One Stop Centre of Financial Market Trading blog

Morning Forex Overview

2010-11-02T17:14:00.000+08:00

Previous session overview

The euro rose against the dollar in Asia on Tuesday due to knock-on effects from the Australian dollar's surge, which was propelled by the Reserve Bank of Australia's surprise interest-rate hike.

The central bank tightened its benchmark cash rate by 25 basis points to 4.75%, a move traders said was a big surprise. Many market participants had believed the RBA would leave rates unchanged.

While the Australian currency rose sharply, the euro also benefited from the rate hike as the two currencies are closely correlated.

The Australian dollar rose to USD0.9990 from USD0.9881 and to JPY80.43 from JPY79.63 before the RBA's announcement. The euro was at USD1.3927 and JPY112.16 as of 0450 GMT from USD1.3885 and JPY111.91 on Monday in New York.

The U.S. currency was at JPY80.52 at 0450GMT from JPY80.60, and dealers said it could fall below the all-time low of JPY79.75 later in the global day.

The ICE Dollar Index, which tracks the greenback against a trade-weighted basket of currencies, was at 77.090 from 77.294.

Sterling, now higher against the dollar, is likely to consolidate with risks skewed lower, while investors await the Fed's move and how it could impact the pound, which itself is vulnerable to weak U.K. housing data. Against the euro, the pound is now a tad lower, with the cross buffeted by reduced expectations the Bank of England will announce more bond purchases Thursday, despite recent data.

Market expectation

Dealers said the dollar should keep weakening against not only the euro but also the yen, as short-term speculators are decreasing their holdings of the greenback ahead of a two-day Federal Open Market Committee meeting ending Wednesday.

Many investors think the FOMC will take additional easing measures to prop up the economy. This should push down yields on U.S. bonds and make the U.S. currency less attractive.

EURCHF is now in a bullish trend, with near-term upside potential seen to 1.3924. Above that area, there is scope for gains to 1.4041, say technical analysts. Near-term support is pegged at 1.3540.

European stocks are expected to open largely unchanged Tuesday after an uninspiring close on Wall Street Monday and little direction from Asia overnight, but eyes will be on a slew of earnings in the U.K. ahead of key events in the U.S.

Most important events of the day

Nov 02	Count.	Event	For	Unit	Cons.	Prev.
03:30	AU	RBA Interest Rate announcement
07:00	IE	Manufacturing PMI	Oct	Index		48.4
08:00	ES	Unemployment	Oct	k	82.8	48.1
08:00	GB	Halifax House Price Index (2nd-6th)	Oct	% 3m y/y	0.8	2.6
08:00	GB	Halifax House Price Index (2nd-6th)	Oct	% m/m	0.6	-3.6
08:15	ES	Manufacturing PMI	Oct	Index		49.6
09:00	GR	Manufacturing PMI	Oct	Index		44.7
18:00	NO	Norges Bank Governor Gjedrem gives speech at the Polytechnic Association
19:00	IT	Budget Balance	Oct	EUR bn		-12.7
22:30	AU	AIG Performance of Services	Oct	index		45.6

Afternoon Forex Overview

2010-11-02T14:08:00.000+08:00

Previous session overview

The dollar reversed overnight losses Monday against the yen and the euro, supported by optimistic U.S. manufacturing data.

That more encouraging economic snapshot gave pause to the more aggressive bets on expected Federal Reserve stimulus.

The manufacturing side of the U.S. economy continued growing in October with an Institute for Supply Management purchasing managers' index rising to 56.9 from 54.4 in September.

Economists had expected the PMI number to slip to 54.3.

Shortly after the PMI data, the euro hit its intra-day low, falling back below USD1.39, and had reversed all gains garnered overnight from strong Chinese manufacturing data that led to a return to riskier assets.

The dollar further retreated from a new 15-year low reached overnight against the yen following the data. The dollar fell to fresh lows against the yen early Monday before investors backed off, reluctant to risk the possibility of another strong Japanese intervention.

The pair fell to JPY80.21, it's lowest in 15 years and the closest it has come to the JPY79.75 level that has stood since April 1995.

The ICE Dollar Index, which tracks the greenback against a trade-weighted basket of currencies, was at 77.328 from 77.047.

Market expectation

The markets remain focused, in large part, on central banks and their moves this week, said analysts. Most anticipated of all is a decision by the Federal Reserve's Federal Open Market Committee on possible new U.S. economic stimulus after a two-day meeting ending Wednesday.

Investors have been betting on the possibility of the resumption of quantitative easing for the last several months. Since the PMI on Monday was the last important U.S. indicator before Wednesday, it seems likely the currency markets will now take a breather for the next day and a half, said analysts.

The EUER slightly bearish according to 1 and 4 hours indicators, pair has found support around USD1.3890/1.3910 price zone today; lose of this last could signal some downside continuation rally towards USD1.3840, yet downside seems limited for now; hovering around USD1.3935 strong level, pair needs a clear break higher to change this bearish tone, aiming to retest USD1.3980/1.4010 price zone.

Most important events of the day

Nov 01	Count.	Event	For	Unit	Act.	Cons.	Prev.
00:00	NZ	Treasury Monthly Economic Indicators published.
00:00	AU	Market Holiday- All Saint's Day
00:00	LU	Market Holiday- All Saints' Day
00:01	GB	Hometrack housing survey	Oct	% y/y	-0.1		1
00:30	AU	House Price Index	Q3	% q/q	0.1		2.0
02:00	NZ	ANZ Commodity Price	Oct	% m/m	3.5		2.8
07:30	DK	Retail Sales	Sep	% m/m
10:00	DK	PMI	Oct	Index	55.2		50.6
12:30	US	Personal income	Sep	% m/m	-0.1	0.2	0.4
12:30	US	Personal spending	Sep	index	0.2	0.4	0.5
15:00	US	Construction Spending	30-Dec	% m/m	0.5	-0.5	-0.2
15:00	US	Help Wanted Index	Oct	index
15:00	US	ISM Manufacturing	Oct	index	56.9	54	54.4
15:00	JP	BoJ release minutes of prior (4th-5th October) Monetary Policy Meeting

Afternoon Forex Overview

2010-10-29T13:54:00.000+08:00

Previous session overview

The dollar fell sharply against its major rivals Thursday as continued talk of another round of Federal Reserve stimulus to kick-start a slowing U.S. economy contrasted with better-than-expected data out of the euro zone, where the central bank remains on the path to policy normalization.

Positive earnings reports from European blue-chip companies also stoked a bid into riskier, higher-yielding assets, reducing the appeal of the safe-harbor dollar.

EURUSD is brushing up against USD1.39, hitting recent intraday high of USD1.3898 from USD1.3766 late Wed. The pair benefits from earlier released better-than-expected euro-zone data and strong European corporate earnings. Risk also stoked by positive surprise in US weekly jobless claims. USD weighed down broadly by continued expectations of another round of Fed stimulus.

The ICE Dollar Index, which tracks the U.S. currency against a trade-weighted basket of others, was at 77.540 from 78.103.

The Bank of Japan also was in the spotlight Thursday after it left key rates unchanged, but announced details on its own massive asset-purchase plan.

The dollar declined against the Japanese yen, threatening to break below JPY81, as part of its broad downtrend.

Market expectation

If the euro zone continues to register better-than-expected data, such as Thursday's economic sentiment indicator that surprised to the upside, the European Central Bank is likely to remain on a path to monetary policy normalization, eventually raising key rates, contrasting with a Fed that is likely to still be in a phase of ultra-loose monetary policy, analysts said. That contrast will keep the dollar on the defensive in the longer term.

