Afternoon Forex Overview

Daily Forex Fundamentals | Written by Dukascopy Swiss FX Group | Apr 07 09 14:08 GMT |

Previous session overview Dollar demand is back on a return of financial sector woes Tuesday. The greenback is higher versus its European counterparts and the commodity currencies at the start of earnings season and on a report that says the International Monetary Fund has increased its forecast for toxic debts accumulated by banks and insurers worldwide to USD4 trillion. The euro and U.K. pound's decline Tuesday also comes after they were unable to break beyond technical levels Monday before traders took profits off their recent rally. Tuesday morning in New York, the euro was at USD1.3273 from USD1.3414 late Monday. The dollar was at JPY100.18 from JPY101.0. The euro was at JPY132.97 from JPY135.49. The U.K. pound was at USD1.4673 from USD1.4751, while the dollar was at CHF1.1442 from CHF1.1367. Final official data Tuesday showed the record contraction in the euro-zone economy in the fourth quarter was even sharper than initially estimated. Gross domestic product contracted 1.6% on the quarter and 1.5% on the year in the final three months of 2008, the biggest contraction by both measures since records began in 1995. The Canadian dollar is lower again Tuesday morning as risk aversion remains the dominant theme in markets. Market expectation Currencies will likely continue to follow risk appetite and stock performance Tuesday with no key U.S. data to affect markets. EURUSD rebounds modestly to USD1.3275 area, trying to track cable higher but also feeling the weight from a soggy euro-sterling, traders say, while another posits that the pair continues to exhibit a heavy tone and the ease at which euro comes off scares people. Resistance eyed earlier at USD1.3280 area providing a hurdle to further gains. Bids back at USD1.3220. Pound recovery managed to stretch up to USD1.4714 before faltering, the rate then correcting back to USD1.4683 (23.6% USD1.4583/1.4714), currently trading around USD1.4690. Bids now seen placed to USD1.4680, a break to allow for a deeper move toward USD1.4665 ahead of USD1.4650. Resistance seen placed at USD1.4715/20, a break to open a retest on USD1.4745/50. EURJPY - Recovery from early US lows under JPY132.30 now stretching back to the JPY133.30 area, despite what looks likely to be a negative open for US stocks. Light offers are noted here, more said to come in around JPY134.00. 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.