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European Session: BoJ Holds Rates Steady

Fri, Nov 20 2009, 11:06 GMT
by Peter Rosentreich

ACM - Advanced Currency Markets


Market Brief

Risk appetite stayed weak in the Asian session, after Wall Street closed lower but, overall, most of the trading in currencies and commodities was well in their ranges. The EURUSD traded between 1.4880 and 1.4940, while spot Gold traded between $1140 and $1147. With no first tier economic releases scheduled today, we don't expect any one way trade of break out of the monthly ranges. But ranges can also be very profitable, especially the EURCHF. The USDJPY remains heavy below 90.61 high, with the break of 88.74 low opening the 88.01 key support.

As was universally expected, the BoJ held its uncollateralized overnight cash rate at 0.1%. The decision was unanimous and the BoJ statement stated that the domestic economy was improving but would continue with its "extremely accommodative" monetary policy. Finance Minister Fujii warned about the dangers of rising bond yields, which could counteract the ultra loose monetary policy and small business improvement initiatives.

Today, China's Central Bank Governor, Zhou Xiao Chuan, said “It’s like watching a tournament,...We just watch the game. Regardless who wins or loses, the issue of whether the winner or loser benefits the spectator doesn’t arise." In short, don't expect pressure from the West to have any influence on China's exchange rate mechanism.

There is little economic data of note today. More significantly, speakers in Frankfurt today include ECB President Trichet and Bundesbank President Weber. Outside the euro area, SNB President Roth will speak in Fribourg.

Snap Shot

Global Indexes Current Level % Change
Nikkei 225 Index9,497.68-0.54
Hang Seng Index22,455.84-0.82
Shanghai Index3,308.35-0.36
FTSE 100 Index5,289.820.41
DAX Index5,735.380.59
SMI Index6,302.180.24
S&P future1,094.300.01

World Markets Current Level % Change
Gold1,145.380.06
Silver18.51-0.13
VIX22.634.62
Crude wti77.550.11
USD Index75.330.07

Todays Calender Estimates Previous Country / GMT
SNB Chairman Roth speaks at the University of Frib----CHF / 09.15
ECB President Trichet gives the keynote address----EUR / 10.30
Core Inflation (% y/y)Oct2.82.9PLN / 12.00
GDP (% y/y)Q3-6.7-10.3MXN / 19.30


Currency Tech

AUDUSD
R 2: 0.9405
R 1: 0.9335
CURRENT: 0.9185
S 1: 0.9130
S 2: 0.9095

USDCAD
R 2: 1.0780
R 1: 1.0689
CURRENT: 1.0647
S 1: 1.0545
S 2: 1.0450

EURJPY
R 2: 134.45
R 1: 134.02
CURRENT: 132.46
S 1: 131.75
S 2: 131.00

USDMXN
R 2: 13.135
R 1: 13.088
CURRENT: 13.044
S 1: 12.999
S 2: 12.945

  • S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot

Advanced Currency Markets, S.A.  | 50 Rue du Rhone CH-1204 Geneva
http://www.ac-markets.com | support@ac-markets.com

Legal disclaimer and risk disclosure

This report has been prepared by AC Markets and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by AC Markets personnel at any given time. ACM is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.

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