CURRENCY TRADING SUMMARY – 19th June 2008 (00:30GMT)

US dollar down as credit crisis hits regional banks.


U.S. Dollar Trading (USD) with little economic data out yesterday markets were driven by equities and commodities. US stocks were down again as focus switched to the regional banking troubles hit by mortgage delinquencies. The Dow Jones touched below 12000 for the first time in 3 months. US crude inventories showed a decline of 1.2 million barrels and combined with dollar weakness sent oil higher again. In the US share markets, the NASDAQ was down 28 points (1.14%) and the Dow Jones was down 131 points (1.08%). Crude Oil closed up $2.29 ending the New York session at $136.20 per barrel. Looking ahead, weekly jobless claims forecasted at 375K. June Philly Fed is also released expected rebound from May’s -15 to -10 this month.


The Euro (EUR) continued to pivot the 1.5500 level as new a direction waits to be established. The Euro bounced off day lows as Oil popped higher. Further gains were tempered by newly elected Italian Prime Minister Berlusconi comment “It is unfortunate that the ECB has done nothing to stop hyperinflation of Euro”. Overall the EUR/USD traded with a low of 1.5463 and a high of 1.5538 before closing the day at 1.5528 in the New York session.


The Japanese Yen (JPY) stock market weakness failed to provide support as continued high Oil and yield differentials weighed. EUR/JPY made new multi-month highs briefly trading above 168. Overall the USDJPY traded with a low of 107.72 and a high of 108.44 before closing the day around 107.85 in the New York session. BoJ Governor Shirakawa is scheduled to speak.


The Sterling (GBP) continued to trade heavy as the BoE minutes came in 8-1 with the lone dissenter pressing for a rate cut. The Cable was lifted off lows from a higher than expected CBI Industrial Trends Orders came in stronger at +1 vs. market expectations of -12. Late day USD weakness also provided support. Governor King commented that Q2 is expected to slow considerably, further delaying any rate rises. Overall the GBP/USD traded with a low of 1.9480 and a high of 1.9610 before closing the day at 1.9597 in the New York session. Looking ahead, May Retail Sales expected to come in at -0.1% up from last months -0.2%.


The Australian Dollar (AUD) was helped to day highs as commodities bounced on general USD weakness. AUS/JPY made new multi month highs above 102. Overall the AUD/USD traded with a low of .9403 and a high .9472 before closing the day at .9469.


Gold (XAU) bounced as oil and risk sentiment started to creep into the market. Questions about the US Fed’s willingness to raise rates have improved Gold’s position as an inflation hedge. Overall trading with a low of USD$880.80 and high of USD$895.60 ending the New York session at USD$894 an ounce.


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Euro – 1.5575
Initial support at 1.5461 (June 17 low) followed by 1.5303 (June 13 low). Initial resistance is now located 1.5552 (Jun 17 High) at followed by 1.5587 (Jun 12 high).


Yen – 107.65
Initial support is located at 106.8 (June 12 low) followed by 106.24 (Jun 10 low). Initial resistance is now at 108.61 (Feb 14 high) followed by 108.98 (Jan 14 high).


Pound – 1.9600
Initial support at 1.9472 (June 17 low) followed by 1.9410 (Jun 13 low). Initial resistance is now at 1.9612 (Jun 18 high) followed by 1.9698 (June 10 high)


Australian Dollar – 0.9455
Initial support at 0.9304 (50% retracement of the .8953 to 0.9655 advance) followed by 0.9291 (May 15 low). Initial resistance is now at 0.9491 (Jun 12 high) followed by 0.9527 (Jun 10 high).


Gold – 894
Initial support at 858 (Jun 12 low) followed by 850 (Psychological Number). Initial resistance is now at 895.7 (June 16 high) followed by 900 (round number).


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FOREX TRADING SUMMARY

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RBA hike as the BoC cuts. XAU tumbles on profit taking.



U.S. Dollar Trading (USD) was mixed versus a number of majors yesterday tracking data and rate outcomes of other central banks for a change. In events specific to the US market, Fed Chairman Ben Bernanke urged lenders to expand mortgage write-downs for borrowers whose home values have declined and said that more must be done to cease foreclosures.

