Fridays allow investors and markets to take stock of the past week�s developments and events. This week has been packed with news and interesting turnarounds in market dynamics that has left investors somewhat perplexed at the direction for the week to come. One thing is for sure, Cash continues to be king and risk aversion remains strong. The Swiss franc declined on the back of the UBS news, USDCHF culminating at 1.1880 at time of writing. The Yen turned a corner this week, shedding some of its risk averse haven status. The Yen gave in to the dollar while the dollar continued to rise, the dire state of the Nippon economy finally coming to terms with the Yen�s repatriation and risk averse driven price action. The USDJPY has been cautiously rising, trading a broad 93.00 � 94.00 range.
[B]News and Events:
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Fridays allow investors and markets to take stock of the past week�s developments and events. This week has been packed with news and interesting turnarounds in market dynamics that has left investors somewhat perplexed at the direction for the week to come. One thing is for sure, Cash continues to be king and risk aversion remains strong.
President Obama announced a housing rescue plan this week to compliment the already introduced and revised TARP � a Term Asset-backed securities Lending Facility (TALF) is yet to come. The Dollar continues to be bolstered by the high demand for the green-back. Repatriation and measures that could be deemed �protectionist� will continue to bolster the U.S Dollar for the time being. It is however important to note that more than half of U.S assets are foreign owned � continued tight lipped antics with regards to the economic stimuli could discredit the local authorities � a large out flux of assets would drastically hurt the dollar.
UBS and more intrinsically Switzerland have been embattled with the U.S government on fraud charges that go against the very nature of the Swiss financial system � the banking secrecy policy that this small country nestled in the Alps has become known for. This has not done much to put down the Swiss investor, the Zew numbers coming out at -57.7, up from -66.7 last month. The Swiss franc declined on the back of the UBS news, USDCHF culminating at 1.1880 at time of writing. The Yen turned a corner this week, shedding some of its risk averse haven status.
The Yen gave in to the dollar while the dollar continued to rise, the dire state of the Nippon economy finally coming to terms with the Yen�s repatriation and risk averse driven price action. The USDJPY has been cautiously rising, trading a broad 93.00 � 94.00 range.
In other news the Turkish central bank unexpectedly cuts rates by 150bps. Norway�s GDP numbers come out largely better than expected at +1.3% vs. -0.3%. The RBA governor Stevens says he sees the Aussie economy fairing very well amidst these difficult times � in part due to the steps the RBA took to stimulate the economy.
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Today’s Key Issues (time in GMT):[/B]
12:00 CAD CPI (MoM) -0.2% vs. -0.7%
12:00 CAD CPI (YoY) 1.2% vs. 1.2%
13:30 USD CPI (MoM) 0.3% vs. -0.7%
13:30 USD CPI (YoY) -0.1% vs. 0.1%
[B]The Risk Today: [/B]
[B]EurUsd:[/B] corrective recovery is holding above 1.2514, a break here would refocus 1.2389. Near term resistance stands at 1.2641 � strong resistance remains at 1.2707. Bearish sentiment persists, near-term support found at 1.2566 via 1.2602.
[B]GbpUsd:[/B] recovery defines interim support at 1.4295; however cable needs to clear 1.4610 to rid itself of its near-term pressure. Initial resistance at 1.4335.
[B]UsdJpy:[/B] Can Yen decline be sustained, pressure building on advance. Pair continues to rise on wedge formations. Initial support at 93.31, on the upside we are aiming for 94.46.
[B]UsdChf:[/B] continued advance as Swissie falters; rise above 1.1827 sets tone for days to come � would pave the way for 1.2252. Initial resistance at 1.1890, support at 1.1827.
[B]Resistance and Support:
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By[B] Philippe Meyer [/B]- ACM Advanced Currency Markets, Geneva, Switzerland