Thursday, November 8, 2007
Friday, October 19, 2007
100 Pips in Under 25 Minutes
You read that right... how to earn 100 pips (that's $100 if you trade just 1 mini-lot) in just under 25 minutes! An overview of the ABCD pattern and how to use it together with Fibonacci retracements & extensions.
During the Forex Market and Strategy Discussion
During the Forex Market and Strategy Discussion on April 19th, 2005, top-ranked alternative investment manager Michael Mansfield answers ... all » questions from his online viewers about the forex market, his forex managed account (the GDFX Portfolio), the future of real estate, the dangers of the stock market, and more. To view this video correctly, please download the free Camtasia Player from our website or install the Tech Smith Screen Capture Codec (TSCC) on your computer.
Monday, October 1, 2007
Forex - Euro comes off fresh-all time high against dollar after in-line PMI
The euro was off a fresh all-time high against the dollar after an in-line manufacturing survey, with last week's soft US data continuing to weigh on the greenback.
The Purchasing Managers' manufacturing index for the 13-nation single currency area confirmed the earlier flash estimate reading of 53.2, down from 54.3 in August. This was in-line with analyst expectations and suggested that business sentiment is starting to wane, pushing the euro away from the all-time high of 1.4282 usd it hit in overnight Asian trade.
The main focus in the euro zone this week will be on the European Central Bank's interest rate decision. Analysts expect the ECB to remain on hold - however close attention will be on the subsequent press conference to see if the tightening bias remains in-tact.
Gavin Friend, currency analyst at Commerzbank said if ECB president Jean-Claude Trichet made any negative comments about the strength of the euro - something he has so far refrained from doing - then it could put a halt to the currency's ascendency.
But he added that 'only a pronounced fall of risk appetite could lead to a sustainable and stronger correction of the euro, which we currently do not expect.'
Meanwhile the dollar remained weak, with last Friday's softer than expected Michigan consumer confidence survey added to expectations that the US economy is entering a prolonged slowdown, and that further Federal Reserve rate cuts are on the cards.
'Investors will stay bearish to the dollar in the short term if US data continues to disappoint, if ECB officials stay hawkish and if G7 officials fail to give stronger signals on currency markets ahead of this month's meeting
on Oct 20-21,' said Geoffrey Wu, currency strategist at UBS. (NYSE:UBS)
Focus this week is likely to be on Friday's payrolls report to see if last month's surprise fall in jobs is repeated.
Meanwhile the yen was weaker as investors sold the Japanese currency to buy higher-yielding ones despite a stronger than expected manufacturing survey.
The Tankan report showed confidence among large Japanese manufacturers held flat for the second straight quarter in the third quarter, with strong confidence about sustained profit growth weighing against uncertainty about the subprime loan problem and the direction of financial markets.
'Overall, however, the tone of the survey was that businesses were not overly perturbed by the fallout from the US sub-prime market,' said Daragh Maher, currency strategist at Calyon.
'But with yield appetite back with a vengeance for now, the yen will likely remain on the back foot against all bar the dollar,' he added.
Finally the pound was stronger ahead of a series of lending figures from the Bank of England and a key manufacturing survey.
The Purchasing Managers' Manufacturing Index is expected to show a slight easing in the sector's growth rate to 55.7 from 56.3 in August. Meanwhile analysts anticipate figures from the BoE showing a slowdown in mortgage and unsecured lending during August as the turmoil in the credit markets pushed up lending rates.
London 0822 GMT London 0300 GMT
US dollar
yen 115.51 up from 115.03
sfr 1.1710 up from 1.1650
Euro
usd 1.4221 down from 1.4261
yen 164.24 up from 164.08
sfr 1.6648 up from 1.6615
stg 0.6954 down from 0.6972
Sterling
usd 2.0445 down from 2.0450
yen 236.12 up from 235.28
sfr 2.3938 up from 2.3825
Australian dollar
usd 0.8898 unchanged 0.8898
stg 0.4350 down from 0.4351
yen 102.72 up from 102.38
source: cnn money
The Purchasing Managers' manufacturing index for the 13-nation single currency area confirmed the earlier flash estimate reading of 53.2, down from 54.3 in August. This was in-line with analyst expectations and suggested that business sentiment is starting to wane, pushing the euro away from the all-time high of 1.4282 usd it hit in overnight Asian trade.
