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Daily FX Report

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U.K. Prime Minister Gordon Brown will today pledge a 500 million GBP stimulus plan

Mon, Jan 12 2009, 09:51 GMT
by Varengold Bank Research Team

Varengold Wertpapierhandelsbank AG

Good morning from beautiful and cold Hamburg. We hope that you enjoyed your weekend and wish you a good start in the new week. This week will probably influenced by the rate decision of the ECB on Thursday. However, we wish you a successful trading.

Market review

On Friday the EUR/USD lost 1.65 %. Today the currency is also under pressure and fell to 1.3381 in early Tokyo trading, based on speculations that the European Central Bank will cut its key interest rate this week. The EUR/JPY also dropped to a one-month low due to the risk that the recession in the Euro-Zone will be worse than economists expected. The EUR fell against the JPY on Friday from 124.96 at its opening to 121.17 at its low.

U.K. Prime Minister Gordon Brown will today pledge a 500 million GBP stimulus plan to encourage hiring and counter rising unemployment while the United Kingdom provided in the deepest recession for a long time. The EUR/GBP extended its losses for the fifth day and closed on Friday at 0.8887, which imply a weekly loss of 7.24 percent. The GBP/USD fell from 1.5216 at Fridays opening to 1.5164 at its closing and lost today further 0.57 % to 1.5053 at its low.

After a U.S. Report showed that the U.S. unemployment rate rose to 7.2 percent in December, the highest level in almost 16 years, the important U.S. stock indices fell and pull under the AUD/USD to 0.7033. Also the NZD/USD declined from 0.5963 to 0.5928.

GBP/CAD

Since the middle of October 2008, the GBP/CAD has been trading in a bearish trend-channel. On the 6th of January the currency touched the lowest level since 1985 at 1.7169. After hitting the multi-yearlow the currency pair recovered and crossed the 23.6 % retracement line. If the GBP/CAD stabilized over the 23.6 % line, it could boost and may help to climb across its next resistance at 1.8530.

AUD/USD

Since the End of November, the AUD/USD has been trading in a small bullish trendchannel close to the upper Bollinger Bands. It tested the resistance line at 0.7268 on the 7th of January. Now it seems that the AUD/USD returns and is now checking the support on the underneath of the trendchannel near to the lower Bollinger Bands. If it doesn’t cross the support line it might be a confirmation of the trend channel.

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Published on  Mon, Jan 12 2009, 10:08 GMT