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Daily FX Report

The USD fell against a basket of currencies after gains in the stock market

Mon, May 11 2009, 08:14 GMT
by Varengold Bank Research Team

Varengold Wertpapierhandelsbank AG  |  View company's profile


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Good morning from wonderful Hamburg. We hope you had a great weekend and you are ready for a volatile FOREX market. According to the news, it might be caused by the global economic rebound. However, have a great start in the new week and good luck in trading.


Market review

The EUR/USD rose to a six-week high on expectation the stock markets could extend a twomonth rally as optimism the global recession is easing. The EUR rose to its highest level in four weeks against the JPY after the market get risk appetite, buying higher-yielding assets. According to some economists, tomorrow the Chinese government report will show that exports fell the least in four months, which would add to evidence the worlds economy is reviving. The MSCI World Index rose 0.5 % today, extending nine straight weeks of gains. The MSCI Pacific index of regional shares advanced 0.4 %. But losses in the JPY may be tempered on speculation that Japanese companies bought the currency after it dropped to the lowest level in a month against the EUR. The EUR/JPY rose for a third day to 134.10 after touching a day-high at 134.82. On Friday the EUR/USD climbed over 240 pips, closing the week at 1.3634, which was the highest level since March 25th. Today it increased for a third day and trades currently around 1.3650.

The USD fell against a basket of currencies after gains in the stock market, a U.S. jobs report for April which wasn’t as bad as feared and the stress test’s results that showed banks’ needs for capital were manageable. On Friday the USD/CHF fell 250 pips and reached its lowest level since January 9th. Today the U.S. currency decreased against the JPY for a second time by touching as low as 98.18 after its opening at 99.12 on Friday.


USD/CAD

USDCAD

Since the end of February, the USD/CAD has been moving in a downward trend. The currency pair has reached its lowest level since the end of October 2008. If the market breaks this long-term and psychological support line at 1.15, it could continue its downward trend.


NZD/USD

NZDUSD

Today the NZD rose for the seventh day against the USD by rising 6.8% since the beginning of May. The market has already broken the important resistance line at 0.60. Additionally the MACD is now signalizing further gains. If the currency pair also breaks the long-term bullish trend line, it could make more positive movements.

Published on  Mon, May 11 2009, 08:19 GMT


Varengold Wertpapierhandelsbank AG http://www.varengold.de/ | info@varengold.de

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Legal disclaimer and risk disclosure

This document is issued and approved by Varengold WPH Bank AG. The document is only intended for market counterparties and intermediate customers who are expected to make their own investment decisions without undue reliance on the information set out within the document. It may not be reproduced or further distributed, in whole or in part, for any purpose. Due to international laws/regulations not all financial instruments/services may be available to all clients. You should have informed yourself about and observe any such restrictions when considering a potential investment decision. This electronic communication and its contents are intended for the recipient only and may contain confidential, non public and/or privileged information. If you have received this electronic communication in error, please advise the sender immediately, and delete it from your system (if permitted by law). Varengold does not warrant the accuracy, completeness or correctness of any information herein or the appropriateness of any transaction. Nothing herein shall be construed as a recommendation or solicitation to purchase or sell any financial product. This communication is for informational purposes only. Any market or other views expressed herein are those of the sender only as of the date indicated and not of Varengold. Varengold reserves the right to consider any order sent electronically as not received unless it is confirmed verbally or through other means.
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