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Daily FX Report

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EUR/USD reached a 3 week high at 1.5768 on Thursday

Fri, Jun 27 2008, 11:19 GMT
by Varengold Bank Research Team

Varengold Wertpapierhandelsbank AG

Good morning from Hamburg, and welcome to the Varengold Daily FX Report. The weather here in Hamburg has become worse and worse. It doesn’t seem like summer, and our expectations on a better climate have been being reduced. On the topic of Forex, the analysts have also reduced their expectations of the Fed’s ability to increase its interest rate.

Market review

The US economy has been suffering these last few days. Surging oil prices and the fall in the stock markets are leading to a deprecation of the USD against other major currencies on the market. This depreciation is accentuated by the market’s expectations of a rate increase in the Eurozone. The ECB’s hawkish comments might lead analysts to expect a rate increase this year.

As a result, the EUR/USD reached a 3 week high at 1.5768 on Thursday. This morning, the currency pair was down 0.1% at 1.5735. Buying positions from Japanese importers helped the USD to recover some of its post-Fed’s meeting losses. This boost led the JPY to drop against the USD. This morning, the USD/JPY was up 0.3% at 107.10. The AUD/JPY also increased by 0.5% and is currently being traded around 102.70. The current Japanese economic situation is facing some troubles, as the JPY is falling, inflation risks are becoming greater and the Nikkei dropped 2.2 % and hit a 2-month low level of 13,515.

New Zealand’s economy is showing negative signs, as the GDP suffered a 0.3% loss in the first quarter of 2008, showing signs of a recession. Yesterday, the NZD/USD hit a high of 0.7533. It rose an additional 0.7% to 0.7615 earlier last night. This morning, the NZD/JPY was up 1% at 81.40

USD/JPY

After the USD/JPY crossed the resistance at 105.50 at the beginning of June, the pair has been trading in an upward trend channel. However, for more increases the new resistance at 108.37 seems to be too strong. The decreasing volume in the last days and the vain cross attempts might be a sign for a new short trend period.

GBP/USD

Since the End of May, the GBP/USD has been trading in a downward trend channel. After it touched the bottom of the channel in the middle of June, the currency started an upward movement along the blue trend line. The cross through the resistance at 1.9844 might give the pair a further push.

• Download full Daily FX Report with charts

Published on  Fri, Jun 27 2008, 11:58 GMT

Archive

• Japan's Nikkei Stock falls over 5% to a 5-year low under 10,000
  Published On Tue, Oct 7 2008, 09:23 GMT
• Analysts expect that the BoE cut rates to 4.75%
  Published On Mon, Oct 6 2008, 08:51 GMT
• The EUR/USD climbs to a session peak of 1.3871 up nearly a full cent from a low of 1.3772
  Published On Fri, Oct 3 2008, 07:24 GMT
• Commodity prices of New Zealand had their biggest monthly fall in 21 years in September
  Published On Thu, Oct 2 2008, 08:28 GMT
• The U.S. Senate agrees to vote on a $700 billion bail-out package tonight
  Published On Wed, Oct 1 2008, 08:13 GMT

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