Market expectations for Fed rate cuts next week continue to constrain the USD

Daily FX Report

Good morning from wonderful Hamburg and welcome to Varengold’s Daily FX Report. Market expectations for Fed rate cuts next week continue to constrain the USD – a survey result that Investors see an 80% chance of lowering interest rates by 75 basis points and a 20% chance of 50 basis point reduction.

Markets review

On Wednesday the EUR rose to a fresh lifetime high at 1,5574 against the USD caused by extending gains seen on strong euro zone economic data and doubts about the long-term sustainability of the past Federal Reserve 200 billion USD liquidity measures.

The USD tumbled 1,50 % against the JPY to its lowest since 1995 at 100,02. Traders say the drop was fuelled by a flurry of stop-loss sellings related to options and structured products. Such stop-loss sales were triggered at levels around 101,00 and 100,50. In the early trading session the USD held above the psychologically important 100,00 level and quotes around 100,40 this morning.

Australian employment rose 36.700 in February, well above expectations for a 15.000 increase. The unemployment rate droped to 4,00% from 4,15% in January. After publication of this good news the AUD/USD jumped from 0,9355 up to 0,9394.

Technical analysis

USD/CHF

Since the end of last week we touched 1,0150 the third time in the CHF/USD so there could become a new side ward movement. However if there is a real support can be profits in intraday long positions.

USD/JPY

Since the beginning of March a support level at 101,21 has developed in the USD/JPY currency pair. Moreover, there can be generated a tradable sideward channel propably.

USD/JPY chart


Currency	Support 2	Support 1	Pivotpoint	Resistance 1	Resistance 2
EUR / USD	1,5494	1,5529	1,5558	1,5593	1,5622
USD / JPY	99,30	100,24	100,96	101,90	102,62
GBP / USD	2,0194	2,0232	2,0292	2,0330	2,0390
USD / CHF	1,0052	1,0093	1,0130	1,0171	1,0208
AUD / USD	0,9275	0,9304	0,9361	0,9390	0,9447
CAD / USD	0,9851	0,9873	0,9895	0,9917	0,9939
NZD / USD	0,7982	0,8023	0,8057	0,8098	0,8132
EUR / AUD	1,6467	1,6569	1,6625	1,6727	1,6783
EUR / CAD	1,5339	1,5370	1,5397	1,5428	1,5455
EUR / CHF	1,5678	1,5727	1,5758	1,5807	1,5838
EUR / GBP	0,7646	0,7661	0,7670	0,7685	0,7693
EUR / JPY	154,62	156,05	157,01	158,44	159,40
GBP / CHF	2,0440	2,0492	2,0547	2,0599	2,0654
GBP / JPY	201,71	203,45	204,76	206,50	207,81


Date	Time (GMT)	Economic Indicator	Last
13.03.2008	12:30	USExport prices	1,2
13.03.2008	12:30	USImport prices	1,7
13.03.2008	12:30	USInitial claims	351
13.03.2008	12:30	USJobless claims 4-wk avg	359,5
13.03.2008	12:30	USjobless contin claims	2831
13.03.2008	12:30	USRetail sales mm	0,3
13.03.2008	14:00	USBusiness Inventories	0,6

Download full report with charts

Published On Thu, Mar 13 2008, 11:13 GMT

About this Report

Varengold Wertpapierhandelsbank AG

http://www.varengold.de/

info@varengold.de

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