scenario remains a 50bps reduction in the federal funds target rate by the Federal Open Market Committee on 18 September. Data released in the U.S. today saw the August ISM manufacturing index decline to 52.9 from 53.8 in July while July construction spending was off 0.4%. The Fed’s Beige Book is scheduled for release tomorrow and could evidence additional concern from policymakers about the state of the U.S. economy. In eurozone news, many traders believe the European Central Bank will keep its main refinancing rate unchanged this week on account of global credit conditions while others believe the ECB will remain on track and lift the refinancing rate by +25bps. Data released in the eurozone today saw EMU-13 GDP expand 0.3% q/q in Q2 and 2.5% y/y, unchanged from provisional estimates. Also, the European Commission kept its growth forecasts unchanged and still estimates Q3 GDP growth between 0.3% and 0.8% and Q4 GDP growth between 0.2% and 0.8%. Other data released today saw the July producer price inflation up 0.3% m/m and 1.8% y/y. Euro bids are cited around the US$ 1.3530 level.

YEN:

The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥115.30 level and was capped around the ¥116.00 figure. Traders unwound short yen carry trades as risk aversion grew on speculation the global credit markets glut could worsen. Data released in Japan overnight saw the August monetary base rise 0.7% y/y, the first increase in eighteen months. The pair has traded in a relatively narrow ¥115.30 - ¥113.85 range over the past several trading sessions. Most traders believe Bank of Japan’s Policy Board will lift the overnight call rate by +25bps to +0.75% by the end of the year. The Nikkei 225 stock index lost 0.63% to close at ¥16,420.47. Dollar bids are cited around the ¥114.55 level. The euro weakened vis-à-vis the yen as the single currency tested bids around the ¥156.55 level and was capped around the ¥158.00 figure. The British pound and Swiss franc moved lower vis-à-vis the yen as the crosses tested bids around the ¥231.95 and ¥95.05 levels, respectively. The Chinese yuan lost ground vis-à-vis the U.S. dollar as the greenback closed at CNY 7.5497 in the over-the-counter market, up from CNY 7.5443. A government official reported the economy is not overheating but noted “the growth rate is high.”

BRITISH POUND:

The British shed ground vis-à-vis the U.S. dollar today as cable tested bids around the US$ 2.0075 level and was capped around the $2.0195 level. Stops were hit below the $2.0090 level, representing the 38.2% retracement of the move from $1.9180 to $2.0655. Most traders believe Bank of England’s Monetary Policy Committee will keep its repo rate unchanged at 5.75% on Thursday. Notably, three-month interbank rates are trading around nine-year highs today for the second day in a row. The three-month sterling London Interbank Offered Rate reached 6.798% today, the highest level since the demise of Long Term Capital Management in 1998. The market rate is more than 100bps above the BoE’s base 5.75% repo rate. Bank of England is one of the few major global central banks that did not supply additional liquidity to the money markets in the wake of the mortgage meltdown in the U.S. and the high market rates evidence the scramble to secure financing. Traders want the central bank to clarify its policy stance given the liquidity crisis, especially in the context of its recently-issued August quarterly inflation report. Data released in the U.K. today saw construction PMI rise to 64.8 in August from 61.8 in July, the highest level since February 1998. Also, BRC like-for-like retail sales were up 1.8% in August. Cable bids are cited around the US$ 1.9915 level

SWISS FRANC:

The Swiss franc lost marginal ground vis-à-vis the U.S. dollar today as the greenback tested offers around the CHF 1.2150 level and was supported around the CHF 1.2075 level. Technically, today’s intraday high was just above the 50% retracement of the move from CHF 1.2470 to CHF 1.1815. Data released in Switzerland today saw Q2 GDP up 0.7% q/q and 2.8% y/y. Swiss National Bank officials have conceded the global liquidity crisis could impact the Swiss economy. Most traders believe SNB will keep monetary policy unchanged this month. 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 1.6485 and CHF 2.4425 levels, respectively.