EURUSD is testing at USD1.3890/05 (intra-day support-resistance levels), with resistance levels at USD1.3960 (intra-day level) and USD1.3980 (Oct 26 high). On the downside, support levels lie at USD1.3800 (intra-day level), and below here, USD1.3770/90 (intra-day level) and USD1.3730 (Oct 27 low).On the short-term, the pair's upside target lies between USD1.3900 and USD1.3950, say analysts.

Most important events of the day

Oct 28	Count.	Event	For	Unit	Act.	Cons.	Prev.
00:00	GR	Market Holiday- National Holiday
00:00	EU	ECB and Central Bank of Cyprus hold Eurosystem Seminar with Mediterranean Central Banks
00:00	JP	BoJ Outlook Report (The Bank's View) published
00:00	CH	SNB board member Danthine gives speech on Interest Rate and Credit Risk
00:00	ES	FinMin Salgado gives speech at Foro Cinco Dias
02:00	NZ	Monetary Aggregates M3	Sep	% y/y	-2		-3.3
07:00	EU	ECB Governing Council member Weber speaks on "Global Imbalances: Causes and Challenges" at a conference
07:15	SE	Economic Tendancy Survey	Oct	Survey	110.4	113	114.3
07:30	DK	Unemployment	Sep	%
07:55	DE	Unemployment	Oct	k	-3	-30	-37
07:55	DE	Unemployment Rate	Oct	%	7.5	7.4	7.5
08:00	IT	Hourly Wages	Sep	% m/m	0.3
08:00	IT	Hourly Wages	Sep	% y/y	1.7		2.2
08:00	AT	Manufacturing PMI	Oct	index	56	7.4	56.1
08:30	EU	ECB Governing Council member Orphandies and Chairman Trichet participate in the Eurosystem seminar of Mediterranean central banks
09:00	EU	Consumer sentiment	Oct	index	-11	-11	-11
09:00	EU	EC Business Climate Index	Oct	index	0.98	0.79	0.76
09:00	EU	Economic sentiment	Oct	index	104.1	103.5	103.2
12:30	US	Initial Claims	23-Oct	k	434	455	455
13:00	IE	ECB Governing Council member Honohan speaks on "Euro Membership and Bank Stability: Friends or Foes?"
13:30	EU	ECB Council member Costa speaks on financial reform in Portugal
15:00	EU	EU leaders hold a Summit in Brussels
23:01	GB	Gfk Consumer Confidence	Oct	Index		-22	-20

Afternoon Forex Overview

2010-10-28T10:01:00.000+08:00

Previous session overview

The dollar gained broadly Wednesday after a Wall Street Journal report dashed expectations that the Federal Reserve would engage in a massive program of "quantitative easing" asset purchases to kick-start the U.S. economy.

After recently hammering the greenback on the idea the Fed would announce a dollar-weakening shock-and-awe program to stoke growth, investors turned back to the buck on the report the Fed over several months will purchase only a few hundred billion dollars worth of Treasurys, far from the more than USD1 trillion some had expected.

The ICE Dollar Index, which tracks the greenback against a trade-weighted basket of currencies, was at 77.920 from 77.675.

Better than expected U.S. durable goods figures for September did little to help the dollar extend its gains, as "nobody's really putting on any major positions now," ahead of the Fed announcement next week of its possible stimulus package, said traders.

The dollar also gained sharply against the Australian dollar, which was dragged down by weaker-than-expected domestic inflation data. A slower rate of inflation tamps down expectations the Reserve Bank of Australia will increase key interest rates at its next meeting, leading the Australian dollar to shed nearly 1.5% against the greenback.

Market expectation

If the Dollar Index, at 77.964, breaks down below hourly resistance at 77.908 a minimum lower move would test 77.763. Extended weakness would likely result in lower trading on the day. If the dollar weakens Wednesday then the euro, at USD1.3804, would be going for USD1.4007. But the dollar, at JPY81.74, is strong against the yen, and traders should give it room to test a potential intraday high of JPY82.71, said technical analysts.

GBPUSD support lies at USD1.5800 (intra-day level), and below here, USD1.5770 (session low) and USD1.5690 (Oct 26 low). On the upside, immediate resistance lies at USD1.5880/00 (session high/Oct 27 high), and above here, USD1.6000 (psychological level) and USD1.6070 (Feb 3 high).

Most important events of the day

Oct 27	Count.	Event	For	Unit	Act.	Cons.	Prev.
00:00	DE	CPI (Prelim)	Oct	% y/y	1.3	1.3	1.3
00:00	DE	CPI (Prelim)	Oct	% m/m	0.1	0.1	-0.1
00:00	EU	ECB and Central Bank of Cyprus hold Eurosystem Seminar with Mediterranean Central Banks (27th-28th Oct)
00:00	JP	BoJ Deputy Governor Nishimura speaks at International Association of Deposit Insurers conference
00:00	SE	Riksbank Deputy Governor Oberg speaks on the interest rate decision and Monetary Policy Report at the West Sweden Chamber of Commerce and Industry
00:00	SE	Riksbank Deputy Governor Ekholm gives speech on the interest rate decision and Monetary Policy Report at SEB in New York
00:00	SE	Deputy Governor Svensson debates how our view of central banks has changed as a result of the latest financial crisis at theCEPR/ESI conference (27th-28th Oct)
00:00	JP	BoJ Deputy Governor Nishimura speaks to the International Association of Deposit Insurers
00:30	AU	Trimmed Mean inflation	Q3	% q/q	0.6	0.7	0.5
00:30	AU	Weighted Median inflation	Q3	% q/q	0.5	0.7	0.5
02:00	NZ	NBNZ Business Confidence	Oct	index	23.7		13.5
06:45	FR	Consumer Spending	Sep	% m/m	1.5	0.4	-1.6
06:45	FR	Consumer Spending	Sep	% y/y	1.1	-0.3	1.2
07:00	ES	Retail Sales	Sep	% y/y	-2.9		-2.5
07:30	IT	ISAE Business Sentiment	Oct	index	99.8	98.5	98.6
09:00	IS	CPI	Oct	% y/y	3.3	3	3.7
09:00	IS	CPI	Oct	% m/m	0.7	0.4
09:00	EU	ECB Council member Costa speaks on the Portugese economy
12:00	NO	Norges Bank interest rate announcement followed by press conference @12:45
12:30	US	Durable goods orders	Sept	% m/m	3.3	2	-1.0
12:30	US	Durables ex defence	Sept	% m/m	2.9		-0.9
12:30	US	Durables ex transport	Sept	% m/m	-0.8	0.5	1.9
13:00	BE	GDP (Prelim)	Q3	% q/q	0.5		1.0
13:00	BE	GDP (Prelim)	Q3	% y/y	2.1		2.6
14:00	US	New Home Sales	Sep	k		300	288
20:00	NZ	RBNZ Official Cash Rate announcement
23:50	JP	Large Retailers sales	Sep	% y/y		-2.5	-1.8

Morning Forex Overview

2010-10-27T17:22:00.000+08:00

Previous session overview

The Asian market Wednesday witnessed a something of a rarity recently a rising dollar.

From early in the day, the U.S. currency strengthened gradually after new signs emerged overnight that the U.S. Federal Reserve's "QE II" second-round quantitative easing won't be a supertanker. As well, slightly weaker-than-expected inflation numbers from Australia hammered that country's currency.

The dollar started the Asian day at around JPY81.33, then climbed steadily through the day, with a blip higher on the Australian news.

By mid afternoon the greenback hit a high for the day at JPY81.77. At 0450 GMT it was quoted at JPY81.65. This compared with JPY81.47 in late New York trade.

