Expert Analysis of Today's Market

EUR/JPY at Resistance Ahead of G-7 Meeting

Hans Nilsson 2007-04-13

The dollar fell to new multiyear lows against the euro and Australian dollar on Friday. The yen hit a record low versus the euro and fell against the dollar before the two-day G-7 meeting in Washington. The G-7 is unlikely to have a strong statement criticizing the yen’s weakness as Japan is not intervening in the FX market.

The EUR/JPY rose to an all-time high today. The pair is at resistance at the upper trading band in the upward sloping trading channel. The pair is overbought, requiring some consolidation. However, the longer-term trend is still up.

4_13_2007_IMG1

The dollar index is at important support. If this support is broken, the index will possibly test support at 2005’s low.

4_13_2007_IMG2

Financial and Economic News and Comments

US & Canada

The US producer-price index rose a more-than-forecast 1% in March versus 1.3% in February, the US Labor Department said. The core PPI, which excludes food and energy, was unchanged. In the 12 months through March, wholesale prices rose 3.2%, the fastest pace since August 2006. The core PPI, in contrast, increased just 1.7% y/y.

The Reuters/University of Michigan’s preliminary index of US consumer sentiment declined more than expected to 85.3 in April from 88.4 March. Both current conditions and consumer expectations indexes fell with the stronger decline in expectations as 1-year inflation expectations rose to 3.3%.

4_13_2007_IMG3

The US trade deficit unexpectedly narrowed to $58.4 billion in February from $58.9 billion in January, the US Commerce Department reported. Imports declined 1.7% in February to $182.4 billion, from $185.7 billion in January. Exports fell 2.2% to $124 billion in February from $126.8 billion a month earlier.

Europe

The Eurozone seasonally adjusted industrial production rose 0.6% m/m in February, after January’s 0.5% m/m decline and December’s 1.2% m/m rise, Eurostat reported.

Asia-Pacific

The US trade gap with China fell to $18.4 billion in February from $21.3 billion in January.

China, the world’s second-largest sugar consumer after India, may increase its sugar production by 2.5% to 12.9 million metric tons in the year through September 2008, a US Foreign Agricultural Service report said.

FX Strategy Update

2008
January | February | March | April

Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The commentaries, charts, and information provided on this website are not intended as trading advice. Please contact a registered trading advisor if you have any questions.

This report is intended solely for distribution to customers of Capital Market Services, L.L.C. Any information in this report is based on data obtained from sources considered to be reliable, but no representations or guarantees are made by Capital Market Services, L.L.C. with regard to the accuracy of the data. The opinions and estimates contained herein constitute our best judgment at this date and time, and are subject to change without notice. Capital Market Services, L.L.C. accepts no responsibility or liability whatsoever for any expense, loss or damages arising out of, or in any way connected with, the use of all or any part of this report. No part of this report may be reproduced or distributed in any manner without the permission of Globicus International, Inc.