AUSTRALIAN / NEW ZEALAND DOLLAR:

The Australian dollar gained ground vis-à-vis the U.S. dollar today as the Aussie tested offers around the US$ 0.8270 level and was supported around the $0.8195 level. Technically, today’s intraday high was right around the 50% retracement of the move from $0.8865 to $0.7675. Data released in Australia today saw Q2 GDP growth register 0.9% q/q and 4.3% y/y exceeding forecast. Australian dollar bids are cited around the US$ 0.8160 level. The New Zealand dollar moved lower vis-à-vis the U.S. dollar as the kiwi tested bids around the US$ 0.6965 level and was capped around the $0.7045 level. New Zealand dollar bids are cited around the US$ 0.6760 level.

CANADIAN DOLLAR:

The Canadian dollar appreciated marginally vis-à-vis the U.S. dollar today as the greenback tested bids around the C$ 1.0515 level and was capped around the C$ 1.0565 level. Bank of Canada is not expected to change interest rates when it releases its interest rate decision on Thursday. U.S. dollar offers are cited around the C$ 1.0655 level.

BillyT Daily Forex

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

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

EURO:

The euro moved lower vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.3610 level and was capped around the $1.3655 level. Technically, today’s intraday high was right around the 61.8% retracement of the move from $1.3840 to $1.3360. Liquidity was reduced on account of the U.S. Labour Day holiday. Traders are still talking about remarks from Federal Reserve Chairman Bernanke on Friday in which he indicated the Fed “is prepared to act” to counter disorderly market functioning and minimize the economic impact from the subprime mortgage meltdown. The Federal Open Market Committee will vote on interest rates in 18 September and is expected to reduce the federal funds target rate. Such a move may provide a psychological boost to the markets but its impact on the real economy – especially the beleaguered housing market – may be a different story. Fed Governor Mishkin this weekend indicated “Monetary authorities have the tools to limit the negative effects on the economy from a house-price decline.” The big data due this week in the U.S. include Friday’s August non-farm payrolls report. Many economists estimate that about 110,000 new jobs were created last month and are curious to see if August’s tally of 92,000 will be upwardly revised. In eurozone news, EMU-13 manufacturing PMI fell to a nineteen-month low of 54.3 in August from 54.9 in July. The European Central Bank is now expected to keep monetary policy unchanged this week. Euro bids are cited around the US$ 1.3530 level.

YEN:

The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥116.10 level and was supported around the ¥115.65 level. Today’s range was thin on account of the market holiday in the U.S. Traders sold the yen on account of a report that non-financial firms reduced their capital expenditures in Q2 for the first time in seventeen quarters, off 4.9% on the year. This reduction in business spending is expected to result in a contraction in real GDP for Q2 for the first time in ten quarters. This development is another reason why Bank of Japan’s Policy Board may delay its next expected +25bps hike in the overnight call rate to +0.75%. Most traders now expect BoJ to raise rates one time before the end of the year. Other data released today saw employees’ average pay off 1.9% y/y in July. The Nikkei 225 stock index lost 0.27% to close at ¥16,524.93. Dollar bids are cited around the ¥114.55 level. The euro lost ground vis-à-vis the yen as the single currency tested bids around the ¥157.50 level and was capped around the ¥158.40 level. The British pound and Swiss franc appreciated vis-à-vis the yen as the crosses tested offers around the ¥234.55 and ¥96.20 levels, respectively. The Chinese yuan appreciated vis-à-vis the U.S. dollar as the greenback closed at CNY 7.5443 in the over-the-counter market, down from CNY 7.5450. Data released in China saw the August CLSA PMI survey improved to 53.4 from 53.1 in July. Also, a People’s Bank of China official indicate China is not impacted by U.S. subprime problems.

BRITISH POUND:

The British pound gained marginal ground vis-à-vis the U.S. dollar today as the Aussie tested offers around the US$ 2.0215 level and was supported around the $2.0135 level. Bank of England’s Monetary Policy Committee is expected to keep the repo rate unchanged this week. Data released in the U.K. today saw manufacturing PMI improved to 56.3 from 55.9 in July, its strongest level in thirteen years. Other data released today saw EEF report that growth in manufacturing orders books and output reached their highest level since 1995. Most traders expect Bank of England’s Monetary Policy Committee to lift its repo rate by +25bps to +6.00% in the coming months. Cable bids are cited around the US$ 2.0090 level. The euro weakened vis-à-vis the British pound as the single currency tested bids around the £0.6740 level and was capped around the £0.6765 level.