The latest sign that the Federal Reserve story may have been oversold was news in The Wall Street Journal that the Fed is likely to unveil a Treasury bond purchase program of a few hundred billion dollars. While not exactly chump change, there had been escalating expectations the buying spree could total more than USD1 trillion.

The Australian dollar weakness also hit the risk sensitive euro, which fell to USD1.3824 from USD1.3855 in late New York trading and JPY112.86 against JPY112.90. The Australian dollar plummeted and short-end bond futures surged Wednesday after Australia's third quarter inflation report came in below expectations.

The ICE Dollar Index, which tracks the greenback against a trade-weighted basket of currencies, was at 77.828 from 77.675.

The Pound hit the day's high against the US dollar and the euro after surprisingly strong economic growth data and a vote of confidence in the government's management of the economy from ratings agency S&P. Data showed the UK economy grew 0.8% in July-September, twice as fast as forecasts.

Market expectation

The U.S. dollar is performing well against majors after the Australian dollar weakened earlier on benign Australia inflation data.

Investors are unwilling to keep the euro near USD1.40 based on the uncertainty of the Nov. 2 U.S. elections and the Nov. 2-3 Federal Reserve meetings.

Indeed, the general view up to Wednesday was that unless Japan backs its talk against a strong currency with fresh intervention, the greenback could slide below JPY80.00, and possibly break its record low of JPY79.75 in the coming sessions. On Monday, the dollar fell to JPY80.41, its lowest since April 1995.

But as of Wednesday, the dollar's day of reckoning when it might go below its record seems a little further off.

European stocks are expected to open lower Wednesday, following weakness in Asian markets and an uninspiring U.S. session. Investors are also seen as being wary of taking new positions ahead of next week's Federal Reserve meeting.

Most important events of the day

Oct 27	Count.	Event	For	Unit	Act.	Cons.	Prev.
00:00	DE	CPI (Prelim)	Oct	% y/y		1.3	1.3
00:00	DE	CPI (Prelim)	Oct	% m/m		0.1	-0.1
00:00	EU	ECB and Central Bank of Cyprus hold Eurosystem Seminar with Mediterranean Central Banks (27th-28th Oct)
00:00	JP	BoJ Deputy Governor Nishimura speaks at International Association of Deposit Insurers conference
00:00	SE	Riksbank Deputy Governor Oberg speaks on the interest rate decision and Monetary Policy Report at the West Sweden Chamber of Commerce and Industry
00:00	SE	Riksbank Deputy Governor Ekholm gives speech on the interest rate decision and Monetary Policy Report at SEB in New York
00:00	SE	Deputy Governor Svensson debates how our view of central banks has changed as a result of the latest financial crisis at theCEPR/ESI conference (27th-28th Oct)
00:00	JP	BoJ Deputy Governor Nishimura speaks to the International Association of Deposit Insurers
00:30	AU	Trimmed Mean inflation	Q3	% q/q	0.6	0.7	0.5
00:30	AU	Weighted Median inflation	Q3	% q/q	0.5	0.7	0.5
02:00	NZ	NBNZ Business Confidence	Oct	index			13.5
06:45	FR	Consumer Spending	Sep	% m/m		0.4	-1.6
06:45	FR	Consumer Spending	Sep	% y/y		-0.3	1.2
07:00	ES	Retail Sales	Sep	% y/y			-2.5
07:30	IT	ISAE Business Sentiment	Oct	index		98.5	98.4
09:00	IS	CPI	Oct	% y/y		3	3.7
09:00	IS	CPI	Oct	% m/m		0.4
09:00	EU	ECB Council member Costa speaks on the Portugese economy
12:00	NO	Norges Bank interest rate announcement followed by press conference @12:45
12:30	US	Durable goods orders	Sept	% m/m		2	-1.5
12:30	US	Durables ex defence	Sept	% m/m			-1.2
12:30	US	Durables ex transport	Sept	% m/m		0.5	1.7
13:00	BE	GDP (Prelim)	Q3	% q/q			0.9
13:00	BE	GDP (Prelim)	Q3	% y/y			2.4
14:00	US	New Home Sales	Sep	k		300	288
20:00	NZ	RBNZ Official Cash Rate announcement
23:50	JP	Large Retailers sales	Sep	% y/y		-2.5	-1.8

Afternoon Forex Overview

2010-10-22T11:22:00.000+08:00

Previous session overview

The dollar fell slightly against the euro and gained slightly on the yen Thursday as positive data from China and Germany nudged investors toward embracing risk.

The euro continued its recent strong run, but gave back some gains following a better-than-expected U.S. jobless claims report for the week ended Oct. 16.

But overnight, most economic data pointed to global growth outside the U.S., luring investors to take riskier positions, said analysts.

China's gross domestic product slowed from 10.3% growth in the second quarter, but the 9.6% mark in the third quarter was slightly above the consensus forecast of 9.5% as Beijing continued to withdraw stimulus and took measures to cool sectors such as the property market.

German data showed its private sector expanded at a stronger pace in October than in September as both the manufacturing and services sectors posted a rise in activity.

The ICE Dollar Index, which tracks the dollar against a trade-weighted basket of currencies, was at 77.124 from 77.212.

Market expectation

The widely anticipated resumption of a bond purchasing program by the Fed which would flood the market with dollars and devalue the currency remains the strongest force guiding investors. But investors are looking at U.S. data to gauge the size of such a program.

Investors will be looking for more clues on the U.S. economic recovery and possible quantitative easing with the Philadelphia Fed survey due at 10 a.m. EDT.

In case of EURUSD further retreat, below the mentioned USD1.3975, the pair might find support at USD1.3925/30 (intra-day support) and USD1.3875 (session low). On the upside, immediate resistance lies at USD1.4050 (session high), and above here, USD1.4115/25 (Oct 14 highs) and then USD1.4155 (Oct 15 high).

Most important events of the day

Oct 21	Count.	Event	For	Unit	Act.	Cons.	Prev.
00:00	US	Federal Reserve Bank of St. Louis President Bullard speaks on "Frictions in Financial and Labour Markets" at an Economic Policy Conference
00:00	WLD	G-20 FinMins meet (21st-23rd Oct)
00:00	WLD	G-20 Deputy FinMins and Deputy Central Bank Governors meet
02:00	NZ	Credit Card Statistics	Sep	% m/m (sa)	0.9		0.6
02:00	NZ	Westpac Consumer Confidence	Oct	index
02:00	NZ	ANZ Consumer Confidence	Oct	index	113.6		116.4
04:30	JP	METI All industry Activity	Aug	% m/m	-0.4	-0.4	1.1
06:58	FR	Flash Manufacturing PMI	Oct	index	55.2	55.5	56
06:58	FR	Flash Services PMI	Oct	index	55.3	57.5	58.2
07:00	CH	SNB monthly statistical bulletin
07:30	NL	Unemployment (sa)	Sep	% rate	5.3	5.3	5.3
07:30	DK	Consumer Sentiment	Oct	Index		1.8	2.3
09:00	CH	Credit Suisse ZEW Survey	Oct	Survey	-27.5		-5.1
09:15	GB	BoE member Posen speaks at the Austrian National Bank
11:45	EU	ECB hold non-rate setting meeting
12:30	US	Initial Claims	16-Oct	k	452	455	475
12:30	CA	Leading indicator	Sep	% m/m	-0.1	0.2	0.5
14:00	US	Leading Indicators	Sept	% m/m		0.3	0.3
14:00	US	Philadelphia Fed Survey	Oct	index		2	-0.7
14:00	EU	EC Flash Consumer Sentiment	Oct	index		-11	-11
14:30	CA	Business Outlook Future Sales	Q3	index			25

Morning Forex Overview

2010-10-21T17:14:00.000+08:00

Previous session overview

Comments from U.S. Treasury Secretary Timothy Geithner lent the dollar a helping hand against the euro and yen Thursday in Asia, but dealers said the boost would likely prove short-lived amid continued expectations for more monetary easing by the Federal Reserve.

