12/7/2004 6:00 am: EUR/$..1.3457 $/JPY..102.58 GBP/$..1.9490 $/CHF..1.1364 AUD/$..0.7788 $/CAD..1.1953
USD Stumbles to New Lows by
Korman TamNo Key Data
The dollar plunged to fresh lows late in the Asian session, stumbling to a new all-time low against the euro at 1.3466 and a fresh 12-year low versus the sterling above the key 1.95-level. The currencies eased up as the European markets stepped, with quiet trading prevailing throughout the day. The economic calendar is light for the remainder of the session, with no key data slated for release.
Euro Ekes Out Fresh HighThe euro climbed to another record high against the dollar as Tokyo trading was winding down at 1.3466. Earlier in the session, Germany’s ZEW sentiment survey for December beat economists forecasts for a drop to 10.0, instead climbing to 14.4 and up from 13.9 in November. The current conditions indicator however, deteriorated further to –64.2, versus –57.8 a month earlier. The ZEW said the weakening dollar was a worry since it damages export competitiveness.
ECB President Jean Claude Trichet, in a statement following the FinMin meeting, said that the US and the Eurozone have homework to do in order to smooth fx movements. EURUSD remains buoyed near 1.3450, with resistance eyed at 1.3480, followed by 1.35 and 1.3530. Additional ceilings are eyed at 1.3565 and 1.36. Support begins at 1.3420, backed by 1.34 and 1.3370. Subsequent floors are seen at 1.3340, backed by 1.33 and 1.3270.
Cable Flirts with 1.95Cable jumped to a new 12-year high above the psychologically key 1.95-level. However, gains above that mark were brief and subsequently fell to 1.9470. Support is seen at 1.9440, followed by 1.94 and 1.9370. Additional floors are seen at 1.9340, backed by 1.93 and 1.9280. Resistance is eyed at 1.95, backed by 1.9525 and 1.9550. A move higher will target 1.9590, backed by 1.9620 and 1.9650.
USDJPY Dips Back Beneath 103 Japan’s October leading indicator index stood at 20.0, down from the previous month 33.3. Meanwhile, the coincident indicator dropped to 11.1, down sharply from a revised 36.4 figure from September.
Finance Minister Tanigaki continued his efforts to talk down the yen, saying appropriate action would be taken if necessary and that current forex moves do not reflect fundamentals. He also hinted at the possibility of bilateral intervention, saying it was his understanding that Eurozone officials view the euro’s ascent as unwelcome.
USDJPY hovers near 102.60, with resistance eyed at 102.80 and 103. Subsequent ceilings are seen at 103.40, backed by 103.70 and 107. Losses will target support at 102, followed by 101.70 and 101.40. A break lower encounters subsequent support at 101, backed by 100.65 and 100.20.
AUDUSD Hovers Near 0.78The RBA is scheduled to announce its rate decision today, but no change in monetary policy is expected – with the Bank expected to leave its benchmark rate steady at 5.25%. Also slated this week will be Australian consumer sentiment, labor report, and trade balance data.
AUDUSD trades just beneath the 0.78-level, with resistance seen at 0.7840-50, followed by 0.7880 and 0.79. Subsequent ceilings are eyed at 0.7930, followed by 0.7970 and 0.80. Support begins at 0.7750, backed by 0.7730 and 0.77. Additional floors are seen at 0.7670, followed by 0.7640 and 0.76.
