AUD/USD rebounded from 0.9060 to extend further rally to 0.9278 in early US session on heavy short-covering and fresh buying sparked by stronger equities and commodities. While more short-covering could still be seen, upside is expected to be limited below 0.9404 previous high resistance. Any fall below 0.9173 minor support will turn intraday bias back to the downside. Further break of 0.9060 will bring fall resumption to 0.8915 support next.
USD/SGD closed Asia trading at 1.3855, after heavy selling from early morning high at 1.3902. Selling pressure on fresh surge in the EUR/USD was halted above the 1.3850 support level on fear of MAS intervention. The USD/SGD remains heavy into overnight trading, as the EUR/USD continued its ascend towards the 1.50 handle. Expect rallies to be capped yet again. USD/SGD ended at 1.3856 overnight, after range of 1.3835-1.3864.
USD/KRW traded a moderate 1158.6-1168.5 range in Asia on Friday; last at 1159. USD was in demand early (on the back of the regulator announcing that they would allow naked short selling of bonds) with the pair racing to 1168. Once the topside stops had been done the pair baulked at the further topside attempts given the layers of offers around 1170. The pair drifted back below 1160 in the afternoon session in a quiet end to the week. The Kospi for its part closed flat. On Friday night the implieds traded an 1163-1166 range on high volume before closing in NY at 1161/1163.
USD/TWD traded an elevated 32.30-32.379 range in Asia on Friday; last at 32.35 on strong volume of $1.033mln. Traders say the CBRC remains active trying to keep the pair above 32.30 and help squeeze out more shorts replicating US Dollar short covering witnessed in the majors. Meanwhile the Taiex closed down 0.99%. On Friday night the implieds traded a 32.30-34 range on moderate volume before closing in NY at 32.31/34.
USD/SGD was pressured early by a European bank but met good bidding above 1.3880. The pair rallied to 1.3912 then collapsed in a heap as EUR/USD raced above 1.4900 again. Weak longs fled but buyers protecting at 1.3870 still. The pair had another shot above 1.39 during the offshore session hitting a high of 1.3918 before closing in NY just 2 pips lower from its open at 1.3888; overall range for Friday 1.3869-1.3918. October inflation is awaited on Monday. A DJ poll said inflation would have fallen by 0.5%y/y in Oct, from -0.4%y/y in Sept. On a monthly basis, CPI is likely to rise 0.7% vs -0.1%m/m in Sept.
~ China NDRC Zhang: to continue moderately loose monetary policy, continue active fiscal policy, recent Sino-US trade friction regrettable
~ ECB Trichet: Too early as of today to declare the crisis over
~ ECB Weber: Monetary policy was not one of the culprits for causing crisis
~ SNB Roth: Swiss unconventional policy measures worked well
EUR/USD quietly consolidated between 1.4865/1.4905 for most of the European morning session before coming under heavy pressure once the US market arrived. EUR/USD was weighed down by broad USD strength and weak equity markets and the market took the opportunity to knock out the lower leg of a 1.4800/1.51 DNT option. EUR/USD bounced from the 1.4800 level amid talk of Asian sovereign demand and the pairing received a further boost by comments from ECB officials indicating that exit strategies will be enacted in 2010. The ECB did announce some changes to the collateral criteria for the March auction that will be less accommodating to the banks participating. EUR/USD closed around 1.4865.
AUD/USD fell another 0.5% on Friday and ended the week completing a key outside week reversal lower. Funds and investors in general are paring risk positions ahead of the US Thanksgiving holiday and long AUD has been a popular investor strategy over the last few months. Hedge and model funds have been the main sellers - but the move lower has been cushioned by sporadic real money and sovereign name buying. AUD/USD closed around 0.9145.
Extended correction in US stocks markets and firmer USD/Majors should continue to underpin sentiment in regional pairings in the new week. Profit taking in stocks after recent strong rally could see further corrective falls in Asian currencies too. Strong rebound in the USD/KRW on liquidity control fears to also further impact sentiment. Meanwhile, Asian markets will be bombarded by heavy data from China, Korea and Taiwan this week. Focus will be on China”s Q3 GDP, Sept CPI, retail sales and industrial production on Oct 22. S Korea Q3 GDP is due on Oct 23, also Taiwan”s trade and industrial output data. Malaysia, Hong Kong and Singapore will release CPI data on the Oct 21, 22 and 23 respectively. Bank of Thailand is expected to keep rates steady at 1.25% on Oct 21, while the customs department will announce Sept trade data on the same day. The Malaysian govt will release its 2010 budget on Oct 23. On Monday, Hong Kong will announce unemployment data for July-Sept.
USD/KRW finished at 1164.5 on Friday, after range of 1156-1164.5. BOK intervention and stock losses lifted the pairing off lows. Funds reportedly bought large on break above 1160. USD/KRW swaps shifted heavily towards the left, while KTB slumped on talks S Korea might imposed forex liquidity controls amid volatility in the foreign exchange markets. Foreign investors reportedly dumped a record 21,177 govt bond futures contracts on Friday, worth the equivalent of $2.25 billion. Markets were also spooked by comment from the BOK chief that interest rate hikes will be in big steps when they decide to start raising rates. Hectic short cover extended into overnight dealings. The 1 mth NDF shot through 1170 resistance to 1180 high, before closing at 1172.0-1173.5. High volume was touted. USD/KRW will likely trade 1170-1180 range intraday. Exporters sales could hinder gains.
USD/TWD closed locally at 32.30, after trading a 32.17-32.30 range. Short covering amid fund outflows and continued intervention from the central bank underpinned sentiment. The central bank was suspected to have bought $500 million in support of the USD/TWD on Friday. Taiex finished flat, +0.06%. TWD NDFs traded 32.15-32.22 range overnight, and closed at 32.17-32.21. Only low volume was traded though. Expect the USD/TWD to trade 33.30-33.45 intraday.
USD/SGD stayed bid after scaling the 1.3900 handle on Friday. Rebound in USD/Majors and continued whispers of agent banks bids around 1.3880-1.3890 stalled falls. Stops were further tripped on break above 1.3920 in thin mid-day dealings. The pairing stayed well bid above 1.3910 for the rest of the day. Better than expected non-oil domestic data did not have any positive impact on the SGD, as markets continued to book dollar shorts on surge in the USD/Majors. USD/SGD traded range of 1.3915-1.3987 overnight, before closing at 1.3920. Expect range of 1.39-1.40 on Monday.
USD/THB ended lower on rebound in stocks and reassuring comments from the finance minister, who said that economic fundamentals in Thailand remain sound. He further said the govt sees no need to intervene in the stock markets. Thai SET finished up 3.52% on Friday. USD/THB ended the Far East session at 33.41-33.43, after range of 33.41-33.48. Caution ahead of the weekend kept the 33.40 support intact. In overnight dealings, the USD/THB traded amid 33.38-33.45 range, before finishing at 33.39 in New York. In weekend news, the Thai Princess reported that the King”s health is improving and is not in danger. He need physical therapy, she added, which accounts for his prolonged stay in the hospital. Expect the USD/THB to trade 33.40-33.50 range on Monday, as bullish dollars overseas underpins.
OVERNIGHT SUMMARY ~ USD closed firm though off intraday highs on profit taking and mixed US data. US Oct consumer confidence came in at 69.4 from 735.5 in Sept, and below expectation for 73.5. Industrial production was however stronger at +0.7% vs consensus for +0.2%. ~ The Dow finished below the 10000 mark as investors were disappointed by quarterly results of IBM, BOA and GE. DJI closed down 0.67% to 9995.91, S&P -0.81% to 1087.68 and Nadaq -0.76% to 2156.80. ~ Treasuries closed mixed. Longer dated government debts remain supported by safe haven plays on lower stocks. ~ Oil prices surged to fresh high in year, closing up 99 cents to $78.57 per barrel. ~ Gold finished around $1052.80 per ounce, off mid-week high of 1070.40 on profit taking. Investment demand remains supportive though.
EUR/USD opened New York around 1.4910 on the rebound from 1.4885 European lows but succumbed to early sales as NY hedge funds liquidated even more long EUR/GBP positions. EUR/GBP opened around 0.9045, kissed 55 then slumped to 0.9090, dragging EUR/USD lower, with a test of previous day"s lows which stalled just above at 1.4845. There was talk of Asian central banks playing 1.4850-1.4950 ranges to replenish longs on dips in order to defend 1.4975 and 1.5000 option barriers. EUR/USD subsequently traded 1.4875-15 range through close.
AUD/USD opened in NY at 0.9185 and was immediately hit by a wave of GBP/AUD profit taking and risk aversion after stinky BOA earnings report. Spot dipped to a 0.9123 low but recovered after Fed TIC data showed positive long-term investor flows. US ind. production, also, beat expectations at 0.7%. The recovery in shares was led by oil. With a bullish Australian article (quoting RBA Stevens) floating about, AUD/USD hit a 0.9194 NY high at the London fix. It pulled back on AUD/JPY liquidations then rose again after Trade Minister Crean said that exporters have adjusted to the rise in Aussie and that a high Aussie is good for import prices. AUD/USD finished near 0.9180 and stops lurking above 0.9230. AUD/JPY opened at 83.66 and closed at 83.56. The CRB finished 0.20% higher and oil closed near the highs of the day above $78.00.
USD/SGD traded a tight 1.3962-1.3985 range in Asia yesterday; last at 1.3967 slightly down from its previous NY close. It has been another session of trying to track EUR/USD with a brief move above 1.48 coinciding with the USD/SGD low. When EUR/USD eased, USD/SGD recovered instep. In the afternoon session USD/SGD has remained heavy regardless of Euro moves. Singapore extended its job credit scheme for a further 6-mths. Overnight USD/SGD traded up to 1.3987 when Wall Street was trading in the red only to fall precipitously to 1.3947 after the Intel earnings/outlook was released after the market closed.
EUR/USD ranged between 1.4750 and 1.4800 for much of the Asian and European morning before surging higher when the US market started to arrive. There was talk of sovereign names buying the dip and then those names stepped up to buy above 1.4800 and the market successfully knocked out a 1.4850 option barrier to a high of 1.4875. EUR/USD then retreated to 1.4800 on profit taking. Sovereign buying once again emerged and EUR/USD traded back to 1.4860 only to get knocked back to 1.4800 again when Wall Street slipped into the red. EUR/USD popped back to 1.4850 when sovereign names bought once again and Intel beat expectations.
AUD/USD traded up to 0.9127 at one stage when the USD fell across the board and oil & gold surged higher. AUD/USD fell back to 0.9050 when Wall Street fell into the red - but moved back to 0.9090 into the close when Intel reported better than expected outlook for Q4 in the after-hours.
USD/SGD ended the Asian session at 1.4109, after intraday range of 1.4062-1.4131. Strong Asian bids were countered by very aggressive dollar selling pressure early. However, recovery in the USD/KRW amid heavy BOK intervention ( touted near to $2 bln) and sell-off in the EUR/USD to sub 1.4600 support lifted the USD/SGD above the 1.4100 handle. The pairing stayed firm in overnight dealings. Weak US data set off stocks dumping and risk cutting, which lifted the USD/SGD to 1.4155 high overnight. US manufacturing activity eased to 52.6 in Sept from 52.9 in Aug, and below market expectation for a reading of 54. New claims for jobless benefits rose unexpectedly to 551k last week from 534k the previous week, and above market consensus for 530k. US stocks posted their biggest loss in 3 months after the data, which renewed doubts on recovery hopes. USD/SGD ended at 1.4135 in New York, after range of 1.4109-1.4155. Further short squeeze is likely, as Asian stocks are likely to reel on Wall Street”s sell-off. Range of 1.4120-80 is likely intraday.
USD/MYR closed at 3.4640-3.4680 locally yesterday, after a hectic range of 3.4470-3.4700. Heavy selling was reversed quickly amid strong interventions from the BOK and MAS. Fixing demands added to buy backs in the USD/MYR. MYR NDFs traded 3.4600-3.4700 overnight on low volume. It finished at 3.4700-3.4750. USD/MYR will likely trade 3.4700-3.4850 intraday, with markets to remain choppy on renewed risk aversion.