While, "efforts by both government and private-sector entities to reduce unnecessary foreclosures are helping, but more can, and should, be done." Also, Bernanke sees "delinquencies and foreclosures likely will continue to rise for a while longer." In U.S. share markets the NASDAQ was slightly higher by 1.68 points (+0.07%) whilst the Dow Jones was down by 45.10 point (-0.37%). Crude oil fell by US$2.60 a barrel to US$99.85 mainly on profit taking. Looking ahead, Services ISM will be key to the market today whilst ADP employment often considered a preview to the Non Farm Payrolls data on Friday is also scheduled for release today.

The Euro (EUR) was once again range bound, trading higher during the day despite the Euro zone policy makers pressuring Washington to do more to halt the dollar's decline. On the data front Eurozone PPI data came in on expectations of 0.8% for the month of January. Overall the EURUSD traded with a low of 1.5174 and a high of 1.5250 before closing the day at 1.5210 in the New York session. PMI Services and Retail Sales are key figures for the EZ on Wednesday with forecast at 52.3 and 0.4% respectively.

The Japanese Yen (JPY) strengthened against the dollar, as investors' concern over the US slipping into recession prompted carry trade to be fled. The Currency gained for a sixth straight day, approaching a three-year high, as stocks fell on speculation banks will have to write off more mortgage-related debt on the back of Bernanke’s prompt during his speech. Overall the USDJPY traded with a low of 102.65 and a high of 103.57 before closing the day at 103.32 in the New York session.

The Sterling (GBP) strengthened against the dollar even after a private report showed construction, which accounts for 6 % of Britain's economy, grew at its slowest pace in February. Traders pared bets on how far the BoE will cut interest rates this year which also added to the pound gain. Overall the GBPUSD traded with a low of 1.9827 and a high of 1.9892 before closing the day at 1.9862 in the New York session.

The Australian Dollar (AUD) had a data filled day first with Retail Sales figures for the month of January coming in unchanged from the previous at 0.0%. The Aussie Dollar sell off was limited ahead of the much anticipated RBA rate announcement in which board decided to lift the cash rate to 7.25% (25 basis point hike), the highest level in 12 years.

Nonetheless the AUD did suffer on the back of tentative comments in which policy makers noted “some moderation in household demand is beginning to occur” in which “the extent of the moderation was uncertain.

In other news the current account deficit widened to a record $19.4 billion from it previously revised $16.4 billion. Overall the AUDUSD traded with a low of 0.9220 and a high of 0.9371 before closing the day at 0.9274 in the New York session. Looking ahead, key data in the form of Quarter Four GDP is out on Wednesday morning, with expectation at a decline to 0.8%/3.9% from the previous 1%/4.3%.

The Canadian Dollar (CAD) fell to the lowest in more than a week after the central bank reduced the benchmark interest rate a half-percentage point and signaled it probably will cut again to help the economy cope with a slowdown in the U.S. Overall the USDCAD traded with a low of 0.9854 and a high of 0.9978 before closing the day at 0.9950 in the New York session.

Gold (XAU) fell sharply on profit taking having traded at record highs the previous session. XAU traded with a high of 987.50 and a low of 959.35.

___________________________________

Euro – 1.5200
Initial support at 1.5074 (Feb 28 low) followed by 1.4971 (Feb 27 low). Initial resistance is now located at 1.5275 (Mar 3 high) followed by 1.5304 (1.4311 plus 0.618 of 1.3361 to 1.4967).

Yen – 103.30
Initial support is located at 102.61 (Mar 3 low) followed by 101.67 (Jan 1995 reaction low). Initial resistance is now at 104.97 (Jan 23 high) followed by 105.39 (Feb 29 high)

Pound – 1.9845
Initial support at 1.9763 (Feb 28 low) followed by 1.9644 (Feb 22 low). Initial resistance is now at 1.9975 (Feb 27 high) followed by 2.0000 (Round Number)

Australian Dollar – 0.9375
Initial support a 0.9122 (38.2% retracement of the 0.8513 to 0.9499 advance) followed by 0.9006 (50.0% retracement of the 0.8513 to 0.9499 advance). Initial resistance is now at 0.9499 (Feb 28 high) followed by 0.9555 (Open + Last week range * 1.618)

Gold – 976.10
Initial support at 953.48 (Feb 28 low) followed by 949.00 (Feb 27 low). Initial resistance is now at 988.15 (Mar 4 high) followed by 1000.00 (Round Number)

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US Dollar trades at fresh record lows!