The dollar rose in morning trade in Tokyo following an interview in The Wall Street Journal with Geithner in which he said he believes major currencies are "roughly in alignment now," suggesting he sees no need for further dollar falls against the euro and yen.

The U.S. unit touched an intraday high of JPY81.84 following the remarks, while the euro sank against the greenback to USD1.3872.

At 0450 GMT, the dollar was at JPY81.20, up from JPY81.16 late Wednesday in New York. The euro traded hands at USD1.3916, compared with USD1.3949. The ICE Dollar Index, which tracks the greenback against a trade-weighted basket of currencies including the euro, was up at 77.392 from 77.212.

The British pound stripped gains against the dollar and weakened vs. the euro after the UK government announced detailed public spending cuts. Finance Minister George Osborne announced that the government aims to cut half a million public sector jobs, raise the retirement age to reach 66 by 2020 and introduce a permanent levy on banks.

The Australian dollar was higher late in Asia on Thursday in choppy trade as the main focus was on remarks by U.S. Treasury Secretary Timothy Geithner that suggested he sees no need for the U.S. dollar to sink more than it already has against the euro and yen.

Market expectation

The dollar may fall to JPY80.80 by the end of the global day, refreshing the new 15-year low it marked Wednesday at JPY80.84, analysts said. In coming trading sessions, the currency could even drop to a new post-war low below JPY79.75, they said.

Traders say the overall bearish-dollar trend isn't likely to reverse over the short term. They said the dollar won't sustain any gains against the yen. It's not as if the U.S. is going to intervene in the currency market to weaken the dollar.

Sterling is a bit lower against the dollar but slightly higher versus the euro. Prospects for more quantitative easing at some point by the Bank of England are likely to cap the pound's upside. Ever changing risk sentiment is likely to keep sterling in ranges.

European stock markets are expected to open little changed Thursday, with market participants looking to the slew of corporate earnings and economic data expected during the session before building further positions.

Most important events of the day

Oct 21	Count.	Event	For	Unit	Act.	Cons.	Prev.
00:00	US	Federal Reserve Bank of St. Louis President Bullard speaks on "Frictions in Financial and Labour Markets" at an Economic Policy Conference
00:00	WLD	G-20 FinMins meet (21st-23rd Oct)
00:00	WLD	G-20 Deputy FinMins and Deputy Central Bank Governors meet
02:00	NZ	Credit Card Statistics	Sep	% m/m (sa)	0.9		0.5
02:00	NZ	Westpac Consumer Confidence	Oct	index
02:00	NZ	ANZ Consumer Confidence	Oct	index	113.6		116.4
04:30	JP	METI All industry Activity	Aug	% m/m		-0.4	1
06:58	FR	Flash Manufacturing PMI	Oct	index		55.5	56
06:58	FR	Flash Services PMI	Oct	index		57.5	58.2
07:00	CH	SNB monthly statistical bulletin
07:30	NL	Unemployment (sa)	Sep	% rate		5.3	5.3
07:30	DK	Consumer Sentiment	Oct	Index		1.8	2.3
09:00	CH	Credit Suisse ZEW Survey	Oct	Survey			-5.1
09:15	GB	BoE member Posen speaks at the Austrian National Bank
11:45	EU	ECB hold non-rate setting meeting
12:30	US	Initial Claims	16-Oct	k		455	462
12:30	CA	Leading indicator	Sep	% m/m		0.2	0.5
14:00	US	Leading Indicators	Sept	% m/m		0.3	0.3
14:00	US	Philadelphia Fed Survey	Oct	index		2	-0.7
14:00	EU	EC Flash Consumer Sentiment	Oct	index		-11	-11
14:30	CA	Business Outlook Future Sales	Q3	index			25

Morning Forex Overview

2010-10-20T21:35:00.000+08:00

Previous session overview

The euro rose against the dollar and yen Wednesday in Asia as China's unexpected interest rate hike failed to suppress Shanghai share prices, somewhat easing concerns over its impact on China's growth and the outlook for the global economy.

The People's Bank of China said that it will raise benchmark deposit and lending rates by 0.25 percentage point. The move prompted investors to speculate that this could blow down global economic growth, which in turn would forestall a tightening of rates by the European Central Bank.

However, the news failed to dent optimism in China's stock markets. The benchmark SSE Composite Index ended the morning session 0.65% higher at 3,021.42. With gains in the shares, investors bought back the euros they had sold earlier in Asia, pushing the common currency higher.

As of 0450 GMT, the euro was at USD1.3775 and JPY112.12, from USD1.3700 and JPY111.70 in Sydney Wednesday.

The greenback, meanwhile, was at JPY81.39 from JPY81.42 in Sydney.

The British pound extended losses following the unexpected rise in US housing starts in September that hit a five month high. Domestically, the results from the latest survey released by the Confederation of British Industry CBI, for UK's manufacturing had the lowest total order balance since April of -17 and the lowest export balance since February at -5.

The Australian dollar was lower late in Asia on Wednesday after China's move to tighten policy hurt commodity currencies on worries of slower growth in Asia, which would hit demand for Australian exports such as coal or iron ore.

Market expectation

Investors are now looking at whether China will hike its rates again in the near term, and analysts offered divided opinions on the prospects for such a move.

Some think China's move was largely a political gesture ahead of this weekend's meeting of finance ministers from the Group of 20 nations, in which case this increase is likely to be the last.

Others, though, believe the PBOC's surprise move was a signal that the nation's prices are raising sharply, which would force the central bank to take further steps to stem inflation.

EURCHF remains trapped in a range between support at 1.3268 and resistance at 1.3453, according to technical analysts. The pair is sidelined between the 55-day moving average.

European stock markets are expected to stabilize Wednesday as sentiment recovers after the negative reaction to China's surprise rate hike Tuesday, although resource stocks are expected to remain under pressure on demand concerns following the policy-tightening measure.

Most important events of the day

Oct 20	Count.	Event	For	Unit	Cons.	Prev.
00:00	AU	DEWR Skilled Vacancies	Oct	% m/m		0.1
00:00	US	Federal Reserve Governor Duke speaks at New York University Money Marketeers Club
00:00	EU	ECB Executive Board member Stark concludes ECB conference on "Central Bank Statistics- What did the financial crisis change?"
00:00	JP	BoJ Deputy Governor Nishimura speaks to business leaders in Hiroshima, followed by a press conference
05:00	JP	Leading indicator (Final)	Aug	index		99.1
06:00	DE	PPI	Sep	% m/m	0.2
06:00	DE	PPI	Sep	% y/y	3.8	3.2
06:30	EU	ECB Vice President Constancio gives speech at the ECB Statistics Conference in Frankfurt
07:30	NL	Consumer Confidence	Oct	index	-16	-14
08:00	IT	Industrial Orders (nsa)	Aug	% y/y	10.4	0.7
08:00	IT	Industrial Orders (sa)	Aug	% m/m	3.5	-3
08:00	IT	Non EU Trade balance	Sep	EUR bn		-2.162
08:00	EU	IMF Regional Economic Outlook for Europe
08:30	GB	BoE release minutes of prior (6th& 7th October) MPC meeting
08:30	GB	Public Borrowing (PSNB ex interventions)	Sep	GBP bn	14.3	15.3
08:30	GB	M4 Money Supply (Prelim)	Sep	% m/m	0.3	-0.1
08:30	GB	M4 Money Supply (Prelim)	Sep	% y/y	1.5	1.9
12:30	CA	Wholesale Sales	Aug	% m/m	0.5	-0.1
14:30	CA	BoC release Monetary Policy Report, followed by a press conference by Governor Carney
16:45	US	Federal Reserve Bank of Philadelphia President Plosser gives speech on "Incentives and Regulation"
18:00	US	Fed release Beige Book
20:00	US	Federal Reserve Bank of Richmond President Lacker gives speech on the US Economic Outlook at an "Economics Made Easy" seminar
21:45	NZ	External Migration	Sep	net people (sa)		840
23:30	AU	RBA Bulletin

