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Enron Mail |
[IMAGE] Forums Discuss these points in the Forums: Forexnews Forum T= echnicals Live Charts Analysis available from: Cornelius Luca J.P. Chorek= Technical Research Ltd. Charts & News featuring Standard & Poor's = Interest Rates US: Japan: Eurozone: UK: Switzerland: 1.75% 0.15% 3.= 25% 4.0% 1.25-2.25% [IMAGE] =09 [IMAGE] Euro Broadly Stronger, But= Gains vs Dollar Seen Fleeting February 8, 7:00 AM: EUR/$..0.8736 $/JPY..1= 34.37 GBP/$..1.4156 $/CHF..1.6842 Euro Broadly Stronger, But Gains vs Doll= ar Seen Fleeting by Jes Black At 10:00:00 AM US Dec Wholesale Inventories = (exp n/f, prev -1.1%) The dollar came under renewed pressure against the b= roadly stronger single currency in European trade. EUR/JPY forged the way, = rising 1.5% to a high of 117.62 from an overnight low of 115.65. This outpa= ced the more modest 0.7% gain in USD/JPY to a day's high of 134.54 and allo= wed the euro to test key resistance at 87.50. Traders say the euro's upward= correction against the dollar could carry as high as 88 cents before a ren= ewed sell off. Euro gains are still seen temporary as capital moves to safe= r instruments such as gold in the midst of renewed uncertainty. The dollar= remains depressed this week by the ongoing Enron affair, which has spread = a dark cloud over the markets and caused investors to overlook recent upbea= t US data. Indications are that conditions in the US are improving and that= the US economy is on the road to recovery. Therefore, USD weakness should = only be temporary and will be mitigated as signs of a rebounding US economy= increasingly emerge. Yet, in the meantime the dollar will continue to take= its direction from Wall Street. Currency markets are also likely to hold = steady ahead of this weekend's meeting of G7 finance ministers in Canada. U= SD/JPY upside is therefore seen limited in the near-term since Japan is bec= oming more reluctant for the yen to weaken further. Especially since this w= eekend's meeting is likely to spark more cries of foul from US manufacturer= s that the weak yen is undermining their trade competitiveness. Tokyo stoc= ks rebounded today after Japanese officials indicated their willingness to = use public funds to buy stocks from banks. Bank shares led a rally after Ja= panese FinMin Shiokawa said his ministry was backing a stock-buying body th= at would buy shares from banks, which are trying to get rid of their massiv= e shareholdings because losses have eroded their capital. Shiokawa said tha= t his ministry is prepared to spend up to two trillion yen ($14.96 billion)= in public money to buy stocks from Japanese banks. "We must halt this fall= in shares. It's like diarrhea, we must stop it," he said. Moreover, the of= floading of cross-shareholdings by banks and insurance companies has been a= big factor in the Nikkei's slide. The index ended up 2% from Wednesday's 1= 8-year low, but it is still down 30% since January 1, 2001. Historically, t= he popular index is down 75% from its 1989 bubble high of 38915. JPY fell = over one yen to a day's low of 134.54 against the dollar after reaching a d= ay's high of 133.58 and 115.97 against the euro following the Bank of Japan= 's decision to keep monetary policy unchanged. The central bank's reluctanc= e to add further liquidity came as no surprise, but markets had pushed the = yen to earlier session lows of 134.17 against the dollar in the hope the Bo= J would take further action. USD/JPY upside is seen capped at 134.50 foll= owed by 135.20. The pair is also expected to remain within the 132-135 rang= e over the short term as the cost of the weak yen policy has been detriment= al to asset prices as it undermines confidence in the ability to hold value= . Therefore, given the weakened state of Japanese financial institutions am= id falling stock prices, the Japanese are now more likely to shun yen weakn= ess in order to restore confidence in the market. Meanwhile, EUR/USD could= break 87.50 and test as high as 87.75-88.00 if the US has another disappoi= nting day on Wall Street. However, dealers still regard this as the top of = an upward correction in the euro as the dollar bears the brunt of Enroniti= s. Support is seen at 87.00/15 and 86.45. GBP/USD rose to a high of 1.416= 9 on the back of EUR/USD strength despite sterling falling to a 2-week low = of 61.96 pence to the euro. But only a move above 1.4177 would add to sterl= ing's strength against the dollar. This level marks the 61.8% retracement = of the decline from 1.4247 to 1.4064. Cable peaked at a 1-week high of 1.42= 47 in European trade on Tuesday and that marks the next resistance. Support= is seen at 1.4115 and failure to maintain above 1.4110 would call upon key= support at 1.4180, which marks the 38.2% retracement of the 1.4418-1.4038 = move. Follow up support is seen at last week's 6-month lows of 1.4045. Upsi= de capped at 1.4235, 1.4270 and 1.4300. The only data from the US today is= wholesale inventories. They will likely show that merchants continued to m= ake progress trimming inventories in December, although sales also likely r= emained lackluster. The lack of data means the dollar will take its cue fro= m Wall Street, which continues to follow the developments in the Enron affa= ir. Today's earnings announcements include Goodyear Tire & Rubber, Universa= l and Wendy s International =09[IMAGE] Audio Mkt. Analysis Euro Crawls H= igher in Quiet Trading Articles & Ideas A Weak Yen Bites Even Koiz= umi Drags Down the Yen Articles & Ideas Forex Glossary Economic Ind= icators Forex Guides Link Library [IMAGE] =09 =09=09[IMAGE][IMAGE] [IMAGE][IMAGE]=09 =09=09 This e-mail is never sent unsolicited. If you wish to unsubscribe f= rom this or any other Forexnews.com newsletters, please click here . Any = opinions expressed by representatives of Forexnews.com or its affiliates as= to the commentary, market information, and future direction of prices of s= pecific currencies reflect the views of the individual analyst, and do not = necessarily represent the views of Forexnews.com or its affiliates in any w= ay. In no event shall Forexnews.com or its affiliates have any liability fo= r any losses incurred in connection with any decision made, action or inact= ion taken by any party in reliance upon the information provided in this ma= terial; or in any delays, inaccuracies, errors in, or omissions of informat= ion. =09
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