EURO
The euro moved lower vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.4810 level and was capped around the $1.4910 level. Technically, today’s intraday low was right around the 38.2% retracement of the move from $1.4520 to $1.4965. Data released in the U.S. today saw the November consumer confidence index decline to 87.3 from a revised 95.2 in October. The decline in consumer sentiment coincides with elevated oil prices and credit market turmoil. Traders await remarks from Philadelphia Fed President Plosser later in the North American session. In eurozone news, German consumer price inflation rose 3.0% y/y in November, its highest level since February 1994 and up from October’s 2.4% level. These data suggest the European Central Bank cannot be complacent about price risks in the eurozone’s largest economy. Also, the German November Ifo business climate index improved to 104.2 from 103.9 in October, defying forecasts for a drop. ECB member Garganas called the euro’s recent moves “sharp and abrupt” and added they are not following economic fundamentals. Euro bids are cited around the US$ 1.4575/ 1.4470 levels.
JPN/CNY
The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥108.85 level and was supported around the ¥107.25 level. Technically, today’s intraday high was right around the 38.2% retracement of the move from ¥111.75 to ¥107.20. The Japanese government downgraded its assessment of employment for the first time in three years and reiterated the overall economy “is recovering, while some weaknesses have been seen recently.” The government also noted the largest economic risk remains the problems in the U.S. subprime market. Data released in Japan today saw the October corporate services price index increase 1.4% y/y, the eleventh consecutive monthly increase. The Nikkei 225 stock index gained 0.58% to close at ¥15,222.85. Dollar bids are cited around the ¥106.55 level. The euro moved higher vis-à-vis the yen as the single currency tested offers around the ¥161.80 level and was supported around the ¥159.35 level. The British pound and Swiss franc appreciated vis-à-vis the yen as the crosses tested offers around the ¥225.60 and ¥98.95 levels, respectively. The Chinese yuan appreciated sharply vis-à-vis the U.S. dollar as the greenback closed at CNY 7.3840 in the over-the-counter market, down from CNY 7.3969.
STERLING
The British pound slumped vis-à-vis the U.S. dollar today as cable tested bids around the US$ 2.0640 level and was capped around the $2.0755 level. Technically, today’s intraday high was right around the 50% retracement of the move from $2.1160 to $2.0355. Most
traders believe Bank of England Monetary Policy Committee may begin
easing interest rates as early as next month, and well into 2008. Cable bids are cited around the US$ 2.0365 level. The euro moved lower
vis-à-vis the British pound as the single currency tested bids around
the ₤0.7160 level and was capped around the ₤0.7195 level.
SWISS
The Swiss franc moved lower vis-à-vis the U.S. dollar today as the greenback tested offers around the CHF 1.1070 level and was supported around the CHF 1.0955 level. Data released in Switzerland today saw the October producer and import price index up 0.2% m/m and 2.7% y/y. These data suggest Swiss National Bank may be forced to tighten monetary policy next month. Also, the UBS October private consumption index improved to 2.23 from 2.01. Dollar offers are cited around the CHF 1.1185 level. The euro and British pound gained ground vis-à-vis the Swiss franc as the crosses tested offers around the CHF 1.6410 and CHF 2.2870 levels, respectively.