Morning Forex Overview

2010-10-20T12:59:00.000+08:00

Previous session overview

The euro fell against the dollar in Asia on Tuesday as the Reserve Bank of Australia's dovish minutes reduced expectations for higher domestic interest rates, with the subsequent fall of the Australian unit having a knock-on effect on the risk-sensitive common currency.

The Australian central bank concluded overall "that it would be appropriate to hold the cash rate steady for the time being, pending evaluation of further information," at its Oct. 5 policy meeting, the minutes of the gathering published earlier in the day showed. The cash rate target was held at 4.50% in October, surprising many in the markets at the time.

The speculation hurt the Australian dollar, weighing on the euro. During Asian trade, the two currencies tend to follow a similar moving pattern because they are both considered sensitive to investors' appetite on risk-taking.

As of 0450GMT, the euro was at USD1.3917, down from USD1.3943 in New York Monday. It was at JPY113.35 from JPY113.28 overnight. Meanwhile, the Australian dollar was around USD0.9870 and JPY80.35.

The ICE Dollar Index, which tracks the greenback against a trade-weighted basket of currencies, was at 77.291 from 76.984.

The Pound remained pressured for much of the trading day, ahead of UK governments spending review on Tuesday, and growing expectation of a third installment of stimulus.

Market expectation

The dollar was higher against the yen due to buying by Japanese importers, dealers said. It may extend its gains to JPY82.00, as there are many automated stop-loss buying orders at JPY81.50 and above, said dealers.

While it's unlikely that the U.S. unit will move sharply against its Japanese counterpart because investors lack fresh trading cues, earnings reports from Goldman Sachs and other top U.S. companies later in the global day will be watched as indicators of the state of the U.S. economy, dealers said.

European stock markets are expected to open marginally lower Tuesday, as market participants react with a degree of caution to earnings from leading U.S. corporates, Apple Inc and International Business Machines Corp.

USDCHF is still holding in its three-month downtrend channel, and will need to break above 0.9731 to change its current medium-term bearish trend, say analysts. Further resistance comes at 0.9932, the mid-September low, though a minor bottom may have been formed last week, according to technical analysts.

Most important events of the day

Oct 19	Count.	Event	For	Unit	Cons.	Prev.
00:00	EU	ECOFIN meeting
00:00	EU	ECB conference on "Central Bank Statistics- What did the financial crisis change?" (19th-20th Oct)
00:00	GB	BoE Governor King speaks at an event hosted by the Chamber of Commerce and BoE
07:30	NL	Consumer Spending	Aug	% y/y		0.2
08:00	EU	Current account (nsa)	Aug	EUR bn	3.7	3.7
08:00	EU	Current account (sa)	Aug	EUR bn		-3.8
10:00	GB	CBI Quarterly Industrial Trends	Oct	%	-19	-17
12:30	US	Building Permits	Sept	k	575	571
12:30	US	Housing Starts	Sept	k	580	598
13:00	CA	BoC announce key policy interest rate
13:00	EU	ECB Governing Council members Provopoulos and Kranjec participate in an ECB conference
13:40	US	Federal Reserve Bank of Chicago President Evans gives speech on the economic outlook
14:00	US	Federal Reserve Bank of New York President Dudley speaks at the Regional Economic Briefing
14:00	EU	ECB Governing Council member Weber speaks on the path to a more stable financial system
14:00	EU	ECB Governing Council member Weber speaks on the Basel 111 rules
15:00	EU	ECB Governing Council member Costa gives speech on Statistics at the ECB Conference
15:00	EU	ECB Governing Council member Costa, Riksbank Deputy Governor Nyberg and Federal Reserve Vice Chairman Yellen participate in an ECB conference on Statistics
15:30	US	Federal Reserve Bank of Atlanta President Lockhart gives speech on the economy to the Southeast US-Japan Association meeting
16:50	US	Federal Reserve Bank of Dallas President Fisher gives speech to the New York Association for Business Economics
17:20	US	Federal Reserve Bank of Minneapolis President Kocherlakota speaks on "The tools of the FOMC"
22:15	US	Federal Reserve Board Governor Duke gives speech on "Come with me to the FOMC" before the Money Marketeers Club of New York
23:10	AU	Assistant Governor Edey gives speech in Sydney
23:30	AU	Westpac-MI Leading Index	Aug	% m/m		0.4

Morning Forex Overview

2010-10-18T16:00:00.000+08:00

Previous session overview

The euro fell against the dollar and yen in Asia Monday as investors sold the common currency following dovish comments from European Central Bank president Jean-Claude Trichet over the weekend.

Trichet on Sunday pushed back against hawkish remarks from governing council member Axel Weber last week. Weber had said the central bank shouldn't wait long to withdraw from its extraordinary stimulus and should phase out its bond-buying program, but Trichet said the majority of the governing board does not agree with that view.

At 0450 GMT, the euro was at USD1.3892, down from USD1.3974. Dealers said short-term investors were selling the common currency after it retreated earlier in the day below USD1.3920, which many had considered a technical support level. Market participants were already eager to lock in profits after the euro had risen Friday to a near nine-month high at USD1.4161, traders said. As such profit-taking continues the euro could next test USD1.3800 in coming sessions, dealers said.

The euro was also down against the yen, falling to its lowest level since late September as Japanese institutional investors and other players sold the common currency as it tumbled against the dollar, dealers said.

At 0450 GMT, the euro stood at JPY112.87. That was near the earlier low it marked at JPY112.76, it's lowest since Sept. 28, and down from JPY113.77 late Friday in New York.

The ICE Dollar Index, which tracks the greenback against a trade-weighted basket of currencies including the euro, was up at 77.314 at 0450 GMT from 76.984 late Friday in New York.

The Australian dollar weakened in thin Asia trade Monday, retreating from the parity levels traded in New York Friday as traders pared U.S. dollar short positions.

Market expectation

The dollar traded hands at JPY81.25 at 0450 GMT compared with JPY81.41 late Friday in New York. While any further rises in U.S. Treasury yields this week could buoy the greenback to around JPY82.00, any rises above that level would likely be blunted by selling by Japanese exporters, dealers said.

EURCHF gains remain capped at the 1.3462 level and technical indicators continue to signal a consolidation in coming days, say analysts. This allow for a slide back to the 55-day moving average at 1.3282, and perhaps even to the 1.3070 key support level to unfold, says technical analysts.

European stock markets are expected to open lower Monday, as concerns about the health of some of the weaker euro-zone countries return and as market participants question how much Federal Reserve stimulus has already been priced in following chairman Ben Bernanke's comments Friday.