The main focus in the euro zone this week will be on the European Central Bank's interest rate decision. Analysts expect the ECB to remain on hold - however close attention will be on the subsequent press conference to see if the tightening bias remains in-tact.
Gavin Friend, currency analyst at Commerzbank said if ECB president Jean-Claude Trichet made any negative comments about the strength of the euro - something he has so far refrained from doing - then it could put a halt to the currency's ascendency.
But he added that 'only a pronounced fall of risk appetite could lead to a sustainable and stronger correction of the euro, which we currently do not expect.'
Meanwhile the dollar remained weak, with last Friday's softer than expected Michigan consumer confidence survey added to expectations that the US economy is entering a prolonged slowdown, and that further Federal Reserve rate cuts are on the cards.
'Investors will stay bearish to the dollar in the short term if US data continues to disappoint, if ECB officials stay hawkish and if G7 officials fail to give stronger signals on currency markets ahead of this month's meeting
on Oct 20-21,' said Geoffrey Wu, currency strategist at UBS. (NYSE:UBS)
Focus this week is likely to be on Friday's payrolls report to see if last month's surprise fall in jobs is repeated.
Meanwhile the yen was weaker as investors sold the Japanese currency to buy higher-yielding ones despite a stronger than expected manufacturing survey.
The Tankan report showed confidence among large Japanese manufacturers held flat for the second straight quarter in the third quarter, with strong confidence about sustained profit growth weighing against uncertainty about the subprime loan problem and the direction of financial markets.
'Overall, however, the tone of the survey was that businesses were not overly perturbed by the fallout from the US sub-prime market,' said Daragh Maher, currency strategist at Calyon.
'But with yield appetite back with a vengeance for now, the yen will likely remain on the back foot against all bar the dollar,' he added.
Finally the pound was stronger ahead of a series of lending figures from the Bank of England and a key manufacturing survey.
The Purchasing Managers' Manufacturing Index is expected to show a slight easing in the sector's growth rate to 55.7 from 56.3 in August. Meanwhile analysts anticipate figures from the BoE showing a slowdown in mortgage and unsecured lending during August as the turmoil in the credit markets pushed up lending rates.
London 0822 GMT London 0300 GMT
US dollar
yen 115.51 up from 115.03
sfr 1.1710 up from 1.1650
Euro
usd 1.4221 down from 1.4261
yen 164.24 up from 164.08
sfr 1.6648 up from 1.6615
stg 0.6954 down from 0.6972
Sterling
usd 2.0445 down from 2.0450
yen 236.12 up from 235.28
sfr 2.3938 up from 2.3825
Australian dollar
usd 0.8898 unchanged 0.8898
stg 0.4350 down from 0.4351
yen 102.72 up from 102.38
source: cnn money
Friday, September 28, 2007
The Federal Reserve cut interest rates by 50 basis points to 4.75% at the September 18th meeting. The decision was more aggressive than market had forecasted to favour growth over the danger of a deeper deterioration of the financial conditions. The European currency, in the mean time, could target new historical highs against the U.S. dollar, if technical levels will be respected.
