USD Surges on Safe Haven Flows
CURRENCY TRADING SUMMARY – 22nd October 2008 (00:30GMT)
·U.S. Dollar Trading (USD) made broad based gains as money managers brought their money back to the US and Commodities slumped on demand concerns. Also supporting the Dollar was plans from the Fed to set up a new program to buy assets from Funds to help them meet record redemption demands. In the U.S. share markets, the NASDAQ was down -73 points (-4.14%) and the Dow Jones was down 231 points (+2.50%). Crude Oil closed down $3.36 ending the New York session at $70.89 per barrel. Looking ahead, Treasury Secretary Paulson Speaks Today.
·The Euro (EUR) traded at its lowest point since February 2007 on USD strength and continued speculation that the ECB will cuts rates aggressively to stop a recession. Also weighing was the large drop in Oil which has kept a close relationship with the Euro this year. 1.3000 is now perilously close and a natural bear target. Overall the EUR/USD traded with a low of 1.3051 and a high of 1.3358 before closing the day at 1.3060 in the New York session.
·The Japanese Yen (JPY) was the strongest currency of the day as Funds pulled their money out of Europe and Carry trades were unwound aggressively. GBP/JPY and AUD/JPY both fell as Equities came off Monday’s rally. USD/JPY held up well but still threatened the 100 level as Stock losses mounted. Overall the USDJPY traded with a low of 100.11 and a high of 102.16 before closing the day around 100.15 in the New York session. Looking ahead, September Japanese Trade Balance seen at 600B Yen and Exports are seen jumping 5.2%.
·The Sterling (GBP) Tracked the Euro lower against the USD as European stocks reversed direction. The pound then took the lead crumbling as Bank of England Governor King stated the UK appeared in recession. Also weighing was October CBI orders falling to -39 from -26 previously. Overall the GDP/USD traded with a low of 1.6650 and a high of 1.7199 before closing the day at 1.6700 in the New York session. Looking ahead, MPC minutes expected at 9-0.
·The Australian Dollar (AUD) was sold heavily after the RBA minutes and Governor Stevens reiterated the markets view that there could be substantial easing of Interest rates. Also weighing was broad USD strength, risk aversion and steep falls in commodities. Overall the AUD/USD traded with a low of 0.6725 and a high of 0.7034 before closing the US session at 0.6750. Looking ahead, Q3 CPI expected at 1% M/M 4.8% Y/Y.
·Gold (XAU) new month lows on USD strength. Cash has become the asset of choice especially as inflation eases around the world. Overall trading with a low of USD$766.20 and high of USD$802.25 before ending the New York session at USD$772 an ounce.
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
|
EUR/USD |
1.2865 |
1.3000 |
1.3020 |
1.3359 |
1.3531 |
|
USD/JPY |
99.27 |
100.12 |
100.20 |
102.41 |
103.07 |
|
GBP/USD |
1.6400 |
1.6500 |
1.6525 |
1.6652 |
1.7000 |
|
AUD/USD |
0.6496 |
0.6725 |
0.6775 |
0.7076 |
0.7239 |
|
XAU/USD |
764.00 |
766.00 |
775.00 |
814.00 |
850.00 |
·Euro – 1.3020
Initial support at 1.3000 (Key Level) followed by 1.2865 (Jan 12 2007). Initial resistance is now located at 1.3359 (Oct 21 high) at followed by 1.3531 (Oct 20 high).
·Yen – 100.20
Initial support is located at 100.12 (Oct 20 low) followed by 99.27 (Oct 16 trend low). Initial resistance is now at 102.41 (Oct 20 high) followed by 103.07 (Oct 14 high).
·Pound – 1.6525
Initial support at 1.6500 (Psych Support) followed by 1.6400 (Key level). Initial resistance is now at 1.6652 (Oct 21 low) followed by 1.7000 (Key level).
·Australian Dollar – 0.6775
Initial support at 0.6725 (Oct 21 low) followed by the 0.6496 (Oct 16 low). Initial resistance is now at 0.7076 (Oct 15 high) followed by 0.7239 (Oct 14 high).
·Gold – 775
Initial support at 766 (Sept 21 low) followed by 764.6 (Sept 15 low). Initial resistance is now at 814 (Oct 17 high) followed by 850.0 (Oct 16 high).
