Wednesday, July 23, 2008

EUR/USD - Euro Dollar Analisa

EUR/USD - Euro Dollar

Short term (Intraday)

1,5882. EUR USD is in a range between 1,5800 and 1,5950. EUR USD moves without trend and swings around exponential moving averages (EMA 50 and 100). The volatility is low. ForexTrend 4H, daily (Mataf Trend Indicator) is in a bullish configuration. The price should continue to move in 1,5800 / 1,5950 range. We won't take a position.
1,5910 - 1,5950
1,5870 - 1,5800
Long term chart
EUR/USD - Euro Dollar
updated 22 juli 2008 13:29 GMT

Dollar Advances as Paulson Stresses Support for U.S. Currency

Dollar Advances as Paulson Stresses Support for U.S. Currency

July 22 (Bloomberg) -- The dollar rose the most against the euro in almost a week as Treasury Secretary Henry Paulson voiced support for the currency and the Federal Reserve Bank of Philadelphia president said interest rates should be raised.

The greenback extended its gain after breaking $1.59, where orders to sell the euro were clustered, and increased further as crude oil prices fell, traders said. The Canadian dollar dropped against all of the other major currencies as a report showed domestic retail sales rose in May less than economists forecast.

``The feeling is that we're at a turning point and things are going to get better from here in the financial sector,'' said Brian Dolan, chief currency strategist at, a unit of online currency trading firm Gain Capital in Bedminster, New Jersey. Paulson's comments ``helped the market get over the mass hysteria about Fannie and Freddie.''

The dollar increased 0.4 percent to $1.5851 per euro at 10:28 a.m. in New York, from $1.5922 yesterday. It fell to $1.6038 on July 15, the weakest since the European currency's 1999 debut. The dollar advanced 0.4 percent to 106.86 yen, from 106.45. The yen was little changed at 169.40 per euro, compared with 169.48, after falling to a record of 169.91 yesterday.

South Africa's rand was the biggest gainer versus the dollar among the world's major currencies as gold prices increased and platinum advanced for the first time in seven days. South Africa produces about 10 percent of the world's gold and almost 80 percent of its platinum. The rand increased 0.4 percent to 7.5378 versus the dollar.

Canadian Dollar

Canada's dollar fell for the first time in three days against its U.S. counterpart, dropping 0.6 percent to C$1.0055 per U.S. dollar. Retail sales rose 0.4 percent in May to C$35.8 billion ($35.7 billion), Statistics Canada said today in Ottawa. The median forecast of 22 economists surveyed by Bloomberg News was for an increase of 0.6 percent.

The U.S. dollar strengthened today as Paulson said in a speech in New York that he's ``confident'' that lawmakers will pass the bill to ``boost confidence'' in Fannie Mae and Freddie Mac, the largest sources of U.S. mortgage financing. He reiterated that a strong dollar is ``really very important.''

The dollar touched the record low earlier this month on concern Fannie and Freddie, which own or guarantee almost half of the $12 trillion in U.S. home loans outstanding, may fail to survive the housing slump.

Plosser on Rates

Philadelphia Fed President Charles Plosser said in a speech today in King of Prussia, Pennsylvania, that the U.S. central bank should raise interest rates ``sooner rather than later.'' He argued against reductions in two Fed decisions this year.

Two-year U.S. Treasury yields rose 7 basis points, or 0.07 percentage point, to 2.66 percent. The yield advantage of comparable-maturity German bunds narrowed to 191 basis points.

``Plosser's hawkish comments pushed Treasury yields higher,'' contributing to the dollar's turnaround, said Matthew Kassel, director of proprietary trading at ING Financial Markets LLC in New York.

Futures traded on the Chicago Board of Trade showed a 7 percent chance the Fed will increase its 2 percent target rate for overnight lending between banks by a quarter-percentage point at its Aug. 5 meeting, compared with 40 percent odds a month ago.

The euro traded earlier near an all-time high versus the dollar as the Italian daily La Stampa reported that European Central Bank executive board member Lorenzo Bini Smaghi said the bank's main refinancing rate isn't ``exactly restrictive'' at 4.25 percent.

`Hawkish Noises'

``The ECB has continued to make hawkish noises, meaning the euro is going to be quite well-supported in the near term,'' said Ian Stannard, a London-based senior currency strategist at BNP Paribas SA. The dollar may still rebound to $1.50 by the end of the quarter, he said.

The euro may climb past 170 to an all-time high against the yen as the ECB raises rates a second time this year while the Bank of Japan leaves its benchmark rate unchanged at 0.5 percent, according to Commerzbank AG.

``The Japanese yen has to bear the consequences from having been unable to benefit from falling equity markets over the last weeks,'' currency strategists at the firm led by Frankfurt-based Ulrich Leuchtmann wrote in a note to clients. ``On the backdrop of low key rates, which are unlikely to see any changes in the near future, the general environment will remain difficult for the Japanese currency.''

Tuesday, July 22, 2008


Dollar Is Little Changed After Bank of America Beats Forecasts

July 21 (Bloomberg) -- The dollar was little changed against the yen after Bank of America Corp. said profit declined less than analysts estimated.

The yen touched the all-time low against the euro as the largest U.S. consumer and home lender became the fourth of the nation's five biggest banks to post better-than-estimated results. The pound dropped versus the dollar and the euro as a report showed U.K. house prices fell in July for the first time since data began in 2002.