Most important events of the day

Oct 18	Count.	Event	For	Unit	Cons.	Prev.
00:00	EU	EuroGroup meeting
07:30	DK	Consumer Sentiment (18th-22nd)	Oct	index		2.3
09:00	IT	Current Account	Aug	EUR mn		535
13:00	US	Treasury International Capital System (TICS)	Aug	US $ bn		61.2
13:15	US	Capacity utilisation	Sept	%	74.8	74.7
13:15	US	Industrial production	Sept	% m/m	0.2	0.2
16:55	US	Federal Reserve Bank of Atlanta President Lockhart gives speech on the economy to the Savannah Rotary Club
17:00	US	NAHB Builders survey	Oct	index	14	13
23:30	AU	RBA release minutes from prior MPC meeting

Morning Forex Overview

2010-10-15T18:35:00.000+08:00

Previous session overview

The euro declined against the dollar and the yen in Asia Friday as falls in regional equities prompted short-term investors to sell the common currency to lock in profits on its recent rises.

At 0450 GMT, the euro was at USD1.4041, down from USD1.4077 late Thursday in New York. It stood at JPY114.16 against the yen, down from JPY114.74.

The declines came as Japan's benchmark Nikkei Stock Average was down 0.96% and Hong Kong's Hang Seng Index was off 0.44%.

Meanwhile, the dollar traded at JPY81.30 at 0450 GMT, down from JPY81.51 late Thursday in New York.

Investors recently have been selling the dollar and buying higher-yielding units like the euro on expectations that the Federal Reserve's policy-setting Open Market Committee will introduce a second round of quantitative easing at its next meeting Nov. 2-3.

The ICE Dollar Index, which tracks the greenback against a trade-weighted basket of currencies, including the euro, was up at 76.666 at 0450 GMT from 76.563 late Thursday in New York.

The Pound rebounded on the back of a broadly weaker dollar, The GBP traded with a low of USD1.5886 and a high of USD1.6066 before closing the day at USD1.6005.

The Australian dollar also retreated against the U.S. dollar Friday after rising near parity to its highest level since it was floated in 1983. The Australian currency was down as investors sold it to lock in profits ahead of a speech by Fed Chairman Ben Bernanke in Boston slated for 1215 GMT.

Market expectation

The euro's failure to build on its rise to a near nine-month high against the dollar Thursday prompted some dealers to say expectations for more monetary easing in the U.S. may now be largely priced into the market.

Investors remain on alert for any more Japanese government intervention, particularly since the dollar fell to a fresh 15-year low at JPY80.88 Thursday. The Ministry of Finance dumped an estimated JPY2 trillion on Sept. 15 to weaken the yen, its first foray into currency markets in more than six years.

Investors will be listening closely Friday to Federal Reserve Chairman Ben Bernanke's speech at a conference in Boston for clues on the timing and extent of any further quantitative easing measures. Any hints that asset-purchase programs might not be as extensive as once thought would support the greenback, said analysts.

Sterling is likely to consolidate after setting an eight-month high of USD1.6067 yesterday, with negative dollar sentiment providing support. Still, the pound's topside is likely limited by negative domestic UK concerns. Against the euro, sterling is seen in ranges.

European stocks are expected to open tentatively higher Friday, bolstered by reasonable U.S. earnings news, but with some investors unwilling to push the indexes significantly higher without more compelling signs of economic growth.

Most important events of the day

Oct 15	Count.	Event	For	Unit	Cons.	Prev.
00:00	US	US Treasury semi-annual currency report released
00:00	SE	Deputy Governor Ekholm participates in the ELSNIT conference in Paris
00:00	EU	ECB President Trichet speaks at World Policy Conference
00:00	WLD	World Policy Conference on Global Governance
00:00	JP	BoJ Governor Shirakawa speaks at Credit Association meeting
04:30	JP	Industrial Production (Final)	Aug	% m/m		-0.3
04:30	JP	Industrial Production (Final)	Aug	% y/y		15.4
04:30	JP	Capacity Utilisation	Aug	% m/m		-0.3
07:30	SE	Average house prices	Sep	% y/y		6
08:00	IT	Total Trade balance	Aug	EUR mn		-395
08:00	IT	EU Trade balance	Aug	EUR mn		-100
08:00	AT	CPI	Sep	%y/y		1.7
08:00	AT	CPI	Sep	% m/m		0.2
08:45	EU	ECB Executive Board member Bini Smaghi attends the Aspen Institute International Board Meeting
08:45	EU	ECB Executive Board member Stark speaks at a conference on taxes
09:00	IT	CPI (Final)	Sep	% m/m	-0.2	-0.2
09:00	IT	CPI (Final)	Sep	% y/y	1.6	1.6
09:00	EU	Trade balance (sa)	Aug	EUR bn	-0.8	-0.2
09:00	EU	Trade balance (nsa)	Aug	EUR bn		6.7
09:00	EU	HICP - Core (Final)	Sep	% y/y	1	1
09:00	EU	HICP (Final)	Sep	% m/m	0.2	0.2
09:00	EU	HICP (Final)	Sep	% y/y	1.8	1.6
12:00	US	Federal Reserve Bank of Atlanta President Lockhart participates in a Q&A session on the economy
12:10	EU	EU Economic and Monetary Commissioner Rehn gives speech at the European Liberal Democrats conference
12:15	US	Federal Reserve Chairman Bernanke gives speech at Boston Fed Conference
12:30	CA	Motor Vehicle Sales	Aug	% m/m	-5	2.4
12:30	CA	Manufacturing sales	Aug	% m/m	0.5	-0.9
13:00	BE	Trade Balance	Jul	EUR mn		316.8
13:30	US	CPI	Sept	% m/m	0.2	0.3
13:30	US	CPI ex food and energy	Sept	% m/m	0.1
13:30	US	Empire State Survey	Oct	index	6	4.1
13:30	US	Retail Sales	Sept	% m/m	0.3	0.4
13:30	US	Retail Sales Ex Autos	Sept	% m/m	0.3	0.6
13:55	US	Univ of Mich Sent. (P)	Oct	index	69	68.2
14:00	US	Business inventories	Aug	% m/m	0.5	1
15:00	FR	President Sarkozy holds a press conference
15:30	US	Federal Reserve Bank of San Fransisco research director Williams gives speech on "Have we underestimated the probability of hitting the zero lower bound?"
18:00	US	Budget	Sep	$ bn	-32	-46.6

Afternoon Forex Overview

2010-10-14T09:58:00.000+08:00

Previous session overview

The dollar fell broadly Wednesday as the likelihood of more monetary easing in the U.S. contrasted with the euro zone's readiness to end extraordinary support measures.

The minutes from the Federal Reserve's last policy meeting, released Tuesday afternoon, continued to cast a pall over the greenback. Fed decision-makers said it would be "appropriate to provide additional monetary policy accommodation" if unemployment remained too high or prices too low.

Better-than-expected industrial data from the euro zone and core machinery numbers from Japan added to the lift in risk sentiment that kept the ICE Dollar Index, which tracks the greenback against a trade-weighted basket of currencies, down at levels last seen in January.

The dollar increased slightly against the yen as verbal warnings of possible intervention from Japanese authorities continue to keep investors alert. The dollar also reached a fresh all-time low against the Swiss franc trading at CHF0.9544 in Asian trading.

EURUSD gives back some gains as it retreats further from USD1.40. Pair trade flat, at USD1.3917 from USD1.3914 late Tue.

The dollar was at JPY81.84 from JPY81.74, while the euro was at JPY114.20 from JPY113.74. The U.K. pound was at USD1.5826 from USD1.5796.

Market expectation

Investors now expect the Fed to announce further asset-purchase programs to stimulate the sluggish U.S. economy, perhaps at its next meeting on Nov. 3. Such measures hurt the dollar because U.S. interest rates will remain ultra-low for a longer period, steering investors toward higher-yielding currencies.