USD/IDR ended the local session at 9600-9630, after intraday range of 9615-9647. Profit taking and good bidding interests from state banks provided support for the pairing. IDR NDFs traded 9625-9660 range overnight, and closed at 9650-9670. Should see fresh buying above 9650 today on expected broad base stock losses and risk aversion. However, expect BI to cap rallies to 9700 intraday.
USD/PHP closed at 47.05, after intraday range of 47.03-47.30. The pairing see-sawed in line with choppy USD/Majors. Bullish outlook from the IMF on higher BOP surplus and strong OFW inflows sent the pairing lower in late afternoon dealings. BSP was suspected to have bought USD/PHP to slow the pairing”s fall along the way. PHP NDFs traded 47.05-47.20 range overnight on low volume. It ended at 47.20-47.30. Expect the USD/PHP to open around 47.10, with range of 47.10-30 likely intraday.
USD/THB bounced back initially on good buying from German and short covering interests yesterday. The pairing hit high of 33.50, after good support from the central bank at the 33.40 level. It closed at 33.47 as markets remained bearish the dollars. Heavy selling in the offshore USD/THB forwards also weighed on the spot. However, heavy short covering in the dollars overnight has lifted the USD/THB back above 33.50. The pairing closed at 33.52 in New York, after range of 33.48-33.52. Could see further squeeze higher to 33.60 in intraday trades, as markets are seen caught short. On the political front, Thaksin supporters, the red shirted United Front for Democracy will stage another demonstration on Oct 17 to demand that PM Abhsit submit the petition calling for a royal pardon for the fugitive Thaksin.
USD/KRW traded a massive 1166.6-1185 range in Asia yesterday after opening mid-range at 1175; closed 1178.3 The pair witnessed a savage sell-off on the open plummeting through 1270 but the BOK was having none of it and intervened aggressively. The trade data was much better than expected with the surplus a whopping $5.7bln whilst exports although down for September are expected to return to positive territory next month. After lunch the BOK "shunted" the pair above 1180 spiking to 1185 before settling around 1180. The Kospi closed down 1.7%; foreign investors were net sellers of $220mln worth of local stocks. Overnight the implieds traded an 1173-1186 range on high volume before closing in NY at 1185/87.
USD/TWD traded a 31.995-32.319 range in Asia yesterday on massive volume of $2.3bln. The pair was initially taken off its lows by aggressive buying of US Dollars from the local central bank. The implieds had suggested an OTC open around the figure but the CBRC was intent on ensuring the pair did not drop below 32.00. The CBRC has tried to play down his intervention efforts in the local media with the usual mantra that the TWD exchange rate is determined by market forces etc. In the last 30 minutes of trade the pair dipped from around 32.14 to post an intraday low of 31.995 before closing in Asia spiking to 31.319. This late in the day shenanigans appears based on an option trigger at 32.00 even before the CBRC stepped in to post a ridiculous close. The local Taiex bourse closed up 0.48%. Overnight the implieds traded a 31.85-05 range on moderate volume before closing in NY at 32.03-08.
USD/CNY Chinese financial markets are closed until October 8th. The official September PMI came in at 54.3 vs. 54.0 in August. The 1-yr NDF last in Asia at 6.6870/20 up slightly from its NY close. Overnight the 1-yr NDF traded a 6.6900-6.6960 before closing in NY at 6.6930/80.
USD/HKD markets to reopen after a holiday yesterday. Expect range of 7.7500-05 to hold, as bullish dollars elsewhere should have little impact on the HKD amid still strong IPO related inflows. Expected stock losses today should keep the USD/HKD well supported too. USD/HKD traded 7.7500-03 range overnight, and closed at 7.7500.
EUR/USD climbed steadily during the European session after falling to a low of 1.4565 in Asia buoyed by the German election result and the strong equity markets. The price stalled at 1.4721 in NY and slipped back to trade around 1.4600 into the close, as the Dow closed off the highs in late trading and traders continued to sell into strength, reducing their long positions.
AUD/USD was the star performer overnight surging from a low at 0.8585 in Asia to test 0.8757 in NY led by increased investor risk appetite and spurred by short covering and perhaps a major flow. AUD/USD recorded a bullish outside reversal day which brings the primary up trend back into focus. AUD/NZD climbed from 1.1985 yesterday to close around 1.2175 and the AUD/JPY surged from a low yesterday at 76.53 to close above 78.00
USD/SGD closed firm in Asia at 1.4195 yesterday, after range of 1.4133-1.4224. Corporate and good names selling continued to cap rallies overnight. A big US names were reportedly sellers during the London session after rally failed to cross 1.4204 high. The pair consolidated within 1.4155-1.4196 in NY. USD/SGD closed at 1.4185 in NY, after overnight range of 1.4155-1.4205. Expect a range between 1.4150-1.4250 to hold in near term trade
EUR/USD traded lower in European session on profit taking amid talk that sovereign names were selling rallies. EUR/USD slipped to 1.4731 at NY opening session when Crude prices fell sharply following surprisingly bearish US government energy inventory data. EUR/USD climbed back to 1.4780 before the FOMC announcement and then soared to a fresh 2009 high at 1.4842 before running into sovereign selling amid talk of a very large 1.4850 option being defended. However, when Wall Street closed from positive to negative 0.85%, the EUR tumbled to 1.4725 into late in the US session.
AUD/USD and NZD/USD had a volatile day led by the latter over the past 24 hours - as stronger than expected NZ GDP sent both currency pairs to fresh 2009 highs. RBNZ was rumoured to be buying AUD/NZD during London session and the cross rose from 1.2030 to 1.2090 and NZD/USD eased back to 0.7207. Both pairs spiked higher after the FOMC statement with AUD/USD retesting Asian high at 0.8790 before running into heavy option related selling - amid talk of a large barrier at 0.8800. AUD/USD subsequently crashed to a low of 0.8690 in the closing hours of NY trade amid Wall Street negative closing; with NZD/USD following suit going from 0.7281 to 0.7182.
USD/SGD whipsawed overnight and closed at Asian trade at 1.4118, after intraday range of 1.4078-1.4127. Short covering ahead of the FOMC announcement sent the pair higher in early London dealings. However, it ran into fresh selling ahead of 1.4150 strong ressistance, and eased slightly to 1.4125 region. The USD/SGD ran into another wave of selling after the Fed left rates unchanged and rally in the EUR/USD to 1.4845, pushed the pair down to 1.4078 again. However, retreat in Wall Street and EUR/USD lifted the USD/SGD back above 1.4100. It closed at 1.4135 in New York, after range of 1.4078-1.4117. Extended selling in the EUR/USD during the twilight zone this morning sent the pairing reeling to low of 1.4685, which spilled over into the USD/SGD too. The pairing hit high of 1.4175 as stops were tripped above 1.4150. Expect further choppy dealings amid 1.4150-1.4200 intraday.
EUR/USD started trading from lows of 1.4676 as S&P futures were climbing. Early European equities rally triggered stops in EUR/USD through 1.4760 with a Swiss name reportedly the buyers that shot prices just shy of 1.48 barriers. But, the resistance was breached on continued advance in equities and a vulnerable USD pushed prices to a high of 1.4821, short of an options expiry at 1.4825. The EUR/USD spent the rest of the session trading between 1.4770 and 1.4820. GBP/USD was keeping pace with EUR/USD being spurred on by the climb in equities. But, it was EUR/GBP that caught the market's attention. An early rally to 0.9081 stirred dealer reaction with sell recommendations that contributed to the decline down to 0.9028 before settling back above 0.9040 ahead of Wed's BoE minutes. AUD/USD got a boost from firm equities, commodities, and gold to reach 0.8758 from 0.8625.
USD/SGD was trading on a firm footing on the back of overnight dip in US equities and lack of EUR strength, but reversed trend on equity market bounce in the Asian session, which triggered long USD unwinding and EUR rally. The pair retreated towards the 1.4120 area and stabilizes when EUR rallies stalled. Aug CPI data due out at 0500GMT today. Moves in the USD/SGD will probably continue to be dictated by the swings in the EUR and the equity markets. With the FOMC as the main event on Wed followed by the G20 into the end of the week, volatility is expected. MAS is expected to intervene should the SGD strengthen too fast given the rich valuations of the SGD NEER with respect to the policy band. Near-term support is seen at the 1.4100 first ahead of strong technical support at 1.4052.
AUD/USD fell as low as 0.8544 during the London session when the USD was broadly bid due to the uncertainty created by the trade tiff between China and the US. AUD/USD held steady between 0.8560/90 into US opening and then received a boost from a buoyant Wall Street shrugging of the trade/protectionism concerns. AUD/USD rallied as high as 0.8625 and closed the session just below 0.8620.
EUR/USD fell to a low of 1.4517 during the European session as the USD and JPY benefitted from the rise in risk aversion that was prompted by the news of a growing trade tiff between the US and China. EUR/USD was supported near the lows by reports that Asian central banks were on the bid. Wall Street buoyancy and reported option expiry above 1.4600 pushed the EUR/USD to as high as 1.4652 before drifting back to 1.4620 into the close, well up from the Friday close around 1.4565.
USD/SGD closed Asian trading at 1.4264-66, after ranging between1.4225-72. The pair was trading between the 1.4245-65 range after the run-up in early trades, triggered by retreat in the EUR/USD and selling pressure in JPY crosses. The signs of a positive economic recovery earlier than expected capped rally in the pair though, despite losses in the STI, which closed down 1.54%. USD/SGD resumed downtrend in overnight trades. The USD/SGD traded in a range of 1.4215-1.4267, and finished in New York at 1.4225. Range trade between 1.4210/60 is expected intraday.
AUD/USD opened in New York at 0.8435 but slipped to its 0.8395 low after a jump in the unemployment rate to 9.7%. Sovereign funds and corporate buying lend support and pushed the pair higher but ran into selling interest around the 0.8460 level. Subsequent rally in shares after ECRI data near London close and stop-loss trigger pushed the AUD/USD through 0.8470/80 and barriers at 0.8500. Asian Sovereigns were reported selling near 0.8520. GBP/AUD and EUR/AUD hit fresh 2009 lows at 1.9207 and 1.6774, respectively. The CRB closed down 0.47%.
EUR/USD was pushed up to 1.4280 after the US jobs report but gave way to sellers, sliding to a low of 1.4190 ahead of the NYSE open. Sellers capped subsequent buying interest up to 1.4235 that held until after the London fix, from which point the prices gave way and hit 1.4330 high but fall short of a retest of 1.4350 high from Thur. The pair drifted lower to the 1.4300 area as traders wound down positions ahead of the long weekend, despite decent stock demand.
GBP/USD was capped at 1.6365 out of London on the back of fairly strong EUR/GBP demand out of Europe. French accounts were reported to buy the cross at better levels but nothing came through in the cross play in either leg. Support for the GBP grew as the pair started to find bids into US payrolls reports which had started to stir up volatility in the market. However, the GBP/USD remained range-bound between 1.6300 – 1.6400 moving into US midday.
USD/JPY opened NY at 92.85, but fell to a 92.26 low after US unemployment number. It then surged higher following finance minister comments and a second read of the payrolls number and spiked up to 93.26 before running into selling interest. The pair settled at 92.85 by the London close but cross buying on an equity/bond allocation, comments about stimulus from BRIC nations, and US news about North Korea nuclear ambitions left USD/JPY at 93.00 by the NY close.
Overnight rally in stock markets globally should see extension of bullish sentiment in both equities and regional currencies, with China markets expected to lead the pack. Late announcement on Friday that China’s FX regulator, the State Administration of Foreign Exchange, plans to raise single QFII quota to $1 billion from $800 million added to bullish outlook for stocks.
USD/KRW closed at 1241.5, after range of 1239.4-1247.4. Exporters sales pushed the pair lower but pre-weekend short cover and talk of BOK intervention below the 1240 mark lifted prices off its lows. KOSPI closed down 0.29% on profit taking, with foreigners remained net sellers for the 3rd day running. Foreign funds reportedly sold KRW 433.6 billion worth of stocks in the past 3 sessions. BOK meeting on Thursday, but expect the central bank to keep its rates unchanged at 2.0% for the 7th month in a row. BOK”s outlook on growth and inflation are seen unchanged, hence should see limited impact on dealings.
