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Research
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Forex - Fundamental research
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7
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Thursday,
13 December 2007,
03:25 GMT
GCI Forex Research
by FX Research Desk
Fundamental Outlook
The euro strengthened vis-a-vis the U.S. dollar today as the single currency tested offers around the US$1.4745 level and was supported around the $1.4650 level. Technically, today’s intraday high was right around the 23.6% retracement of the move from $1.4015 to $1.4965. Market volatility has been significant following yesterday’s interest rate announcement from the Federal Open Market Committee wherein policymakers reduced the fed funds target rate by 25bps to 4.25%, disappointing a large segment of the market that wanted a 50bps easing. The Fed cited an “intensification of the housing correction” and “some softening in business and consumer spending.” Notably, the Fed also cited difficult financial market conditions twice in its policy statement, an indication the Fed may be inclined to ease rates further at the FOMC meeting in late January.
• EUR
• JPY
• GBP
• CHF
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Wednesday,
12 December 2007,
03:45 GMT
GCI Forex Research
by FX Research Desk
Fundamental Outlook
The euro strengthened vis-a-vis the U.S. dollar today as the single currency tested offers around the US$1.4735 level and was supported around the $1.4640 level. Traders positioned themselves ahead of the Federal Open Market Committee’s interest rate decision later in the North American session. Ahead of the announcement, the December fed funds futures contract was pricing in an 82% chance the FOMC would reduce the fed funds target rate by 50bps to 4.0% while the February fed funds futures contract is pricing in a 74% chance the target rate would be 3.75% by the end of the January FOMC meeting. As is always the case, the FOMC’s policy statement will be closely monitored for clues about inflation, economic growth, housing market conditions, and any clues regarding further easings from the Fed.
• EUR
• JPY
• GBP
• CHF
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Wednesday,
05 December 2007,
04:22 GMT
GCI Forex Research
by FX Research Desk
Fundamental Outlook
The euro moved higher vis-a-vis the U.S. dollar today as the single currency tested offers around the US$ 1.4765 level and was supported around the $1.4635 level. Stops were reached above the $1.4740 level, representing the 23.6% retracement of the move from $1.4015 to $1.4965. The common currency gained some ground overnight after San Francisco Fed President Yellen was quoted as saying “It is far too early to tell if we are in for a sustained period of sluggish growth in consumption spending, but recent developments do raise the possibility as a serious risk to the outlook. Since the October FOMC meeting, financial conditions have deteriorated, and we have seen some unexpected softening in the economic data.
• EUR
• JPY
• GBP
• CHF
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Monday,
03 December 2007,
03:18 GMT
GCI Forex Research
by FX Research Desk
Weekly market recap, week ahed, and schedule
The euro depreciated vis-a-vis the U.S. dollar last week as the single currency tested bids around the $1.4630 level and was capped around the $1.4910 level. The pair lost about 205 pips last week. Early U.S. holiday retail sales look to be fairly robust. Fed’s Kohn cited “elevated turbulence” from the credit shock and said policymaking must be “flexible, pragmatic, and nimble.” Philly Fed’s Plosser hawkishly said lowering rates won’t solve the markets’ problems. The Fed’s Beige Book cited decelerating GDP growth, “relatively soft retail spending,” and a “quite depressed” real estate sector. Fed boss Bernanke said the Fed is “exceptionally alert and flexible” and sees headwinds for consumers.
• EUR
• JPY
• GBP
• CHF
• CAD
• AUD
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Friday,
30 November 2007,
04:10 GMT
GCI Forex Research
by FX Research Desk
Fundamental Outlook
The euro depreciated vis-a-vis the U.S. dollar today as the single currency tested bids around the US$ 1.4720 level and was capped around the $1.4845 level. The common currency extended its recent pullback on growing doubts the European Central Bank will continue to tighten monetary policy. Traders also added to U.S. dollar exposure after U.S. GDP growth between July and September was upwardly revised to 4.9% from 3.9%, its strongest level in four years. The dollar’s gains were limited, however, that GDP growth in the current October-to-December period could be weak around 1.5% or so. There is also a changing perception in the market concerning interest rate differentials. Some traders are now buying U.
• EUR
• JPY
• GBP
• CHF
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Tuesday,
27 November 2007,
03:44 GMT
GCI Forex Research
by FX Research Desk
Fundamental Outlook
The euro gained ground vis-a-vis the U.S. dollar today as the single currency tested offers around the US$ 1.4885 level and was supported around the $1.4805 level. On Friday, the common currency established a new lifetime high before paring intraday gains and traders continue to eye the psychologically-important US$ 1.5000 figure. The pair’s upside moves were limited by news that early U.S. holiday retail sales have been robust this weekend, up 7.2% y/y. Data released in the U.S. today saw the Chicago Fed’s National Activity Index fall to -0.73 in October, down from -0.30 in September. Traders await comments from Philadelphia Fed President Plosser tomorrow and U.S. housing market data this week.
• EUR
• JPY
• GBP
• CHF
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Monday,
26 November 2007,
06:59 GMT
GCI Forex Research
by FX Research Desk
Weekly market recap, week ahed, and schedule
The euro appreciated vis-a-vis the U.S. dollar last week as the single currency tested offers around the $1.4965 level and was supported around the $1.4620 level. The pair gained about 175 pips last week. Treasury’s Paulson reiterated the U.S.’s strong dollar policy. Rumours surfaced that Saudi Arabia and UAE will revise their FX regimes by reducing USD exposure. The Fed saw the October rate cut as a “close call” and now sees core PCEs up 1.7 to 1.9% in 2008 and GDP growth between 1.80% and 2.5%. The euro neared the $1.50 figure on Friday and pulled away.
ECB’s Trichet and Liebscher noted exchange rate volatility is “not welcome” and cited
upside inflation risks. Buba sees German inflation normalizing in 2008.
• EUR
• JPY
• GBP
• CHF
• CAD
• AUD
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