Expert Analysis of Today's Market

• Trading was light on Monday as Europe and parts of Asia were closed for Easter. The dollar rose against the yen and Swiss franc but fell versus the pound and the Canadian and Australian dollars. The yen and Swiss franc fell against all of the key currencies as US equity gains encouraged investors to buy higher-yielding assets funded by cheap loans in Japan and Switzerland. The Canadian’s dollar rose from a two-month low following stabilized commodity prices and stock rallies in the US and Canada.


• The EUR/USD fell to lowest level in eight days. The Federal Reserve’s creative actions last week have pressured the pair, supported US equities and reduced commodity prices. There is strong support from the uptrend in the 1.53-area. If this is broken, the pair will possibly test the 1.49-1.50 support.

Financial and Economic News and Comments

US & Canada

• February US existing-home sales rose to a more-than-expected 5.03 million annual rate, the first increase in seven months and a 2.9% rise from January’s 4.89 million annual pace, the National Association of Realtors said. February sales fell 24% y/y. The median price dropped 8.2% to $195,900 in February, from $213,500 in February 2007. Inventories of homes fell 3.0% at the end of February to 4.03 million available for sale, which represented a 9.6-month supply at the current sales pace, compared with a revised 10.2-month supply at the end of January. The February 2.9% sales gain is a positive sign, but it is too early to say the housing market is stabilizing.

• The Chicago Fed National Activity Index (CFNAI) was −1.04 in February, down from −0.68 in January, the Federal Reserve Bank of Chicago reported. All four broad categories of indicators made negative contributions to the February CFNAI.

Europe

• UK housing prices increased 0.8% m/m in March to £239,655 ($475,000), up 5.0% y/y, Rightmove Plc reported.

Asia-Pacific

• Japanese manufacturer sentiment fell to −12.9 in Q1 2008, the lowest level in at least four years, from 5.2 in Q4 2007, a government survey showed.


• Japanese supermarket sales in February rose 1.9% y/y, a government report showed.


• Japan’s land prices rose for a second year after a 15-year decline. Price increased 1.7% on average after climbing 0.4% a year earlier, the Ministry of Land, Infrastructure and Transport said. Average commercial land gained 3.8% in 2007 from 2.3% in 2006, and residential land increased 1.3% from 0.1%.

FX Strategy Update