``The world looks a little more peaceful for the time being,'' said Alan Ruskin, head of international currency strategy at RBS Greenwich Capital Markets in Greenwich, Connecticut. ``But longer-term concerns about the U.S. economy haven't diminished.''

The dollar traded at 106.96 yen at 10:06 a.m. in New York, unchanged from July 18. The U.S. currency was at $1.5850 per euro, compared with $1.5847. The yen traded at 169.54 per euro, compared with 169.49, and touched 169.91, the weakest level since the European currency debuted in 1999.

Bank of America's net income fell to $3.41 billion, or 72 cents a share, the Charlotte, North Carolina-based bank said today in a statement. The average estimate of 21 analysts surveyed by Bloomberg was 54 cents.

The bank added $2.2 billion to loan loss reserves. The world's biggest banks and brokerages have disclosed $447 billion of writedowns and losses because of a credit-market slump triggered by mortgage defaults.

JPMorgan & Chase Co., Citigroup Inc. and Wells Fargo & Co. reported second-quarter results last week that exceeded analysts' estimates.

Weaker Pound

The pound dropped for a second day, depreciating 0.3 percent to $1.9940 and 79.46 pence per euro. Rightmove Plc, Britain's most-used property Web site, reported that the average asking price for a home fell an annual 2 percent to 235,219 pounds ($469,544). Bank of England policy maker David Blanchflower told the Guardian newspaper that the British economy is entering a recession that may last more than a year and the bank must lower its 5 percent target lending rate.

``Given that the U.K. economy is going to grow below trend, why do we need tight policy in the U.K.?'' said Michael Metcalfe, head of macro strategy at State Street Global Markets in London. ``I would agree that the next move in U.K. rates will be downward and sterling will fall on the back of that.'' The pound may decline to $1.80 within a year, he said.

Australian Dollar

The Australian dollar rose as much as 0.7 percent to an eight-month high of 104.48 yen on speculation the nation will retain its interest-rate advantage over Japan. The difference in yield between two-year Australian and Japanese bonds widened to 5.85 percentage points, the most in a week. Australia's target lending rate of 7.25 percent compares with 0.5 percent in Japan.

South Korea's won dropped for a sixth day, decreasing 0.4 percent to 1,018.00 versus the dollar. A five-year rally in emerging-market currencies is coming to an end as central banks from South Korea to Turkey struggle to contain inflation, according to DWS Investments and Morgan Stanley.

Futures on the Chicago Board of Trade showed an 8 percent chance the Federal Reserve will increase its 2 percent target rate for overnight lending between banks by a quarter-percentage point at its Aug. 5 meeting, compared with 12 percent odds a week ago.

``The Fed has simply not been in a position to raise interest rates and fight inflation, so people have been shunning the dollar,'' said Neil Mellor, a currency strategist in London at Bank of New York Mellon Corp.

Stern on Rates

The U.S. central bank shouldn't wait for housing and financial markets to stabilize before raising rates, Minneapolis Fed President Gary Stern said in an interview July 18.

``We're pretty well-positioned for the downside risks we might encounter from here,'' he said. ``I worry a little bit more about the prospects for inflation.''

Sales of previously owned homes in the U.S. declined to a 4.94 million annual pace in June, from 4.99 million the prior month, according to the median forecast of 74 economists surveyed by Bloomberg News. The National Association of Realtors will release the report July 24.

A day later, the Commerce Department will say sales of new houses dropped to an annual pace of 503,000 from 512,000 in May, a separate survey shows. Sales of existing and new homes are down 35 percent from their July 2005 peak.

Leading economic indicators dropped 0.1 percent in June after a revised 0.2 percent decline the prior month, the Conference Board reported today. The decrease matched the median forecast of 62 economists surveyed by Bloomberg News.

Currency trading volume today may be about 75 percent of normal levels because of a public holiday in Japan, said Robert Rennie, chief currency strategist in Sydney at Westpac Banking Corp., Australia's fourth-biggest lender.

Forex News

7/21/2008 3:00 PM: EUR/$..1.5888 $/JPY..106.73 GBP/$..1.9982 $/CHF..1.0209 AUD/$..0.9753 $/CAD..1.0010

FX Listless, Awaits Data by Korman Tam

The trading week kicked off to a quiet start with the Japanese market away on holiday and a dearth of fresh economic news for traders to digest. Moving the markets today was a better-than-forecast Q2 earnings report from Bank of America, which, combined with the earnings reports from last week, instills renewed confidence in the financial sector. Although earnings plunged by 41% to $0.72 per share, it exceeded consensus estimates for $0.53 per share, prompting currency traders to push the euro/yen pair to a new record high at 169.89.

The economic calendar from the US consists of the Richmond Fed survey, weekly jobless claims, June existing home sales, building permits, durable goods orders, July University of Michigan consumer confidence, and June home sales. The data will highlight the current hurdles impeding the economy with further declines expected in both the housing market and consumer sentiment. Fears of rapid deterioration in the financial sector have subsided somewhat following recent better-than-expected earnings reports from banks. Nonetheless, the Fed has revealed increased concern over the outlook of the economy, tempering market sentiment for an FOMC rate hike in the coming months.