Attention is now focused on a speech to be delivered Friday by Federal Reserve Chairman Ben Bernanke, with investors awaiting further signals on the timing and extent of U.S. monetary easing. The euro jumped back above USD1.40 in early trading but couldn't hold that level, although it is ahead on the day.

The dollar, trading now near parity with the Canadian dollar, is making new lows for the downtrend from the May high of CAD1.0857. Trading below CAD0.9984 would point the dollar down to CAD0.9959. But a move above CAD1.0050 would, instead, be the signal for a rally to CAD1.0092.

Most important events of the day

Oct 13	Count.	Event	For	Unit	Act.	Cons.	Prev.
00:00	EU	EU Economic and Monetary Commissioner Rehn speaks at EU-Russia Economic talks
08:10	US	Federal Reserve Chairman Bernanke speaks on Business Innovation
09:00	PT	HICP	Sep	% y/y	2		2
09:00	PT	CPI	Sep	% m/m	0.2		-0.2
09:00	PT	CPI	Sep	% y/y	1.9		1.9
09:00	PT	HICP	Sep	% m/m	-0.1		-0.1
09:30	IE	Prime Minister Cowen answers questions in Parliament
12:30	US	Import prices	Sept	% m/m	-0.3	-0.2	0.6
12:30	CA	House Price Index	Aug	% m/m	0.1	-0.1	-0.1
23:50	JP	CGPI	Sep	% y/y

Morning Forex Overview

2010-10-13T17:25:00.000+08:00

Previous session overview

The euro rose against the yen and dollar Wednesday as strong regional equities prodded investors to buy the risk-sensitive currency, which also benefited from the growing view that the European Central Bank will likely abandon unconventional easing measures ahead of its counterparts.

After tripping stop-loss buying orders around USD1.3950 in morning trade in Tokyo, the euro climbed to an intraday high of USD1.3979. The gains came as Asian share markets strengthened; with Japan's benchmark Nikkei Stock Average trading up 0.46% in afternoon trade.

At 0450 GMT, the euro was up at USD1.3972 from USD1.3914 late Tuesday in New York. Against the yen, the common currency was at JPY114.27, up from JPY113.74.

The dollar struggled, falling Wednesday to another record low against the Swiss franc, after minutes from the Federal Reserve's latest meeting released overnight added to expectations the Fed will soon implement another round of quantitative easing.

The dollar dropped to CHF0.9546 in afternoon trade in Tokyo.

The ICE Dollar Index, which tracks the greenback against a trade-weighted basket of currencies including the euro, was down at 77.100 at 0450 GMT from 77.339 late Tuesday in New York.

Meanwhile, the dollar traded hands at JPY81.78 compared with JPY81.74 in late New York trade.

The Australian dollar climbed in Asian trade Wednesday, helped by suggestions by the Federal Reserve that more action is needed to help jump-start the U.S. economy.

Market expectation

If European and U.S. investors get behind the euro-buying trend later in the global day, the common currency could rise to USD1.4050 and JPY115.50, said analysts.

Dealers said the greenback could fall to around CHF0.9000 in the medium term, as expectations mount that the Fed will ease further.

European stocks are expected to open higher Wednesday, with investors encouraged by signs the U.S. Federal Reserve may take further action to bolster the U.S. economy.

Sterling is likely to consolidate against the dollar and euro, with the pound underpinned by negative dollar sentiment and higher investor risk appetite. But the pound's topside limited is by a slump in the nationwide U.K. consumer confidence index and worse-than expected September RICS U.K. house price survey.

Most important events of the day

Oct 13	Count.	Event	For	Unit	Cons.	Prev.
00:00	EU	EU Economic and Monetary Commissioner Rehn speaks at EU-Russia Economic talks
08:10	US	Federal Reserve Chairman Bernanke speaks on Business Innovation
09:00	PT	HICP	Sep	% y/y		2
09:00	PT	CPI	Sep	% m/m		-0.2
09:00	PT	CPI	Sep	% y/y		1.9
09:00	PT	HICP	Sep	% m/m		-0.1
09:30	IE	Prime Minister Cowen answers questions in Parliament
12:30	US	Import prices	Sept	% m/m	-0.2	0.6
12:30	CA	House Price Index	Aug	% m/m	-0.1	-0.1
23:50	JP	CGPI	Sep	% y/y

Morning Forex Overview

2010-10-12T22:20:00.000+08:00

Previous session overview

The yen rose against the dollar in Asia Tuesday despite warnings of possible intervention from the Japanese government, as investors viewed any action by Tokyo as not powerful enough to change the direction of the market.

Finance Minister Yoshihiko Noda reiterated earlier in the day that the government would take "decisive steps", including intervention, if necessary to stem the yen's rise.

Meanwhile, amid speculation that Japan's stance on currency intervention may find a lack of support among other leading economies, Economy Minister Banri Kaieda said that Noda explained Tokyo's view at a weekend meeting of financial chiefs from the Group of Seven industrialized nations in Washington and "seemed to get some understanding from his counterparts."

But investors shrugged off the remarks and increased their holdings of the yen. At 0450 GMT the dollar was at JPY81.94, down from JPY82.13 in New York Monday. Dealers said it's only a matter of time before the greenback drops below JPY81.00.

Elsewhere, the euro fell to JPY113.58 and USD1.3862 from JPY113.97 and USD1.3877 as investors turned away from riskier currencies due to weaker Japanese equities.

The ICE Dollar Index, which tracks the greenback against a trade-weighted basket of currencies, was at 77.518 from 77.500.

The Pound eased further in Asian trade on Tuesday, as RICS house price index fell to -36 from -32, to record it lowest reading since May 2009 whilst BRC retail Sales also fell to 0.5% from previous 1.0%, justifying the BoE's disregard to near term inflationary pressures.

The Australian dollar fell in Asian trade Tuesday as investors treaded lightly ahead of the release of the Federal Reserve's October meeting minutes later in the trading day and key Chinese data due on Wednesday.

Market expectation

Foreign exchange majors traded in tight ranges with markets looking to the U.S. Federal Reserve's November policy meeting. The FOMC minutes expected later in the global day will be watched closely for any signs of more quantitative easing.

Large EURUSD sell stops stand at USD1.3790, say dealers; ads pair tumbled to low of USD1.3819 from USD1.3862 in past half hour as EURJPY fell to JPY113.12 from JPY113.60 on strong euro sales by hedge funds, commodity trading advisers.

GBPCHF may slip toward its all-time low of 1.51 as the Bank of England may resume quantitative easing, while the Swiss National Bank appears to have stopped intervening, say analysts.

European stocks are expected to open slightly lower Tuesday, with traders nervous about the forthcoming U.S. earnings season and taking their cue from lower U.S. stock-index futures.

