This is article is released weekdays under the heading Daily Fundamentals at 5pm EST on

The mixed results from the morning initial jobless and continuing claims data proved to be a non-factor with the markets more keenly focused on digesting the fallout from the BOE and ECB rate decisions.


The mixed results from the morning initial jobless and continuing claims data proved to be a non-factor with the markets more keenly focused on digesting the fallout from the BOE and ECB rate decisions. While the actual rate decisions from the respective central banks yielded an as expected result at 0.50% and 1.00%, the more dovish tint accompanying the announcements has forced some broad based profit taking in currencies. Recent polls by Bloomberg and a Shadow MPC report calling for an end to QE from the Bank of England were way off the mark with the Bank of England announcing that not only would they extend the QE programme, but also would double the expected GBP25B addition to GBP50B, taking the total programme to GBP175B. The MPC said that the world economy remained in recession, despite increasing signs that the output in the UK's export market was stabilizing, and that financial markets were still fragile even with noticeable improvements. This weighed tremendously on Sterling across the board, and set the tone for the day. Meanwhile at the ECB press conference, ECB President Trichet noted that interest rates were appropriate and that economic activity was likely to remain weak with high uncertainty despite some signs of stabilization within the economy. Trichet also said that he saw recovery into 2010. Commenting on non-standard monetary policy, Trichet said that these measures would be quickly unwound once the macroeconomic environment improved. The ECB did not discuss whether rates were at their lowest level. On currencies, Trichet continued to stress the importance of a strong USD policy. Also seen weighing on sentiment was the news of the introduction of an anti-manipulation rule for the oil market. The market now looks ahead to Friday's highly anticipated NFP (-328k expected) and unemployment rate (9.6% expected) data.


Usd/Mxn: The peso has been showing some impressive relative strength today even with sentiment and risk appetite damaged, currencies selling off across the board, and commodities faltering. The market is now testing the very well defined range lows over the past several months in the 13.00 area and with daily studies showing oversold, we would recommend looking to buy at current levels, in anticipation of some upside over the coming days and weeks. While the relative strength might be attributable to some favorable developments on the domestic front, and reduction in risk appetite should ultimately weigh on the risk correlated peso.

Written by Joel Kruger, Technical Currency Strategist for
If you wish to receive Joel's reports in a more timely fashion, e-mail and you will be added to the distribution list.

Joel Kruger publishes 6 daily pieces:

Tech Talk - A Daily Video Highlighting Technical Developments in the Overnight Session of Trade.
Monday-Friday (between 5:30am-6:30am EST)

Morning Slices - Morning Overview using Fundamental, Technical, Flow, and Quantitative Analysis (Includes Trade of the Day).
Monday-Friday (between 6:30am-7:30am EST)

Indicator of the Day - A Feature Report that Highlights our Most Significant Technical Indicator of the Day.
Monday-Friday (between 8:00am-9:00am EST)

Midday Snapshot - A Midday Fundamental Update, along with Technical Analysis of Selected Rates.
Monday-Friday (between 10:30am-11:30am EST)

Scandi Daily - A Specialized Daily Fundamental and Technical Overview of the Nordic Currencies. (This report is only distributed through email. Please contact if you would like to be added to distribution.)
Monday-Friday (between 11:30am-12:30pm EST)

Daily Classical - A Daily Technical Overview of the Major Currencies.
Monday-Friday (published between 2:00pm-3:00pm EST)

Visit the DailyFX Forex Stream for Real-Time News and Market Updates