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Asian Snap: China revives the reserve currency debate and pushes for more Forex diversification

Thu, Jul 2 2009, 09:20 GMT
by Peter Rosentreich

ACM - Advanced Currency Markets


Market Brief

Vice foreign minister He Yafei said yesterday that he wasn’t aware that China had asked the issue of a global reserve currency to be on the agenda for next week’s G8 summit. This saw the dollar drop, sending the EURUSD to a high of 1.4201. Despite the consternation at the minister’s misinformation his comments on the need for a more stable and potentially non-sovereign global reserve currency ignited debate on the matter – this isn’t much of a surprise as China is the largest holder of foreign exchange reserves and U.S Treasuries.

Focus today is on the NFP’s (12:30 GMT) and ECB rate decisions (11:45 GMT). Currency markets have been quite jittery as dollar driven moves show an inherent “tug of war” between the risk adverse and the risk takers. ADP report came in at -473K yesterday while consensus was at -395K – Consensus for the NFP’s is at -365K with some economists expecting as much as -425K. A weaker number would be bullish dollar as it would reaffirm the plight of the risk adverse. Riksbank cut it’s rates this morning by 25bps – another sign that we haven’t seen the end of this recession. The ECB is largely expected to keep it’s rates at 1.00%

Snap Shot

Global Indexes Current Level % Change
Nikkei 225 Index9876.15-0.64
Hang Seng Index19178.05-1.09
Shanghai Index3060.251.73
FTSE 100 Index4291.32-1.14
DAX Index4820.82-1.73
DJIA futures8402-0.55
Nasdaq futures1471.25-0.51

World Markets Current Level % Change
Gold937.78-0.32
Silver13.71-0.33
VIX26.22-0.49
Crude wti69.12-0.27
USD Index79.990.47

Todays Calender Estimates Previous Country / GMT
Euro Zone Unemployment rate9.40%9.20%EUR / 09:00
ECB Rate Decision1.00%1.00%EUR / 11:45
US Change in Non-Farm Payrolls-365K-345KUSD / 12:30
US Unemployment Rate9.60%9.40%USD / 12:30


Currency Tech

AUDUSD
R 3: 0.8375
R 2: 0.8263
R 1: 0.8150
CURRENT: 0.8026
S 1: 0.8025
S 2: 0.7985
S 3: 0.7930

EURJPY
R 3: 139.20
R 2: 138.33
R 1: 136.46
CURRENT: 136.34
S 1: 135.04
S 2: 134.35
S 3: 133.00

USDSGD
R 3: 1.4800
R 2: 1.4748
R 1: 1.4649
CURRENT: 1.4490
S 1: 1.4454
S 2: 1.4385
S 3: 1.4334

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

Published on  Thu, Jul 2 2009, 09:28 GMT


Archive

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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