Daily FX Reviews

Thursday, March 12, 2009


The European central Bank Executive member, Lorenzo Bibi Smaghi, made comments on Tuesday that confirmed that the ECB was ready to lower interest rates to 0 should deflationary signs continue to be visible. Despite this, the Euro had a good session, continuing to make gains against some of the majors it has suffered against in recent weeks. Forex broker analysts attribute the bounce in the Euro to an increase in risk appetite, however these gains are not expected to last as banking worries and continued decline in the global economic environment are expected to push investors back into safe-havens like the US Dollar.

At 6pm GMT, the Euro was up 1/4% to the Japanese Yen at 124.81, up more than 1/2 to the British Pound to .9203 and up 3/4 to the Swiss Franc to 1.4699. The Euro fell nearly 1% to the Canadian Dollar to 1.6271 and more than 1 1/4% to the Australian Dollar to 1.9682.


The US Bank Citigroup, recently at the center of a government bailout that saw the US government take a 40% stake in the company, announced on Tuesday that it had actually posted a profit in the first two months of 2009. This news lifted the stock more than 35% and caused a US Dollar sell off in the Forex. The dollar is still considered a safe-haven and analysts took Tuesdays fall of the dollar as a sign of profit taking after the dollar has been on a charge the past three weeks. It is expected that the dollars fall will be short lived and as economic reporting around the globe continues to show a slowing, the Dollar will regain its appeal.

At 6:15GMT, the US Dollar was off 1/4 to the Euro at 1.2638, down .1% to the Yen to 98.81, down .3% to the Pound to 1.382, and down over 1% to the Canadian Dollar to 1.2881 and over 1 1/2% to the Australian Dollar to .6405. The dollar also fell to the New Zealand Dollar over 1 1/4% to .4988 and rose against the Swiss Franc to 1.164 in daily FX charts.

Chart Analysis: EURSEK

The 11.40 level looks pivotal for EURSEK, which could continue to drop if we get a rally in risk appetite going here, and especially if that rally is aligned with a relief rally in the CEE currencies.

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