USD/TWD closed local trading at 32.905, after a 32.845-32.966 range. Exporters and foreign funds sales were neutralized by central bank intervention and oil importers bids. Central bank presence is expected to continue with a range of 32.80-33.00 seen in near term. TWD NDFs traded 32.80-32.81 range in New York on moderate volume. It closed at 32.77-32.80. Taiwan August trade and inflation data are awaited at 0800 GMT on Monday. Exports and imports are likely to remain in contraction on yearly basis, but improved from July as demands from major partners rose. DJ poll sees Aug exports at -29.0%y/y vs -24.40%y/y in July; imports at -37.32%y/y vs -34.10%y/y in July. Aug CPI is forecast at -0.9%y/y vs -2.33%y/y in July. Typhoon Morakot, which hit Taiwan in early August, is seen pushing up food prices. The central bank is highly expected to kept its benchmark discount rate steady at a record low of 1.25% when it next meet on Sept 24 on rates.
USD/CNY was fixed at 6.8305 on Friday, slightly lower than Thursday’s fix at 6.8307. USD/CNY slipped below 6.8300 to 6.8297 low in late trading. Thin and illiquid market, with many banks hitting long USD limit, sent the pair lower and closed at 6.8300. Expect a slightly lower fix on Monday, but no big impact as the central bank will likely continue to keep the pair within tight range around the 6.8300 pivot. CNY NDFs eased on broad dollar sell-off overnight. The 1 year closed at 6.7800-6.7850, versus the Asian close at 6.7840-6.7880. Meanwhile, PBOC vice governor Su Ning said China needs to study regulatory tools to adjust lending, but did not elaborate on the present situation. He added they need to pay special attention to asset price changes and monitor global capital flows. In others, another PBOC vice governor, Yi Gang, said China will continue to manage its foreign exchange reserves to make them safe and fluid with good returns.
USD/HKD extended loss to 7.7502 overnight, before closing at 7.7507. Expectation of huge IPO related inflows in coming weeks weighed on the pair with at least 7 companies touted to have plans to raise some HKD40 billion ($5.2 billion) in Hong Kong IPOs in the next few weeks. The Sinopharm Group kicked off a road show on Friday to raise up to HKD8.73 bln ($1.13 bln) in its Hong Kong IPO. Trading debut is set on Sept 23. The Hang Seng index closed up 2.82% on Friday, boosted by derivatives related buying and news that China will increase its limit for stock investments by foreign funds to $1 bln from $800 mln.
USD/SGD traded intraday range of 1.4387-1.4422 but closed lower in Asia at 1.4389 on late selling. Upbeat stocks and bullish economic outlook continue to weigh on the USD/SGD. The pair rally to 1.4414 briefly overnight after the US payrolls data, but failed to follow-through when the EUR/USD dip to 1.4191. However, turnaround in dollar sentiment pushed USD/SGD below the 1.4400 support once again. Selling interest and stop-loss selling pressured the USD/SGD below 1.4380 and to 1.4360 low where agent banks were reported to be buying. USD/SGD closed at 1.4385, after range of 1.4360-1.4414 overnight.
USD/MYR attracted little interests ahead of US payrolls data on Friday, while tracking SGD moves. Importers bids initially provided some support at 3.5280 region, but late selling in the USD/SGD and spike in the EUR/USD pushed it down to 3.5230 at the close. In overnight dealings, MYR NDFs eased further amid increased risk appetite after the US jobs data. 1 mth MYR NDFs traded 3.5220-3.5250 range, down from the open at 3.5280-3.5310. It closed at 3.5225-3.5275. Only low volume was cited though. Expect the USD/MYR to trade 3.5200-3.5300 on Monday. Meanwhile, July trade data is awaited at 1000 GMT. Weak manufacturing demands will likely keep exports and imports both at double digit losses. June exports fell 22.60%y/y, while imports were down 20.8%y/y, with trade surplus at MYR 9.12 bln.
USD/IDR closed onshore trading at 10110-10140, after intraday range of 10120-10145. Local bids provided early support. Fixing demands and German bids added to bidding interests but demand were pushed back by state banks sales. Steady stock and bond markets after the BI left rates steady saw the USD/IDR hobbling a tad lower in afternoon trades. No trades were reported in the IDR NDFs overnight. The 1 mth closed in New York at 10120-10160, down from the open at 10160-10190 level. Elsewhere, Indonesian finance minister Sri Mulyani said they will discuss commodity price volatility at the weekend G20 meet but does not expect any move linked to the removal of fuel subsidies. She added exit strategies from stimulus policies need to be carefully timed in order not to dent market optimism.
USD/PHP closed at 48.62, after ranging between 48.60-48.765. New week inflows expected to weigh on the pair but talk of BSP buying saw initial stall above the 48.70 level. Stops were reportedly triggered below 48.70 in thin trading ahead of the close, and the pair declined to 48.60 low. No trades were reported in the PHP NDFs overnight. The 1 mth closed at 48.70-48.80, down from the open at 48.77-48.82. The Philippines government announced that Monday will be a holiday to mark the funeral of the leader of a religious group and financial markets will be closed. On the data front, July exports is due on Thursday.
USD/THB spiked to 34.08 on Friday on buying from agent banks. Local traders said the bank could be taking advantage of quiet market to push the pair up to help exporters. However, the move up was very lethargic due to lack of interest as well as some exporter offers at the top. The pair traded in a tight range of 34.07-34.079 overnight, and ended at 34.07 in New York. Thai FX reserves rose to $127.0 billion on Aug 28 from $125.2 billion on Aug 21 and $123.7 on Aug 14. The substantial rise is probably seen due to the central bank intervention activities to keep the USD/THB above the 34.00 mark.
AUD/USD opened in NY at 0.8450. Buoyed by higher commodities prices, month-end buying, rumored sovereign interest, decent US consumer spending numbers, and Aussie call buying ahead of the RBA, the AUD/USD was pushed higher. However, the pair ran into 0.8469 option offers and was sold heavily after it expired. A soft U Michigan numbers, and weak EIA numbers. With equities moving lower, AUD/JPY slipped below 79.00 leaving AUD/USD to settle at 0.8390 bids.
EUR/USD were gunning for last Thursday’s high at 1.44 for much of the day, but the latest ACB sales figures saw the pair being sold to 1.4325 low as the currency struggled on the crosses. Positive sentiment generated by the latest EZ Leading Indicator data, however, combined with general USD selling helped push EUR/USD to target 1.4400 again. However, after several fail attempts in the US morning to breach 1.4390, the market reversed and tested the downside steadily, eventually pushing the EUR/USD all the way back to Thursday 1.4280 breakout point.
USD/SGD finally succumbed to selling pressure to below 1.4400 support in late Asian trading, as the EUR/USD surged towards the 1.4400 level on strong buying on positive data. The USD/SGD fell to a low of 1.4385, before closing at 1.4395 in Asia. Fresh buying from a UK clearer subsequently lifted the USD/SGD back to 1.4400 during US opening market. The pair straddled around the 1.4400 pivot for most of the time but was again pushed higher in late trades on short covering amid selling in JPY crosses. USD/SGD closed in New York at 1.4422, after overnight range of 1.4382-1.4430. We should see range of 1.4400-1.4500 this week. Uncertain stocks outlook will likely provide support for the USD/SGD. July PMI will be released on Wednesday. Further improvements are expected but focus to be on the exports orders, which will likely remain weak.
AUD/USD opened in NY at 0.8340, rallied higher with gold, oil, and equity futures, then spiked to an intraday high of 0.8396 after the better-than-expected US housing numbers (+7.2%) and positive comments from Mr. Bernanke. Short covering of AUD/JPY was the main driver followed by buying of EUR/AUD into the London close. With higher US yields, oil slipped from new 2009 highs ($74.72) settling the day up 1.34%. Copper closed up 5% but Aussie underperformed for most of the day closing near the open.
EUR/USD hit a high of 1.4335 when US market open, with European players citing EUR related crosses sales as a weighing factor. The move into the 1.43s was sparked by the upbeat European PMI data, with hopes of recovery being generated by the signs of stabilization. The big drama of the day came on the back of the US housing data, which was much better than expected. EUR traded to a high of 1.4377 before being sold off sharply to a low of 1.4275 on long unwinding activities moving into the weekend. The market was able to recover most of that ground into the close.
USD/SGD spiked to 1.4451 high during the Asian lunch break on Friday, as traders reacted to news of China”s lending curbs. However, lack of follow through action saw the pair drifted lower. Resumption of EUR/USD and EUR/JPY into European dealings further pressured the USD/SGD. Markets were apparently caught long, as the pair continued to lose ground. It ended at 1.4381-86 in Asia, just off the morning low at 1.4380. In overnight dealings, the USD/SGD dropped further to 1.4362 as the EUR/USD surged to 1.4377 high. Fear of fresh MAS buying stalled falls. The pairing recovered to close at 1.4397 in New York. USD/SGD should hold 1.4360-1.4420 range intraday, with markets to remain wary of MAS intervention near the lows.
AUD/USD slid to 0.8175 during the London session when it was a blaring "RISK-OFF" due to the heavy 4.3% drop on the Shanghai Composite. The recovery in commodities and equities sparked by the near 5% surge in oil sent AUD/USD to 0.8315 before closing around 0.8290 to complete a bullish outside day reversal.
EUR/USD It was an extremely choppy day for EUR/USD. The pair fell to 1.4080 in early Europe when the steep fall in the Shanghai Composite sent the USD and JPY broadly higher. EUR/USD staged a vicious reversal when equity markets started to recover and accelerated higher when the crude price soared following US govt data showing a large drawdown in inventories. The stirring recovery on Wall Street and slide in US Treasury yields sent EUR/USD up to 1.4267 before sovereign name selling helped to push the price back to 1.4225 into the close.
USD/SGD finished Asian dealings at 1.4523-1.4525, after intraday range of 1.4469-1.4533. Strong buying from all sorts of good names drove the pairing higher as China stock markets tanked by 4.3% while the STI finished down 1.75%. The pairing however was unable to hit 1.4550 resistance overnight, as surge in oil prices lifted stocks on Wall Street and saw recovery in risks. USD/SGD traded range of 1.4482-1.4533 overnight, and finished at 1.4483 in New York. Further choppy trading range between 1.4450-1.4550 is likely near-term, with markets to continue to eye China leads.
AUD/USD traded in a choppy fashion within a 0.8330ish/0.8430ish range. AUD/USD traded up to 0.8430 during the London session on short covering. The mood changed once the US session was underway - with decent USD demand seen against a number of currencies and especially against the GBP. The GBP/USD helped to lead AUD/USD lower ending up in a re-test of the early Asia low around 0.8330. The move was helped along by soggy equities and commodities - and fresh AUD/NZD selling for reasons hard to fathom.
EUR/USD quietly traded around the 1.4200 level during the London morning session before coming under pressure when the US arrived. Stops were triggered below 1.4150 down to 1.4105 before option related buying ahead of a large 1.4100 option strike (maturing Tuesday) discouraged attempts lower. EUR/USD rebounds were capped below 1.4150 for the rest of the NY afternoon despite a slide in US Treasury yields. EUR/USD closed around 1.4140.
USD/SGD traded a 1.4382-1.4414 range in light trade. Market appears confused after previous strong negative correlation between US Dollar and stocks reversed on Friday night. Singapore was holidays yesterday. Overnight the USD/SGD range was extended to 1.4449 on the topside before closing in NY at 1.4444. A combination of weak stocks and a strong US Dollar move made the topside move a "no brainer".
AUD/USD continued to extend rally to as high as 0.8441 (1500 GMT) so far today. Intraday bias remains on the upside as long as 0.8315 minor support holds and further rally could be seen towards 0.8519. Nevertheless, we'll start to look for reversal signal and sign of losing momentum as AUD/USD approaches this key level. On the downside, below 0.8315 minor support will turn intraday outlook neutral and bring consolidation. But short term outlook will remain bullish as long as 0.8124 support holds.
Day's Range: High 0.8441 Low 0.8339 (1500 GMT)
EUR/USD rally continues as expected and reaches as high as 1.4429 (1500 GMT) so far in early US session. Break of 1.4337 confirms that medium term rally has resumed and should now be targeting at 1.4645. On the downside, a break below of 1.4205 minor support will turn intraday outlook neutral and bring consolidation. But retreat should be contained well above 1.4007 support and bring rally resumption. Real money funds are now desperate to get out of risk-free money market assets and buy risk now that it is widely perceived that "the worst is over" and a bottom has formed in most asset markets.
