Currency Tech

EURUSD R 2: 1.2500 R 1: 1.2330 CURRENT: 1.2220 S 1: 1.2000 S 2: 1.1800

USDJPY R 2: 95.00 R 1: 93.70 CURRENT: 91.45 S 1: 89.00 S 2: 88.00

GBPUSD R 2: 1.5000 R 1: 1.4850 CURRENT: 1.4750 S 1: 1.4550 S 2: 1.4350

AUDUSD R 2: 0.8700 R 1: 0.8600 CURRENT: 0.8560 S 1: 0.8350 S 2: 0.8000

Market Brief

The USDJPY traded at 91.65 after it weakened to 92.12, the lowest level since June 4 as speculation the worldwide economic recovery is intact damped demand for the safety of JPY. The NZDJPY was close to a four-week high before reports today may show Empire manufacturing expanded at a faster pace to 20 (prev. 19.11) and UK inflation increased 3.5% (prev. 3.7%) above the government's 3% upper limit. The USD Index climbed to 86.63 after it fell to 86.18, the lowest since June 1. The BOJ said it will offer as much as 3 trillion JPY for a new program aimed at expanding credit available to companies for as long as four years to strengthen economic recovery and left interest rate unchanged at 0.1% announced in a statement today.Asian currencies declined after Moody's cut Greece's bonds to junk, spurring concern investors will shun higher- yielding assets for the relative safety of the USD. The slide in Asian currencies is due to lower overall risk appetite after Greece's downgrade and Asian currencies have also been rallying for a few days in a row, so a correction is expected. The USDMYR gained 0.5% to 3.2635, USDSGD climbed 0.2% to 1.3991 USDKRW strengthened 0.1% to 1,223.15. A report later today will show retail sales in Singapore increased 0.8% (prev. 2.4%). The won has dropped 7.8% this quarter, Asia's worst performance, as Europe's debt crisis bolstered demand for USDs and tensions with North Korea escalated. Taiwan's USD was the only gainer among Asia's currencies as USDTWD dropped 0.2% to 32.286 on mounting speculation the nation will sign a trade pact with China this month.

The AUDJPY weakened 0.5% to 78.25 for the first time in four days and NZDJPY declined 0.4% to 63.37 after it strengthened to 64.43, the highest level since May 18 and AUDUSD declined to 0.8553 while NZDUSD traded at 0.6935 after the RBA said the situation in Europe would weigh on the outlook for global growth. The AUD weakened versus all of its 16 major counterparts after the RBA said the situation in Europe had deteriorated significantly over the previous month. Policy makers said today in minutes from that meeting previous rate increases gave them flexibility to examine the impact of European events, as well as Australia's inflation outlook. New Zealand house prices fell 1.4% (prev. -0.4%) for a second straight month as sales slumped, adding to signs that interest-rate increases may be gradual this year, house sales retreated 17.2% from a year earlier and home loan approvals declined 26%. RBNZ governor Bollard will likely raise borrowing costs at the next three reviews according to market analysts.

The EURJPY declined to 112.04 after it climbed to 112.87, the highest level since June 4 while EURUSD fell to 1.2211 on speculation the ZEW index of German investor and analyst expectations probably fell to 42 (prev. 45.8), the least since July 2009 and recovery will stall as governments slash spending to tackle the region's debt crisis. Moody's yesterday lowered Greece's credit rating by four levels to Ba1, below investment grade, from A3 citing substantial risks to the nation's economic growth from the austerity measures tied to a 110 billion EUR aid package from the EU/IMF stating that the outlook is stable. Earlier, the EURUSD gained as much as 1.5% after a report showed that European industrial production climbed the most since 1991, advancing to 1.2299, strongest since June 3.

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