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10/4/2008 − the current market sentiment

Thu, Apr 10 2008, 06:34 GMT
by Walid Salah El Din

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Yesterday decline of the US oil inventories data could weaken the greenback across the broad. The broad figure decline by 3.2 Million barrels and also the gasoline declined by 3.4 million barrel ahead of the US driving season. The data derived gold high as well to 930$ area and the EURO could break 1.58 to 1.586 in the Asian session and ahead of today's ECB interest rate decision meeting. The currency market was stagnant waiting for this meeting and MPC meeting. The ECB is expected to leave the interest rate unchanged while the BOE is expected to cut the interest rate by .25%.

The British pound is still under pressure since the decline of Mar Halifax m/m housing prices decline by 2.5% and UK completed mortgages declined to 49.200 by 3.5% in February. The housing figures show that the UK housing market is struggling behind the US housing market and the crediting problems which triggered by the sub prime mortgages bad loans. UK manufacturing increased 0.4% m/m and 1.9% yearly. Industrial production came also higher than expected by .3% and the market was expected a growing by just .2% monthly but the yearly figure came just as the market expectation of 1.3% but these data were not significant enough to move the British pound.

The IMF downgraded the global growth expecting the growth of US this year to be just .5%. The downgrading came on the problems of the US housing market and crediting problems resulted from it and what's most related to it.  The market eye will be closely watching the upcoming G7 meeting in Washington which is expected to discuss the current market turmoil and financial and crediting problems.

It is expected to have an EU criticism of its appreciation as what's reported to be repeated that volatility in the forex market is undesirable and not good for stable growth and the Chinese Yuan is under valued and should reflect fundamentals and the Japanese yen fundamentals are better than what's pricing in the currency markets. The market is directionless currently by these events.

Walid Salah El Din

E-Mail: mail@fx-recommends.com

Published on  Thu, Apr 10 2008, 06:35 GMT