Day's Range: High 1.4429 Low 1.4205 (1500 GMT)
USD/SGD was pressured lower by good selling from European names, in line with lower USD/KRW and extended rally in the stock markets. Profit taking ahead of the weekend stalled falls at the 1.4400 support. USD/SGD extended decline to a low of 1.4310 (1500 GMT) in early US session on Monday. Singapore’s Q2 unemployment rate stays at 3.3% y/y, better than market expectation for rise of 3.7% y/y, and unchanged from Q1.
AUD/USD was the main story form much of Tuesday. The surprisingly hawkish speech from the RBA"s Stevens had some commentators saying that the RBA could hike rates as early as next month. AUD/USD soared to 0.8338 in early London on heavy buying from shorts and real money funds. AUD/USD reversed back to 0.8220 during the US session when the weak US consumer confidence resulted in investor risk appetite diminishing and forced AUD/USD and AUD/JPY longs taken earlier to pare back. AUD/USD recovered to 0.8275 in the US afternoon session when Wall Street made back some of the ground lost earlier.
EUR/USD was swept up to 1.4303 in early London to knockout a 1.4300 option barrier. The move higher was sparked by a strong rise in AUD/USD and AUD/JPY following hawkish comments from RBA Stevens that encouraged investors to go risk seeking again. Sovereign names sold the EUR/USD near the highs and the pair staged a vicious reversal lower to 1.4130 following a large drop in US consumer confidence data that sent investors back to safe-haven USD and JPY. EUR/USD managed to recover to 1.4160/80 late in the US session when Wall Street finished mixed after being well down earlier and there was some EUR/USD buying due to the 2-yr Treasury auction being poorly received by foreign buyers.
USD/SGD was finally bashed through 1.4390 support in Asian dealings yesterday, as funds and interbank specs battled talks of central bank intervention all the way down from 1.4392 to 1.4370 region. The USD/SGD reached low of 1.4368, and finished in Asia at 1.4387-1.4392. Another strong rally in the STI yesterday, the index finished up 1.84%, aided the SGD. In overnight dealings, the USD/SGD traded range of 1.4386-1.4422, with retreat in the EUR/USD from the 1.4300 handle leading to profit taking interests in the USD/SGD. It closed in New York at 1.4412-1.4417. With sentiment in US stock markets turning a bit soggy overnight, reckon it”s about time the STI takes a breather from its recent surge too. Expect the USD/SGD to trade 1.4400-1.4450 intraday.
AUD/USD slipped to 0.8130 on profit taking in late Lon/early NY when Wall Street opened under water. AUD/USD caught a bid when Wall Street steadied and moved higher and Crude made solid gains. There was talk of very good buying interest camped ahead of the 0.8100 level from real money funds and this helped the AUD/USD base and move to 0.8175 into the US close.
EUR/USD continued to firm into the European and NY session. EUR/USD was given a boost by better than expected German IFO and EZ PMI data. The EUR/USD traded up to 1.4253 at one stage after the data before falling to 1.4180 when Wall Street opened lower end encouraged profit taking on EUR longs. EUR/USD traded back to 1.4235 when Wall Street investors proved to be resilient and pushed the Dow and S&P back into the black. EUR/USD closed around 1.4210, as 1.4200 option expiries drew the price action late in the day.
USD/SGD traded a 1.4420-45 range in Asia in light dealings. June factory output fell 9.2% m/m s/adj, the biggest fall in three months as pharmaceutical production lost its steam. Manufacturing declined 9.3% in June from a year earlier, following two months of slight gains, as contractions in electronics and other sectors offset a weaker-than-expected rise in pharmaceutical production. On Friday night the range on the downside was extended to 1.4390 before closing in NY at 1.4404
Monday, July 20, 2009
ASIAN CURRENCY OUTLOOK:
USD/KRW finished at 1259.5, after range of 1257-1264.9. Short cover and importers bids provided support. Kospi trimmed earlier gains of 0.9% to close +0.55%. Foreigners remain buyers for the 3rd consecutive session but amount was only small at KRW156.9 bln. KRW NDFs traded 1256-1260 range overnight, and closed at 1256-1260. Should see further downward pressure on Monday on improved risk appetite but doubt it will break decisively below the 1250 mark. Fear of BOK intervention will likely stall falls too. Q2 GDP on Thursday is key data for the week. Economists see improvement from -4.3%y/y in Q1, given the favourable reports from Singapore and China. IFR forecast is for -3.3%y/y in Q2 GDP. USD/TWD closed locally at the day”s high at 32.955, boosted by importers bids and central bank intervention. The pairing traded amid 32.877-32.959 intraday. Expect range of 32.80-33.20 to hold nearterm. Taiex finished up 1.04%. Taiwan stocks tracked gains on strong earnings of tech bellwether IBM. TWD NDFs traded at 32.82 in New York, and closed at 32.76-32.82. Only low volume was traded. Elsewhere, Taiwan unemployment data for June is due out on Wednesday. Expect the rate to remain above May”s 5.84% on soggy exports and industrial production. June exports and industrial are scheduled on Thursday, with both likely to remain weak, though off May”s contraction. USD/CNY finished OTC trades at 6.8317, after intraday range of 6.8307-19. Late demand for the USD boosted the USD/CNY but overall dealings should remain amid 6.8300-6.8320, aa the PBOC is expected to keep the USD/CNY within a tight band. No trades were reported in the CNY NDFs overnight. The 1-year finished at 6.7650-6.7725 in New York, off the Asian close at 6.7710-6.7760. Improved economic data from China continues to see offshore speculation towards a stronger CNY. In others, PBOC chief Zhou Xiaochuan said China”s huge foreign reserves ($2.13 trln), is diversified despite the vast amount held in US Treasuries. Markets estimate that some 70% of China”s reserves are invested in USD assets, with the bulk in US government debt. USD/THB Good two-way dealings touted in the USD/THB, but activities remained trapped amid narrow 34.05-34.08 range. Good support was once again reported at the 34.05 level, with the BOT suspected behind. Overnight dealings continued amid 34.04-34.065, and it ended at 34.05 in New York. Should see further narrow range trades amid 34.00-34.10 nearterm. No econ data is scheduled for Thailand this week. USD/MYR was well supported throughout the Asian session on Friday, as early news of explosion in Jakarta drove sentiment. The pairing traded range of 3.5620-3.5795, and closed at 3.5625-55 on profit taking ahead of the weekend. No trades cited in the MYR NDFs on Friday night. The one month ended at 3.5675-3.5725 in New York. Should see further range trades amid 3.56-3.58 for now, but expect fresh test at the 3.60 handle on continued concerns over widened budget deficit in Malaysia. June CPI is awaited on Wed. IFR forecast is for -1.3%y/y from +2.4%y/y in May. The first y/y deflation is mostly attributed to the retail fuel price hike in June 2008. USD/IDR jumped on news of explosion in Jakarta, as traders scrambled to cover shorts. The pairing continued to hover around the 10200 level into late Far East dealings, despite BI intervention and bullish talk from the finance ministry. The central bank was touted selling USD/IDR from the 10180 level. Moody”s and Fitch remain positive on Indonesia, saying that the bombs had no impact on the country”s credit ratings. JKSE ended at -0.55% on Friday after a whippy session. IDR NDFs not traded on Friday night. The 1 mth closed at 10100-10150, down from the open at 10175-10225. Markets appeared to have discounted any risk aversion due to the explosion. Investigation on who is responsible for Friday”s bombings continues but Indonesian authorities said indication so far points towards Jemaah Islamaih, the radical militant Islamist group that was responsible for a string of attacks that ended in 2005. Indonesian markets are closed for holiday on Monday. Normal trades to resume on Tuesday. No econ data is scheduled this week.
INTRA-DAY AUD/USD OUTLOOK: 0.8060
AUD/USD recovered losses from last Monday low at 0.7705 and rebounded strongly to 0.8075 before retreating mildly. Although the rebound is strong, we remain at neutral level as we remain firmly in a broad range of 0.7700 - 0.8150 with either side still firmly entrenched. Only a firm break above 0.8155 will indicate that medium term rise is resuming for another attempt at 0.8262 or higher. Intra-day, I would like to sell some here with stops just above 0.8090 for some correction to the low side 0.8000.
EUR/USD rebounded strongly from 1.3878 last Monday low to touch 1.4181 this morning. The price actions seems to argue for more upside test to last month high at 1.4343 although initial bias is neutral at the moment. Based on over-bought condition, some downside correction is possible before continued strength resume. I would like to sell some here with stops above 1.4190 for quick profit at the low 1.4100 area. If EUR trade below 1.4100, then we are in a bigger consolidation range of 1.3850 - 1.4250. Range Forecast Today
USD/SGD traded in a range of 1.4500/46 in Asian market on Friday. NODX data came out worse than expected but have little impact on the SGD. NODX fell 5.5%m/m, below expectation for +1.0%m/m. In view of the bullish sentiment on the stock market as well as recent gains in new launch property market, players are beginning to see prospect of an economic recovery soon which may boister the SGD further. The USD/SGD came off from opening at 1.4508 to a low of 1.4457 at 02:00GMT. Data this week includes June CPI on Thursday, followed by manufacturing output on Friday. Expect good two-way business as well as possibility of MAS intervention if the SGD continue to strengthen to recent low of 1.4427 beginning of this month. Intra-day, I would like to buy some here with stops below 1.4425 for some recovery back to 1.4500 level.
AUD/USD continued to slide on weak commodities prices after running into strong selling at 0.7825 this morning. The subsequent decline saw AUD trading below Friday low at 0.7739 to register intra-day fresh low at 0.7709. The outlook have turn slightly bearish now and more decline is expected in coming session. The current decline from recent high at 0.8040 appeared to be still in progress and a test to major support at 0.7600/0.7650 cannot be discounted. I would like to recommend selling into rally above 0.7800 with stops near 0.7900.
EUR/USD bear the brunt by reports that the Russian central bank was forced to intervene to stem the slide in the Ruble after they announced a 50 bps interest rate cut. The slide in crude to below 60.00 this week and worries that several European countries are negotiating with IMF for aid was also weighing on EUR sentiment. The Eur fell to a low of 1.3878 at one stage before recovering to close 1.3935 at NY closing last Friday. Short-covering in Asia saw the pair rise to 1.3980 before easing back to 1.3927 at Europe opening. Sentiment remain neutral until we break either side of 1.3833 / 1.4073 of last week range. Would still recommend selling into rally with stops above 1.4000. Range Forecast Today
USD/SGD closed Asian trading range 1.4575/1.4618 last Friday. Short covering continued today and hit intra-day high at 1.4667 on the back of strong EUR/USD sale. The immediate trend remain for the USD/SGD to test higher levels above 1.4700. Range today so far 1.4595 / 1.4667 with gain towards the topside expected. The government will announce Q2 GDP on Tuesday, while NODX is due on Friday. The STI slumped 47.9 points at 0730 GMT. Continue to buy into dips intra-day with stops below 1.4585 support area.
AUD/USD crashed to a low of 0.7880 reacting to the softer equity markets from 0.7982 yesterday. It then rebounded strongly from intra-day low at 0.7933 to 0.8040 into UK lunch time before retreating once again to 0.7955 into NY noon market. Although the outlook remain neutral now, the current decline from recent high at 0.8158 appeared to be still in progress. Therefore, I feel the bias will turn back to the downside if ressistance at 0.8050/0.8100 were to cap. However if we trade above the 0.8100 region, sentiment will indicate that the rise from 0.7780 is still in progress. I would like to sell into rally with stops near 0.8080.
EUR/USD rebounded from 1.3878 to touch 1.3995 but succumbed to selling interest ahead of 1.4000 to hit intra-day low at 1.3902. However, strong support and buying interest there saw the pair rally strongly to hit 1.4051 high before tapering off in NY lunch market to 1.3960. Sentiment remain neutral until we break either side of 1.3828 / 1.4137 range. Only a break of upside resistance at 1.4137 suggest that the rise from 1.3747 is still in progress. However, a break below 1.3828 support indicate rally from 1.3747 is over and further decline can be expected. Would still recommend selling into rally with stops above 1.4080. Range Forecast Today
USD/SGD rallied to hit intra-day high at 1.4605 on the back of strong EUR/USD sale. However, the rally was unsustainable and the pair slide back to a low of 1.4548 into NY noon market. Bias in the USD/SGD could be slated to the upside as there are some concerns about BoE extending QEP measures which could weigh on the EUR. The STI closed marginally higher at 2272.26 which had little impact on the local currency pair. Would continue to buy into dips intra-day with stops below 1.4490 support area.
