Currency Tech

R 2: 1.3250
R 1: 1.3000
CURRENT: 1.2810
S 1: 1.2680
S 2: 1.2540

R 2: 87.20
R 1: 86.80
CURRENT: 85.75
S 1: 85.00
S 2: 84.50

R 2: 1.5925
R 1: 1.5750
CURRENT: 1.5565
S 1: 1.5525
S 2: 1.5350

R 2: 0.9200
R 1: 0.9070
CURRENT: 0.8975
S 1: 0.8810
S 2: 0.8725

Market Brief

The JPY weakened versus most major counterparts on speculation Japanese authorities will act to temper further gains after the currency rose to a 15-year high versus the USD this month. The USDJPY climbed to 85.73 as the BOJ may increase the amount of a corporate loan program to 30 trillion JPY ($351 billion) from 20 trillion JPY and may also extend the duration of the loan to six months from three months. Japan's Finance Minister Yoshihiko Noda said today he will continue to monitor financial markets closely.

There have been strong urges for Prime Minister Naoto Kan to immediately take steps to weaken the JPY to 95 as the currency's rally hurts the export-led economy. The MSCI Asia Pacific Index rose 0.3% to 119.41, Nikkei 225 increased 1%, Kospi index climbed 0.9%, Hang Seng Index advanced 0.3% and Shanghai Composite lost 0.2%.The USDJPY may fall for a second day amid speculation worsening data will spur the Fed to expand purchases of Treasuries to lower borrowing costs and spur the economy which would drive yields lower, making US debt a less attractive destination for foreign funds. If the economic data worsens further, we expect the Fed to initiate a full-blown QE program. There is lingering concern that the global recovery will falter as the effects of stimulus measures wane, with the JPY in a better position to benefit from the downfall.

The EURUSD fell to 1.2806 for a second day while EURJPY traded at 109.80 as speculation Europe's economic recovery is waning damped demand for the currency. The EUR dropped against 12 of its 16 most-active counterparts after a report said tensions are rising in Greece as austerity measures shrink every aspect of the economy. The measures that were supposed to fix Greece's problems are dragging down the economy and have pushed the unemployment rate as high as 70% in some areas, the report further added. As the fundamentals of most of the EU haven't really improved, there is strong bias for the EUR to be sold. The currency also dropped toward a four-week low before a report forecast to show growth in producer prices slowed last month rising 0.1% (prev. 0.6%).

Important reports forecast for today would show jobless claims probably declined to 478,000 while the continuing unemployment benefits in the US rose to 4.5 million, UK retail sales probably rose 0.3% (prev. 0.7%) and Canada's leading economic indicators rose 0.7% (prev. 1%).