Morning Forex Overview

Daily Forex Fundamentals | Written by Dukascopy Swiss FX Group | Jun 23 09 08:05 GMT |

Previous session overview The dollar is broadly higher Monday morning as it advances against all major currencies except the yen in response to a more risk averse mood in markets. Uncertainty surrounding the outcome of the U.S. Federal Reserve's Open Market committee announcement on Wednesday is contributing to an uncertain mood among investors, which is turn weighing on stocks and other riskier asset classes. News that the World Bank cut its forecast for the global economy in 2009 and escalating political tensions in Iran and North Korea contributed to the gains, BBH said. There are no significant U.S. data releases Monday, and the data calendar is relatively light for the balance of the week, with the focus falling squarely on the FOMC meeting. The major currency most under pressure has been the euro, but the pound has also suffered, hit by news that U.K. house prices have started falling again. The dollar is at JPY95.86 from JPY96.23 late Friday. The euro is down at USD1.3840 from USD1.3948 and at JPY132.69 from JPY134.22. The dollar is up at CHF1.0884 from CHF1.0803, and pound dipped to USD1.6403 from USD1.6496. Market expectation The market's focus on the next Federal Open Market Committee meeting has intensified as expectations of what the next move will be on U.S. interest rates have swung from one extreme to the next. Analysts blamed this uncertainty on the Fed's unconventional policy which has left the markets unclear about how the Fed is managing key rates in the market during this recession. EURGBP breaks above reported offers placed between stg0.8435/40 (not USD1.6435/40 as reported in an earlier bullet) and seen edging toward next reported resistance between stg0.8450/55. Above here can open a move on toward stg0.8485/90. Support remains in place toward stg0.8400, a break below to open a deeper move towards stg0.8380 ahead of stg0.8355/45. Pound trading heavy, traders said, with rate pressing in toward earlier lows around USD1.6405. Rate currently trades around USD1.6412, while euro-sterling gets pulled higher by euro-dollar. Bids remain in place toward USD1.6400, with stops noted on a break below. Next support noted at USD1.6380 ahead of USD1.6360/50. USDJPY eases back under JPY96.00 area for a look at the overnight low zone at JPY95.80 with a test of demand interest in that area, though flows are described as very light on the day but with the yen finding favor as risk trades are pared back. Trader noting trend support at JPY95.70 area warns of stops below. 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.