Afternoon Forex Overview

Daily Forex Fundamentals | Written by Dukascopy Swiss FX Group | Mar 27 09 15:30 GMT |

Previous session overview The dollar advanced against its major rivals early Friday in New York as the rally in riskier currencies broke down ahead of key policy meetings next week. The dollar completely recovered its losses against the euro since the Federal Reserve's vote last week to begin quantitative easing. Now, traders are preparing for similar, albeit less aggressive, plans of action from the European Central Bank when they decide on interest rates next Thursday. On the same day, the highly anticipated Group of 20 summit is also scheduled. Analysts point to comments Thursday by ECB Vice President Lucas Papademos, who said the ECB could intervene in bond markets to help ease companies' financing problems although they haven't yet decided to do so. Additional comments by German Finance Minister Peer Steinbrueck have mired the euro as well. He said the high debt levels being built up currently worldwide might cause another crisis, and that the effects of fiscal stimulus measures are "very limited". He also confirmed that the German government will cut its 2009 economic forecast April 29 from the 2.25% contraction predicted in January. The update in tax revenue estimates due in May will be so bad that "I will stay in bed for the next week," he said. Friday morning in New York, the euro was at USD1.3323 from USD1.3508 late Thursday, while the dollar was at JPY97.74 from JPY98.71. The euro was at JPY130.21 from JPY133.31. The U.K. pound was at USD1.4335 from USD1.4449, and the dollar was at CHF1.1415 from CHF1.1288. USDCAD has scrambled sharply higher in the last few minutes as the accumulated force of a number of negatives weighs on CAD and erodes its earlier outperformance. Equities markets are very weak today, so that is not helping the Canadian dollar, said technical analysts. Weaker crude oil futures and broad USD strength are also burdening CAD. Market expectation EURUSD easing to fresh lows for the day at USD1.3270, some demand interest said positioned around the earlier mentioned Fibo support at USD1.3250 but said to have tight stops attached. USDJPY sees a quick pop over JPY98.00 for trade to JPY98.13 and a quick reversal to JPY97.95. Not much flow or noise on the trade, dealers say. Pound little changed in the US session as the force of euro-sterling sales is felt through a weaker euro-dollar. Cable holding well above European lows at USD1.4270 and seen in the wake of downward revisions to UK Q4 GDP data. Light offers eyed at USD1.4360, more into USD1.4400, with bids coming in around USD1.4320 in small. EURGBP fresh lows hit in the cross as reported demand in the stg0.9280 area gives way, stops hit on the break, with slippage extending down to stg0.9252 at time of writing. Hedge fund supply cited for main sell pressure today, with a former US investment house said to have had the order. Light interest now eyed on the downside ahead of the stg0.9180 area. Dukascopy Swiss FX Group Legal disclaimer and risk disclosure This overview can be used only for informational purposes. Dukascopy SA is not responsible for any losses arising from any investment based on any recommendation, forecast or other information herein contained.