Market Brief The EURJPY declined for a third day to 124.13 as concern that an aid package to Greece will falter and probes into Goldman Sachs may widen boosted demand for JPY as a refuge. Gains in the JPY were tempered on speculation Japanese importers took advantage of its rally to a three-week high to sell the currency. Japan’s large manufacturers expect the USDJPY to average 91 this fiscal year, according to the BOJ’s Tankan survey. There have been talks that importers are selling the JPY which could see the currency surging to multi-week highs versus the USD and the EUR. The JPY rose against 15 of its 16 major counterparts after UK Prime Minister Gordon Brown yesterday called for an investigation into Goldman Sachs, while German regulators asked the US SEC for details on its suit filed against the bank last week. The USDJPY was unchanged at 92.17 after touching 91.82, the weakest since March 25. The SEC said last week that in early 2007, Goldman Sachs created and sold a collateralized debt obligation linked to subprime mortgages without disclosing that hedge fund Paulson & Co. helped pick the underlying securities and bet against it.
The AUDUSD traded at 0.9231 while AUDJPY weakened 0.2% to 85.03 near the lowest level in almost two weeks as prospects a US probe into Goldman Sachs will prompt investigations in Europe damping investors’ appetite for higher-yielding assets. NZDUSD reversed earlier declines climbing to 0.7098 and NZDJPY traded 65.40 before a government report tomorrow expected to show consumer prices rose in the first quarter, backing the case for policy makers to consider raising interest rates from a record low. The AUDJPY declined before IMF visits Athens today to discuss aid for Greece and the market will be looking to see whether Greece is going to formally seek funding. AUDUSD may find support as it approaches 0.9200 and is unlikely to strengthen beyond 0.9270 while the NZDUSD probably will trade between 0.7050 and 0.7150 based on technicals. The AUDUSD could also climb to the highest since July 2008 as an improved outlook for corporate earnings and expectations global economy will continue to strengthen boost demand for riskier assets.
The EURUSD touched a one- week low trading at 1.3468 after touching 1.3447, the weakest since April 9 after EU finance ministers told Greece to brace itself for the IMF’s conditions on a bailout package. The EURUSD also declined as concern Greece will activate a 45 billion EUR emergency-loan package damping demand for the EUR as Greece needs to raise 11.6 billion EUR by the end of May. Talks on Greece involving the EU, the IMF and the ECB have been delayed to April 21 from April 19 because of the volcanic ash cloud disrupting European air travel. The premium of Greek 10-year bonds over similar- maturity German bunds widened 30 basis points to 430 basis points on April 16.
Today’s main event will be the Leading indicators data from the US which is expected to show a figure of 1% gain (prev. 0.1%) while Fed Chairman Bernanke and Chicago Fed President Evans will address a financial literacy and education summit today.
G10 Advancers and Decliners vs USD
Nikkei 225 Index
Hang Seng Index
Country / GMT
Euro-Zone Construction Output (MoM)
ECB's Weber Speaks
Fed's Bernanke Speaks
ECB's Papademos Speaks
Currency Tech EURUSD R 2: 1.3725 R 1: 1.3550 CURRENT: 1.3456 S 1: 1.3410 S 2: 1.3280
USDJPY R 2: 94.82 R 1: 93.00 CURRENT: 91.98 S 1: 91.15 S 2: 90.25
GBPUSD R 2: 1.5550 R 1: 1.5420 CURRENT: 1.5250 S 1: 1.5100 S 2: 1.4980
AUDUSD R 2: 0.9450 R 1: 0.9340 CURRENT: 0.9190 S 1: 0.9000 S 2: 0.8920
USDCAD R 2: 1.0310 R 1: 1.0250 CURRENT: 1.0168 S 1: 0.9955 S 2: 0.9810