European Morning Forex Wrap Up; Market on hold ahead of non-farm payrolls

Fri, Nov 6 2009, 12:36 GMT
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South Korean fx authorities seen buying dlrs to check won's rise - Traders John Lewis weekly dept store sales up 7.8% Swiss adj unemployment flat at 4.1% in October Shanghai share index ends up 0.3%, up 5.6% for the week Japan PM Hatoyama: Japan economy may worsen further BOJ Dep Gov Yamaguchi: Chance of Japan economy experiencing double dip is small Japan Strategy Minister Kan: Strong risk of Japan experiencing double dip French September trade balance -1.755 bln euros, better than median forecast of -3.0 bln - Customs House China needs managed float for yuan, wants no sharp moves. FX reserves diversification will be gradual - PBOC's Fan Moody's Cailleteau: Sees US and UK as resilient AAA-rated countries. Still some questions on AAA euro zone sovereign credits over medium-term. Sees chance of more fiscal slippages in Greece over next 5 yrs UK October input prices +2.6% m/m, +0.1% y/y, stronger than median forcasts of +1.5%, -1.3% respectively. Output prices +0.2% m/m, +1.7% vs median forecasts +0.3%, +1.9% respectively ECB's Nowotny: ECB will probably withdraw liquidity first, then raise rates. Liquidity withdrawal will not be abrupt. Cannot exclude risk of lost decade of economic growth in Europe German September manufacturing orders +0.9% m/m vs median forcast of +1.0% Market in the majors effectively onhold infront of this afternoons non-farm payroll release. EUR/USD started around 1.4880 and gently ticked higher eventually reaching session high 1.4905, where ACB selling emerged capping the rally. Comments from ECB's Nowotny, suggesting any ECB tightening is some ways away, helped pressure the pairing and we've drifted back to where we started, presently at 1.4875. Talk of sell orders at 1.4900 up through 1.4950. Also talk of specific ACB standing sell orders up at 1.4920/30, good till nfps. Also talk of decent stops starting just North of 1.4915, so somewhat of a mixed bag up ahead. Cable finishing morning marginally easier, presently at 1.6590 from an early 1.6615. The pairing rallied early but intially ran into good sell interest at 1.6620, rumoured to have been the BIS. However these rumours were later quoshed, the selling apparently having been down to a French name. After a brief dip though, cable rallied again, reaching session high 1.6635, where decent selling from a UK clearer capped the rally. There was talk of stops gathered around 1.6640, but these remained safe. USD/JPY dipped early to 90.42 from an early 90.65, but talk of decent buy orders at 90.40 lent support. We're presently back up at 90.60. Talk of sell orders up at 90.90, with very large 91.00 option expiry today, well-touted. AUD/USD firmer, presently at .9160, but off session high .9177. Mixed picture up ahead. Talk of sell orders at .9170 through .9190, but also talk of decent-sized buy stops just above .9180.

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