CURRENCY TRADING SUMMARY – 04 MARCH 2008

U.S. Dollar Trading (USD) was subject to an extremely volatile session on Monday trading at fresh record lows versus a number of majors, before pairing those losses. The initial moves against the dollar were largely attributed to traders adding to bets that the Federal Reserve will look to cut rates by 50 bps on March 18. On the data front, ISM manufacturing came in slightly better then expectations at 48.3 (Forecast: 48). In U.S. share markets, the NASDAQ was up by 7.93 points (+0.09%) whilst the Dow Jones fell slightly by -7.49 points (-0.06%). Crude oil rose by US$0.56 a barrel to US$102.40, having earlier hit a record high of US$103.95. Looking ahead, Fed Chairman Ben Bernanke is scheduled to talk on mortgage foreclosures at 1400 GMT.

The Euro (EUR) traded at a fresh record high during the session, before comments made by Luxembourg Prime and Finance Minister Jean Claude Juncker said he was becoming “increasingly concerned” about the Euro’s recent rally, which ceased any further upside moves. Overall the EURUSD traded with a low of 1.5158 and a high of 1.5275 before closing the day at 1.5205 in the New York session. Looking ahead, key growth data in the form of GDP is scheduled for release on Tuesday as well as PPI figures for the fourth quarter and the month of January respectively.

The Japanese Yen (JPY) traded at it strongest level in 3 year versus the USD, breaking below key 103.00 levels. Fear of recession in the US sent Asian stock markets lower which prompt carry trade unwinding and boosted the Yen. Overall the USDJPY traded with a low of 102.62 and a high of 103.70 before closing the day at 103.21 in the New York session.

The Sterling (GBP) was range bound trading sideways for much of the session, GBPUSD traded with a low of 1.9810 and a high of 1.9935 before closing the day at 1.9846 in the New York session.

The Australian Dollar (AUD) rose from for Asian session lows, as major Asian equity markets heading into the red ensured the AUD remained pressured as a high yielding currency. Overall the AUDUSD traded with a low of 0.9300 and a high of 0.9420 before closing the day at 0.9397 in the New York session. Looking ahead, Retail Sales for the month of January are released today whilst the RBA is widely expected to increase rates by 0.25%, leaving the borrowing rate at 7.25%. UPDATE: Aussie Retail Sales for the month of January seen well below expectations of 0.0% (Forecast: 0.4%; Prior: 0.5%)

Gold (XAU) rose to new records but later gave back its intra-day gains, as US recession and surging oil price above 103 continue to boost the metal serving as inflation hedge. XAU traded with a low of 975.65 and a high of 989.35

__________________

Euro – 1.5200
Initial support at 1.5074 (Feb 28 low) followed by 1.4971 (Feb 27 low). Initial resistance is now located at 1.5275 (Mar 3 high) followed by 1.5304 (1.4311 plus 0.618 of 1.3361 to 1.4967).

Yen – 103.30
Initial support is located at 102.61 (Mar 3 low) followed by 101.67 (Jan 1995 reaction low). Initial resistance is now at 104.97 (Jan 23 high) followed by 105.59 (Feb 29 high)

Pound – 1.9845
Initial support at 1.9763 (Feb 28 low) followed by 1.9644 (Feb 22 low). Initial resistance is now at 1.9975 (Feb 27 high) followed by 2.0000 (Round Number)

Australian Dollar – 0.9375
Initial support a 0.9266 (23.6% retracement of the 0.8513 to 0.9499 advance) followed by 0.9122 (38.2% retracement of the 0.8513 to 0.9499 advance). Initial resistance is now at 0.9499 (Feb 28 high) followed by 0.9555 (Open + Last week range * 1.618)

Gold – 976.10
Initial support at 953.48 (Feb 28 low) followed by 949.00 (Feb 27 low). Initial resistance is now at 985.00 (Mar 3 high and bull channel resistance) followed by 1000.00 (Round Number)

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Dollar continues to ease on rate cut expectations.