AUD/USD surged to 0.8158 early London when broad USD selling led by a rise in the GBP/USD resulted in stops being triggered above 0.8130. A reversal higher in the USD due to month-end flows; sovereign names buying and weak US data leading to lower commodities in equities sent the AUD/USD down to 0.8037 before good buying emerged. AUD/USD managed to hold up relatively well considering the fall in equities, commodities and the spectacular fall from the high in the GBP/USD. Traders say that this was due to relatively light quarter end flows in the AUD as opposed to the EUR and GBP where the selling flows were quite large. AUD/USD ended the day at 0.8070, similar to where it ended on Friday and Monday.
EUR/USD traded up to 1.4153 in early Europe when a surge higher in the GBP/USD led the USD broadly lower. EUR/USD selling by Asian central banks capped the rally and end of quarter flows sent the pair in both directions in choppy trading ahead of the release of the US Consumer Confidence data. EUR/USD was sold off to 1.4000 at one stage with long liquidation due in part to the weak US consumer data sending Wall Street and commodities lower, but also due to a rumour of a large order in EUR/USD sold for the fix with 2 billion rumored to be put through by one US investment bank. EUR/USD found strong buying interest near of 1.4000 from the sellers from their sales earlier possibly profit-taking and EUR/USD closed just above 1.4030.
USD/SGD traded to a broad 1.44471-24 range after opening around 1.4515. The well bidded EUR/USD had only limited impact on USD/SGD in the morning session but towards the close the pair could not deny the Euro"s strength or a crumbling USD/MYR (weighed down by broad financial sector liberalization measures) causing longs to unload their positions. The STI closed up 0.69% (well off its intraday high of nearly 2%) in what was a mixed performance by regional stocks impacted by month/quarter/half year flows/window dressing.
Monday, June 29, 2009
INTRA-DAY AUD/USD OUTLOOK: 0.8055
AUD/USD has retreated from 0.8086 and traded to intra-day low at 0.7982. Outlook is turned neutral now but if the current decline continued and break below 0.7930, then the bias will turn back to the downside. However if we trade above the 0.8086 region, sentiment will indicate that the rise from 0.7780 is still in progress. I would like to sell into rally with stops at 0.8120.
EUR/USD failed to breach beyond 1.4120 high overnight and retreated lower again to 1.3981 intra-day. Sentiment is neutral until we break either side of 1.3828 / 1.41 37 range. Only a break of upside resistance at 1.4137 suggest that the rise from 1.3747 is still in progress. However, a break below 1.3828 suppport indicate rally from 1.3747 is over and further decline can be expected. Would suggest selling into rally with stops above 1.4120. Range Forecast Today
USD/SGD hit a low of 1.4520 in European noon market on some stop/loss selling after failing to break above 1.4568 intra-day high despite EUR and AUD failure to rally higher. The STI closed 0.78% lower and have little impact on the local currency pair. Would look to buy into dips intra-day with stops below 1.4490 support.
AUD/USD has broken the key psychological 0.8000 level on substantial dollar weakening. This pair has been entrenched in a relatively steep uptrend extending from the March lows, and has further accelerated its uptrend since late April. With any strong breakout above the 0.8080 region, a major upside resistance target resides around the 0.8260 price region. Downside support is located at current accelerated uptrend area around the 0.7800 area, with dynamic support right around the accelerated uptrend support line.
EUR/USD continued it's bullish scenario on Friday breaking above key resistance at 1.4050. After the break above key resistance level at 1.4050 the pair topped at 1.4169 today and hover around 1.4130/50 range in Asia lunch hour. The bias is bullish in nearest term targeting 1.4220 but we seem to have strong resistance around 1.4173 area. A break above that area could trigger further bullish momentum. However we are in overbought area and heading down breakup area to potential downside rebound testing 1.4075/50 support area is possible. Break below that area could lead us into more consolidation. Range Forecast Today
USD/SGD continued it's downward spiral on AUD and EUR strength. The pair hit a low of 1.4382 but rebounded quickly above 1.44 on MAS intervention fear. However, the USD/SGD has not priced in the risks of more downside in global trade and to that extent, it is looking a bit expensive at this point in trade weighted terms. With equity market broadly remain positive, any rally from the pair will also be subdue owing to the fresh influx of real money into the stock market and limiting rally to 1.4600/50 area.
EUR 1.4139/41 H 1.4169 / L 1.4098 AUD 0.8048/51 H 0.8067 /L 0.7987 SGD 1.4406/11 H 1.4446 / L 1.4382 HKD 7.7514/17 TWD 32.3445/645 KRW 1247.35/85 IDR 10255/75
OVERNIGHT OUTLOOK
AUD/USD gained over 2% against the USD, as investor looked fro the double action of better yield and commodity hedge from this currency. The AUD/USD soared higher after stops above 0.7930, 0.7950 and 0.8000 were triggered. The Aud was given a boost from Londonfix demand and constant real money fund demand right through the last day of the month.
EUR/USD extended to touch 1.4150 high. The pair stayed bid through late Asian session and for the rest of the day, as the USD bear trend has resumed with a vengeance. The EUR/USD started the climb during Asian after South Korean national pension fund said they would diversify out of US bonds, but the weakness for the rest of the day was more a case of investors getting out of cash and into riskier assets. Stops were triggerred all the way from 1.4050 to 1.4150 due to relentless USD selling by real money funds at month end.
USD/SGD broke below 1.4500 reaching a low of 1.4460 overnight but was bought back up again to 1.4500 again as the pair seesaw on the back of violent EUR/USD movement. Near-term, the pair seems to be in a phase of consolidation with MAS intervention risks on excessive SGD NEER strength quite notable.
Wednesday, May 20, 2009
INTRA-DAY AUD/USD OUTLOOK: 0.7692
AUD/USD staged a particularly strong rally from its recent correction to 0.7451 low on Monday. It soared to 0.7785 on natural demand as well as rumours of sovereign names buying up risk assets. Some stop/loss order were also triggered on its way up and AUD continued to find buyers on dips to 0.7580 - 0.7600 areas. AUD continued to be favored by investors due to rising commodities and stock prices as well as attractive yield compared to other currencies. However, this rally will be neutralized if AUD were to trade below 0.7450 and any trade below 0.7330, which was a previous interim high will indicate that this rise is over.
EUR/USD continued with it's ascend after hitting a low of 1.3426 on Monday from the recent high of 1.3723 on 13 May 2009 from overbought long position. It climbed steadily again to reach a high of 1.3670 in late NY last night culminating within a range of 1.3584 / 1.3652 today in Asia. This move suggest that current rally is still in progress but expect further consolidation until we break out of upside channel above 1.3715. Only a break below 1.3475 will neutralized this rally and a break below 1.3250 will negate this whole upside momentum.
USD/SGD failed to break above 1.4750 on Monday from the downward correction of the EUR and the pair eased back to 1.4600. Talks of agent banks lurking around near the low side kept the pair supported and we expect range of the past week at 1.4550 ~ 1.4750 to continue to dominate the market. Many Asian currencies are still witnessing real money inflow buoyed by improved risk appetite from investors, which will remain supportive of the SGD. Only a rise above 1.4750 will indicate that this downward correction is over.
AUD/USD appears to be forming a double-top formation at 0.7715 and already traded below the neckline at 0.7563. Could retrace lower should the pair fail to trade above the neckline in coming sessions.
EUR/USD appears to be forming a top above 1.3700 and should the pair trade below 1.3550, could see further decline in coming sessions
USD/SGD is showing sign of bottoming-out should it break above 1.4680/1.4700 convincingly in coming sessions.
Wednesday, May 13, 2009
INTRA-DAY AUD/USD OUTLOOK: 0.7685
AUD/USD continued to find buyers on dips to 0.7580 - 0.7600 on past few sessions. The recent high at 0.7705/15 continue to offer some resistance although the not a strong one. AUD continued to be favored by investors due to rising commodities and stock prices as well as attractive yield compared to other currencies. However, the rally will be neutralized if AUD were to trade below 0.7450/0.7500 and any trade below 0.7330, which was a previous interim high will indicate that this rise is over.
EUR/USD soared again after some "long" liquidation to a low of 1.3588 in late NY overnight. It climbed steadily again to reach a high of 1.3723 in Asian trade on Wednesday, short of our interim objective at 1.3737. The stage is now set for further rise should major resistance at 1.3737 breached and next level to watch will be at 1.4165. Only a break below 1.3550 will neutralized this rally and a break below 1.3250 will negate this whole upside momentum.
USD/SGD continued to be pressured lower on general bearish dollar sentiment. The pairing slipped to a low of 1.4520 when EUR spiked above 1.3700. in Asian trading on Wednesday. Most of Asian currencies are witnessing real money inflow buoyed by improved risk appetite from investors. Renewed strength in the EUR/USD will continue to put a cap on the USD/SGD and expect 1.4640-70 to halt any short-term rally. Only a rise above 1.4800 will indicate that this downward correction is over.
AUD/USD continued to soar higher unabated and took out resistance at 0.7600 and 0.7700 trading to a high of 0.7715 at one stage before easing back to 0.7602 at 1230 GMT. AUD rise was buoyed by rising commodities and stock prices as well as rising risk appetite. The stage is now set for AUD to rally higher towards major resistance at 0.7900/0.8000 which is 50% retracement of 0.9849 to 0.6008 at 0.7928. The rally will be neutralized if AUD were to trade below 0.7450/0/7500 and any trade below 0.7330, which was a previous interim high will indicate that this move is only a false break.
EUR/USD leaped higher after better than expected US jobs data last Friday. The EUR spiked to 1.3668 high during Tokyo lunch hour today but eased back to 1.3558 at 1230 GMT. The stage is now set for further rally to major resistance at 1.3737 now that 1.3580 resistance is taken out. Only a break below 1.3248 will dampen this rally and further down 1.3190 will negate this whole upside momentum.
USD/SGD continued to trade lower in tune with other Asian currencies on soaring stock markets and improved risk appetite from investors. The pair was pressured lower to 1.4585 low in NY last Friday after better than expected non-frarm payroll and continued to press lower today to 1.4554 into Asian afternoon trade. Further strength in the EUR/USD will put a cap on the USD/SGD and expect 1.4640-70 to halt any short-term rally. No economic data due this week except Mar retail sales data due this Friday.
AUD/USD rally continued unabated and took out major resistance at 0.7480/0.7500 trading to a high of 0.7618 so far at 1330 GMT. The stage is now set for AUD to rally higher towards major resistance at 0.7900/0.8000 which is 50% retracement of 0.9849 to 0.6008 at 0.7928. However if AUD were to trade below 0.7330 again, which was a previous interim high, it only indicate that this move is only a false break.
EUR/USD extended gain beyond previous resistance at 1.3435 trading to a high of 1.3470 after a 0.25% cut by the ECB today. The stage is now set for further rally to major resistance at 1.3580 and 1.3737. Only a break below 1.3248 will dampen this rally and further down 1.3190 will negate this whole upside momentum. Expect some sideway trading before further rise could be seen.
USD/SGD started on a firmer note yesterday but failed to get pass 1.4805. Better than expected bank results, strong inflow of funds in stock market (STI), and a strong EUR help pushed the USD/SGD to a low of 1.4627 into NY opening hour today (1400 GMT). However the still weak economy and financial market may continue to underpin the SGD once this short-term euphoria subside. Would continue to trade with caution as MAS and bargain hunters may emerge soon to check the current strength of the SGD. Expect a range of 1.4550 - 1.4850 over the coming weeks
European Central Bank cut rate by 0.25 bps to 1.00% on 7 May 2009 Bank Indonesia cut rate by 0.25 bps to 7.25% on 6 May 2009 Reserve Bank of NZ cut rate by 0.50 bps to 2.50% on 29 April 2009 Philippine National Bank cut rate by 0.25 bps to 4.50% on 16 April 2009
Wednesday, May 6, 2009
INTRA-DAY AUD/USD OUTLOOK: 0.7435
AUD/USD rally continued and traded to a high of 0.7480 in Europe yesterday. However, it has slipped back below 0.7400 and traded to a low of 0.7340 as Wall Street fell into negative territory in late NY hours yesterday. Buyers emerged at the low and the pairing soon rebounded to 0.7472 in European trading hour today. AUD looks well supported after five consecutives of higher lows were made. Immediate support now lies at 0.7380 and further down 0.7330 level and it would be interesting if the market reverse its trend at this juncture.
