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Dollar extended its gains against the Euro and Yen
• The Rupee gained against the Dollar today helped by the gains in the domestic stock market following the victory of the Government in the vote of confidence, retreat in global crude oil prices and NDF arbitrage opportunities. USD/INR pair ended at 42.09 from 42.73 yesterday. • The 6- month and 1-year forward premium was at 4.77 % and 4.07% as compared to 5.17 % and 4.34% yesterday. • The Dollar extended its gains against the Euro and Yen following hawkish remarks by Fed’s Plosser and Dollar

London Session
The greenback was higher for the most part in the London session as very weak Eurozone data helped it extend gains. French consumer spending for June was a paltry -0.4% and the annual growth rate was a weaker than expected 1.0%, to boot. Eurozone industrial orders for May was even worse coming in at -3.5% versus an expected -1.3% print. This put pressure on EUR/USD, taking the pair from an open near 1.5790 to 1.5730 at the close. The JPY crosses were bid in London trading as

Dollar rises as a hike on the interest rate is on the cards
The dollar rose to a two-week high against the yen after Treasury Secretary Henry Paulson voiced support for the currency and the Federal Reserve Bank of Philadelphia president said interest rates should be raised. The greenback traded near a two-week high versus the euro and the Swiss franc as Paulson said he expects Congress to approve a rescue plan for Fannie Mae and Freddie Mac, the two biggest U.S. mortgage finance companies. The yen fell to a record low against the euro as stocks

Australian Q2 Core Inflation +1.1% Q/Q, +4.4% Y/Y (highest since 1991), vs +1.2% and +4.2% Q1
Quote: ‘I do not object to people looking at their watches when I am speaking. But I strongly object when they start shaking them to make certain they are still going.’ William Norman Birkett (1883-1962) The News: Australian Q2 Core Inflation +1.1% Q/Q, +4.4% Y/Y (highest since 1991), vs +1.2% and +4.2% Q1. The Numbers: British Summer Time, with expectations and previous figures in brackets. 09:30 GB Bank of England’s Minutes of July 9/10th MPC meeting. 09:30 GB June BBA Mortgage Approvals

Terrific Finish After Very Negative Start
The markets had a terrific finish with very bullish implications after a very negative start. So it was a complete turnaround today after the indices gapped down, particularly on the Nasdaq 100, which was down very sharply before the opening. The day started out with a gap lower. They then bounced sharply, backed and filled for several hours, looked like they potentially could roll over, but with the S&P 500 and Dow much stronger today they lifted the Nasdaq 100. A late very strong surge

Countertrend Rally Developing in Dow
My pattern and momentum work on the 4-hour Dow Diamonds (AMEX: DIA) price action off of the July 15 low argues that the upleg from the 108.33 low to the 115.65 high (7/21) represents the initial recovery rally leg, and that the weakness into today's low at 113.80 represents a shallow correction of that initial upleg. If my work proves accurate, then current "strength" that is pushing up against the 115.00-115.65 area is the start of a secondary -- and possibly very potent -- upmove that will

Asia Session
The story in today's Asia session was one of consolidation but the narrow ranges could be hiding a potentially larger theme. Stronger US equities and lower commodity prices contributed to a powerful rally in the USD. USD/JPY has broken through the critical 107.10 area and EUR/USD now can't get back over 1.5800. If we see further sideways movement this could be a setup for a continuation move higher in the USD. An interesting relationship appears to be developing in the

Dollar Bulls run on Hawkish FED comments
Dollar Bulls run on Hawkish FED comments U.S. Dollar Trading (USD) came under selling pressure early in the European session as stocks turned negative and Wachovia Bank reported a record loss. The rebound and subsequent rally in the USD was spurred buy a combination of Treasury’s Paulson strong Dollar comments and FED’s Plosser stating that ‘interest rate policy reversal should happen sooner rather than later’ and ‘there is no need to wait for a recovery in labor or financial markets’. Also

Daily Market Outlook
********************************************************** Market Review - 22/07/2008 21:43 GMT The greenback gains broadly on comments by Plosser and Paulson The greenback rallied on Tuesday, boosted by a steep drop in oil prices and comments from Philadelphia Federal Reserve President Charles Plosser who suggested that U.S. interest rates may have to rise even before financial markets recover to fight rising inflation. In addition, remarks by U.S. Treasury Secretary Henry Paulson reiterated

