Monday, October 18, 2010
Previous session overview
The euro fell against the dollar and yen in Asia Monday as investors sold the common currency following dovish comments from European Central Bank president Jean-Claude Trichet over the weekend.
Trichet on Sunday pushed back against hawkish remarks from governing council member Axel Weber last week. Weber had said the central bank shouldn't wait long to withdraw from its extraordinary stimulus and should phase out its bond-buying program, but Trichet said the majority of the governing board does not agree with that view.
At 0450 GMT, the euro was at USD1.3892, down from USD1.3974. Dealers said short-term investors were selling the common currency after it retreated earlier in the day below USD1.3920, which many had considered a technical support level. Market participants were already eager to lock in profits after the euro had risen Friday to a near nine-month high at USD1.4161, traders said. As such profit-taking continues the euro could next test USD1.3800 in coming sessions, dealers said.
The euro was also down against the yen, falling to its lowest level since late September as Japanese institutional investors and other players sold the common currency as it tumbled against the dollar, dealers said.
At 0450 GMT, the euro stood at JPY112.87. That was near the earlier low it marked at JPY112.76, it's lowest since Sept. 28, and down from JPY113.77 late Friday in New York.
The ICE Dollar Index, which tracks the greenback against a trade-weighted basket of currencies including the euro, was up at 77.314 at 0450 GMT from 76.984 late Friday in New York.
The Australian dollar weakened in thin Asia trade Monday, retreating from the parity levels traded in New York Friday as traders pared U.S. dollar short positions.
Market expectation
The dollar traded hands at JPY81.25 at 0450 GMT compared with JPY81.41 late Friday in New York. While any further rises in U.S. Treasury yields this week could buoy the greenback to around JPY82.00, any rises above that level would likely be blunted by selling by Japanese exporters, dealers said.
EURCHF gains remain capped at the 1.3462 level and technical indicators continue to signal a consolidation in coming days, say analysts. This allow for a slide back to the 55-day moving average at 1.3282, and perhaps even to the 1.3070 key support level to unfold, says technical analysts.
European stock markets are expected to open lower Monday, as concerns about the health of some of the weaker euro-zone countries return and as market participants question how much Federal Reserve stimulus has already been priced in following chairman Ben Bernanke's comments Friday.
Most important events of the day
| Oct 18 | Count. | Event | For | Unit | Imp. | Act. | Cons. | Prev. |
|---|---|---|---|---|---|---|---|---|
| 00:00 |  EU | EuroGroup meeting |  | |||||
| 07:30 |  DK | Consumer Sentiment (18th-22nd) | Oct | index | | 2.3 | ||
| 09:00 |  IT | Current Account | Aug | EUR mn | | 535 | ||
| 13:00 |  US | Treasury International Capital System (TICS) | Aug | US $ bn |  | 61.2 | ||
| 13:15 | US | Capacity utilisation | Sept | % | | 74.8 | 74.7 | |
| 13:15 | US | Industrial production | Sept | % m/m | | 0.2 | 0.2 | |
| 16:55 | US | Federal Reserve Bank of Atlanta President Lockhart gives speech on the economy to the Savannah Rotary Club | | |||||
| 17:00 | US | NAHB Builders survey | Oct | index | | 14 | 13 | |
| 23:30 |  AU | RBA release minutes from prior MPC meeting | |
0 comments:
Post a Comment