EU Morning Report
Better than expected Factory Orders lift the dollar
- The US dollar edged higher against a basket of currencies but fell against the Swiss franc and Japanese yen. Economic data from the US surprised the markets yesterday after it was revealed that Factory Orders rose 2.4% in July, the highest figure in four months. ADP Employment Change was also released showing a slightly weaker than expected figure of 91K expansion of the private job market. The number is in line with tomorrow's Non Farm Payrolls expectations of 90K growth. Against the Japanese yen, the dollar jumped to 77.23 from 76.42 after dollar purchases by Japanese and US accounts easing fears of another intervention by the Bank of Japan. Against the Swiss franc, the greenback shed 2.6% falling to 0.7993 from 0.8208 after a government official said that Switzerland would have to live with a strong currency. Focus turns to Initial Jobless Claims and ISM Manufacturing data.
- The euro dropped yesterday weighed by renewed concerns over the eurozone debt crisis. Further pressuring on the single currency was economic data that showed Unemployment Rate rose to 10%. The pair dropped as low as 1.4353 from 1.4468 and it was last trading at 1.4362. Versus the Swiss franc, the single currency dipped to 1.1525 from 1.1851.
- The Australian dollar advanced broadly after better than expected retail sales and capital spending data. Against the dollar, the Aussie edged as high as 1.0721 from 1.0651.
- Oil prices ticked higher to 89.50 dollars a barrel from 87.65. Gold edged higher to 1839.50 dollars an ounce from 1811.45. Silver also ticked higher to 42.01 dollars an ounce from 41.06.
Currencies to watch out for: EURUSD & USDJPY
- § The EURUSD pivot point is at 1.4420 with a preference to enter Short positions at 1.4410
- § The USDJPY pivot point is at 77.10 with a preference to enter Short positions at 77.05
- § The OIL pivot point is at 87.65 with a preference to enter Long positions at 87.65
- § The Gold pivot point is at 1810 with a preference to enter Long positions at 1811
Today's calendar and market movers:
- § Switzerland Retail Sales in July is forecast to gain 4.6%
- § Europe Purchasing Manager Index Manufacturing in August is forecast to rise to 49.7
- § UK Purchasing Manager Index Manufacturing in August is forecast to fall to 48.6
- § US Initial Jobless Claims is forecast to fall to 410K
- § US ISM Manufacturing in August is forecast to fall to 48.5
US equities were positive on Wednesday with the S&P500 trading up 0.49% and the DJIA up 0.46%. The European bourses were also positive with the FTSE trading up 2.39%, the DAX up 2.50% and the CAC up 3.07%. The NIKKEI and the HSI at the time of writing are trading up 1.18 % and 0.81% respectively.
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