| 4/28/2008
3:15 PM: EUR/$..1.5645 $/JPY..104.24 GBP/$..1.9896
$/CHF..1.0347 AUD/$..0.9391 $/CAD..1.0122
USD Edges Higher Ahead of Key Week
The week ahead offers a barrage of economic news
for currency traders to digest, with the key highlights
coming from the US. Markets will focus closely
on the FOMC monetary policy decision on Wednesday
afternoon. We expect the Fed to ease policy by
25-basis points to 2.0%, and maintain a downbeat
outlook on the economy similar to its previous
statement. Nonetheless, we anticipate the Fed
to leave policy unchanged for the remainder of
the year after this week¡¯s rate cut
given the aggressive easing that has already materialized.
In addition to the highly anticipated US jobs
report on Friday, the calendar also consists of
April consumer confidence, US Q1 advanced GDP,
PCE, Chicago PMI, March consumption, personal
income, durable goods orders, and factory orders.
The April unemployment rate is expected to hold
steady at 5.2%, while non-farm payrolls are not
expected to improve, posting another 80k loss
of jobs. The Q1 advanced reading for GDP is seen
slowing to 0.2% from 0.6% previously, the PCE
index is expected to ease to 3.7% from 3.9% in
the previous quarter.
The greenback rallied to its highest levels in
two-weeks against the yen at 104.79 and euro at
1.5590. While it remains to be seen whether the
recent dollar rebound will be sustainable, Eurozone
officials have become more outspoken about their
unease over the euro¡¯s strength. ECB
President Trichet said ¡°there have
been at times sharp fluctuations between major
currencies¡± and expressed concern
about the ¡°possible implications on
economic and financial stability¡±.
Euro Mired near Two-Week Lows
The euro holds steady above the 1.56-level, having
retreated sharply since breaching the psychologically
key 1.60-mark last week. The Eurozone economic
reports will include Germany and E-13 employment
reports, manufacturing PMI, and Germany retail
sales.
We look for the euro correction to stabilize
near the 1.5350-region and make another run toward
its all-time high at 1.6018. The pair finds interim
support at 1.56, followed by 1.5550 and 1.5520.
Subsequent floors are seen at 1.55, backed by
1.5460 and 1.5430. On the upside, ceilings will
emerge at 1.5670, backed by 1.57 and 1.5740. Additional
gains will target 1.5780, followed by 1.58 and
1.5865.
Euro Mired near Two-Week Lows
The euro holds steady above the 1.56-level, having
retreated sharply since breaching the psychologically
key 1.60-mark last week. The Eurozone economic
reports will include Germany and E-13 employment
reports, manufacturing PMI, and Germany retail
sales.
We look for the euro correction to stabilize
near the 1.5350-region and make another run toward
its all-time high at 1.6018. The pair finds interim
support at 1.56, followed by 1.5550 and 1.5520.
Subsequent floors are seen at 1.55, backed by
1.5460 and 1.5430. On the upside, ceilings will
emerge at 1.5670, backed by 1.57 and 1.5740. Additional
gains will target 1.5780, followed by 1.58 and
1.5865.
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