Risk of growth is a priority in the United States
As expected, the Federal Reserve cut interest rates by 50 basis points to 4.75% at the September 18th meeting. The decision was more aggressive than market had forecasted to favour growth over the danger of a deeper deterioration of the financial conditions. Will it succeed? Only time will tell, although the long term interest rates cycle (years) appears to contemplate a high rates scenario. Nonetheless, another rate cut by 25 basis points by the end of 2007 should not be discharged, if the financial conditions will not improve. The Fed still considers inflation a menace, but risk of growth is now a priority. In reality, prices have remains stable at the higher levels of the Fed comfort zone, but they could rise further in the coming months, as crude oil prices are touching historical highs. In August, the Producer Price Index (PPI) declined 1.4%, more than the expected 0.3%. Year over year, prices are now 2.2%, down from July¡¦s 4%. Core prices rose 0.2% (0.1% expected) month over month and 2.2% year over year, below July¡¦s 2.3%. The decline of energy costs, -6.6% versus July¡¦s increase of 2.5%, supported the PPI in August. The Consumer Price Index (CPI) fell instead 0.1% month over month in August, below market expectations, and is now up 2% on year over year basis, down from July¡¦s 2.4%. Core CPI, excluding food and energy, rose 0.2% and it declined to 2.1% year over year, compared to July¡¦s 2.2%.
Angelo Airaghi is a Commodity Trading Advisor, registered with the National Futures Association and the Commodity Futures Trading Commission. He has been an active professional since 1990 working for major international financial companies. In the past 10 years, Angelo Airaghi has been an analyst and commentator for national and international media.
This article contains the following sections:
# Risk of growth is a priority in the United States
# A weak dollar is helping exports
# The European economic momentum still up for now
# The trend is up for the European currency
read more
Risk of growth is a priority in the United States
As expected, the Federal Reserve cut interest rates by 50 basis points to 4.75% at the September 18th meeting. The decision was more aggressive than market had forecasted to favour growth over the danger of a deeper deterioration of the financial conditions. Will it succeed? Only time will tell, although the long term interest rates cycle (years) appears to contemplate a high rates scenario. Nonetheless, another rate cut by 25 basis points by the end of 2007 should not be discharged, if the financial conditions will not improve. The Fed still considers inflation a menace, but risk of growth is now a priority. In reality, prices have remains stable at the higher levels of the Fed comfort zone, but they could rise further in the coming months, as crude oil prices are touching historical highs. In August, the Producer Price Index (PPI) declined 1.4%, more than the expected 0.3%. Year over year, prices are now 2.2%, down from July¡¦s 4%. Core prices rose 0.2% (0.1% expected) month over month and 2.2% year over year, below July¡¦s 2.3%. The decline of energy costs, -6.6% versus July¡¦s increase of 2.5%, supported the PPI in August. The Consumer Price Index (CPI) fell instead 0.1% month over month in August, below market expectations, and is now up 2% on year over year basis, down from July¡¦s 2.4%. Core CPI, excluding food and energy, rose 0.2% and it declined to 2.1% year over year, compared to July¡¦s 2.2%.
Angelo Airaghi is a Commodity Trading Advisor, registered with the National Futures Association and the Commodity Futures Trading Commission. He has been an active professional since 1990 working for major international financial companies. In the past 10 years, Angelo Airaghi has been an analyst and commentator for national and international media.
This article contains the following sections:
# Risk of growth is a priority in the United States
# A weak dollar is helping exports
# The European economic momentum still up for now
# The trend is up for the European currency
read more
Broad dollar weakness continues after poor US housing data yesterday
LONDON (Thomson Financial) - The theme of broad dollar weakness continued as yesterday's very poor US housing data sparked talk of further interest rate cuts to come from the US Federal Reserve.
Figures showed new home sales in the US slumped by 8.3 pct in August from a year earlier, keeping the euro close to the record highs against the dollar reached yesterday of 1.4189 usd and sparking talk that it could break through the 1.42 usd barrier today.
"Dollar weakness remains a dominant theme after yesterday's far worse than expected US new home sales data suggested once again that we would see further rate cuts from the Fed as the year progresses," said James Hughes, market analyst at CMC Markets.
The dollar did see a degree of profit taking during the overnight session, particularly against the pound, but this is now reversing as European trade gets underway, he said.
Data out this morning showed French producer prices rising well above expectations, exacerbating fears of growing inflationary pressures within the euro zone after yesterday's much stronger-than-expected German inflation data.
