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The euro weakened vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.4625 level and was capped around the $1.4800 figure. The Federal Reserve, European Central Bank, Bank of England, Bank of Japan, and Swiss National Bank today announced they will extend their liquidity-providing facilities and operations through January 2010. The common currency was partially dragged lower by comments from Bank of England Governor King who said the weaker sterling has been “helpful” in reducing economic and financial imbalances. News that BoE would meet with London-based economists on Tuesday to discuss economic policies. Data released in the eurozone today saw the French number of unemployed rise 0.7% m/m to 2.553 million. Also, the German Ifo business confidence index rose to 91.3 in September from 90.5 in August, the sixth consecutive improvement but below expectations. The German economy, however, could suffer from political uncertainty, difficult credit conditions, and a weakening labour market. The ECB’s September monthly bulletin reported the EMU-16 economy is stabilizing. ECB member Quaden reported the worst of the financial crisis is over but said business may not return to normal. In U.S. news, data released in the U.S. today saw August existing home sales off 2.7% to an annualized 5.10 million rate. Weekly initial jobless claims fell to 530,000 from a revised 551,000 while continuing claims fell to 6.138 million from a revised 6.261 million. Euro bids are cited around the US$ 1.3900 figure.
¥/ CNY
The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥90.35 level and was supported around the ¥91.60 level. Bank of Japan announced it will extend liquidity provision measures through January 2010 to cushion money markets in concert with other central banks. Yen borrowing costs declined to a three-year low with three-month Libor at 0.34750, the lowest level since June 2006. Similarly, U.S. dollar three-month Libor printed at a record low of 0.28500. U.S. dollar rates have been below Japanese dollar rates since 24 August and that has resulted in the U.S. dollar being used as a carry trade funding currency. Data released in Japanese overnight saw the July all industry activity index climb +0.5% with industrial production up 2.1% m/m and the tertiary index up +0.6% m/m. Additionally, the August trade surplus came in stronger-than-expected at ¥187.5 billion. The Nikkei 225 stock index gained 1.67% to close at ¥10,544.22. U.S. dollar offers are cited around the ¥94.75 level. The euro moved lower vis-à-vis the yen as the single currency tested bids around the ¥133.35 level and was capped around the ¥134.65 level. The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥146.30 level while the Swiss franc moved lower vis-à-vis the yen and tested bids around the ¥88.15 level. In Chinese news, the U.S. dollar lost ground vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8218 in the over-the-counter market, down from CNY 6.8256. People’s Bank of China Deputy Governor Hu yesterday reported G20 nations should consider establishing an international wealth fund to invest a portion of members’ current account surpluses. There is continued speculation among dealers that Chinese monetary authorities may allow the yuan to appreciate further vis-à-vis the U.S. dollar.
Technical Outlook at 1230 GMT (EDT + 0400)
(Bid Price) (Today’s Intraday Range)
EUR/ USD 1.4647 1.4802, 1.4627
USD/ JPY 91.24 91.62, 90.35
GBP/ USD 1.6058 1.6385, 1.6021
USD/ CHF 1.0303 1.0323, 1.0207
AUD/USD 0.8642 0.8768, 0.8619
USD/CAD 1.0907 1.0946, 1.0706
NZD/USD 0.7156 0.7269, 0.7148
EUR/ JPY 133.61 134.66, 133.33
EUR/ GBP 0.9120 0.9156, 0.8989
GBP/ JPY 146.50 149.54, 146.28
CHF/ JPY 89.51 89.04, 88.16
Support Resistance Support Resistance
EUR/ USD USD/ JPY
L1. 1.4470 1.4915 88.60 93.30
L2. 1.4355 1.5140 87.10 95.50
L3. 1.4175 1.5360 86.10 98.85
GBP/ USD USD/ CHF
L1. 1.6115 1.6685 1.0275 1.0580
L2. 1.5720 1.6830 1.0040 1.0695
L3. 1.5405 1.7040 0.9750 1.0885
AUD/ USD USD/ CAD
L1. 0.8450 0.8830 1.0535 1.0945
L2. 0.8300 0.9050 1.0365 1.1125
L3. 0.8070 0.9120 1.0155 1.1355
NZD/ USD EUR/ JPY
L1. 0.6880 0.7125 131.45 135.75
L2. 0.6750 0.7260 129.75 136.90
L3. 0.6535 0.7395 127.00 138.75
EUR/ GBP EUR/ CHF
L1. 0.8795 0.8995 1.5110 1.5380
L2. 0.8675 0.9105 1.4905 1.5580
L3. 0.8320 0.9225 1.4670 1.5880
GBP/ JPY CHF/ JPY
L1. 146.10 152.50 86.30 88.65
L2. 142.05 157.75 85.40 90.10
L3. 135.70 161.70 81.55 91.60
SCHEDULE
Thursday, 24 September 2009
all times GMT
(last release in parentheses)
N/A Japan September purchasing manager index, manufacturing (53.6)
0100 Australia August HIA new home sales (0.1% m/m)
0130 Australia Reserve Bank of Australia Financial Stability Review
0430 Japan July all industry activity index (0.1% m/m)
0700 Japan August convenience store sales (-7.5% y/y)
0800 Italy July trade balance
0800 Germany September Ifo, expectations (95.0)
0800 Germany September Ifo, business climate (90.5)
0800 Germany September Ifo, current assessment (86.1)
1230 US Weekly initial jobless claims (545,000)
1230 US Continuing jobless claims
1400 US August existing home sales (5.24 million)
1400 US August existing home sales (7.2% m/m)
1600 France August total jobseekers
2245 NZ August trade balance
2350 Japan Bank of Japan Policy Board meeting minutes
2350 Japan August corporate service prices (-3.4% y/y)
Friday, 25 September 2009
all times GMT
(last release in parentheses)
N/A Germany August import price index (-0.9% m/m)
N/A Germany August import price index (-12.6% y/y)
0640 France September consumer confidence
0650 France Q2 gross domestic product (0.3% q/q)
0650 France Q2 gross domestic product (-2.6% y/y)
0800 Italy July retail sales (-0.4% m/m)
0800 Italy July retail sales (-0.8% y/y)
0800 Eurozone August M3 money supply (3.0% y/y)
0830 UK Q2 total business investment (-10.4% q/q)
0830 UK Q2 total business investment (-18.4% y/y)
0930 CH September KOF economic forecast
1230 US August durable goods orders (5.10%)
1230 US August durable goods, ex-transportation (1.10%)
1400 US September University of Michigan consumer sentiment (70.2)
1400 US August new home sales (433,000)
1400 US August new home sales (9.6% m/m)
1715 US Federal Reserve Governor Warsh speaks
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