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[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: 2.5% 0.15% 3.7= 5% 4.5% 1.75-2.75% [IMAGE] =09 [IMAGE] Euro Falls Below 90-cents O= n Bad German Ifo Survey October 19, 7:00 AM: EUR/$..0.9001 $/JPY..121.16 G= BP/$..1.4413 $/CHF..1.6409 Euro Falls Below 90-cents On Bad German Ifo Sur= vey by Jes Black At 8:30:00 AM US Sept CPI m/m (exp 0.2%, prev 0.1%) US Se= pt CPI ex food, energy sa m/m (exp 0.2%, prev 0.2%) US August Exports (exp = n/f, prev 83.72 bln) US August Imports (exp n/f, prev 112.5bln) US Sept Rea= l Earnings sa (exp n/f, prev 0.3%) US August Trade Balance (exp -28.7 bln, = prev -28.8 bln) The euro suffered a sustained break below 90 cents today f= ollowing a much worse than expected decline in the key German Ifo survey. E= UR/USD fell half a cent to a five-week low of 89.81, putting it at pre-Sept= ember 11 levels. EUR/JPY also hit a three-week low of 108.90 yen. The headl= ine figure fell to 85.0 in September from 89.5 the previous month, but the = Ifo's head economist, Nerb, said the sharp drop in sentiment might have bee= n an overreaction to attacks on U.S. cities. Nerb also said the index could= stabilize next month and that its September reading did not yet signal a n= ew downward trend. Nevertheless, the figure was the worst in eight years an= d will put the European Central Bank under intense pressure next week to lo= wer rates. According to the Organization of Economic Cooperation and Deve= lopment's latest release, the outlook for world economies is now the worst = since 1982. Average growth in 2001 is estimated to be just 1.0%, followed b= y a sub-par 2.8% average in 2002. US 2002 growth was revised down to 1.3% f= rom the earlier 3.1%, while Japanese 2002 growth is now expected to contrac= t by 0.8% from earlier projections of 1.1% growth. Therefore, with EU 2002 = growth forecast now revised to 1.5% from 2.7%, and no bottoming in the zone= 's largest economy, European monetary policy will again be at the forefront= of trader's minds next week ahead of the ECB's next meeting on Thursday. = Following the Ifo, ECB member Liebscher said it was the work of politicians= , not central bankers, to ensure economic growth. That may be, and today's = Ifo survey may also be an overreaction. But, there is also a possibility of= a contraction in German Q4 growth that would put even FinMin Eichel's 0.75= % 2001 growth target at risk. That means the longer the ECB waits, the wors= e it will be for the euro. Therefore, if the market encounters anything but= a clear indication for a cut, the euro will come under further pressure ne= xt week, possibly testing downtrend channel support around 89.50. Other E= uropean majors came under pressure against the dollar as well. Sterling fel= l to an eight-week low against the dollar, which benefited from the euro's = losses against the dollar. Moreover, news on Thursday of a sharp slowdown i= n British retail sales growth continued to weigh on the pound. But, dealers= noted the weaker figures had already been discounted and that the Bank of = England left the door open for more rate cuts if needed. GBP/USD briefly br= oke below the 1.44 level to a day's low of 1.4388 in the wake of the Ifo re= lease. However, sterling soon regained 1.4400, which is the key 38.2% Fibon= acci retracement of the move from 1.37 to last Monday's 8-1/2 month high of= 1.4836. Only a sustained break of the August 28 low of 1.4375 is seen incr= easing the bearish outlook for sterling. Key support stands at 1.44, while = resistance is seen at 1.4450 followed by 1.4500. The Swiss franc also fell= fell 3/4 centimes against the dollar, but then regained that ground. The m= uted reaction could be due to the recurring safe-haven flows ahead of the w= eekend as seen in past weeks. U.S. troops are now in Afghanistan, and with = the conflict expected to escalate, the US is on high alert for more terrori= st attacks. USD/CHF rose to a session high of 1.6447 and is now seen suppor= ted above the key 1.64 level. Ability to maintain support above 1.63 would = maintain bullish trend in USD/CHF as it targets the 1.65 level. However, an= y major negative developments for the US, at home or abroad, would quickly = translate into gains for the franc. USD/JPY hovered in a tight range today= after spending most of the week in-between 120.80 and 121.80. The yen edge= d slightly lower against the dollar as the market braced for Japan's prelim= inary tertiary industry activity index for August due on Monday. But, the y= en was supported by its gains against the euro after the weak Ifo index pus= hed the single currency lower across the board. Also supporting the yen was= the approval of a basic extra budget framework by a panel of economic advi= sers to PM Koizumi. FinMin Shiokawa proposed a 3 trillion yen extra budget,= but only 1.68 trillion would be financed by government bonds, thereby leav= ing JGB issuance under the 30 trln cap promised by Koizumi under his reform= campaign. Today earnings and economic data from the US are not expected t= o have much influence over the markets. The US trade deficit is expected to= hold steady around 28.7 billion, and a temporal rise in gas price is expec= ted to push inflation (CPI) higher in September, but fall in October. Moreo= ver, markets are not worried about inflation because the Fed is still expec= ted to cut rates again this year. Meanwhile, deterioration in Q3 earnings w= as no worse than expected this week and Q4 forecasts are still the same as = previous estimates. Therefore, with very few earnings announcements today m= arkets will likely move more on events linked to the war on terrorism. =09= [IMAGE] Audio Mkt. Analysis Euro Crawls Up In Quiet Trading Articles = & Ideas EURO: German IFO Will Remind ECB to Build Growth Dollar Comebac= k Stopped by Risk of Terrorism Articles & Ideas Forex Glossary Econ= omic Indicators 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 . =09
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