Most important events of the day

Oct 12	Count.	Event	For	Unit	Act.	Cons.	Prev.
00:00	DE	Bundesbank President Weber at Shadow Open Market Committee Meeting in New York
05:00	JP	Consumer Confidence	Sep	index	41.4		42.4
06:00	DE	CPI (Final)	Sep	% m/m	-0.1	-0.1	-0.1
06:00	DE	CPI (Final)	Sep	% y/y	1.3	1.3	1.3
06:00	DE	Wholesale price index	Sep	% y/y	7.6	6.3	6.4
06:00	DE	Wholesale price index	Sep	% m/m	1	0.4	1.6
06:45	FR	Current Account	Aug	EUR bn			-2.2
07:30	NL	Trade balance	Aug	EUR bn			3.1
08:30	GB	DCLG House Prices	Sep	% y/y		8.1	8.4
08:30	GB	BoE policy maker Miles speaks at the ESRI Conference in Dublin
09:30	SE	Deputy Governor Svensson speaks on "Monetary Policy in Sweden, Europe and the United States"
11:00	SE	2011 budget proposal
14:00	US	IBD consumer optimism	Oct	index		44.5	45.3
15:45	US	Federal Reserve Bank of Kansas City President Hoenig gives speech to the National Association of Business Economics
15:45	IE	Central Bank Governor Honohan gives speech on "Ireland and its Recovery from the Financial Crisis"
16:00	EU	ECB President Trichet speaks at Economic Club of New York
18:00	US	FOMC release minutes of prior (Sept 21st) MPC meeting
20:00	EU	ECB Governing Council member Weber speaks on "European Monetary Union and the Financial Crisis: Lessons for Economic Policy"
23:01	GB	Nationwide Consumer Confidence	Sep	Index		59	61
23:50	JP	Bank Lending Data	Sep	% y/y			-1.9
23:50	JP	M2 Money Supply	Sep	% y/y		2.8	2.8

Afternoon Forex Overview

2010-10-12T11:35:00.000+08:00

Previous session overview

The dollar declined slightly in thin trading Monday with negative sentiment amidst Federal Reserve stimulus concerns.

While expectations hadn't been high that finance ministers attending would come up with a plan for currency coordination at the International Monetary Fund's weekend meetings in Washington, the lack of encouraging news weighed on the greenback when global trading resumed Monday in Asia.

The worse-than-expected U.S. monthly employment report for September published Friday also hurt the dollar as bad U.S. data is seen as prompting the Fed to take further steps to prod the economy's performance.

The ICE Dollar Index, which tracks the greenback against a trade-weighted basket of currencies, continued to trade at lows last seen in January. But with Japanese and Canadian markets closed Monday due to national holidays and the U.S. bond market observing Columbus Day, trading is expected to be light through North American trading.

The dollar retraced losses against the euro after the pair hit above USD1.40 in Asian trading minus Japan. The dollar came back slightly against the yen after hitting a new 15-year-low of JPY81.37, with investors alert for the possibility of Japanese government intervention in currency markets.

Market expectation

All currencies now have net long positions versus the U.S. dollar, with bets against the dollar at USD35.3 billion, the highest level since December 2009, according to analysts.

With world leaders downplaying talk of "currency wars" over the weekend, the dollar negative dynamic remains in place at the start of this week, said analysts.

Short of any moves on a world stage, Federal Reserve's likely initiation of dollar devaluing asset-purchasing remains the single most significant dynamic in the currency markets.

Until those key dates, the euro and the yen should continue to benefit, said analysts.

The dollar dipped earlier to JPY81.37, which is the current low for the downtrend from the August 1998 high of JPY147.71. It's going for monthly support at JPY77.59. But a move above JPY82.13 would be the signal for a move up to JPY84.86.

Most important events of the day

Oct 11	Count.	Event	For	Unit	Act.	Cons.	Prev.
00:00	JP	Market Holiday- Sports Day
00:00	US	Market Holiday- Columbus Day (Nyse, Amex and NASDAQ open)
00:00	CA	Market Holiday- Thanksgiving Day
00:00	GB	BoE Deputy Governor Tucker speaks at the Institute of International Bankers
00:00	SE	Governor Ingves speaks on "How the Riksbank handled the financial crisis"
00:00	GB	BoE Governor King speaks at the Caplin Conference in Washington
06:45	FR	Manufacturing Production	Aug	% m/m		0.4	1.2
06:45	FR	Manufacturing Production	Aug	% y/y	4.4	3.7	5.5
07:30	DK	CPI	Sep	% y/y	2.6		2.3
07:30	DK	HICP	Sep	% m/m	0.4		0.5
07:30	DK	HICP	Sep	% y/y	2.5		2.3
07:30	DK	CPI	Sep	% m/m	0.4		0.3
12:00	US	Federal Reserve Bank of New York President Dudley speaks at the Institute of International Bankers Breakfast
13:00	SE	Deputy Governor Ekholm comments on research report "Europe and Global Imbalances"
18:45	US	Federal Reserve Bank of San Fransisco President Yellen gives speech on "Macroprudential Supervision and Monetary Policy in the post crisis world"
23:01	GB	BRC Retail Sales Monitor	Sep	% y/y			2.8

Morning Forex Overview

2010-10-11T15:38:00.000+08:00

Previous session overview

The dollar slid early Monday against most other major currencies after the Group of Seven industrial powers did nothing to arrest its slide, but the currency clawed back some of its declines later in extremely thin Asian trade.

The dollar's tone remained weak, even though it recovered modestly from a 15-year low against the yen and an eight-month low against the euro, after weak U.S. job data Friday boosted expectations that the Federal Reserve will ease policy further, and after the G-7 and International Monetary Fund made no headway in what are being called the global "currency wars."

The euro rose to USD1.4012 after China set the yuan's fixing at a record low. The greenback remained weaker against most Asian currencies.

The U.S. dollar index, a measure weighing the currency against a basket of currencies, recently traded at 76.954, off 0.3%.

The Pound strengthened against the US dollar which was broadly sold off after weak US employment data reinforced views that the Federal Reserve could start quantitative easing as early as next month. News in the US took the spotlight away from speculation of additional quantitative easing by the Bank of England.

The Australian dollar traded just off its post-float highs against the U.S. dollar late Monday as currency traders picked up where they left off last week, selling the U.S. dollar.

Market expectation

Major currency pairs, including the euro and sterling, are narrowly mixed on Monday as investors sort out a barrage of comments from officials that signal a lack of international consensus on how to cope with currency imbalances.

Traders said the common currency may fill the technical gap between USD1.3935-USD1.3950 formed at the morning's higher opening. The euro was at USD1.3960 at 0607 GMT.

European stocks are expected to open slightly higher Monday, with traders taking heart from a strong close in the U.S. Friday, when the Dow Jones Industrial Average closed above 11,000 for the first time in almost six months.

The next key technical support for USDCHF below the 0.9500 level is at 0.9078, according to technical analysts. Upside resistance is seen at 0.9739, with 0.9918 the target for a breakout from its current trend.

Most important events of the day

Oct 11	Count.	Event	For	Unit	Cons.	Prev.
00:00	JP	Market Holiday- Sports Day
00:00	US	Market Holiday- Columbus Day (Nyse, Amex and NASDAQ open)
00:00	CA	Market Holiday- Thanksgiving Day
00:00	GB	BoE Deputy Governor Tucker speaks at the Institute of International Bankers
00:00	SE	Governor Ingves speaks on "How the Riksbank handled the financial crisis"
00:00	GB	BoE Governor King speaks at the Caplin Conference in Washington
06:45	FR	Manufacturing Production	Aug	% m/m	0.4	1.4
06:45	FR	Manufacturing Production	Aug	% y/y	3.7	5.9
07:30	DK	CPI	Sep	% y/y		2.3
07:30	DK	HICP	Sep	% m/m		0.5
07:30	DK	HICP	Sep	% y/y		2.3
07:30	DK	CPI	Sep	% m/m		0.3
12:00	US	Federal Reserve Bank of New York President Dudley speaks at the Institute of International Bankers Breakfast
13:00	SE	Deputy Governor Ekholm comments on research report "Europe and Global Imbalances"
18:45	US	Federal Reserve Bank of San Fransisco President Yellen gives speech on "Macroprudential Supervision and Monetary Policy in the post crisis world"