Attention will now turn to the euro zone business climate and economic sentiment readings due for release at 9.00 am GMT, with market players looking to see whether the euro will breach the 1.42 usd mark before the end of the quarter today, Hughes said.
Beyond this, however, US data will provide the focus, with Michigan sentiment, Chicago PMI, and personal income and expenditure figures all due for release.
"Once again anything that provides further influence on where the Federal Open Market Committee will take rates, not just through the next quarter but also on into 2008, will be jumped upon by the market and could leave the greenback looking somewhat depleted by the close," Hughes said.
Elsewhere, the pound came under pressure overnight on reports that Northern Rock PLC has taken further funding from the Bank of England.
Steve Pearson at HBOS noted, however, that this was not unexpected and, as long as there is no indication of trouble among other UK banks there should be scope for the UK currency to recover.
"Provided this does not weigh on other UK bank equities today... we look for the negative impact on sterling to be short-lived," he said.
London 0831 GMT Hong Kong 1:00 pm (0500 GMT)
US dollar
yen 115.31 up from 115.13
sfr 1.1707 down from 1.1716
cad 0.9982 down from 1.0009
Euro
usd 1.4167 up from 1.4160
yen 163.43 up from 163.04
sfr 1.6595 up from 1.6593
stg 0.6989 down from 0.7000
Sterling
usd 2.0271 up from 2.0223
yen 233.78 down from 232.85
sfr 2.3735 up from 2.3696
Australian dollar
usd 0.8817 down from 0.8829
stg 0.4351 down from 0.4364
yen 101.70 up from 101.66
New Zealand dollar
usd 0.7559 down from 0.7573
jessica.mortimer@thomson.com
jkm/ak
source: fxstreet
Figures showed new home sales in the US slumped by 8.3 pct in August from a year earlier, keeping the euro close to the record highs against the dollar reached yesterday of 1.4189 usd and sparking talk that it could break through the 1.42 usd barrier today.
"Dollar weakness remains a dominant theme after yesterday's far worse than expected US new home sales data suggested once again that we would see further rate cuts from the Fed as the year progresses," said James Hughes, market analyst at CMC Markets.
The dollar did see a degree of profit taking during the overnight session, particularly against the pound, but this is now reversing as European trade gets underway, he said.
Data out this morning showed French producer prices rising well above expectations, exacerbating fears of growing inflationary pressures within the euro zone after yesterday's much stronger-than-expected German inflation data.
Attention will now turn to the euro zone business climate and economic sentiment readings due for release at 9.00 am GMT, with market players looking to see whether the euro will breach the 1.42 usd mark before the end of the quarter today, Hughes said.
Beyond this, however, US data will provide the focus, with Michigan sentiment, Chicago PMI, and personal income and expenditure figures all due for release.
"Once again anything that provides further influence on where the Federal Open Market Committee will take rates, not just through the next quarter but also on into 2008, will be jumped upon by the market and could leave the greenback looking somewhat depleted by the close," Hughes said.
Elsewhere, the pound came under pressure overnight on reports that Northern Rock PLC has taken further funding from the Bank of England.
Steve Pearson at HBOS noted, however, that this was not unexpected and, as long as there is no indication of trouble among other UK banks there should be scope for the UK currency to recover.
"Provided this does not weigh on other UK bank equities today... we look for the negative impact on sterling to be short-lived," he said.
