Good morning from wonderful Hamburg and welcome to the Varengold Daily FX Report. This morning stock markets fall throughout Asia after the world No. 2 computer maker Dell comment a slowing global economy and also for the technology sector. However we wish you a nice start in this week with hopefully more enjoyable news.
Market review
Hurricane “Gustav” forced the US energy companies to shut down offshore oil production and there refineries. Crude Oil is up nearly $1 to 116.40 while the dollar index rise 0.4% to 77.505, after touching a peak of 77.578 earlier, close to the 8-month high.
A survey from property consultants Hometrack shows a fall in house prices in UK for an 11th straight month in August. The fall of 5.3% is the biggest annuel drop since the survey began in 2001. The bad data of the british housing market is one of the reason why traders value the sterling lower because they expect the BoE rate cuts. The GBP/USD dips 0.7% on the day at 1.8094 after touching a 2-year low of 1.8081. The EUR/GBP touched a record high of 81.39 but recoverd back to 81.11 while the EUR/JPY is down 0.8% to a 4-month low of 158.42.
A private survey in Australia shows manufacturing activity contracts for a third straight month in August. The main reason for this development is the global credit squeeze and the increasing input costs. The RBA plans to reduce interest rates from 7.25% to 7% at this policy conference on Tuesday which would be the first cut in seven years. The AUD/JPY falls to its lowest level since the beginning of April at 92.40.
EUR/CAD
Between June and the middle of August, the EUR/CAD has been trading in a horizontal trend channel with a resistance at 1.6164 and a support level at 1.5700. Last Tuesday the market touched again the support level at 1.53 from the end of May. It seems that the currency pair is now on the way back to its old trend channel which might be a sign for a bullish trend.
GBP/CHF
Since the end of April, the GBP/CHF has been trading in an horizontal trend channel with a resistance at 2.08 and a support level at 2.00. Today the market broke trough the 2.00 support level. The cross happened in combination with a gap. This might be a clear sign for a short trend recruitment.
