Daily news bulletin covering the foreign exchange market
| 03.07.2009 09:40:52 |
| 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 Swedish Riksbank surprised markets by cutting its key interest rates by a quarter of a percentage point to 0.25%. The ECB, however, left its key interest rates on hold at 1.00% as had been expected. Swiss National Bank Governing Board member Thomas Jordan said that the central bank was still willing to intervene in currency markets to prevent further appreciation of the Swiss franc. Eurozone producer prices fell 0.2% on the month in May and declined 5.8% on the year, the largest annual decline since comparable records began in January 1982. Unemployment in the Eurozone rose to a 10-year high of 9.5% in May. In the US, factory orders jumped 1.2% in May from April, while durable goods orders were up 1.8% on the month. These figures exceeded analysts’ forecasts. | |
| Short-term Technical Analysis |  |
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| Cross | Spot level | Previous day move (in pips) | Supp. | Res. | Daily target |
| USD/CHF | 1.0846 | 0.0076 | 1.0820 | 1.0910 |
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Daily chart
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1.0795 | 1.0950 | |||
| Short-term chart |
1.0740 | 1.1025 | |||
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Comments With US unemployment continuing to grow and reaching 9.5%, and non-farm payrolls falling by a worse-than expected 467,000 in June following May’s decline of 322,000 jobs, USD interest rates eased by around 15 basis points. As a result, market confidence about any imminent improvement in the world economy has dwindled sharply. Despite this gloomy backdrop, though, the greenback was able to gain some ground, The USD/CHF advanced from 1.0742 to 1.0900, and it would appear that any breach of the bottom of our range of 1.0750-1.1000 has been delayed for the time being. |
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| EUR/USD | 1.4002 | -0.0112 | 1.3920 | 1.4035 |
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Daily chart
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1.3890 | 1.4080 | |||
| Short-term chart |
1.3825 | 1.4155 | |||
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Comments As had been expected, the ECB left its interest rates on hold yesterday. ECB President Jean-Claude Trichet remains sceptical about any recovery in the near future and is expecting an even more acute economic slowdown in the second half of 2009. In the face of this dismal news, the EUR/USD retreated from 1.4154 to 1.3930 and is thus hovering around our pivotal rate of 1.4000 yet again. With US markets closed today, the EUR/USD should end the week close to this point. |
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| USD/JPY | 95.99 | -0.63 | 95.65 | 96.25 |
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Daily chart
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95.30 | 97.00 | |||
| Short-term chart |
95.05 | 97.20 | |||
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Comments In a textbook case of correlation, the yen advanced on disappointing macroeconomic figures published in Europe and the US yesterday (see above). The USD/JPY followed the same road south as equity markets and slid from 96.88 to 95.71, whiles the EUR/JPY cross trimmed previous gains and tumbled from 136.76 to 133.60. We are now neutral on the pair and think it should trade towards the lower end of our range between 95.00 and 98.00. |
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| EUR/CHF | 1.5188 | -0.0009 | 1.5175 | 1.5255 |
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Daily chart
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1.5150 | 1.5290 | |||
| Short-term chart |
1.5100 | 1.5325 | |||
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Comments The statement made by Swiss National Bank Governing Board member Thomas Jordan mentioned above was the only event that caused any significant move in the EUR/CHF yesterday. The pair quickly rose from 1.5192 to 1.5257 before eventually losing steam and coming back down to 1.5178 in the wake of the dismal macro indicators published yesterday. Our expected trading range heading into the weekend is 1.5150-1.5225. |
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| GBP/USD | 1.6397 | -0.0063 | 1.6325 | 1.6435 |
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Daily chart
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1.6280 | 1.6470 | |||
| Short-term chart |
1.6230 | 1.6500 | |||
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Comments The Cable has eased from 1.6500 to 1.6324 since this time yesterday, due mainly to the dollar gaining back some ground against the major currencies. The sharp decline in the oil price since the start of the week (from $73.38 to $66.10, i.e. drop of more than 10%!) has provided support for the US currency. The pair is still trading within our range between 1.6200 and 1.6600, and we do not expect it to break out at either end between now or the close of the week. |
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| Crude Oil and Precious Metals | |
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| Spot | Pips move | ||
| Crude Oil | 66.82 | -2.43 | Daily chart |
| Platinum | 1183.50 | -5.00 | Daily chart |
| Gold | 933.35 | -5.95 | Daily chart |
| Silver | 13.42 | -0.31 | Daily chart |
| Economic Data | |
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| GMT Time | Economic data | Country | Period | Forecast | Previous |
| 08:15 | CPI M/M | SWI | JUN | 0.10% | 0.20% |
| 08:15 | CPI Y/Y | SWI | JUN | -1.00% | -1.00% |
| 08:53 | SERVICES PMI | GER | JUN | 44.30 | 45.20 |
| 08:58 | SERVICES PMI | EMU | JUN | 44.50 | 44.80 |
| 08:58 | COMPOSITE PMI | EMU | JUN | 44.40 | 44.00 |
| 09:28 | SERVICES PMI | UK | JUN | 52.00 | 51.70 |
| 10:00 | RETAIL SALES M/M | EMU | MAY | -0.10% | 0.20% |
| 10:00 | RETAIL SALES Y/Y | EMU | MAY | -2.70% | -2.30% |
