Thu, Feb 28 2008, 11:15 GMT
by Benny Menashe
| EUR/USD | USD/JPY | GBP/USD | USD/CHF | |
| 1.526 | 107.4 | 2 | 1.0765 | |
| Resistance | 1.5215 | 107 | 1.997 | 1.073 |
| 1.5145 | 106.6 | 1.985 | 1.0665 | |
| 1.508 | 105.95 | 1.974 | 1.061 | |
| Support | 1.503 | 105.3 | 1.971 | 1.053 |
| 1.4925 | 105 | 1.965 | 1.05 |
Euro dollar hit a record high over $1.51 as Fed Chairman Bernanke indicated the central bank is still prepared to cut interest rates which are already at a three year low. ‘The (Fed) will be carefully evaluating incoming information bearing on the economic outlook and will act in a timely manner as needed to support growth and to provide adequate insurance against downside risks,’ Bernake said yesterday in his semi-annual monetary policy report to Congress. Technical analysis shows buy a bounce near $1.5020.
While the Fed are concerned about downside risks to growth, we here at the Finotec Dealing Desk think Bernanke has to address inflationary concerns. “Bernanke has really overweighted the economic risks relative to inflation,'' said John Silvia, chief economist at Wachovia Corp. in Charlotte, North Carolina, following the Fed chief's testimony to Congress yesterday. ``He may get some disagreement'' among colleagues on the Federal Open Market Committee, Silvia said.
US new home sales fell by 2.8% in January to a 13 year low. New home prices fell 15.1% over the past year which was the biggest drop on record. Meanwhile US durable goods orders fell by 5.3% in January after rising 4.4% in December.
The Aussie dollar traded a fresh 24 year high over $0.9400 as private capital expenditure rose 5.1% in real terms, seasonally adjusted for the December quarter. The market was expecting 3.1%. This bullish run is expected to continue as the interest rate differential between Aussie and its pegged currency, the dollar, widen. ”The data just underscores the strength of the Australian economy even in the face of a weaker global environment and that's one of the factors behind the strength of the Aussie,'' Mr Halmarick (Citigroup director of Economics) said yesterday. The Aussie touched highs of $0.9461. Market strategy is to buy a bounce near $0.9365.
Ahead today in the US, we are expecting an upward moderate revision of quarter four GDP. This is mainly due to lower imports opposed to stronger exports.
Today's Economic Events
| Time | Event | Currency | Period | Previous | Forecast | Significance | Actual |
| 23:30 | Core CPI y/y | JPY | Jan | 0.80% | 2 | ||
| 23:30 | Core Tokyo CPI y/y | JPY | Feb | 0.40% | 2 | ||
| 23:30 | Overall Household Spending | JPY | Jan | 2.20% | 2 | ||
| 23:30 | Unemployment Rate | JPY | Jan | 3.80% | 2 | ||
| 23:15 | Manufacturing PMI | JPY | Feb | 52.3 | 2 | ||
| 21:45 | Trade Balance | NZD | 0.03B | 3 | |||
| 15:00 | Fed Chairman Bernanke Speaks | USD | 3 | ||||
| 13:30 | GDP Annualized q/q | USD | Quarterly | 0.60% | 3 | ||
| 13:30 | GDP Deflator | USD | Quarterly | 2.50% | 2 | ||
| 13:30 | Unemployment Claims | USD | Weekly | 2 | |||
| 9:00 | Unemployment Rate | EUR | Feb | 8.10% | 8.00% | 2 | 8.00% |
| 8:15 | Payrolls | CHF | Quarterly | 3.87m | 2 | 3.88m |
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