CURRENCY TRADING SUMMARY – 25 FEBRUARY 2008


U.S. Dollar Trading (USD) ended the week lower across the board on growing recession fears. In a quiet end to the week in terms of data the greenback eased as traders added to bets that the Federal Reserve will look to cut rates on the 18th of March by as much as 50 bps. In U.S. share markets the NASDAQ was up by 3.57 points (+0.16%) whilst the Dow Jones was also up slightly by 96.72 points (+0.79%). Crude oil edged higher once again, falling short of the $100 target, up by US$0.83 a barrel to US$99.06. Looking ahead, key data is in the form of US Existing Home Sales, with economists forecasting a decline to 4.8 mln for the month of January, from the previous 4.89 mln.

The Euro (EUR) rallied on the back of EURJPY crosses heading to a five week high of 159.58 on Thursday. In what was otherwise a dour session, the EURUSD traded with a low of 1.4786 and a high of 1.4863 before closing the day at 1.4824 in New York. ECB president Trichet is scheduled to testify in front of Parliament on Monday

The Japanese Yen (JPY) traded at a week high versus the USD on the back of easing equity markets. As a result the JPY ceased eight successive session of decline versus the Euro and traded at its strongest level against the USD since Feb 12. Overall the USDJPY traded with a low of 106.69 and a high of 107.57 before closing the day at 106.92 in the New York session.

The Sterling (GBP) strengthened versus the Euro and Dollar on Friday as robust UK retail data the previous session eased expectations about the extent of monetary easing likely from the Bank of England. Overall the GBPUSD traded with a low of 1.9607 and a high of 1.9709 before closing the day at 1.9684 in the New York session.

The Australian Dollar (AUD) failed to break key 92 cent levels for much of the Asian session before heading to a week high of 0.9240 in Europe. Despite profit taking the AUD was able to return its day highs on higher stock prices at the close of New York. Overall the AUDUSD traded with a low of 0.9168 and a high of 0.9252 before ending the day at 0.9252. In Other news neighboring currency the New Zealand Dollar tested record 22 year highs of 0.8109 on Friday trading at a high of 0.8103

The Czech Koruna (CZK) rose to a record against the Euro and posted a fifth weekly gain on speculation the central bank will raise interest rates. Policy makers have raised the rate 1.25 percentage points to 3.75 percent over the past 10 months. “The Czech story is really very positive,” said Nicholas Kennedy, an emerging-market currency strategist at 4Cast Ltd. in London. “Everyone's looking for a reason to pull back but it's not giving them a reason.” It has been the world's best-performing currency against the Euro this year, gaining 6 percent. The Czech currency also advanced to 16.916 per dollar, from 17.168 on Feb. 15. Overall the USDCZK traded with a low of 16.837 and a high of 16.98.

Gold (XAU) fell from a record, as declining energy and commodity prices eased inflation concerns that had spurred demand for the precious metal as a hedge. Despite easing, XAU ended the week up 4.2% overall, the biggest weekly advance since November 2007. XAU traded with a low of 936.20 and a high of 949.40.


Euro – 1.4835
Initial support at 1.4702 (Feb 21 low) followed by 1.4611 (Feb 18 low). Initial resistance is now located at 1.4863 (Feb 22 low) followed by 1.4956 (Feb 1 high).

