FX Daily Report

Daily Forex Fundamentals | Written by swiss pb | Oct 13 09 05:59 GMT |

The dollar was mostly lower on Monday as investors positioned for earnings from some of the biggest U.S. banks later this week on expectations that results will top forecasts and drive risk tolerance higher. Though the relationship has weakened in recent months, some investors are still selling the dollar against other currencies as they buy riskier assets. Results from JPMorgan Chase & Co and Goldman Sachs Group Inc are slated for later this week. The German government expects gross domestic product (GDP) to rise by about 0.5 percent in the third quarter, government sources told on Monday. The sources said government experts were forecasting a contraction in GDP of 4.5 to 5.0 percent for the full year 2009, and modest growth of about 0.75 percent in 2010. The economy ministry releases its official growth forecasts on October 21 and third quarter GDP data is due to be published in mid-November. The Swiss franc lost ground against the euro and the dollar on Monday as analysts looked for potential exchange rate volatility on investor sentiment numbers and other macro data due out later in the week. Swiss macroeconomic data in the pipeline include producer prices for September on Tuesday, investor sentiment for October on Thursday and August retail sales on Friday, with German investor sentiment numbers also weighing in on Tuesday. Sterling fell to a six-month low against a basket of currencies on Monday, as British government plans to raise billions of pounds through asset sales reminded investors of how bleak the outlook is for UK public finances. Prime Minister Gordon Brown outlined plans to sell 3 billion pounds of assets, part of a broader program to raise 16 billion pounds and help reduce the ballooning budget deficit. A report on Monday from consultancy Centre for Economics and Business Research, meanwhile, said interest rates could stay at the record low of 0.5 percent until 2011 and that the pound could fall to $1.40 and possibly below parity with the euro. UK opposition leader David Cameron said last week that printing money - a reference to the BoE's quantitative easing program - risked fuelling inflation if it continued much longer. The Bank of England has cut interest rates to a historic low of 0.5 percent and embarked on an unprecedented 175 billion pound program of quantitative easing, creating money to help stave off the threat of deflation. EUR/USD: Yesterday pair tested highs and reached 1.4812 level. Prefer buy moving down till 1.4760 for break of resistance at 1.4820 and target 1.4850 – 1.4880. Stop loss below 1.4730 GBP/USD: Important day for GBP. Big movements after CPI figures are possible. Prefer sell moving up till 1.5860 for target 1.5700. Stop loss above 1.5930 USD/JPY: Prefer buy dip till 89.70 level for target 90.50. Stop loss below 89.40. USD/CHF: Prefer sell at current price (1.0267) and moving up till 1.0280 for target 1.0200. Resistance at 1.0270 – 1.0280 should hold. Stop loss above 1.0300. swiss pb Disclaimer To the extent allowed by applicable law, swiss pb, its employees and partners disclaim without reservation any liability for direct, indirect or consequential damage and/or losses of any kind whatsoever arising from use of fact sheets, reports or access to the swiss pb website or from links to the websites of third parties. Furthermore, swiss pb disclaims without reservation any liability for damage to or influences on the internet user's IT system. In this regard, swiss pb particularly wishes to alert all visitors and users of the swiss pb website to the danger of viruses and the possible presence of hackers in Internet traffic and in telecommunications in general. swiss pb expressly recommends the use of the latest versions of browsers and the installation of regularly updated anti-virus software, and advises against opening e-mails and their attachments from unknown senders. Performance Past results and performance form no reliable basis for decisions regarding future investments and yield expectations. The value of investments can go up as well as down. Exchange rate fluctuations can likewise result in a loss of value. swiss pb can therefore undertake no guarantee that the value of invested capital will be preserved or increase.