EUR/USD recent gain were halted at 1.3435 and came off strongly as Wall Street gave up gains and the currency pair slipped to test 1.3248 as stops were triggered under 1.3325 and 1.3285 overnight. The pair recovered slightly to 1.3375 into early European market today on the back of a strong Asian bourses gain but gave that all back into early NY market to test 1.3275 again. Upside momentum remains unconvincing at this stage although the bullish trend still remain as long as minor support at 1.3200 holds. Range trade expected between 1.3200 and 1.3435 with outlook remains unchanged.
USD/SGD continued to hover around the 1.4700 level in London market yesterday after failing to break above 1.4750. Improved Singapore PMI data (purchasing managers index) drove the USD/SGD to 1.4685 low but found good support there from local banks. However, when the EUR were bashed lower, the pair saw a surged in short-covering and hit a high of 1.4805 in Asia lunch time. As Asian stocks continue to climb due to fresh fund inflows, the USD/SGD retreated 1.4740 at Asia closing and continue its descend into European market to as low as 1.4706 and hover around 1.4715/45.
AUD/USD continued its ascend through strong resistance at 0.7330 touching a high of 0.7390 this afternoon in Tokyo lunch hour. With 3 resistance points at 0.7175, 0.7240 and 0.7330 being taken out, it has set the stage for a stronger rise towards critical resistance at 0.7475. Immediate support now lies at 0.7300 and 0.7240 and it would be interesting if the market reverse its trend at this juncture.
EUR/USD rebounded strongly to 1.3385 last week but lacked of follow-through due to May day holiday last Friday capped further rally. The ensuing retracement found support at 1.3190 and the EUR extended its gain to 1.3347 in Asia lunch market on Monday. The trend remain mildly bullish and a test of further upside can still be expected. However due to UK bank holiday today, more sideway consolidation will be expected with thin trading expected.
USD/SGD were unaffected even though Singapore had raised the Influenza A (H1N1) alert level from "yellow" to "orange". The break of 1.4850 support triggered panic long unwinding due to last Friday's Labour Day holiday. The bears were out with a vengeance and the USD/SGD slides to a low of 1.4728. The subsequent mild recovery only found resistance at previous support point at 1.4850 and the pair was pushed back to 1.4728 this morning in Asia market. In view of a bouyant EUR and UK market closed today, expect any rally for the pair to be subdue and more sideway trading expected. Any further panic selling could still looks ugly as next major support are located at 1.4550 and 1.4200 apart.
AUD/USD spiked to intraday high of 0.7280 on US GDP data which contracted by 6.1% annualized rate in Q1 from an expectation of -4.7%. Clarifications from WHO that there was only 7 reported deaths in Mexico rather than 150 as reported everywhere yesterday, caused the pair to reverse its direction steadily as risk aversion receded. The low seen yesterday at 0.6988 will serves as a good base for support. Now that the AUD has pushed through 3 resistance points at 0.7125, 0.7175 and 0.7240, it has set the stage for a stronger rise towards critical resistance at 0.7330.
EUR/USD rebounded strongly and reversed direction from yesterday on weak US GDP data reaching a high of 1.3340 on Wednesday in US market. The change in fortune in the EUR were also attributed from the clarification from WHO, reporting of a lower death toll from the swine flu in Mexico as opposed to those higher numbers reported a day earlier as risk aversion receded. The breach of major resistance at 1.3300 came as a surprise and solidify a more bullish scenario towards previous high at 1.3737. The low traded yesterday at 1.2964 will now act as the support level for any correction or reverse selling should the swine flu take a turn for the worse.
USD/SGD came off to a low of 1.4815 on the back of a raging EUR that broke above 1.3300 on worst than expected US GDP numbers. Although Singapore had raised the swine flu alert level from "green" to "yellow", statements from the Ministry of Health has indicated that they are well prepared to handle the situation should it arise. The pressure on the SGD is definitely reduced and market will have to watch out for fresh developments on the swine flu pandemic that will most likely dominate the next couple of days. The resistance are clearly define at 1.4950 and 1.5035 for now as long dollar position squaring may be expected ahead of Friday 's Labour Day holiday. Any panic selling could looks ugly as next major support are located at 1.4550 and 1.4200 apart.
AUD/USD fell sharply on Monday after failing to go past 0.7238 resistance, thus reviving a bearish divergence again. Further fear of a Mexican flu outbreak pushed AUD to as low as 0.6988 in Asia market on Tuesday afternoon. The sentiment improved slightly on better data in UK and US markets and the AUD climbed back to 0.7070 on some short covering. Nevertheless, strong resistance are all lined-up from 0.7125, 0.7175 and 0.7240 and any attempt to trade beyond those barriers require a hercules effort to penetrate. However recent low at 0.6955 still holds the key to downside and a breach of support will see quick acceleration towards next critical support at 0.6768. Only a rally above 0.7125 will put off selling pressure and bring some consolidation into play.
EUR/USD came off from a high of 1.3255 on Monday in Asia, as risk aversion heightened on the Mexican swine flu news, which spread over to London/NY. Remarks by ECB's Wellink that ECB should discuss rates below 1% weighed on the pair, but Liikanen, another ECB official said that he sees signs that the global economy is stabilizing, which provided some support. Amid conflicting remarks, the swine flu and risk aversion weighed heavily on the EUR. The pair traded to a low of 1.2964 on Tuesday before climbing back above 1.3100 on better UK and US data. The overall outlook remains rather mixed with fresh developments likely to dominate. Expect rally towards 1.3160/80 to be cap with further strong resistance at 1.3300 to cap further bounce and recent low at 1.2884 to lend support on further weakness. A break on either side will dictate next directional trade.
USD/SGD traded to a high of 1.5035 in Asia on Tuesday from last Friday low of 1.4848 on news that Singapore has up swine flu alert level from "green" to "yellow". However fear of MAS intervention on any undue SGD weakness has seen some profit taking pushing the pair below 1.5000. Better than expected UK and US data also lend support to the SGD and pushed USD/SGD back to 1.4960 level from the high of 1.5035 on Tuesday morning. Fresh developments on the swine flu pandemic will most likely dominate as Asia tightens controls over the swine flu with China on full alert.
India and Canada cuts interest rates by 25 bps - 21 April 2009
INTRA-DAY AUD/USD OUTLOOK: 0.7023
AUD/USD fell sharply yesterday on comment from RBA governor Glenn Stevens that Australia's economy was likely already in recession. Long positions built up against the USD and JPY during the recent AUD bull-run were liquidated and heavy stop-loss triggering saw the AUD/USD breached strong suppport at 0.7085 and 0.7030 and traded to a low of 0.6955. The oversold scenario saw mild recovery today in Asia to 0.7031 but weak stock market will likely put a lid on any potential recovery. Only a rally above 0.7120 will put off selling pressure and bring some consolidation into play. Otherwise, this current decline suggest the recent top at 0.7240 is in place and a bearish divergence is developing and further decline to 0.6770 major support is now expected. Asia range so far: 0.6964 ~ 0.7031.
USD/SGD traded to a high of 1.5108 as the EUR slides below 1.3000 support in US market overnight. The pair was trading within 1.4998/1.5095 range in Asia and early London market but gave way on further pressure on the EUR. In addition, news of Moody's revised ratings outlook for DBS, OCBC and UOB from stable to negative did not augur well for the SGD as well. The USD/SGD rallied to 1.5140 high as Asian stocks tumble today on news of a 41% quarterly increase in bad loan at BOA. The increased in BOA reserves for non-performing assets had renewed fears of deteriorating credit market, raising uncertainties about future writedowns. Given all these negative backdrops, expect downside for USD/SGD to be fairly limited with dampened risk appetites and continued weakness on the euro. Would expect to see a range of 1.4985 - 1.51585 over the next few trading days.
AUD/USD fell sharply yesterday on stop-loss unwinding reaching a low of 0.7233 from 0.7330 level. However the recovery back to 0.7300 ahead of US retail sales data was short-lived as the AUD continue to dive lower. There were rumours that an Asian central bank had buying interest ahead of 0.7200 but it had no effect on the pair as heavy stop-loss continued to be triggered today and we reached an intra-day low at 0.7148 before some profit-taking took it back to 0.7180 level. Critical support is at 0.7125 and further down, 0.7075. A breach of that level may see a major reversal of trend bringing an end to the recent rally. On the topside, a reclaim and breach of resistance at 0.7267 is required for further rise in the pair. Asia range so far: 0.7148 ~ 0.7240.
USD/SGD traded lower after MAS re-centres the exchange rate policy band yesterday. The move was in line with market's expectation and as it provides more room for the S$NEER to move lower from here. Immediately following the announcement and comment from MAS that "there is no reason for any undue weakening of the Singapore dollar", the USD/SGD slide to a 1.4960 on heavy long position unwinding, before stabilizing around 1.5000. As such, we could see the S$NEER stabilizing at around -0.5% from the mid-point in the near-term. At the current currency levels, the 1% downside from mid-point on S$NEER model corresponds to USD/SGD at 1.5130. The MTI has cut it's full-year growth forecast further to between -9% and -6% from previous -5% to -2%. NODX forecast was also lowered to a contraction of -13% this year from earlier -10%. Given the 1Q 2009 numbers, full year growth looks to be within the region of -7.5% contraction than the lower figures which were predicted before. As such, bottom-picking on the currency pair will still persist after weak long has been flushed out by this move. Would expect to see a range of 1.4950 - 1.5150 over the next few trading days.
USD/KRW rallied above 1350 yesterday to close at 1354.50, after intra-day range of 1333-1361. Markets were worried by renewed risk aversion and stock related outflows as Kospi closed down 2.93%. Expect the USD/KRW to consolidate around the 1350 pivot ahead of BOK rate decision today. Markets consensus expect the BOK to hold interest rates steady for the second consecutive month at 2.0%.
USD/TWD are expected to remain bid due to aggressive central bank intervention and risk aversion activities. It closed at 33.90 yesterday, after trading in a range of 33.79-34.00. Expect further consolidation amid 33.80-34.00 intraday. TWD NDFs traded 33.75-33.80 range, and closed at 33.75-33.80 in NY session.
USD/HKD was range bound amid 7.7500-10, as markets continue to eye Hang Seng's Index movement. The pair traded in a range of 7.7500-08 overnight, and closed at 7.7502. Expect thin trading ahead as Hong Kong markets will be closed from tomorrow to Monday for Easter. Normal trades to resume only on Tuesday.
USD/CNY closed at 6.8359 after trading in a range of 6.8355-6.8384 overnight. PBOC fixed the mid at 6.8370 yesterday. Meanwhile, China exports in March were down by double digits from a year earlier, but the decline was smaller than in February, the Chinese-language International Business Daily quoted an unnamed ministry official. Exports in February fell 25.7%y/y. Economists polled by Reuters expect a 21.5%y/y fall in March.
USD/IDR Indonesian markets are closed for parliamentary election today and Good Friday holiday tomorrow. NDFs only traded at 11500 on low volume, and closed at 11425-11500.
USD/PHP Philippine markets are closed from today (Maundy Thursday to Easter Sunday) for Easter holidays. Normal trading to resume on Monday. PHP NDFs traded range of 48.07-48.11 overnight on moderately low volume. It closed at 48.05-48.11.
USD/THB to remain well supported from ongoing mass protests in Thailand. Ousted premier Thaksin Shinawatra in a video linkup last night rallied for more people to join other protestors in red shirt rally aimed at installing "a true democracy" in Thailand. He told the protesters to "continue enduring until we are victorious". Thaksin, who has been threatening the government with a "people”s revolution", urged civil servants, police and military officers to resist official orders. USD/THB traded in a range of 35.42-35.49 overnight, and closed at 35.49 amid a tense market. Things could get ugly ahead of the Thai New Year next week. Thai markets will be closed from Monday to Wednesday next week for the Songkran holidays.