SWISS FRANC:

The Swiss franc lost marginal ground vis-à-vis the U.S. dollar today as the greenback tested offers around the CHF 1.2095 level and was supported around the CHF 1.2060 level. Technically, today’s intraday low was right around the 38.2% retracement of the move from CHF 1.2470 to CHF 1.1815. Data released in Switzerland today saw the August PMI survey improve to 65.1 from 63.0 in July, exceeding forecasts. Many traders believe Swiss National Bank may delay its expected +25bps monetary tightening this month. Dollar offers are cited around the CHF 1.2140 level. The euro came off vis-à-vis the Swiss franc as the single currency tested bids around the CHF 1.6445 level while the British pound moved higher vis-à-vis the Swiss franc and tested offers around the CHF 2.4410 level.

AUSTRALIAN / NEW ZEALAND DOLLAR:

The Australian dollar gained ground vis-à-vis the U.S. dollar today as the Aussie tested offers around the US$ 0.8235 level and was supported around the $0.8155 level. Technically, today’s intraday low was right around the 38.2% retracement of the move from $0.7015 to 0.8870. Data released in Australia today saw the August performance of manufacturing index fall 5.0 index points to 52.4. Also, August ANZ job advertisements were up 0.1% m/m and July building approvals rose 0.4% m/m. Additionally, the TD Securities August inflation gauge was up 0.5% m/m. Most traders expect Reserve Bank of Australia to keep interest rates unchanged this week. Australian dollar bids are cited around the US$ 0.7940 level. The New Zealand dollar moved marginally higher vis-à-vis the U.S. dollar as the kiwi tested offers around the US$ 0.7060 level and was supported around the $0.6995 level. New Zealand dollar bids are cited around the US$ 0.6760 level.

CANADIAN DOLLAR:

The Canadian dollar appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the C$ 1.0515 level and was capped around the C$ 1.0555 level. Bank of Canada is expected to keep interest rates unchanged this week. U.S. dollar offers are cited around the C$ 1.0655 level.

BillyT Daily Forex

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

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

EURO:

The euro moved higher vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.3720 level and was supported around the $1.3625 level. Technically, today’s intraday high was just below the 76.4% retracement of the move from $1.3840 to $1.3360. Traders bid the common currency higher in Australasian and European dealing on expectations that Federal Reserve Chairman Bernanke may not make market-friendly comments about the U.S. housing sector at the annual Jackson Hole symposium in Jackson Hole today. Bernanke was quoted as saying the Fed “stands ready to take additional actions as needed” to limit “adverse affects” on the broad economy from the recent liquidity meltdown. Moreover, he noted “it is not the responsibility of the Federal Reserve – nor would it be appropriate – to protect lenders and investors from the consequences of thief financial decisions.” Traders are also paying close attention to remarks expected from President Bush today in which he may announce a rescue package for the U.S. housing sector. Data released in the U.S. today saw July personal income up 0.5% m/m with personal spending up 0.4% m/m. Also, July factory orders were up 3.7%, the August Chicago PMI survey rose to 53.8 from 53.4 in July, and the August University of Michigan consumer sentiment index declined to 83.4 from 90.4. In eurozone news, traders continue to pare back their expectations that the European Central Bank will lift its main refinancing rate by +25bps next week. Data released in the eurozone today saw August EMU-13 economic sentiment move lower in August while provisional August HICP was up 1.8% y/y and was unchanged m/m. Moreover, EMU-13 July unemployment was unchanged at 6.9% and German July retail sales were up 0.3% m/m and off 1.5% y/y. Euro bids are cited around the US$ 1.3530 level.