23/7/2008 - the current market sentiment
The oil prices and their volatile actions have contained the markets sentiments recently as their high effects on both of inflation and growth at these serious levels of inflation and sluggish growth. The greenback could extend its gains across the broad because of the Oil prices easing lower than 140$ per barrel since last Wednesday after the weekly release of US oil inventories data. The oil is trading lower than 130$ a barrel currently. The equity market has gained trust too after

New York Session
The buck was bid in a big way in NY trading, rising more than 100 pips on average against the majors. Driving the increase was another plunge in oil prices and a strong rally in US financial stocks. Oil fell more than $3 to $127.95/bbl in the session as speculation that Tropical Storm Dolly will miss major oil facilities in the Gulf of Mexico intensified. Stocks for their part, rose more than 1% in broad terms on a more than 6% rally in financials stocks as a note by a top

U.S. Forex Market Commentary
EURO The euro weakened vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.5825 level and was capped around the $1.5945 level. Technically, today’s intraday high was right around the 23.6% retracement of the move from $1.5610 to $1.6040. The common currency eroded during the North American session after NYMEX crude oil futures for September delivery slipped nearly $5.00 to the $126 handle. Comments from Philadelphia Fed President Plosser

London Session
The buck saw some sideways trading in the London session as the lack of anything to bite on seems to have the market focused on stocks once again. Indeed, just as the session came to a close we saw a US bank report much worse than expected earnings and the buck come under pressure. Earnings have been the thing to watch in the last week or so and we expect they will continue to be a factor as US stocks continue to look for direction. That direction this morning is lower, with

Dollar weakens after American says profits fell
The dollar traded near a record low against the euro after American Express Co. said profit dropped because more consumers defaulted on loans, raising concern the U.S. economic slowdown will deepen. The currency may extend declines against the yen before reports this week forecast by economists to show that U.S. home sales and durable-goods orders dropped in June. American Express, the biggest U.S. credit-card company by purchases, reported second-quarter profit fell 37 percent on bad consumer

Spot PLATINUM
Comment : Bizarre price action so far this year as we consolidate under $2200 per ounce in a sort of ‘triangle’. This much needed pause after Q1 2008’s fireworks has brought prices back on to the ‘trendline’ that started the rally in 2007 and has allowed the Ichimoku ‘cloud’ to catch up. Platinum has give up 61% of this year’s gains but is certainly not ‘cheap’ yet. We feel there is a better than even chance that it will base this summer between $1800 and $1750, allowing it to trade back up to

Forex - Forex market believe the worst of the problems in the US financial system are not yet over
Forex News and Events: The Dollar fell near a record low against the Euro as investors believe the worst of the problems in the US financial system are not yet over. While the Dollar has recovered somewhat after better results than expected from big financial institutions such as Citigroup, JPMorgan Chase and Bank of America, investors are awaiting more earnings reports this week. The Euro may gain against the Yen as Japanese Investors ship more funds into higher-yielding currencies for better

The Chinese yuan is lower vs. the dollar at 6.83 amid talk of slowing appreciation
USD -- The greenback opened last week lower across-the-board against its major trading counterparts on speculation Federal Reserve Chairman Bernanke and US Treasury Secretary Paulson would report to Congress that credit market losses will weigh on US economic growth. This proved to be accurate when both men testified before the Senate Finance committee last week. The currency declined to a 25-year low versus the Australian dollar on concerns the debt of Fannie Mae and Freddie Mac will

Bosnia's ex-president Karadzic arrested in Belgrade for war crimes after 11 years on the run
Quote: ‘To see the world in a grain of sand And a heaven in a wild flower, Hold infinity in the palm of your hand And eternity in an hour.’ William Blake (1757-1827) The News: Bosnia’s ex-president Karadzic arrested in Belgrade for war crimes after 11 years on the run. The Numbers: British Summer Time, with expectations and previous figures in brackets. 00:50 JP May All Industry Activity Index +0.4% M/M versus +0.8% April 06:00 JP June Supermarket Sales –0.9% Y/Y versus –1.1% May. 08:00 JP

Oil, a short term bottom ?
Crude oil futures are trying to bottom after the $19/bbl plunge since the July 11th high at $147.27, currently chopping from key support at $127.50/128.50 (Friday’s low, bullish trendline since Feb, and a 38% retracement from the March low at $98.65, see daily chart below). With the market near term oversold after the recent sharp declines, this area should hold at least temporarily and if more aggressive, would buy here (currently at $130.35). Note however, that the confidence level that a

