Daily news bulletin covering the foreign exchange market
| 05.09.2008 09:53:38 |
| This market comment is published by our Customer Forex Trading Desk and is not the product of our Financial Research department. As such, these recommendations are not subject to the Swiss Bankers Association's Directives on the Independence of Financial Research. |
 Hot News |
| Short-term Technical Analysis |
| Crude Oil and Precious Metals |
| Economic Data |
| Hot News |  |
| The UK HALIFAX HOUSE PRICE INDEX was down 12.7% Y/Y IN AUGUST, the BIGGEST FALL SINCE RECORDS BEGAN IN 1983. The Swedish Riksbank has raised its key interest rates by 0.25% to 4.75%. The ECB and the BOE have left their interest rates unchanged at 4.25% and 5.00% respectively. US labour costs fell by 0.5% in the second quarter of 2008 and productivity was up by 4.3% for the same period. The number of Americans filing for first time unemployment benefits rose to 444,000. The ISM non-manufacturing PMI climbed to 50.6 for August. | |
| Short-term Technical Analysis |  |
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| Cross | Spot level | Previous day move (in pips) | Supp. | Res. | Daily target |
| USD/CHF | 1.1091 | 0.0033 | 1.1080 | 1.1145 |
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Daily chart
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1.1040 | 1.1180 | |||
| Short-term chart |
1.1010 | 1.1200 | |||
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Comments Forex markets have been plagued by sharp volatility in the past 24 hours with the publication of a slew of economic indicators and statements by central bank officials. The US ADP National Employment Report showed that private-sector employers trimmed 33,000 new jobs in August, compared to July’s revised figure of +1,000. The USD/CHF remained wedged between 1.1009 and 1.1180. Our target of around 1.1250 should be difficult to reach for the time being, and we expect to finish the week in the range of 1.1000-1.1150. |
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| EUR/USD | 1.4308 | -0.0177 | 1.4260 | 1.4330 |
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Daily chart
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1.4210 | 1.4365 | |||
| Short-term chart |
1.4170 | 1.4410 | |||
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Comments The euro had its worst day of the year yesterday with the EUR/USD falling from 1.4544 to 1.4213, its lowest level this year. The ECB voted to leave its interest rates on hold and Jean-Claude Trichet was much more pessimistic in the statements he issued than previously. With the threat of a recession looming over the Eurozone, it doesn’t look like the central bank will be able to raise interest rates despite rampant inflation. We had been targeting 1.4250 for the EUR/USD pair, but now that this mark has been reached we may very well see the pair tumble to as low as 1.4000 in the near future. |
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| USD/JPY | 106.59 | -1.47 | 106.45 | 107.40 |
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Daily chart
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105.90 | 107.60 | |||
| Short-term chart |
105.65 | 108.10 | |||
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Comments The JPY has had a stellar week, gaining a lot of territory against all the major currencies. The USD/JPY fell from 108.56 to 105.70, overstepping one-by-one all the supports we gave throughout the week. The EUR/JPY plummeted from 157.74 to 150.60, or a decline of more than 4.5% in just one session (a record since 1998). An upward correction in the yen was widely expected, but the extent of the correction and how quickly it happened is quite remarkable. The BoJ’s currency reserves in dollars have slipped to 996.74 billion. Our new trading range is 105.50-107.50. |
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| EUR/CHF | 1.5869 | -0.0148 | 1.5835 | 1.5895 |
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Daily chart
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1.5810 | 1.5930 | |||
| Short-term chart |
1.5790 | 1.5960 | |||
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Comments The EUR/CHF has taken the road less travelled after falling from 1.6051 to 1.5815, finally breaking below the 1.6000 mark. The CHF and JPY have appreciated on the back of the fall in world equity markets, lower commodity prices, the closing of carry-trade positions and negative statements by Jean-Claude Trichet. We now think the pair will trade between 1.5750 and 1.6000 in upcoming sessions. |
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| GBP/USD | 1.7586 | -0.0164 | 1.7535 | 1.7625 |
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Daily chart
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1.7505 | 1.7665 | |||
| Short-term chart |
1.7485 | 1.7680 | |||
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Comments The Bank of England did not dare to cut interest rates after a series of weak economic indicators, as it was felt that inflation was still too high. Yesterday, the Cable fell yet again from 1.7859 to 1.7537. The dollar is benefiting from extremely favourable conditions and should pull the cable down to 1.7500 today. Employment figures due out today could momentarily derail the dollar’s positive performance. Our expected trading range for today is 1.7475-1.7675. |
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| Crude Oil and Precious Metals | |
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| Spot | Pips move | ||
| Crude Oil | 107.82 | -1.51 | Daily chart |
| Platinum | 1373.50 | 44.00 | Daily chart |
| Gold | 798.25 | -3.90 | Daily chart |
| Silver | 12.79 | -0.01 | Daily chart |
| Economic Data | |
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| GMT Time | Economic data | Country | Period | Forecast | Previous |
| 11:00 | INDUSTRIAL OUTPUT M/M | GER | JUL | -0.5% | 0.2% |
| 13:30 | MANUF. PAYROLL | USA | AUG | -35'000 | -35'000 |
| 13:30 | NON-FARM PAYROLLS | USA | AUG | -75'000 | -51'000 |
| 13:30 | UNEMPLOYMENT RATE | USA | AUG | 5.7% | 5.7% |