London 0831 GMT Hong Kong 1:00 pm (0500 GMT)
US dollar
yen 115.31 up from 115.13
sfr 1.1707 down from 1.1716
cad 0.9982 down from 1.0009
Euro
usd 1.4167 up from 1.4160
yen 163.43 up from 163.04
sfr 1.6595 up from 1.6593
stg 0.6989 down from 0.7000
Sterling
usd 2.0271 up from 2.0223
yen 233.78 down from 232.85
sfr 2.3735 up from 2.3696
Australian dollar
usd 0.8817 down from 0.8829
stg 0.4351 down from 0.4364
yen 101.70 up from 101.66
New Zealand dollar
usd 0.7559 down from 0.7573
jessica.mortimer@thomson.com
jkm/ak
source: fxstreet
Tuesday, September 18, 2007
Rainbow - very powerful scalping technique
This video will show you the setup of the indicators for a very powerful scalping technique. I beleive this method was developed by linuxtroll so lots of credits to linuxtroll
Forex podcast by DailyFX
DailyFX Forex Radio is produced by currency trading analysts at forex news site, DailyFX and discusses what happened in the US trading session and what to look ahead to.
Forex podcast feed:
Forex podcast feed:
Wednesday, September 5, 2007
U.S. Forex Market Commentary
EURO
The euro moved lower vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.3570 level and was capped around the $1.3625 level. Technically, today’s intraday high was just above the 23.6% retracement of the move from $1.2865 to $1.3850. Data released in the U.S. today saw ADP private sector jobs climb 38,000 in August, the smallest monthly ADP job increase in more than four years and below expectations. These data suggest that Friday’s U.S. non-farm payrolls tally for August could be on the weak side and possibly below the 110,000 estimate projected by many economists. It was also reported that Challenger job cuts were up 85.2% m/m in August to 79,459, a reflection of the dire employment situation in the U.S. mortgage and housing sectors. A weak employment report this week will increase pressure on the Federal Reserve to deliver additional monetary expansion at the Federal Open Market Committee meeting on 18 September. Other data released in the U.S. today saw July pending home sales fall 12.2% m/m to their lowest level in nearly six years. In eurozone news, traders await tomorrow’s European Central Bank interest rate decision and accompanying remarks from ECB President Trichet. Most traders believe the ECB will keep the refinancing rate at 4.0% and believe the ECB will lift rates by +25bps by the end of the year. Many money market traders conclude the ECB is not providing sufficient cash to the interbank market because market conditions remain elevated. Data released in the eurozone today saw the EMU-13 August PMI services index print at 58.0 while EMU-13 July retail sales were up 0.1% m/m and 0.5% y/y. Euro bids are cited around the US$ 1.3530 level.
JPN/CNY
The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥115.40 level and was capped around the ¥116.45 level. Technically, today’s intraday high was right around the 38.2% retracement of the move from ¥124.15 to ¥111.60. The Japanese government reported that U.S. subprime woes are not having a major impact on the Japanese economy but warned the short yen carry trade could unwind if global problems become exacerbated. The Nikkei 225 stock index lost 1.60% to close at ¥16,158.45. Dollar bids are cited around the ¥114.55 level. The euro came off vis-à-vis the yen as the single currency tested bids around the ¥156.75 level and was capped around the ¥158.65 level. The British pound and Swiss franc depreciated vis-à-vis the yen as the crosses tested bids around the ¥231.90 and ¥95.20 levels, respectively. The Chinese yuan was unchanged vis-à-vis the U.S. dollar as the greenback closed at CNY 7.5497 in the over-the-counter market. Goldman Sachs reported China is likely to raise interest rates twice by the end of the year to counter inflation.
STERLING
The British pound came off vis-à-vis the U.S. dollar today as cable tested bids around the US$ 2.0040 level and was capped around the $2.0160 level. Technically, today’s intraday high was right around the 50% retracement of the move from $2.0655 to $1.9650. Data released in the U.K. today saw the PMI services sector survey improve to 57.6 from 57.0 in July. Also, REC August wage pressures eased in August and Nationwide August consumer confidence moved lower. Additionally, BRC reported August shop prices were unchanged m/m and up 0.4% y/y and RICS reported house affordability has fallen to its lowest level in seventeen years. All eyes are on the Bank of England Monetary Policy Committee tomorrow with policymakers expected to keep its headline repo rate at 5.75%. The BoE today announced measures to inject liquidity into the money market by raising its aggregate reserves target by 6%. This follows a major spike in three-month sterling Libor market rates to more than 100bps above BoE’s target rate of 5.75%. The BoE pledged to offer additional liquidity as needed but warned it has little influence over long-dated maturities. BoE reported “Those (longer-dated) spreads have risen significantly in all major financial markets since August 9, reflecting the difficulty of valuing a variety of asset-backed instruments which, for the moment, has reduced liquidity. The sources of these problems does not, therefore, lie in a lack of central bank liquidity.” Cable bids are cited around the US$ 1.9915 level. The euro came off vis-à-vis the British pound as the single currency tested bids around the ₤0.6750 level and was capped around the ₤0.6770 level.
