Daily FX Report

The Fed is expected to keep its interest rate low, at 2%.

Wed, Jun 25 2008, 08:21 GMT
by Varengold Bank Research Team

Varengold Wertpapierhandelsbank AG


Good morning from Hamburg, and welcome to the Varengold Daily FX Report. Yesterday, most FOREX participants were paying attention to the Fed’s 2-day meeting. The Fed is expected to make final statements about its meeting and upcoming policies today.

Market review

The Fed is expected to keep its interest rate low, at 2%. According to its first comments, the current economic situation is preventing the Central Bank from raising the interest rate. In actuality, the US economy has been facing some troubles in the past few weeks. Surging oil prices and weakness on the Housing market are the main reasons why US consumer confidence levels have reached a 16 year low. Consequently, the USD dropped against major currencies earlier this week.

This morning, the EUR/USD inched down 0.1% to 1.5555 after hitting 1.5572 yesterday. The market is still waiting for some clear statements on the Fed’s upcoming policies, whether they will combat inflation, or support economic growth.

The USD/JPY went up 0.1% to 107.90. This slight rise is partially due increased demand from Japanese importers for the USD, which allowed the USD to recover the losses, after it hit a daylow of 107.66.

Nikkei’s stock market is down just 0.3% after falling to a 6-week intraday low earlier this night. Additionally, some data has shown that the Japan’s trade surplus fell by 7.6% in May which is higher than expected. As a result, the JPY is down 2% to a 7-month low against the AUD and an 11-month low against the EUR this month. The AUD/JPY is currently being traded at 103.11 and the EUR/JPY is at 167.87.

USD/CAD

Since the middle of May, the USD/CAD has been trading on a fast track upward trend line and stopped the increase at the resistance level at 1.0287. The currency pair rebounded and went into a deceasing phase.

Chart 2

NZD/USD

Since the beginning of March, the NZD/USD has been trading in a downward trend channel. On closer examination of the candlestick chart, we notice a doji and afterwards a decreasing candle. This could be a sign that the currency pair could drop down to the support line of the trend channel.

Chart 4


Pivot Points - Daily FX Support and Resistance Levels
Currency Support 2 Support 1 Pivotpoint Resistance 1 Resistance 2
EUR / USD 1.5428 1.5496 1.5559 1.56271.5690
USD / JPY 106.91 107.38 107.79 108.26 108.67
GBP / USD 1.9584 1.9646 1.9685 1.9747 1.9786
USD / CHF 1.0287 1.0351 1.0410 1.0474 1.0533
AUD / USD 0.9458 0.9507 0.9547 0.9596 0.9636
CAD / USD 1.0069 1.0093 1.0133 1.0157 1.0197
NZD / USD 0.7527 0.7555 0.7576 0.7604 0.7625
EUR / AUD 1.6240 1.6263 1.6294 1.6317 1.6348
EUR / CAD 1.5668 1.5709 1.5773 1.5814 1.5878
EUR / CHF 1.6116 1.6164 1.6201 1.6249 1.6286
EUR / GBP 0.7868 0.7882 0.7905 0.7919 0.7943
EUR / JPY 166.67 167.23 167.81 168.37 168.95
GBP / CHF 2.0333 2.0429 2.0496 2.0592 2.0659
GBP / JPY 211.04 211.78 212.31 213.05 213.58

Daily Calendar & Key FX Events
Date Time (GMT) Economic Indicator Last
24.06.2008 11:45 USICSC chain stores yy 2.1
24.06.2008 12:55 USRedbook mm -0.9
24.06.2008 13:00 USCaseShiller 20 mm -2.2
24.06.2008 14:00 Us Consumer confidence 57.2
24.06.2008 14:00 US Rich Fed comp. index -3.00
24.06.2008 14:00 US Rich Fed service index -6
24.06.2008 23:50 JP Trade balance total 485.0

Published on  Wed, Jun 25 2008, 08:39 GMT

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http://www.varengold.de/ | info@varengold.de

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