Yen – 107.20
Initial support is located at 106.73 (Feb 22 low) followed by 106.35 (Feb 11 low). Initial resistance is now at 107.57 (Feb 22 high) followed by 108.67 (38.2% retracement of the 114.66 to 104.97 decline)

Pound – 1.9690
Initial support at 1.9611 (Feb 22 low) followed by 1.9363 (Feb 20 low). Initial resistance is now at 1.9709 (Feb 22 high) followed by 1.9738 (Feb 14 high)

Australian Dollar – 0.9235
Initial support a 0.9113 (Feb 20 low) followed by 0.9005 (Feb 15 low). Initial resistance is now at 0.9252 (Feb 22 high) followed by 0.9331 (Nov 8, 2007 high)

Gold – 944.70
Initial support at 906.1 (Feb 19 low) followed by 896.50 (Feb 7 low). Initial resistance is now at 954.60 (Feb 21 high) followed by 970.73 (Bull channel resistance)

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FOREX Daily Outlook

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Poor data out of the US signals further economic concerns. BoJ keep rates on hold at 0.50% in a unanimous vote. >> Full Details

CURRENCY TRADING SUMMARY – 18 FEBRUARY 2008 (00:30GMT)

· U.S. Dollar Trading (USD) fell across the board as disappointing data ensured the greenback remained heavily pressured. New York manufacturing and tumbling consumer confidence added to concern that the U.S. economy is headed for a recession. The NY Fed manufacturing survey fell to -11.72 for the month of February, signaling a contraction for the first time in almost 3 years, whilst Consumer Confidence recorded it lowest reading since 1992, coming in at 69.6. In US share markets, the NASDAQ was down by -10.74 points (-0.46%), whilst the Dow Jones also declined by -28.77 points (-0.23%). Crude oil fell from a five week high on speculation U.S. demand will drop after a report showed that consumer confidence slumped to the lowest level since 1992. However, Crude did end the day up by US$0.23 a barrel to US$95.69.

· The Euro (EUR) traded at a week high on the back of poor data out of the US, prompting investors to look for alternative currencies. Its rise of 1.3% versus the dollar is the biggest weekly advance since Dec 28, 2007. In Eurozone specific data, Trade Balance for the month of December declined by -4.2 bln, well short of the expected 2.4 bln rise. Overall the EURUSD traded with a low of 1.4632 and a high of 1.4709 before closing the day at 1.4669 in the New York session.

· The Japanese Yen (JPY) fell earlier after the Bank of Japan voted unanimously on Friday to keep interest rates unchanged at 0.5 percent, as expected. With Governor Toshihiko Fukui citing the decision on the back of inflationary risks remaining low. The JPY capped its losses on the back of poor manufacturing data out of the US, ensuring the USDJPY traded with a low of 107.22 and a high of 108.32 before closing the day at 107.67 in the New York session.

· The Sterling (GBP) ceased five days of gains against the dollar as investors viewed the recent rally to be a misrepresentation of the UK economy, and future policy outcomes. However any further declines were limited on the back of poor US data. Overall the GBPUSD traded with a low of 1.9597 and a high of 1.9722 before closing the day at 1.9614 in the New York session.

· The Australian Dollar (AUD) remained firm throughout the Asian session, and was buoyed by poor US data in the New York session. Overall the AUDUSD traded with a low of 0.9009 and a high of 0.9098 before closing the day at 0.9071 in the New York session.

· Gold (XAU) traded lower on the back of easing oil prices, as investors were subject to profit taking. XAU traded with a low of 898.70 and a high of 915.20.


· Euro – 1.4680
Initial support at 1.4631 (Feb 15 low) followed by 1.4549 (Feb 14 low). Initial resistance is now located at 1.4698 (50% retracement of the 1.4956 to 1.4440 decline) followed by 1.4759 (61.8% retracement of the 1.4956 to 1.4440 decline).

· Yen – 107.85
Initial support is located at 107.00 (Feb 13 low) followed by 106.35 (Feb 11 low). Initial resistance is now at 108.67 (38.2% retracement of the 114.66 to 104.97 decline) followed by 109.82 (50% retracement of the 114.66 to 104.97 decline)

· Pound – 1.9575
Initial support at 1.9606 (Feb 15 low) followed by 1.9551 (Feb 13 low). Initial resistance is now at 1.9738 (Feb 14 high) followed by 1.9763 (Feb 5 high)

· Australian Dollar – 0.9080
Initial support a 0.9005 (Feb 15 low) followed by 0.8954 (Feb 14 low). Initial resistance is now at 0.9102 (Feb 4 high) followed by 0.9125 (Nov 12, 2007 high)

· Gold – 902.60
Initial support at 896.50 (Feb 13 low) followed by 885.0 (Feb 7 low). Initial resistance is now at 927.31 (Feb 11 high) followed by 936.80 (Feb 1 trend high)



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FOREX Daily Outlook

Bernanke signals more US rate cuts are on the agenda.