USD/MYRclosed at 3.6280-30 yesterday amid aggressive buying after repeated intervention from Bank Negara to check undue gains. Could see range of 3.6200-3.6400 intraday, with markets to remain well bid on dips in line other regional currencies; and could see the USD/MYR targeting break of 3.65 for extended rally towards the 3.68-3.70 area. Meanwhile, markets to await PM Najib's new cabinet line-up and Feb industrial production data today. PM Najib is likely to retain the finance portfolio, while he is likely to cut down the number of cabinet ministers with introduction of parliamentary secretaries again. Elsewhere, Feb industrial production is likely contract further in line with the soft exports sector, while Jan industrial production fell 20.20%y/y. Expect slight improvement to -18.0%y/y.
USD/SGD were mainly capped below 1.5200 overnight, after failing to trade above 1.5218 intraday high in Asian session. Sell-off in the dollars into London dealings pressure the USD/SGD to 1.5140 low. Good buying interest were seen after FOMC minutes near the low 1.51s and the pair bounced back and trade around the 1.5160-85 range thereafter. The USD/SGD attempted to break above 1.5200 in US session but were capped by firm stock gain. USD/SGD closed the New York session at 1.5177, after range of 1.5144-1.5200. Speculation remains in favour of a MAS easing on April 14. Expect range of 1.5150-1.5250 to hold ahead of the long weekend as Singapore markets are closed tomorrow for Good Friday holiday.
Wednesday, April 8, 2009
INTRA-DAY AUD/USD OUTLOOK: 0.7078
AUD/USD shrugged off unexpected RBA cut today by 25 bps and recovers from intra-day low of 0.7045 before recovering above 0.7100 on talk of an Asian central bank buying. However, weak equity market today capped further rally on the AUD. At this juncture, only a break below 70 cents will neutralize the recent bull run and a further breached of critical support at 0.6855 is needed to signal that this rally has peaked.
USD/SGD rebounded above 1.5100 yesterday evening on heavy sell-off in the EUR/USD and EUR/JPY. Strong rally this morning saw the pair hit a high of 1.5179 before light profit-taking took it to support level at 1.5120. Lower Asian stock markets today and fear of MAS decision to weaken the SGD NEER at next week meeting remain supportive for the USD/SGD. Expect further consolidation with bias towards the upside should EUR/USD continue it's downward spiral on heavy EUR/JPY unwinding.
USD/KRW closed in Asia at 1322.50, after trading a range of 1316.50/1336.00. The market is watching closely tomorrow's rate meeting but the Won continues to perform well against other Asian currency as a whole. USD/TWD rallied strongly on news of CBRC intervention pushing the pair up to as high as 33.70 from 33.30 opening. However, it eased back to 33.40 on strong stocks rally with and eventually closed at 33.57. USD/PHP closed at 47.795, after trading in a range of 47.79/47.94. The market will be thin ahead of the Lenten holidays from Maundy Thursday to Easter Monday. There was little reaction to March inflation data yesterday and the easing inflation number could allow BSP room to cut rates further by 25 bps on April 16 meeting. USD/THB surged to a high of 35.49 overnight as tensiond rises ahead of planned mass rally in Bangkok today. Protestors was reported to have attacked the PM Abhisit car in Pattaya yesterday. Pro-Thaksin supporters of around 300,000 are expected to join the rally at government house today. Expect a range of 35.45/65 today with a biddish undertone. BOT is highly expected to cut the 1-day repo rate by another 25 bps today to 1.25 amid easing inflation and recession threats in the country.
Friday, April 3, 2009
INTRA-DAY AUD/USD OUTLOOK: 0.7128
AUD/USD extended rally through resistance at 0.7100 hitting a high of 0.7232 as market reacted to G20 summit results with enthusiasm. Equity markets all around the world soared with gains between 3% to 5% as investor risk appetite pushed up high yield currencies and commodities. The pair eased to 0.7120 on profit-taking but is expected to continue it's momentum to break critical resistance at 0.7265. Only a break below 0.7065 will neutralize this upmove and further breached of critical support at 0.6855 is needed to signal that this rally has peaked. Meanwhile, market will be watching closely US non-farm payrolls and unemployment report due tonight.
USD/SGD was hammered lower on optimism surrounding G20 which has helped increase risk appetite in high yield currencies, commodities and equity markets. The pair retreat started from 1.5260 and broke critical support at 1.5020 on heavy stop-loss selling reaching intra-day low at 1.4970. Strategic buyers were seen at the low and the pair quickly recovered to 1.5060. Although the global equity markets including Asia has given the regional currencies a boost, weak economic data and property market as well as MAS meeting next week could negate this current downward correction if further "shocking news/data" were to surface again. Meanwhile, market await tonight US non-farm payrolls and unemployment report.
AUD/USD rebounded from 0.6770 as expected extending gain to 0.6971 before retreating to current level on some profit-taking. The corrective decline from 0.7095 is over and the rally from 0.6770 to break higher is still in progress. A break above 0.7095 will target critical resistance at 0.7265. Right now, support at 0.6850 and 0.6770 have been clearly define. Asia is trading in a tight range of 0.6855 ~ 0.6930. Some consolidation is expected before we target next move. A slew of economic data due this week and it's going to be interesting how market react to those news. Critical topside resistance is still at 0.7265 and we have to take it out before AUD has the momentum to continue it's bull run.
USD/SGD had held on well at the low 1.50s and continue to trade in range of 1.5050 ~ 1.5250, amid bullish bias ahead of MAS policy meet next week. Overnight range in London/NY was 1.5189/1.5233 with good interest both ways. Asia range so far : 1.5200 ~ 1.5263. Meanwhile, MAS announced Singapore dollar total bank loans at end-February stood at SGD270.5 billion, down 0.2%m/m. Bank lending fell for a fourth month in February as loans to business shrank further and lending to the property sector slowed to a crawl.
AUD/USD extended fall to as low as 0.6805 so far today. The retreat is in line with over-bought condition of the recent rally to 0.7095 seen last week. An intra-day top could be in place and further decline to previous support at 0.6755/85 level is possible at this stage. With global boarses retreating from last week rally, expect AUD to come under some selling pressure should 0.6775 breaks. However, we need to break below 0.6565 critical support for this rally to be over. Critical topside resistance is still at 0.7267 and we have to take it out before AUD has the momentum to continue it's bull run.
USD/ASIAN traded higher at mid-day across the board on the back of heavy losses on Asian stock markets. The Straits Times Index is down 3.95%, Nikkei down 4.53% and Hang Seng down 4.21% (2.30pm HK Time). Large stop/loss were reported in the USD/KRW on rumours that a huge liquidation on shorts will be triggered should GM-Daewoo goes into receivership. The pair rallied to 1,393 from last week closing at 1,349. The range for today has been 1,368/1393, USD/TWD range 33.853/33.943, and the USD/SGD range 1.5174/1.5229. Expect more choppy trading range in Asian currencies ahead with market nervous again on the under-pressured Asian boarses. Focus this week will be on the numerous economic data from US and the G20 meet on Thursday. Mar consumer confidence is due on Tuesday, followed by ADP employment, ISM and Feb pending home sales on Wed, culminating in US non-farm payrolls and unemployment report on Friday. Asian data includes Feb trade data for Thailand, India and Malaysia, PMI for China and Singapore. Thailand and Indonesia to also release CPI this week. S. Korea will kick off the region's trade numer for March on Apr 1.
Thursday, March 26, 2009
INTRA-DAY AUD/USD OUTLOOK: 0.6990
AUD/USD retreated sharply from 0.7095 to 0.6908 breaking minor support at 0.6930 in the process. An intra-day top could be in place and further decline to previous support at 0.6785 is possible at this stage. However, we need to break below 0.6565 critical support for this rally to be over. Asia is trading in a tight range of 0.6973 ~ 0.7022. Expect some consolidation before we see resumption of more attempt to force some stops below 0.6880. Critical topside resistance is still at 0.7267 and we have to take it out before AUD has the momentum to continue it's bull run.
USD/SGD failed to break beyond 1.5173 and eased back to 1.5057 . Expect further range trades between 1.5050 ~ 1.5200 in the weeks ahead amid continued speculation that MAS may tweak the SGD NEER in April. With strong support at 1.5000 likely to hold, markets sentiment still favor buying on dips. The only worry for USD/SGD bull is that everyone is long USD. If a massive trigger on stops below 1.4950 were to occur, then we may see the pairs dip to at least 1.4850/1.4750 before picking up the USD again at those level. Asia range so far : 1.5076 ~ 1.5112. So the trick is to be nimble.
AUD/USD rally extended to a high of 0.6969 this morning after breaching major resistance at 0.6848. Although resumption of upside trend was set in place, expect some side-way trading this week before attempting to break higher above the psychological 0.70 cents barrier. The next critical topside resistance is at 0.7267 and we will await if market has the momentum to take the AUD up there. Only a break below 0.6565 suggest that an interim top is in place. Asia range so far: 0.6865 ~ 0.6969.
USD/SGD rallied higher to 1.5178 in late US market lifted by rebound in USD/Majors from 1.5078 ~ 1.5128 range in Asia last Friday. Pessimistic remarks by MM Lee about Singapore growth recovery, more downward revision of our 2009 GDP growth forecast and expected increased in unemployment rate data continued to put pressure on the SGD. With strong support at 1.5000 likely to remain intact, the USD/SGD will continue to trade cautiously even if the EUR/USD continue to climb. Weak fundamentals and fear of MAS decision to weaken the SGD NEER further will continue to have a psychological bearing on players mind. Asia range so far : 1.5112 ~ 1.5155.
AUD/USD was range-bound around 0.6600 before the Fed announcement and then soar up to 0.6808 in the wake of of the surprise Fed decision to embark on qualitative easing. The pair eased back at the closed of US session to 0.67755/60. Early Asian market took the pair higher again to 0.6820 before pushing it lower on profit-taking to 0.6726 in Asian morning market. With resistance at 0.6655 and 0.6735 taken out, current rise has turn bullish but we need a clear break above 0.6848 strong resistance for resumption of upside trend. Only a break below 0.6545 suggest that an intra-day top is in place.
USD/SGD rebounded strongly to 1.5200 from 1.5077 low after being forced down from a strong EUR/USD rally to 1.3499 after Fed surprised QE announcement. However weak fundamental and fear of MAS decision to weaken the SGD NEER further forced players to take profit fast on any significant retracement on USD/SGD. Expect further consolidation to the pair with bias towards the upside should EUR/USD eased back.
AUD/USD rebounds strongly and reaches as high as 0.6603 in early US session. The bias has turn up as long as minor support at 0.6545 holds. Current rise could attempt 0.6848 strong resistance and a break could trigger higher. Only a break below 0.6545 suggest that an intra-day top is in place. Short-term outlook remains rather mixed with 0.6408 major support remain intact and focus still remain on 0.6655 and 0.6735 resistance. Breach of either side will set the pace for the next impulsive move.
USD/SGD retraces lower overnight reaching 1.5288 low as EUR/USD rally hit above 1.30 mark. The currency pair rebounded above 1.5300 after the Dow's retreated in late NY market. It range traded 1.5288 / 1.5375 overnight. Expect further consolidation amid broad range of 1.5255 / 1.5555 range with focus today on Feb's export data at 0500 GMT. Singapore's non-oil domestic export is likely to continue to contract further, in line with the weak exports from the region. Jan NODX fell 34.80% y/y and 3.20%m/m. Market consensus is for minus 27.5% y/y.
USD/KRW traded in a broad 1434 ~ 1488 range in Asia before closing around 1440. The pair was under pressure from negative investors and traders comments which drove the pair lower. The break of 1460 support seemed to be the catalyst for some heavy stop loss sales with some bids appearing at 1440. The Kospi underperformed the region for the second day running ending flat as foreigners werereported net sellers. Overnight implied traded a 1411-1428 range on a moderate range before closing in NY at 1425/1430.
USD/TWD traded in a tight range of 34.391 ~ 34.495 in Asia overnight before closing at 34.416. Exporter offers pressured the pair lower initially but continued talk of CBRC support at 34.40 kept the bears at bay. The Taiex hit fresh 4-months high and ended the session up a solid 1.5%. Overnight implied traded 34.18~25 range on moderate volume before closing in NY at 34.22/27.
