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Daily FX Report

The British consumer morale falls in April to its lowest since records began four years ago

Wed, May 7 2008, 13:23 GMT
by Varengold Bank Research Team

Varengold Wertpapierhandelsbank AG

We have reached the middle of this week and are looking forward to rate decision of the ECB and BoE tomorrow.

Markets review

The British consumer morale falls in April to its lowest since records began four years ago. Additionally, a survey shows the number of permanent job placements in Britain fell for the second time in three month. This is the weakest growth in vacancies for permanent staff since mid-2003. The GBP/USD changed only a little on Tuesday but falls ~0,2% against the AUD, EUR and JPY.

AUD/JPY is solid, supported by rising commodity prices. Cross/JPY dealings lead the market at the moment because the JPY appears to be under pressure on the prospect of BoJ keeping rates on hold at the low of 0,5% for a while.

After a bigger than expected quarterly loss of Fannie Mae published yesterday, the USD edged lower against the EUR and JPY. Fannie Mae, the largest provider of US home financing, posted a $2,19 billion loss in the first quarter. This news suggest more financial market turmoil ahead and disprove estimates that the subprime crisis is over. However the USD rose in the early Wednesday session after a Federal Reserve official Thomas Hoerning said that interest rates will eventually need to be risen, highlighting that the Fed might go with a relaxing policy after aggressive rate cuts. The hawkish comments give a broad boost to the greenback with a small recovery this morning. The EUR/USD drops 0,4% to a low of 1,5467.

Technical analysis

EUR/AUD

The EUR/AUD established a down trend channel a second time in series. After the first down trend broke through the upper trend channel line, there was a small hope for bullish markets. But the currency pair went back on his way down. At the moment it is less than 1,6400 and there is no sign for a fast comeback.

EUR/USD

In February and March the EUR/JPY tried two times to cross the resistance at 161,38. In the third attempt the EUR/JPY broke through the strong resistance line. Now this mark works as a support and was touched the first time. It rebounded in this level and this could be a sign for a bullish market in future.

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Published on  Wed, May 7 2008, 13:42 GMT

Archive

• News from the US credit market
  Published On Mon, Sep 8 2008, 10:46 GMT
• The stop-loss situation
  Published On Fri, Sep 5 2008, 07:44 GMT
• The ECB and BoE are widely to leave interest rates at 4.25 % and 5.00 %
  Published On Thu, Sep 4 2008, 08:36 GMT
• Yesterday the crude oil decreased 11$
  Published On Wed, Sep 3 2008, 08:17 GMT
• RBA cuts it rate by 0.25 % to 7.00 %
  Published On Tue, Sep 2 2008, 08:29 GMT

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