Promising Start Gives Way to More Downside
The indices ended to the downside after a promising start. Before the opening the futures were higher and the market opened strong, rallied to new snapback highs, but couldn't follow through and sold off rather sharply in the morning. They bounced early afternoon, and then retested mid-afternoon before bouncing back into the close. Net on the day the indices still lost ground, with the Dow down 29.23, the S&P 500 off just 0.68, and the Nasdaq 100 down 3.47. The Philadelphia Semiconductor

S&P Fails to Hurdle Neckline
In a bull market environment, the picture of the S&P 500 & its SPY ETF, as viewed by the e-Mini S&P 500 chart, would be very different. Let's notice that today's new recovery high at 1269 looks like it could have been an upside breakout from a base-like pattern that resembles an "inverted head-and-shoulders," doesn't it? The e-SPU failed to hurdle the neckline at 1260.50, and instead has pivoted to the downside for what points to a revisit of the "Right Shoulder" (RS) support at

Asia Session
The USD closed the NY session on a notably weak note especially after weaker earnings reports from several firms and an especially weak report suggesting that consumers continue to be affected by the credit crunch. S&P 500 futures were down about 12 points in electronic trading. Interestingly, JPY and CHF crosses have not sold off with the increase in risk aversion. EUR/JPY is just under 170 after an unsuccessful test in London/NY. The narrow pull back suggests another

Oil advances on Hurricane watch, Dollar down
Oil advances on Hurricane watch, Dollar down U.S. Dollar Trading (USD) experienced a slow start to the week with Japan away for Ocean day and little economic data out. The Greenback lost some ground as Oil advanced on news of hurricane Dolly in the Gulf. Bank of America results offered the Dollar and Stocks some support but enthusiasm waned and both lost ground into the US session close. After market earning reports from American Express has put extra pressure on the USD and stock futures for

Daily Market Outlook
********************************************************** Market Review - 21/07/2008 20:43 GMT Dollar falls as worries increase over the U.S. financial sector The greenback gained initially versus the yen on Monday as Bank of America posted better-than-expected second-quarter earnings (net income fell to $3.41 billion, or 72 cents a share versus the forecast of 54 cents), however, the dollar dropped afterwards in U.S. session as fears over the U.S. financial sector persisted and investors

Daily Market Outlook

New York Session
US stocks and the oil market set the tone for the buck for the better part of the NY session, with higher oil and lower equities nudging the greenback lower in what was a pretty range bound environment initially. The last hour of NY trading was quite eventful, however, as a plethora of weak earnings reports hit the tapes and led to some quick selling of the US dollar. The earnings highlights were a major credit card company that missed earnings by more than -30% and a huge tech company

U.S. Forex Market Commentary
EURO The euro appreciated vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.5905 level and was supported around the $1.5825 level. Technically, today’s intraday low was right around the 50% retracement of the move from $1.5610 to $1.6040. Data released in the U.S. today saw the June leading index fall 0.1%, its second consecutive monthly decline. The dollar’s decline was limited by better-than-expected Bank of America Q2 earnings but the

21/7/2008 - The Current market sentiment
There was no key important data to move the currency market. The market is stagnant waiting for a major change to move. We have this week the flash release of this month EU PMI of the services and manufacturing sectors and also the release of the germane IFO. From US, we have the release of US building permits of June which was 1.091m in May and by the end of the week we have US new home sales which were 512k units in May and are expected to be 510k units in June. We have also US Michigan

Dollar losses
• The Rupee ended stronger against the Dollar due to the continuing recovery of the Indian stock market. However, its appreciation was limited as the lower oil prices led to import demand. USD/INR pair ended at 42.76 from 42.82 yesterday. • The 6- month and 1-year forward premium was at a 5.09 % and 4.29% as compared to 4.78% and 4.14% yesterday. • The Dollar pared its losses against most major currencies following the better than expected quarterly results posted by Citi Group. EUR/USD was at

London Session
The buck lost ground in a very quiet London session. Lacking any news or economic data releases to bite on, the sideways trading was symptomatic of a market awaiting the open of the US stock market in the NY morning. EUR/USD opened near the 1.5870 mark and closed just a touch higher near 1.5885. USD/JPY was also little changed, with the pair opening near 106.80 and closing around the 106.70 level. GBP/USD witnessed similar results, rising to a close near 1.9975 after opening

