lundi 22 janvier 2007
Yen Weakness Still Present
Johan Ditz Lemche
The FX Strategy Team consists of:
See the full Strategy Team here
Email the Strategy Team
Published: Jan. 22 2007, 13:02 GMT
The Japanese currency extended losses across the board as BoJ officials restated that keeping rates on hold was the right decision for the moment. USDJPY rose to four-year high ahead of Yellen speech.
MAJOR HEADLINES – PREVIOUS SESSION
Friday we saw the preliminary January figures from the U. of Michigan Consumer Confidence out at 98.0 vs. 92.3 expected. Initially the EURUSD fell but was rejected at 1.2915 and after testing 1.3002, the pair closed at 1.2966. Today the dollar has stengthened ahead of Fed's Yellen's speech on expectations that we will see a restatement that the labor market provides a serious risk of inflation, which have made traders pare their bets that the Fed will lower rates in the near future. We will especially pay attention to the release of the Durable Goods Orders on Friday and in particular the release of the US growth figures on January 31st. Today we only expect the release of the Leading Indicators at 15:00 GMT, December figures expected at 0.2%, to have limited effect as focus will be on the announcements from Yellen. We still favor the EURUSD lower, and we are looking for a break of 1.2870 to the downside.
We also still favor the EURJPY higher, as the euro not is that exposed to geopolitical risks as the USD, which we saw on Thursday as the dollar reacted fell on the news regarding Iran. We have published a trading strategy for this cross, which is visible in our 'Trading Strategies', located under the 'Research'-menu in the Trader.
The December US Headline CPI rose yesterday as we expected, but we did not see any upside surprise in the Core rates. The Headline came out at 0.5%/2.5% vs. 0.4%/2.4% expected while the core came out at 0.2%/2.6% as expected. At the same time, we saw solid figures from the US Housing Market, where the building Permits and Housing Starts surprised the market to the upside. Initially EURUSD fell below 1.2900 but was rejected and came back somewhat despite a solid expansion in the January Philly Fed - out at 8.3 vs. 3.1 expected. The prior were also revised higher to -2.3 from -4.3. We believe that the geopolitical tension between US and Iran and together with the announcements from Fed's Bernanke that the economy could be in a 'fiscal crisis' in the coming decades should it fail to deal with the rising costs of the Social Security, Medicare and Medicaid programs. In the Euro-Zone no important data was released, but Bundesbanks Meister said that he still sees the E-Z rates 'very low', and the ECB will take action if necessary, taking the EUR higher. We don't expect the ECB to be in a hurry with raising rates, and still support a lower EURUSD, selling at the break of 1.2870, targeting 1.2820.
STANDARD DISCLAIMER: This product is meant for educational purposes only. Any
resemblance to real persons, living or dead, is purely coincidental. Void where
prohibited. Some assembly required. List each check separately by bank number.
Batteries not included. Contents may settle during shipment. Use only as directed. No
other warranty expressed or implied. Do not use while operating a motor vehicle or
heavy equipment. Postage will be paid by addressee. Subject to CAB approval. This is
not an offer to sell securities. Apply only to affected area. May be too intense for some
viewers. Do not stamp. Use other side for additional listings. For recreational use only.
Do not disturb. All models over 18 years of age. If condition persists, consult your
physician. No user-serviceable parts inside. Freshest if eaten before date on carton.
Subject to change without notice. Times approximate. Simulated picture. No postage
necessary if mailed in the United States. Please remain seated until the ride has come to
a complete stop. Breaking seal constitutes acceptance of agreement. For off-road use
only. As seen on TV. One size fits all. Many suitcases look alike. Contains a substantial
amount of non-tobacco ingredients. Colors may, in time, fade. We have sent the forms
which seem right for you. Slippery when wet. For office use only. Not affiliated with the
American Red Cross. Warranty void if serviced by non-authorized personnel. Drop in
any mailbox. Edited for television. Keep cool; process promptly. Post office will not
deliver without postage. List was current at time of printing. Return to sender, no
forwarding order on file, unable to forward. Not responsible for direct, indirect,
incidental or consequential damages resulting from any defect, error or failure to
perform. At participating locations only. Not the Beatles. Don't try this in your living
room; these are trained professionals. Penalty for private use. See label for sequence.
Substantial penalty for early withdrawal. Do not write below this line. Falling rock. Lost
ticket pays maximum rate. Kilroy was here. Your cancelled check is your receipt. Add
toner. Ceci n'est pas une pipe. Place stamp here. Avoid contact with skin. Sanitized for
your protection. Be sure each item is properly endorsed. Sign here without admitting
guilt. Out to lunch. Slightly higher west of the Mississippi. Employees and their families
are not eligible. Beware of dog. Contestants have been briefed on some questions before
the show. Limited time offer, call now to ensure prompt delivery. You must be present
to win. No passes accepted for this engagement. No purchase necessary. May be
hazardous to health if consumed in excessive quantities. Not responsible for
typographical errors. No returns unless defective. Processed at location stamped in code
at top of carton. Don't even think about parking here. Shading within a garment may
occur. Use only in a well-ventilated area. Keep away from fire or flames. Replace with
same type. Do not put the base of this ladder on frozen manure. Approved for veterans.
Booths for two or more. Check here if tax deductible. Some equipment shown is
optional. Price does not include taxes. No Canadian coins. Not recommended for
children. Under penalty of law, this tag not to be removed except by consumer.
Prerecorded for this time zone. Reproduction strictly prohibited. No solicitors. No
alcohol, dogs or horses. No anchovies unless otherwise specified. Restaurant package,
not for resale. List at least two alternate dates. First pull up, then pull down. Call toll
free number before digging. Driver does not carry cash. Some of the trademarks
mentioned in this product appear for identification purposes only. Objects in mirror
may be closer than they appear. Record additional transactions on back of previous
stub. Unix is a registered trademark of AT&T. Do not fold, spindle or mutilate. No
transfers issued until the bus comes to a complete stop. Package sold by weight, not
volume. Your mileage may vary. This supersedes all previous notices unless indicated