| 6/4/2008
04:00 pm: EUR/$..1.5430 $/JPY..105.22 GBP/$..1.9540
$/CHF..1.0425 AUD/$..0.9564 $/CAD..1.0180
Dollar Firm on Data
The dollar remained firm after a sharp rally yesterday
in reaction to Fed Chairman Bernanke’s warning
on inflation.
The currency extended its gains today as several
economic reports came out better than expected.
US ADP job report showed 40 jobs were added in
private sector in May, beating the estimate of
a 30k fall. We are awaiting the non-farm payrolls
report from the Labor Department due this Friday
to take the pluse of the nation’s whole
job market.
Other US data released today include the first
quarter productivity, which rose 2.6% versus the
estimate of 2.5%, and May non-manufacturing ISM,
which came out at 51.7 above the estimate of 51.0.
The euro was trading in the narrow range between
1.5420 and 1.5480 versus the dollar, and the sterling
dropped to as low as 1.9527 against the dollar.
The dollar rose above 105 against the yen.
The Bank of England and the European Central
Bank will announce their decisions after monetary
policy meeting tomorrow morning. It is widely
expected that they will keep their interest rates
unchanged at 5.0% and 4.0% respectively. The market
will focus on the talk by ECB Chairman Trichet
at post-meeting press conference. If Trichet pointed
out the rising inflation issue and the euro currency
level like what Bernanke talked about the dollar
yesterday before International Monetary Conference’s
Central Bankers panel, the expectations of an
ECB rate rise by year-end will be boosted and
the euro will be supported.
EURUSD will face interim resistance at 1.5480,
followed by 1.55 and 1.5530. Additional ceilings
will emerge at 1.5570, backed by 1.56. Support
starts at 1.5420, backed by 1.54, 1.5380 and 1.5350.
Subsequent floors are eyed at 1.5320.
USDJPY encounters interim resistance at 105.30,
backed by 105.50 and 105.80. Subsequent ceilings
will emerge at 106, followed by 106.30 and 106.50.
On the downside, support begins at 104.80 and
104.50, followed by 104.30. Additional floors
are eyed at 104, backed by 103.70 and 103.50.
GBPUSD encounters interim resistance at 1.9580,
backed by 1.96 and 1.9650. Subsequent ceilings
will emerge at 1.9680, followed by 1.97 and 1.9750.
On the downside, support begins at 1.9530, followed
by 1.95 and 1.9480. Additional floors are eyed
at 1.9450, backed by 1.9420 and 1.94.
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