SWISS
The Swiss franc appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the CHF 1.2045 level and was capped around the CHF 1.2135 level. Technically, today’s intraday high was right around the 50% retracement of the move from CHF 1.2470 to CHF 1.1815. The August unemployment rate will be released tomorrow. Dollar offers are cited around the CHF 1.2220 level. The euro and British pound weakened vis-à-vis the Swiss franc as the crosses tested bids around the CHF 1.6445 and CHF 2.4295 levels, respectively.
AUD/NZD
The Australian dollar slumped vis-à-vis the U.S. dollar today as the Aussie tested bids around the US$ 0.8180 level and was capped around the $0.8285 level. Technically, today’s intraday high was just above the 50% retracement of the move from $0.8865 to $0.7675. As expected, Reserve Bank of Australia kept its cash target rate at 6.50%. Data released in Australia today saw the performance of services index recede to 51.6 in August. Australian dollar bids are cited around the US$ 0.8160 level. The New Zealand dollar came off vis-à-vis the U.S. dollar as the kiwi tested bids around the US$ 0.6860 level and was capped around the $0.6970 level. New Zealand dollar bids are cited around the US$ 0.6760 level.
CAD
The Canadian dollar depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the C$ 1.0565 level and was supported around the C$ 1.0480 level. As expected, Bank of Canada left its overnight rate unchanged at 4.50%. Prior to the global liquidity crisis, many traders believe BoC would lift rates another +25bps. Notably, BoC omitted the phrase some “modest further” tightening of rates may be necessary and added it “will continue to closely monitor evolving economic and financial developments.” Most traders construed BoC’s statement to be a little more dovish than expected. U.S. dollar offers are cited around the $1.0705 level.
The euro moved lower vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.3570 level and was capped around the $1.3625 level. Technically, today’s intraday high was just above the 23.6% retracement of the move from $1.2865 to $1.3850. Data released in the U.S. today saw ADP private sector jobs climb 38,000 in August, the smallest monthly ADP job increase in more than four years and below expectations. These data suggest that Friday’s U.S. non-farm payrolls tally for August could be on the weak side and possibly below the 110,000 estimate projected by many economists. It was also reported that Challenger job cuts were up 85.2% m/m in August to 79,459, a reflection of the dire employment situation in the U.S. mortgage and housing sectors. A weak employment report this week will increase pressure on the Federal Reserve to deliver additional monetary expansion at the Federal Open Market Committee meeting on 18 September. Other data released in the U.S. today saw July pending home sales fall 12.2% m/m to their lowest level in nearly six years. In eurozone news, traders await tomorrow’s European Central Bank interest rate decision and accompanying remarks from ECB President Trichet. Most traders believe the ECB will keep the refinancing rate at 4.0% and believe the ECB will lift rates by +25bps by the end of the year. Many money market traders conclude the ECB is not providing sufficient cash to the interbank market because market conditions remain elevated. Data released in the eurozone today saw the EMU-13 August PMI services index print at 58.0 while EMU-13 July retail sales were up 0.1% m/m and 0.5% y/y. Euro bids are cited around the US$ 1.3530 level.