Dollar rebounds after Citi bank gains
The dollar headed for a weekly advance against the euro, rebounding from a record low on signs U.S. investment banks will withstand credit-market losses stemming from the collapse of the subprime-mortgage market. The dollar rose versus a basket of six major currencies on Friday, boosted after Citigroup reported a smaller-than-expected second quarter loss, calming some jitters on U.S. financial sector health. Citi, the biggest U.S. bank, reported a second-quarter loss per share of $0.49,

Forex - Dollar ended last week higher after smaller-than-expected loss from Citigroup
Forex News and Events: The Dollar rose on Friday, heading for its largest weekly gain versus the Euro in a month, after a smaller-than-expected quarterly loss from Citigroup eased worries about the US financial sector. Citi's results added to positive earnings news this week from Wells Fargo and JPMorgan Chase. That allowed the Dollar to regain some strength after slumping to a record low against the Euro on Tuesday. EurUsd rose only 0.18% to 1.5853, well off its record high of 1.6039 set on

Asia Session
Asian trade was relatively light today as Japan was out on holiday. We did see the release of 2Q Australian PPI. Producer prices rose by 1.0% qoq which was less than the expected reading of 1.5%. This below consensus data is causing some to speculate that CPI on Wednesday may also come in below forecasts. AUDUSD traded firm despite dovish figures as it broke through trendline resistance, and looks poised for a test of the recent highs. The other

Inflation is currently a big problem
Overview Stock indices suffered sharp falls early on but recovered after Wednesday lunchtime on a combination of short-covering and marginally better news from banks, to end roughly unchanged on the week. We would describe this as a ‘relief rally’ but note that we have formed ‘hammer’ candles on many charts suggesting a few weeks of consolidation above these lows. The same effect in Treasury yields which rallied from new recent lows to end unchanged on the week. Credit spreads widened

Thursday will host the release of the existing home sales report for June
Past Week's Data and Events The US currency finished the week on a decent note, after being able to either fully reverse or at least reduce earlier losses. A pullback in the oil price and the stock indices provided an island of peace. Washington worked hard to put on a façade of normalcy on the financial disaster that has been eating away wealth and threatened a worldwide depression. It worked last week. The dollar remains weak in the medium term, but if the oil drops below $125/gallon,

UK growth to slow to 1.00% in 2009; house prices tumbling and consumer spending slowing
Quote: ‘When you see the abyss, and we have looked into it, then what? There isn’t much room at the edge – one person, then another, not many. If you are there, others cannot be there. If you are there, you become a protective wall. What happens? You become part of the abyss.’ Elie Wiesel (1928-) The News: Ernst & Young ITEM Club says UK growth to slow to 1.00% in 2009; house prices tumbling and consumer spending slowing. The Numbers: British Summer Time, with expectations and previous

Q's Holding Up
Under the circumstances, with negative reaction to GOOG and MSFT, the Q's (Nasdaq: QQQQ) are not acting all that poorly. In fact, the GOOG massacre last yesterday pressed prices right to the 50% support plateau of the most recent rally from 43.30 to 45.82, but has since recovered into the 45.00/10 area. My work is telling me to regard the GOOG press as a correction in a developing low pattern, and that I should be patient during the "bottoming" phase. As long as 43.80/30 support contains any

Daily Market Outlook
********************************************************** Market Review - 18/07/2008 21:49 GMT The greenback heads for weekly gain versus euro as banks weather credit turmoil The greenback rose for another day on Friday, heading for its largest weekly gain versus the euro in a month as strength in stock markets gave support to the dollar. The DJI ended in positive territory after a smaller-than-expected quarterly loss from Citigroup Inc eased worries about the U.S. financial sector, with the

Citigroup Earnings Aid Dollar
Citigroup Earnings Aid Dollar U.S. Dollar Trading (USD) had a relatively quiet trading day with little economic data out, equities and commodities directed the market. Citigroup’s earning came in better than expected leading to an overall buoyant mood on the equities markets and dollar. Cooling Middle Eastern tensions allowed Oil to slip again slightly, also helping dollar sentiment. In the U.S. share markets, the NASDAQ was down 29 points (1.28%) and the Dow Jones was up 49 points (0.44%).

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