US Dollar.
Our bias NEUTRAL, we’re on the sidelines until a clearer picture emerges.
- U.S. Dollar recovered sharply against all G10 counterparts last week
- Slew of U.S. eco data this week includes; Retail Sales, TIC Long Term Purchases, Building permits, Producer Price Index, FOMC Meeting Minutes, CPI & Unemployment Claims
- Fed Chairman Bernanke has little intention of reducing QE2 amid sluggish employment growth
- Greenback may have established an important low against Euro Dollar, Sterling & commodity currencies
- FXMW strategy is to sit on sidelines for a clearer picture to emerge e.g. NEUTRAL.
Euro Dollar.
Our bias BEARISH, we’ll be looking to sell the Euro on rallies.
- Potentially major market moving data due this week with German & Euro-zone 2010 4Q GDP reports
- Market will look to Greece, Portugal & Ireland GDP prints for insight to Euro-zone fiscal concerns
- Axel Weber confirms stepping down from Bundesbank on 30th April
- Close below 20 SMA significant
- FXMW strategy to sell rallies into 1.3650-1.3700 or enter short on confirmed close below 1.3550 e.g. BEARISH.
Japanese Yen.
Our bias BEARISH, we’ll be looking to sell the Yen on rallies.
- As U.S. economy stabilizes, Yen expected to lose ground.
- Japan 2010 4Q GDP report due Monday BoJ rate decision due Tuesday
- USDJPY current price testing January highs
- USDJPY remains well bid on dips to 82.00-82.50.
- FXMW strategy to sell Yen rallies e.g. BEARISH.
British Pound.
Our bias NEUTRAL, we’re on the sidelines until a clearer picture emerges.
- Cable tested 1.6000 into Friday close
- CPI due Tuesday, BoE quarterly inflation report Wednesday plus U.K. employment, Retail Sales due Friday
- CPI holds above governments 3% limit
- This weeks data likely to force BoE hand
- Credit Suisse Overnight Index Swaps show BoE to increase rates at least 75bp in next 12 months
- BoE facing tough decision balancing risk of inflation vs. weak economic growth
- FXMW strategy is to sit on sidelines for a clearer picture to emerge e.g. NEUTRAL.
Canadian Dollar.
Our bias BEARISH, we’ll be looking to sell the Loonie on rallies.
- Strong USDCAD push into Friday close
- Loonie price action likely influenced this week by U.S. data & risk sentiment
- Canadian CPI due Friday
- Credit Suisse Overnight Index Swaps pricing in 83 bps of rate hikes over coming 12 months
- FXMW strategy to establish long USDCAD position at Monday open e.g. BEARISH.
Australian Dollar.
Our bias BEARISH, we’ll be looking to sell the Aussie on rallies.
- AUDUSD broke below parity during Friday trade RBA Stevens says central bank not contemplating rate hike at the moment
- Recent natural disasters may lower 2011 Q1 GDP by 1%
- Credit Suisse Overnight Index Swaps, pricing in one 25bp rate hike for the next 12 months
- FXMW strategy to sell Aussie rallies to 1.0065-1.0090 level or short on confirmed close below 0.9950 e.g. BEARISH.
New Zealand Dollar.
Our bias BEARISH, we’ll be looking to sell the Kiwi on rallies.
- Finance minister English says NZ economy might have contracted in 2010 4Q
- Technicals point to NZDUSD sell-off
- Retail Sales due Monday
- FXMW strategy to sell rallies into 0.7640-0.7700 area or short on confirmed close below 50 SMA e.g. BEARISH.
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