JPN/CNY
The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥115.40 level and was capped around the ¥116.45 level. Technically, today’s intraday high was right around the 38.2% retracement of the move from ¥124.15 to ¥111.60. The Japanese government reported that U.S. subprime woes are not having a major impact on the Japanese economy but warned the short yen carry trade could unwind if global problems become exacerbated. The Nikkei 225 stock index lost 1.60% to close at ¥16,158.45. Dollar bids are cited around the ¥114.55 level. The euro came off vis-à-vis the yen as the single currency tested bids around the ¥156.75 level and was capped around the ¥158.65 level. The British pound and Swiss franc depreciated vis-à-vis the yen as the crosses tested bids around the ¥231.90 and ¥95.20 levels, respectively. The Chinese yuan was unchanged vis-à-vis the U.S. dollar as the greenback closed at CNY 7.5497 in the over-the-counter market. Goldman Sachs reported China is likely to raise interest rates twice by the end of the year to counter inflation.
STERLING
The British pound came off vis-à-vis the U.S. dollar today as cable tested bids around the US$ 2.0040 level and was capped around the $2.0160 level. Technically, today’s intraday high was right around the 50% retracement of the move from $2.0655 to $1.9650. Data released in the U.K. today saw the PMI services sector survey improve to 57.6 from 57.0 in July. Also, REC August wage pressures eased in August and Nationwide August consumer confidence moved lower. Additionally, BRC reported August shop prices were unchanged m/m and up 0.4% y/y and RICS reported house affordability has fallen to its lowest level in seventeen years. All eyes are on the Bank of England Monetary Policy Committee tomorrow with policymakers expected to keep its headline repo rate at 5.75%. The BoE today announced measures to inject liquidity into the money market by raising its aggregate reserves target by 6%. This follows a major spike in three-month sterling Libor market rates to more than 100bps above BoE’s target rate of 5.75%. The BoE pledged to offer additional liquidity as needed but warned it has little influence over long-dated maturities. BoE reported “Those (longer-dated) spreads have risen significantly in all major financial markets since August 9, reflecting the difficulty of valuing a variety of asset-backed instruments which, for the moment, has reduced liquidity. The sources of these problems does not, therefore, lie in a lack of central bank liquidity.” Cable bids are cited around the US$ 1.9915 level. The euro came off vis-à-vis the British pound as the single currency tested bids around the ₤0.6750 level and was capped around the ₤0.6770 level.
SWISS
The Swiss franc appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the CHF 1.2045 level and was capped around the CHF 1.2135 level. Technically, today’s intraday high was right around the 50% retracement of the move from CHF 1.2470 to CHF 1.1815. The August unemployment rate will be released tomorrow. Dollar offers are cited around the CHF 1.2220 level. The euro and British pound weakened vis-à-vis the Swiss franc as the crosses tested bids around the CHF 1.6445 and CHF 2.4295 levels, respectively.
AUD/NZD
The Australian dollar slumped vis-à-vis the U.S. dollar today as the Aussie tested bids around the US$ 0.8180 level and was capped around the $0.8285 level. Technically, today’s intraday high was just above the 50% retracement of the move from $0.8865 to $0.7675. As expected, Reserve Bank of Australia kept its cash target rate at 6.50%. Data released in Australia today saw the performance of services index recede to 51.6 in August. Australian dollar bids are cited around the US$ 0.8160 level. The New Zealand dollar came off vis-à-vis the U.S. dollar as the kiwi tested bids around the US$ 0.6860 level and was capped around the $0.6970 level. New Zealand dollar bids are cited around the US$ 0.6760 level.
CAD
The Canadian dollar depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the C$ 1.0565 level and was supported around the C$ 1.0480 level. As expected, Bank of Canada left its overnight rate unchanged at 4.50%. Prior to the global liquidity crisis, many traders believe BoC would lift rates another +25bps. Notably, BoC omitted the phrase some “modest further” tightening of rates may be necessary and added it “will continue to closely monitor evolving economic and financial developments.” Most traders construed BoC’s statement to be a little more dovish than expected. U.S. dollar offers are cited around the $1.0705 level.
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