USD/THB extends fall in afternoon dealing, weighed by fall in the other asian markets. The pair hit a low of 35.83 with BOT support at the 35.80 level likely. The pair eventually traded in 35.80~35.86 overnight. Meanwhile, the censure vote against the Thai Prime Minister and five other ministers has been moved forward to March 21 from March 27. The censure debate will start on Thursday, march 19 and most expect the government to survive the no-confidence vote though, as the opposition Puea Thai party is not likely to rally half the members of parliament to vote with it.
USD/PHP closed at 48.47, after a whippy session. The pair was pressured lower in the afternoon on broad dollar selling in overseas markets, after early speculative short cover and corporate demands lifted the pairs to 48.69 intra-day high. News of Jan remittances from overseas Filipino workers came in near flat at 0.1% y/y, but did not have any impact on the pairs. We should see the USD/PHP testing 48.20 support in due course should EUR/USD rallies further. Strong support at 48.00 should hold with any breach to target a strong reversal. Jan unemployment rate data at 0200 GMT today. Dec unemployment rate was at 6.80%.
Friday, March 6, 2009
Update of Major Central Banks Interest Rate
Thursday, March 5, 2009
INTRA-DAY USD/SGD OUTLOOK: 1.5516
USD/SGD came off the high of 1.5577 yesterday as the EUR/USD made a strong recovery from the Asian low at 1.2455 and spiked up to 1.2653 in US session on heavy EUR/JPY buying. The Dow closed up 150 points or 2.23% at 6,876 also gave the SGD some reprieve as the pair eased back to 1.5438 from the high. As regional bourses remain cautiously in recovery mode from Dow's gain overnight, sentiments remains weak in the medium-term. Expect short-term trade to be capped in the mid 1.55 by MAS presence and profit-taking from long position.
AUD/USD rebounds strongly again after news that China will increase fiscal spending encouraged fresh buying. The weak Aust GDP data had triggered stop-loss on weak longs and a return of increase investor risk appetite, supported by commodity prices gave a boost to the AUD. The AUD traded to a high of 0.6528 during the US session after trading as low as 0.6286 following disappointing Aust GDP data yesterday. Short-term outlook remains rather mixed with 0.6248 support remain intact and focus still remain on 0.6555 resistance. Breach of either side will set the pace for the next impulsive move.
USD/SGD traded to a high of 1.5584 in early Asian time on the back of continued meltdown in global stock markets. Regional sentiments remains weak and show no sign of bottoming yet. MAS is expected to smooth any excessive volatility and profit-taking on longs has seen the pair eased back to the day's low of 1.5462 near Asian closing. In the session ahead, market will continue to focus on the stock markets for further direction on the pair with only PMI index on Wednesday, which will not throw out anything unexpected. Given the risk aversion still lurking in the markets, expect more upside pressure on the USD/SGD and regional currencies.
AUD/USD rebounds strongly after RBA unexpectedly left rates unchanged for the first time in 7 months at 3.25%. The pair rebounds strongly from yesterday's low of 0.6285, breaching 0.64 level into European session to a high of 0.6465. Short-term outlook remains rather mixed with 0.6248 support remain intact and focus will now turn to 0.6555 resistance. Even though weak economic condition is expected to persist in the near term and inflation will likely decline over time, the RBA believes the cumulative decline in interest rates (400 bps reduction from Sept 2008 to Feb 2009) and other fiscal initiatives will be able to boost demand and keep the economy out of recession.
USD/SGD traded in 1.5205 ~ 1.5297 range in Asia yesterday. The pair remained bid despite the biddish tone of EUR/USD and make a spike to 1.5313 before closing a tad below 1.53 at NY closing. Reports of more layoff in the job market in Singapore as well as continued softening of global equities market ahead will continue to weigh down the SGD. For now, the market continue to look to the US front for more banking/financial developments.
AUD/USD continues with choppy sideway trading reaching a high of 0.6555 in early Europe trade yesterday. However, the break of 0.6545 resistance is mildly favoring the upside for the very short-term. Further rise could be seen as rise from 0.6248 is possibly resuming, targeting 0.6850 and above. Only a break of 0.6645 will add more credence to this scenario. On the downside, though, note that below 0.6330 will favor the case that fall from 0.7267 is indeed resuming. Break of 0.6248 will confirm this case and bring decline to retest 0.6008 low. Range Forecast Today
USD/KRW traded higher, hitting a high of 1,418.0, underpinned by a firmer USD. Renewed concerns about South Korea’s external (trade and current account) position amid a sharp global economic downturn also helped to lend support to bids. Net capital outflows showed signs of easing, tracking the lack of major moves on equity bourses. BOK continued intervention on rally will continue to dampen buying interest at current levels. However renewed buying interest for USD from all quarters and lingering concerns about the South Korean economic prospects will continue to pressure underlying bullish sentiment for the pair. Overall, USD/KRW geared for choppy price action within broader 1394.0-1420.0 consolidation band for now. Go short for USD/KRW on rallies. Strong resistance at 1420.0 handle.
USD/TWD soared to a high of 34.28 which was a four-and-a-half-year high for the currency pair, as interbank dealers covered their short positions amid worries over the Taiwan economy and on intervention fears. Trading activity in the TWD will continue to be subdue due to the exports slump and market worries that the central bank would intervene by purchasing US dollars. Investors are awaiting the release of Q4 GDP data this Wednesday, for further direction.With the USD/TWD expected to head higher, the 34.358-figure is seen as the next resistance. Separately, the opposition Democratic Progressive Party (DPP) said it would closely review the govt's economic stimulus package as the Legislative Yuan prepares for its review next month. The Legislature is opening its next session next Friday, Feb 20, with measures to boost the country's economy at the head of its priorities.
USD/PHP rallied to a high of 47.50 overnight on the back of dollar strength can closed near the high of the day.Inter-bank market were caught short below 47.20 and with sentiments getting worse in the day, the failure to break below 47.18 saw the pairing squeeze higher to the 47.35 mark, before ending the session in the afternoon close to intraday highs of 47.50. Even the “better-than expected” OFW remittances and a huge BOP surplus did little to calm markets in the afternoon which took cues from other weakening regional currencies. Continue to eye upside in the 47.11-47.65 band.
USD/SGD continues to climb higher influenced by the EUR movement, hitting a high of 1.5178 overnight. STI sentiments were mostly in negative territory for most part of the session slipping to -0.66% towards at closing. In the coming session, price action is likely to continue being dictated by the weak euro with worries about the European economy/financial sector not letting up. We expect the USD/SGD to trade in the range of 1.5100 / 1.5200 with bias towards the topside. However any excessive buying into the pair would attract the attention of MAS. A breach of 1.5180 will target next major resistance at 1.5360. Lingering market jitters and policy risks will continue to check any downsides. Eyes on the NODX data due to be release 0500GMT, where we expect exports to come under further pressure as global slowdown crimps on overseas sales. We are looking for NODX to slump 32.7% y/y, lower than the previous -20.8% y/y.
Thursday, February 12, 2009
INTRA-DAY AUD/USD OUTLOOK: 0.6520
AUD/USD rallied to a high of 0.6852 on Monday but the subsequent retracement broke below rising support at 0.6630 trading to a low of 0.6487. This fall has indicated that the decline from 0.7265 to 0.6008 is into a broader side-way consolidation. A fall below 0.6470 will fuel more downside risk towards 0.6248 support. However, a break above 0.6850 would suggest that the short-term bull run is not over yet. Range Forecast Today
USD/KRW traded in a range of 1,381 - 1,391 overnight on a biddish note as the Kospi closed 0.3% down with foreigner investors the main seller. Sluggish economic outlook remain a concern for South Korea growth but overbought technical condition, speculative selling and fear of central bank intervention at 1,400 should cap any rallies. Would suggest selling near 1,395 with stops above 1,420 for short-term trade.
USD/TWD traded 33.79 - 34.01 overnight on the upper end of the range as CBC was reported supporting the USD/TWD in a bid to cushion rapid decline in the country's exports. However, this only serves to attract fresh sellers into the currency pair above 34.00 as some renewed interest from investor were seen picking up blue chips in the Taiex. Therefore, would expect rallies to be capped and extend consolidation within a confine band.
USD/PHP fell to a low of 46.76 on the break of 47.00 from local banks. The selling could have been sparked by technical long unwinding as well as renew fresh inflows into the Philippine stock market. Near-term retracement to the lower band is possible but could fizzle out as fresh US policy stimulus announcement could mean that the US recession could be longer than expected. Fresh shorts should take profit on any dips towards 46.20/50 levels.
USD/SGD technical decline from overbought condition from the recent high at 1.5180 hit the low 1.4900. The downward bias in the currency pair was thwarted by tumble in EUR and AUD and the USD/SGD rally to 1.5115 today on short-covering from fresh bear. Although underlying bearish bias in the SGD remain intact as the EUR struggles to hold on to gains, technical overbought condition has not changed and would expect fresh rally to be capped at 1.5120/50. Expect further broad consolidation range of 1.4880 - 1.5120 for the week ahead. Range Forecast Today: 1.5020 / 1.5120
AUD/USD rise sharply past strong resistance at 0.6735 to hit a high of 0.6805 before retracing to 0.6630. This rally has indicated that the recent low at 0.6248 is in place and that more upside momentum is in place to reclaim recent high at 0.7265. Would suggest buying into any dips towards 0.6700/0.6680 for further upside bias. Only a break below 0.6600 would indicate that we are in deeper sideway consolidation of a bigger range of 0.6200 ~ 0.6800. Range Forecast Today
AUD/USD rebounded from yesterday low of 0.6402 and extended to as high as 0.6605 today as predicted. Further rise cannot be discounted but would caution against being too bullish here ahead of strong resistance at 0.6735. However, a strong break above there would indicate that the decline from 0.7265 to 0.6248 has completed. Only a fall below 0.6450 would exacerbate further weakness and drive the AUD lower towards 0.6250 and next target at 0.6080. Range Forecast Today
USD/KRW traded in a range of 1,379 - 1,386 overnight. The pair is unlikely to spike above 1,400 with BOK repeated presence there as well as economic data showed that the country's trade and current account positions are set to improve going forward, which is likely to prevent further capital outflows. The recent signing of USD swap facilities with U.S., China & Japan plus a decent FX reserves should be sufficient to defend any speculative attack on the Korean Won. Therefore, expect the currency pair to trade lower with a bias towards 1,300 in the near-term. Range Forecast Today: 1,340 / 1,380
USD/TWD traded 33.59 - 33.77 overnight with most trade within the 33.65/70 range. Jan CPI data was bigger than expected at 1.50% y/y (expectation 1.1%) while monetary conditions should remain supportive to economic growth with more interest rate cuts expected in the pipeline. As fears of foreign funds outflows subside, the currency pair should trade slightly to the downside cautiously barring no surprise from Wall Street. Range Forcast Today: 33.50 / 33.80
USD/PHP traded 47.38 - 47.65 overnight with little direction from a lethargic market back from long holiday last week. Low volume was cited for the tight range with very little interest ahead of tonite US job data. Range Forecast Today: 47.20 / 47.50
USD/SGD make several attempts above 1.51 but were thwarted by profit-takers as well as fear of MAS continued presence. ECB have kept rate unchanged at yesterday's meeting, which had lend some support to the EUR and kept the bear at bay which also weigh on the USD/SGD indirectly. Expect more side-way consolidation with bias towards downside ahead of key US payrolls data tonight.
Another breaking news is Ex-BHP Billiton CEO Charles Goodyear to replace Ms Ho Ching as Temasek Holding CEO from Oct 1. This could be positive for the SGD as fresh blood and leadership is needed to drive Temasek Holding to the next lap amid this global crisis. Range Forecast Today: 1.4985 / 1.5085
AUD/USD was trading in a wide range between 0.6400 ~ 0.6540 overnight. The AUD gyration was driven by good-size AUD/JPY trades which dominated the 2-way volatile movement throughout London and NY session yesterday. The intraday outlook has turned neutral for the moment with a slight biase to try 0.6550/0.6600 resistance line. However, further near-term rally should faced strong resistance at last week high @ 0.6735.
In the bigger picture, the AUD appears to develop a higher low pattern (see daily chart A 0.6008 - B 0.6080 - C0.6248). The RSI and MACD on the daily chart also indicate that the medium-term pattern show a mild exhaustion on the downtrend. Therefore, we may see some strength in the AUD should strong resistance at 0.6735 breaks decisively.
