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Daily Forex Overview

Thu, Feb 5 2009, 09:15 GMT
by Raivis Zile

Dukascopy Swiss FX Group

Previous session overview

On Wednesday, the euro declined versus the dollar and yen on the fall in U.S. stocks and crude oil futures.

EUR was pressured by rumored Russian intervention in the ruble, which necessitates EUR selling. Weak PMI and retails sales numbers did no favors either. EURUSD traded with a low of USD1.2814 and a high of USD1.3069 before closing the day at USD1.2830.

GBP performed well to USD1.4580, before retracing a cent. Large buying (versus the EUR and USD) ahead of the fixing was noted. The British pound rose from USD1.4323 to USD1.4580.

The Japanese yen gained as risk appetite evaporated on ongoing worries about sluggish global economic growth and the delay in the passage of a U.S. fiscal stimulus plan. Risk aversion will continue to provide support to the yen.

The Australian dollar was lower in Asia Thursday, as traders sit tight ahead of expected dire U.S. jobs data Friday, while interest rate futures prices fell across the curve on the back of traders paring rate cut expectations and lingering oversupply concerns.

Market expectation

The euro is little changed against the dollar and yen ahead of the ECB meeting later Thursday.

A 123-point decline in the Dow Jones Industrial Average signaled a decrease in risk appetite, leading traders to sell the euro and buy the dollar, considered a safe-haven asset.

For EURGBP resistance seen placed at stg0.8930/35, a break above to open a move on toward stg0.8960. Support stg0.8885/80, more toward stg0.8870 ahead of stg0.8845/40.

EURUSD nudges to the topside to USD1.2862, but seen meeting resistance from offers placed around this level (23.6% USD1.3071/1.2798). Earlier reports placed offers to USD1.2865 with stops above, which if triggered to open a move on toward USD1.2900 (USD1.2902 38.2%). Bids remain in place to USD1.2795 with talk of stops through USD1.2795/90.

An upcoming speech of SNB Vice President Philipp Hildebrand will be closely watched by markets.

Traders are uneasy taking new positions ahead of three key events, starting with Thursday's Bank of England interest rate decision at 1200 GMT and the European Central Bank Governing Council meeting press conference at 1330 GMT. Friday brings the release of the January U.S. nonfarm payrolls report.

Most important events of the day

Published on  Thu, Feb 5 2009, 09:17 GMT