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Daily FX Report

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The OPEC decided to reduce its production target as in 2007 to 28.8 million barrel per day

Wed, Sep 10 2008, 09:12 GMT
by Varengold Bank Research Team

Varengold Wertpapierhandelsbank AG

Good morning from wonderful Hamburg. Against the expectations, the OPEC decided to reduce its production target as in 2007 to 28.8 million barrel per day. However, we wish you a nice day and good luck.

Market review

Export volumes of New Zealand fall in the April-June period (the second quarter in a row) as drought hit farming production. That caused almost an economic recession for the first time in over a decade, but during the second quarter, exports volumes drop 3.7% after a 3.9% fall in the first quarter. On the basis of the data there are no expectations of any influence on the central bank monetary policy. According to some analysts the recession during the first half of 2008 in New Zealand, was deeper than expected. The NZD/USD is up to 0.6684 after touching its 21- month low at 0.6586 last Friday.

US crude oil October futures was down 48 cents at 102.78 a barrel at 01:07 GTM after falling more than 1$ to a session low of 102.06 a barrel earlier, close to the 5-month low after a steep slide the previous day. OPEC President Khelil represents a 520,000 bpd cut from the group’s July output. The EUR/USD climbs to 1.4134 after hitting its 11-month low at 1.4103 yesterday. The Gold price is down to its lowest level in almost a year while a the strong USD and oil price plunge trigger heavy follow-up selling after the previous day’s sharp sink. Probably the speculators have closed some of their gold holding positions and shifted money back to currencies following recent gains in the USD. The Oil price probably has also cut gold’s appeal as a hedge against inflation. Spot gold reached its lowest level since October 2007 at 766$.

GBP/AUD

The GBP/AUD has been trading in a “N-format” after it was breaking out of its old horizontal trend channel. Now we see a resistance at 2.203 and a support level at 2.095. If the market breaks trough the 2.203 level it might continue its upward movement.

NZD/USD

Since the beginning of March the NZD/USD has been trading in a bearish trend channel. After breaking out of the channel the market was starting a recovery before beginning to trade in Fibonacci decreasing lines. If the market doesn’t break trough the upper Fibonacci line it could trade further in a strong bearish phase.

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Published on  Wed, Sep 10 2008, 09:27 GMT