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Daily FX Report

The USD fell to a one−month low versus the EUR on Wednesday

Thu, May 22 2008, 08:36 GMT
by Varengold Bank Research Team

Varengold Wertpapierhandelsbank AG

“How could I double up the value of my car?” The easy answer: “Fill it up!” In consideration of the new record high oil price of 135,04 USD, the joke seems to become the truth.

Markets review

The USD fell to a one-month low versus the EUR on Wednesday after the Federal Reserve cut its growth forecast for 2008 and warned of higher unemployment. The central bank also lifted its inflation forecast and suggested that it had finished cutting interest rates after chopping them to 2% last month. In contrast a surprising improvement in German business sentiment bolstered the case for higher interest rates in the euro zone.

Bank of Japan Gov. Shirakawa repeats that the country’s economy is slowing down because of high energy prices and raw material costs, but is expected to return to a moderate growth path in the future. He says monetary conditions remain accommodative, adding the BOJ would conduct monetary policy flexibly. The USD/JPY was down 0,6% at 103,03.

New Zealand economy will slow in 2009 before rebounding in 2010 Finance Minister Michael Cullen says in his budget speech. He adds economic growth would bottom out in March at 1,5%, before growing by 2,3% in 2010 and 3,2% in 2011. The personal rate cuts, which announced in the in the government budget, are unlikely to trigger further RBNZ rate hikes but that would help to cushion the economic slowdown. The NZD/USD rises 1,4% to 0,7883, rebounding sharply from earlier low of 0,7760.

Technical analysis

NZD/USD

The NZD/USD trades still in its midterm downward range. Now it is close to the upper side of the short-term trend channel. This could be turn if it not cross the upper trend channel line clearly.

EUR/CAD

After touching the resistance at 1,6234 the EUR/CAD stopped its downward trend and trades now in a tradable side range between 1,5612 and 1,5382, were the pair surging for the next trend impulse. The next breakout of this trading rang could give a further midterm trend.

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Published on  Thu, May 22 2008, 08:58 GMT

Archive

• 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
• Crude Oil is up nearly $1 to 116.40
  Published On Mon, Sep 1 2008, 08:22 GMT

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