YEN:

The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥116.60 level and was supported around the ¥115.80 level. The pair briefly traded above the ¥116.40 level, representing the 38.2% retracement of the move from ¥124.15 to ¥111.60. Many data were released in Japan overnight. First, nationwide core consumer prices fell for the sixth consecutive month in July, off 0.1% y/y, with headline CPI unchanged. In the Tokyo area, core CPI was unchanged y/y in August and headline CPI was off 0.2% m/m. These data will render it more difficult for Bank of Japan’s Policy Board to lift the overnight call rate by +25bps to +0.75% in September, especially in light of global credit conditions. Second, July all-household spending was off 0.1% y/y. Third, Japan’s unemployment rate contracted to its lowest level in more than nine years, falling to 3.6% from 3.7%. Fourth, July housing starts were weak at -23.4% y/y. Fifth, July orders by the 50 largest contractors were off 10.4% y/y. Sixth, July construction orders were off 10.4% y/y. Seventh, July industrial output was off 0.4% m/m, the fourth decline in five months. The Nikkei 225 stock index gained 2.57% to close at ¥16,569.09. Dollar bids are cited around the ¥114.55 level. The euro appreciated vis-à-vis the yen as the single currency tested offers around the ¥159.60 level and was supported around the ¥157.80 level. The British pound and Swiss franc gained ground vis-à-vis the yen as the crosses tested offers around the ¥235.50 and ¥97.05 levels, respectively. The Chinese yuan came off vis-à-vis the U.S. dollar as the greenback closed at CNY 7.5450 in the over-the-counter market, down from CNY 7.5410.

BRITISH POUND:

The British pound moved higher vis-à-vis the U.S. dollar today as cable tested offers around the US$ 2.0230 level and was supported around the $2.0110 level. The pair reached its strongest showing since 13 August. Data released in the U.K. today saw the August GfK consumer confidence index rise unexpectedly to -4 from -6 in July. Most traders expect Bank of England’s Monetary Policy Committee to lift its repo rate by +25bps to +6.00% in the coming months. Cable bids are cited around the US$ 2.0090 level. The euro came off vis-à-vis the British pound as the single currency tested bids around the £0.6760 level and was capped around the £0.6785 level.

SWISS FRANC:

The Swiss franc lost ground vis-à-vis the U.S. dollar today as the greenback tested bids around the CHF 1.1985 level and was capped around the CHF 1.2080 level. Data released in Switzerland today saw August CPI off 0.1% m/m and up 0.4% y/y. Many traders believe Swiss National Bank may delay its expected +25bps monetary tightening next month. Dollar offers are cited around the CHF 1.2140 level. The euro and British pound gained ground vis-à-vis the Swiss franc as the crosses tested offers around the CHF 1.6480 and CHF 2.4365 levels, respectively.

AUSTRALIAN / NEW ZEALAND DOLLAR:

The Australian dollar appreciated marginally vis-à-vis the U.S. dollar today as the Aussie tested offers around the US$ 0.8250 level and was supported around the $0.8140 level. Data released in Australia today saw the July trade balance print at –A$ 756 million from a revised –A$ 1.737 billion in June. Also, July private sector credit was up 0.9% m/m and up 15.4% y/y and July retail sales were up 0.9% m/m. Australian dollar bids are cited around the US$ 0.7955 level. The New Zealand dollar came off vis-à-vis the U.S. dollar as the kiwi tested bids around the US$ 0.7000 figure and was capped around the US$ 0.7100 figure. New Zealand dollar bids are cited around the US$ 0.6985 level.

CANADIAN DOLLAR:

The Canadian dollar moved marginally higher vis-à-vis the U.S. dollar today as the greenback tested bids around the C$ 1.0505 level and was capped around the C$ 1.0585 level. Data released in Canada today saw Q2 GDP up 0.8% q/q, down from Q1’s pace of +1.0%. On an annualized basis, GDP expanded 3.4% y/y in Q2. The pair was also pressured by news that U.S. technology giant Microsoft might make a play for Canada’s Research in Motion, maker of the Blackberry. U.S. dollar offers are cited around the C$ 1.0655 level.

BillyT Daily Forex