EURO

The euro fell sharply vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.5670 level and was capped around the $1.5795 level. Technically, today’s intraday low was right around the 50% retracement of the move from $1.5305 to $1.6040. The common currency was dented by a further deterioration in energy prices as NYMEX crude oil futures for September delivery traded as low as a $124 handle. Comments from U.S. Treasury Secretary Paulson added to the dollar’s gains as did remarks from Philadelphia Fed President Plosser. Paulson noted a strong dollar “is really very important” while Plosser again noted escalating inflation may result in higher interest rates before labour and financial markets recover. Traders await comments from Federal Reserve Governor Mishkin later in the day and the release of U.S. existing home sales data tomorrow followed by new home sales data on Friday.

In eurozone news, the German July Ifo business sentiment index will be released tomorrow and many economists see it printing around 100.2. Data released today saw EMU-15 May industrial orders off 3.5% m/m and off 4.4% y/y. German Chancellor Merkel warned 2009 economic growth will likely be below 2008’s level. Euro bids are cited around the $1.5645/ $1.5230 levels.

JPN/CNY

The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥107.90 level and was supported around the ¥107.15 level. Technically, today’s intraday low was right around the 23.6% retracement of the move from ¥102.65 to ¥108.55. The pair reached its highest level since 26 June. Traders await the release if consumer price inflation data on Friday. Some dealers believe the yen could correct a little bit if consumer price inflation prints above 2.0%. Bank of Japan’s “understanding of stable prices” is pegged at 0% to 2.0%. The central bank has recently confirmed it sees inflation and growth risks to be roughly balanced thus a further spike in inflation is unlikely to have a major impact on monetary policy now. The Nikkei 225 stock index gained 0.97% to close at ¥13,312.93. Dollar bids are cited around the ¥103.65 level.

The euro came off vis-à-vis the yen as the single currency tested bids around the ¥169.10 level and was capped around the ¥169.95 level. The British pound moved higher vis-à-vis the yen as sterling tested offers around the ¥215.85 level while the Swiss franc weakened vis-à-vis the yen as the pair tested bids around the ¥103.75 level. The Chinese yuan depreciated vis-à-vis the U.S. dollar as the greenback closed at CNY 6.8297 in the over-the-counter market, up from CNY 6.8217.

STERLING

The British pound appreciated vis-à-vis the U.S. dollar today as cable tested offers around the US$ 2.0030 level and was supported around the $1.9900 figure. Technically, today’s intraday high was right around the 38.2% retracement of the move from $2.1160 to $1.9335. Sterling moved higher following the release of Bank of England’s July Monetary Policy Committee meeting minutes. Seven policymakers voted for no change in rates while Blanchflower voted for a 25bps decrease as expected. Unexpectedly, MPC member Besley voted for a +25bps rate hike and this prompted the move higher.

Data released in the U.K. today saw U.K. manufacturers’ confidence fall as price pressures reached a new eighteen-year high. Other data released today saw the CBI monthly order book balance fall to -8 from +1 in May while BBA mortgage approvals fell to a new series low in June. Traders await the release of June retail sales data tomorrow. Cable bids are cited around the US$ 1.9870/ 1.9360 levels.

The euro moved lower vis-à-vis the British pound as the single currency tested bids around the ₤0.7840 level and was capped around the ₤0.7930 level.

SWISS

The Swiss franc depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the CHF 1.0400 figure and was supported around the CHF 1.0290 level. Technically, today’s intraday high was right around the 23.6% retracement of the move from CHF 0.9645 to CHF 1.0625. U.S. dollar offers are cited around the CHF 1.0395 level.

The euro and British pound moved higher vis-à-vis the Swiss franc as the crosses tested offers around the CHF 1.6310 and CHF 2.0785 levels, respectively.

Posted in Categories: Contributor, External Research, Forex.

(1 votes, average: 5 out of 5)

 Loading ...