EUR/USD Performance Chart (10/03/10 04:00)
| Daily % Chg |
-0.40% |
|
3 months |
-7.78% |
| 1 week |
-0.26% |
|
6 months |
-6.20% |
| 1 month |
-0.72% |
|
1 year |
7.33%
|
Details
| Prev close |
1.3634 |
|
|
52 week high |
1.5144 |
| Last trade |
1.3580 |
|
|
52 week low |
1.2533
|
| High |
1.3635 |
|
|
Low |
1.3537 |
Bloomberg Median Forecasts
| Q1 2010 |
1.39 |
|
Q3 2010 |
1.39 |
| Q2 2010 |
1.38 |
|
Q4 2010 |
1.38 |
|
|
|
Commentary
Through today’s trading we have seen a dominant dollar on what is, once again, a very light news day. The only fundamental announcement, one which typically has very little impact on the market, was the French trade balance report, which came in slightly better than expected at -3.7 billion euros. Looking at the more medium-term picture, price action in this pair reflects the uncertainty in the broader markets. Since the middle of February, this pair has been confined to a narrow range of about 300 pips. As is often the case when mixed fundamentals give us only the vaguest notion of what direction we may be heading in, technical channels tend to develop. Currently there are mixed messages on sovereign debt, potential central bank actions, employment, housing, etc., etc. At some point this channel will break, and often when this happens it produces a large move in one direction or the other. Unfortunately, at this point there just does not seem to be one sign that we can say with any degree of certainty would be able to propel a breakout, and even less certainty on which direction that breakout would move. Dan Cook, Chicago
GBP/USD Performance Chart (10/03/10 04:00)
| Daily % Chg |
-0.51% |
|
3 months |
-7.82% |
| 1 week |
0.12% |
|
6 months |
-9.10% |
| 1 month |
-4.17% |
|
1 year |
6.35% |
Details
| Prev close |
1.5066 |
|
|
52 week high |
1.7043 |
| Last trade |
1.4989 |
|
|
52 week low |
1.3657 |
| High |
1.5069 |
|
|
Low |
1.4937 |
Bloomberg Median Forecasts
| Q1 2010 |
1.60 |
|
Q3 2010 |
1.57 |
| Q2 2010 |
1.56 |
|
Q4 2010 |
1.59 |
|
|
|
Commentary
After mounting a 400+ pip run in the first trading week of March, the pound is once again sliding down against the dollar this week, giving back 50% of its previous gains. Not helping the case for sterling support was the release of UK trade balance data that showed a deficit of 8.0 billion pounds, over 1.0 billion worse than previously expected. Overall, however, this report was just a mere pebble in the mountain of concern over Britain’s financial future. One of the dominating factors, and one that will not be resolved until after the UK elections later this year, is fear over political gridlock at a time when cooperation is most needed to address fiscal concerns. Add to that the downward trend which started in mid-January, and there does not appear to be any respite on the horizon for the pound. With that said, world events can spin on a dime and if the market determines what level is enough for this pair, perhaps the GBP can get some support. Currently from a technical perspective, the 1 March low seems to be the most logical level of potential price support. Should the currency pair break below that level, however, it’s a long way before the next layer of support. Dan Cook, Chicago
AUD/USD Performance Chart (10/03/10 04:00)
| Daily % Chg |
0.24% |
|
3 months |
0.31% |
| 1 week |
0.87% |
|
6 months |
5.77% |
| 1 month |
4.95% |
|
1 year |
42.30% |
Details
| Prev close |
0.9092 |
|
|
52 week high |
0.9406 |
| Last trade |
0.9114 |
|
|
52 week low |
0.6307 |
| High |
0.9125 |
|
|
Low |
0.9056 |
Bloomberg Median Forecasts
| Q1 2010 |
0.90 |
|
Q3 2010 |
0.91 |
| Q2 2010 |
0.90 |
|
Q4 2010 |
0.91 |
|
|
|
Commentary
The last few hours have seen the aussie regain some strength and pare back its earlier losses to the USD. From a technical perspective, the losses to start the week seem like a small pullback in what has been an uptrend for the AUD since 25 February (or even 5 February, on the longer term). A break above 0.9134 would seem to confirm that the uptrend is still intact. Currently the aussie has interest rate support and continues to put together strong fundamentals even in the face of Chinese interest rate tightening. Provided the tightening by China does not result in the general slowdown of the Australian economy that was so much feared in January, there could still be a lot of upside for the AUD. The big concern here though is that because the effects of the types of policies we saw employed in China take a while to emerge, from an economic perspective any negative results are yet to be seen; when they are, it will probably seem as if they ‘came out of nowhere’. In all, the Australian economy still looks the sturdiest of those with a major, tradeable currency. The next indication we get will come early in Australia’s Wednesday trading session, when home loans data will be released. This announcement will definitely be worth paying attention to. Dan Cook, Chicago
Notes: Chart data sourced from Bloomberg. Bloomberg Median Forecasts are produced by Bloomberg by taking the median level from rates forecast by a number of contributors. These contributors consist of leading banks and security firms.
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