CURRENCY TRADING SUMMARY – 15 FEBRUARY 2008 (00:30GMT)

· U.S. Dollar Trading (USD) eased against a number of majors as Fed Chairman Bernanke signaled the Central Bank may continue to cut rates further, amidst concerns the US was headed into recession. His comments addressed the Fed “will act in a timely manner as needed to support growth and to provide adequate insurance against downside risks”, causing futures market to price in an 80% chance that policy makers will move to cut by another 50bps in the next rate meeting on the 18 march. In U.S. share markets the NASDAQ was lower on Thursday by 41.39 points (-1.74%) whilst the Dow Jones also fell by -175.26 (-1.40%). Crude oil fell by rose by US$2.15 a barrel to US$95.42. Looking ahead, heavy data day is scheduled for Friday, with the releases of TIC flows, NY Fed Manufacturing, Industrial Production, and Michigan sentiment survey.

· The Euro (EUR) rallied to a week high post “dovish” Bernanke comments yesterday. On the data front, Eurozone GDP came in better than forecasted in at 0.4%/2.3% for the fourth quarter (Forecast: 0.3%/2.2%). Overall the EURUSD traded with a low of 1.4550 and a high of 1.4649 before closing the day at 1.4634 in the New York session. EU Trade Balance on is scheduled for release on Friday.

· The Japanese Yen (JPY) erased a loss versus the dollar as Bernanke warned that tighter credit will be a “restraint on economic growth”, sparking declines in U.S. stocks. Overall the USDJPY traded with a low of 107.77 and a high of 108.61 before closing the day at 107.97 in the New York session. Looking ahead, the BoJ is scheduled to make a rate announcement, although widely expected that rates will be held at 0.50%.

· The Sterling (GBP) pound gained against 11 of the 16 most-traded currencies as traders reduced bets on interest-rate cuts by the Bank of England this year after Governor Mervyn King said on Wednesday, that price growth will overshoot the bank's 2 percent goal in two years. Overall the GBPUSD traded with a low of 1.9616 and a high of 1.9738 before closing the day at 1.9688 in the New York session.

· The Australian Dollar (AUD) was boosted by all time lows in Unemployment Rate coming in at 4.1%, below forecasted figures of 4.3%. The buoyant data confirmed that the labour force had grown by 26.8K jobs, adding to growing expectations that the RBA may move to increase rates in their March meeting.

· Gold (XAU) traded steady around $910 levels amid rising oil prices. XAU traded with a low of 902.15 and a high of 913.80.



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· Euro – 1.4645

Initial support at 1.4440 (Feb 7 low) followed by 1.4366 (Jan 22 reaction low). Initial resistance is now located at 1.4615 (Feb 12 high) followed by 1.4637 (38.2% retracement of the 1.4956 to 1.4440 decline).



· Yen – 107.80

Initial support is located at 105.71 (Jan 31 low) followed by 104.97 (Jan 23 low). Initial resistance is now at 107.66 (Feb 11 high) followed by 107.89 (Jan 28 high)



· Pound – 1.9690

Initial support at 1.9403 (Feb 11 low) followed by 1.9389 (Feb 7 low). Initial resistance is now at 1.9643 (Feb 12 high) followed by 1.9763 (Feb 5 high)



· Australian Dollar – 0.9020

Initial support a 0.8916 (Feb 8 low) followed by 0.8875 (Feb 7 low). Initial resistance is now at 0.9086 (Feb 12 high) followed by 0.9102 (Feb 4 high)



· Gold – 909.60

Initial support at 896.70 (Feb 13 low) followed by 885.0 (Feb 7 low). Initial resistance is now at 927.31 (Feb 11 high) followed by 936.80 (Feb 1 trend high)



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