EURO Update
The euro lost ground against the U.S. dollar today as the single currency tested bids around the US$ 1.4755 level and was capped around the $1.4905 level. It extended the recent losses following Friday’s U.S. November non-farm payrolls data (which was better than expected) which implies the U.S. labour market is stronger-than-expected. Traders continued to pare risk today, especially as U.S. equity markets finished marginally above flat for the day. Federal Reserve Bank of New York President Dudley reported the recession is over but added the economy remains weak, adding the Fed’s exit policy will be “complicated but manageable.” Fed Chairman Bernanke spoke today and said inflation will likely remain “subdued” and added the U.S. economy will continue to face “formidable headwinds.” Bernanke added the pace of expansion is likely to be “moderate.” Fed-watchers continue to speculate the Fed will keep monetary policy largely unchanged for some time. Fed funds futures pared their bets that the Fed will raise rates as early as mid-2010. In eurozone news, European Central Bank President Trichet testified “the eurozone economy shows increasing signs of recovery” but noted uncertainty remains high. Trichet also noted inflation expectations remain “firmly anchored.” ECB member Quaden, referring to when the ECB would begin to remove policy accommodation, said “Let’s wait a bit, because right now we have forecasts that are still, by definition, uncertain. We will wait for more information in the months to come.” Data released in Germany today saw October manufacturing orders off 2.1% m/m and 8.5% y/y. Euro bids are cited around the US$ 1.4720 level.
Technical Outlook at 1330 GMT (EDT + 0500)
(Bid Price) (Today’s Intraday Range)
EUR/ USD 1.4825 1.4903, 1.4755
USD/ JPY 89.49 90.36, 89.04
GBP/ USD 1.6443 1.6514, 1.6312
USD/ CHF 1.0195 1.0243, 1.0136
AUD/USD 0.9126 0.9187, 0.9051
USD/CAD 1.0517 1.0648, 1.0481
NZD/USD 0.7131 0.7187, 0.7080
EUR/ JPY 132.66 134.34, 132.36
EUR/ GBP 0.9014 0.9062, 0.9005
GBP/ JPY 147.13 148.81, 146.62
CHF/ JPY 87.75 88.96, 87.56
Support Resistance Support Resistance
EUR/ USD USD/ JPY
L1. 1.4470 1.4915 88.60 93.30
L2. 1.4355 1.5140 87.10 95.50
L3. 1.4175 1.5360 86.10 98.85
GBP/ USD USD/ CHF
L1. 1.6115 1.6685 1.0275 1.0580
L2. 1.5720 1.6830 1.0040 1.0695
L3. 1.5405 1.7040 0.9750 1.0885
AUD/ USD USD/ CAD
L1. 0.8450 0.8830 1.0535 1.0945
L2. 0.8300 0.9050 1.0365 1.1125
L3. 0.8070 0.9120 1.0155 1.1355
NZD/ USD EUR/ JPY
L1. 0.6880 0.7125 131.45 135.75
L2. 0.6750 0.7260 129.75 136.90
L3. 0.6535 0.7395 127.00 138.75
EUR/ GBP EUR/ CHF
L1. 0.8795 0.8995 1.5110 1.5380
L2. 0.8675 0.9105 1.4905 1.5580
L3. 0.8320 0.9225 1.4670 1.5880
GBP/ JPY CHF/ JPY
L1. 146.10 152.50 86.30 88.65
L2. 142.05 157.75 85.40 90.10
L3. 135.70 161.70 81.55 91.60
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