| 6/2/2008
04:00 pm: EUR/$..1.5531 $/JPY..104.55 GBP/$..1.9659
$/CHF..1.0370 AUD/$..0.9539 $/CAD..1.0012
Dollar Tumbled after S&P
Financial Downgrade
The dollar tumbled after rating agency Standard
& Poor’s downgraded various US financial
sector firms. The euro hit session high at 1.5588
versus the dollar following the news.
US data released earlier in the session were
slightly above the expectations, but had little
impact on the market. Manufacturing ISM rose from
48.6 to 49.6 in May, versus the estimate of 49.0.
Construction spending slipped 0.4% in April after
a 1.1% contraction in the previous month.
Te sterling lost more than 2 cents against the
dollar after a UK mortgage lender announcement
raised concern on financial sector problems. Britain’s
biggest lender of buy-to-let mortgages, Bradford
& Bingley, revealed rising bad debts and lower
lending had reduced its profit in four months
to April by half. Also, an official report showed
UK new home loan approvals hit a record low in
April.
The BoE and ECB will announce interest rates
decisions early Thursday morning. The BoE is expected
to hold rates at 5.0%. The ECB is also seen to
leave rates at 4.0% unchanged. ECB Chairman Trichet
will address economic growth and inflation outlook
in the subsequent press conference.
The Bank of Australia is seen to keep rates unchanged
at 7.25% on its monetary policy meeting tonight.
Tomorrow will see euro zone April PPI (exp 0.8%,
prev 0.7%), euro zone Q1 GDP (exp 0.7%, prev 0.4%),
US April durable goods orders (exp -0.5%, prev
-0.5%), and US April factory orders (exp 0.1%,
prev 1.3%).
EURUSD will face interim resistance at 1.5550,
followed by 1.5580 and 1.56. Additional ceilings
will emerge at 1.5630, backed by 1.5650. Support
starts at 1.55, backed by 1.5480, 1.5450 and 1.5420.
Subsequent floors are eyed at 1.54.
USDJPY encounters interim resistance at 104.80,
backed by 105 and 105.30. Subsequent ceilings
will emerge at 105.50, followed by 105.80 and
106. On the downside, support begins at 104.20
and 104, followed by 103.70. Additional floors
are eyed at 103.50, backed by 103.20 and 103.
GBPUSD encounters interim resistance at 1.9680,
backed by 1.97 and 1.9730. Subsequent ceilings
will emerge at 1.9750, followed by 1.9780 and
1.98. On the downside, support begins at 1.9630,
followed by 1.96 and 1.9580. Additional floors
are eyed at 1.9550, backed by 1.95 and 1.9470.
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