ECB and BOE both Cut Rates
CURRENCY TRADING SUMMARY – 6th March 2009 (00:30GMT)
·U.S. Dollar Trading (USD) made solid gains against the most currencies as the china stimulus plan failed to eventuate and fresh stock weakness sent risk aversion soaring. Weekly Jobless Claims remained high at 639K vs. 679 last week indicating the February NFP will be weak today. Crude Oil closed down $1.77 ending the New York session at $43.61 per barrel. In US share markets, the Nasdaq was down 54 points or 4.00% whilst the Dow Jones fell 281 points or 4.09%. Looking ahead, February Non Farm Payrolls are forecast at -647K vs. -598K previously. The Unemployment Rate is expected at 7.9% vs. 7.6% previously.
·The Euro (EUR) the pair was on weak footing as stock losses mounted pre ECB rate announcement and the 0.5% cut did little to help sentiment. ECB President Trichet indicated that he was willing to cut rates further and the ECB was researching unconventional policies. Overall the EUR/USD traded with a low of 1.2484 and a high of 1.2639 before closing the day at 1.2540.
·The Japanese Yen (JPY) failed in the high 99’s and slumped back as risk aversion prompted heavy cross selling. Business Capex fell -17.3% vs. -15.6% forecast. The market is now awaiting the NFP today for direction. Overall the USDJPY traded with a low of 97.75 and a high of 99.67 before closing the day around 98.10 in the New York session. Looking ahead FX Reserves previously at 1011Bn.
·The Sterling (GBP) was under pressure as the USD strengthened and GBP/JPY selling undermined support. The BOE cut by 0.5% and initiated Quantitative Easing with a 150Bn limit set aside. The market welcomed the clarity and helped the pair to recover and gain especially against the Euro. Overall the GBP/USD traded with a low of 1.4039 and a high of 1.4232 before closing the day at 1.4140 in the New York session. Looking ahead, PPI is forecast to rise 0.1% vs. 0.1% previously.
·The Australian Dollar (AUD) opened just above the 0.6500 before falling back steadily as the china stimulus plan failed to materialize and stocks slipped. Fresh US stock market lows helped the pair to break 0.6400 and close on a weak footing. January Trade balance fell to 0.97Bn vs. 1.1Bn forecast. January Building Permits slipped -3.8% vs. 1.4% forecast. Overall the AUD/USD traded with a low of 0.6358 and a high of 0.6483 before closing the US session at 0.6380.
·Gold (XAU) gained sharply as the market snapped up low prices and risk aversion surged on the back of GM bankruptcy concerns and banking downgrades. Overall trading with a low of USD$908 and high of USD$936 before ending the New York session at USD$932 an ounce.
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
|
EUR/USD |
1.2425 |
1.2457 |
1.2545 |
1.2679 |
1.2751 |
|
USD/JPY |
96.86 |
97.72 |
98.25 |
99.68 |
100.57 |
|
GBP/USD |
1.3929 |
1.3957 |
1.4150 |
1.4233 |
1.4385 |
|
AUD/USD |
0.6249 |
0.6281 |
0.6390 |
0.6528 |
0.6555 |
|
XAU/USD |
874.00 |
900.00 |
933.00 |
963.00 |
978.00 |
·Euro – 1.2650
Initial support at 1.2425 (Nov 21 low) followed by 1.2389 (Nov 13 low). Initial resistance is now located at 1.2679 (Mar 3 low) at followed by 1.2751 (Feb 27 high)
·Yen – 98.25
Initial support is located at 97.72 (Mar 5 low) followed by 96.86 (Feb 27 low). Initial resistance is now at 99.86 (Mar 5 high) followed by 100.57 (Nov 4 high).
·Pound – 1.4150
Initial support at 1.3957 (Mar 2 low) followed by 1.3929 (Jan 27 low). Initial resistance is now at 1.4233 (Mar 5 high) followed by 1.4385 (Feb 26 high).
·Australian Dollar – 0.6390
Initial support at 0.6281 (Mar 3 low) followed by the 0.6249 (Feb 2 low). Initial resistance is now at 0.6528 (Mar 4 high) followed by 0.6555 (Feb 25 high).
·Gold – 933
Initial support at 900 (Mar 4 low) followed by 891 (Feb 9 low). Initial resistance is now at 936 (Feb 27 high) followed by 950 (Round Number).
