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European Forex Recap

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European Forex Recap

Date:  Tuesday, March 20, 2007 12.00am until 7.00am EST

Market Recap:

In earlier news

• Opening levels:-GBP/USD 1.9439/44  EUR/USD 1.3284/87  USD/JPY 117.75/78  USD/CHF 1.2143/47  USD/CAD 1.1783/88  AUD/USD 0.7973/77  NZD/USD 0.7011/15 (11.00pm EST)
• The Bank of Japan policy board voted unanimously to leave Japanese interest rates unchanged at its monthly meeting, dollar-yen on the news remaining unchanged at 117.76/79 (11.45pm EST)
• German PPI for February was +0.3% m/m +2.8% y/y after being flat m/m and +3.2% in January. Euro-dollar currently trading 1.3297/00(3.00am EST)
• Bank of Japan Governor Fukui in his post monthly policy board meeting press conference says that the BOJ??™S policy to change rates gradually remains unchanged. He also adds that Central bankers are in agreement on the need to watch markets and that the markets are making healthy corrections. Dollar-yen is currently trading 117.65/68 (3.15am EST)
• Hearing of Russian interest to buy cable in early London trading taking the currency from 1.9465 to 1.9485 (3.30am EST)
• Real money names buying dollar-yen taking the currency pair almost 20 pips higher to 117.90 (4.10am EST)
• Sterling-yen breaking resistance in the 229.70/80 area (4.20am EST)
• Italian industrial orders in January were -2.1% m/m after +0.3% in December (5.00am EST)
• A Spec name buys a decent clip of Aussie paying a number of banks. Aussie has posted a high of 0.8007 on the move (5.00am EST)
• Strong UK economic data has cable moving higher from 1.9450 to 1.9520.

CPI for February +0.4% m/m +2.8% y/y higher than market expectations of +2.6% y/y..

RPIX in February comes in at +0.5% m/m +3.7% y/y also better than expectations.   

      PSNB in February was ??1.035 billion from ??1.713 billion in February 2006.

      PSNCR in February was ??1.874 billion from ??1.796 billion in February 2006

BBA underlying Mortgage lending for February was ??5.170 billion from ??5.434 billion in January.

BBA net underlying Personal Lending in February was ??4.979 billion from ??5.434 billion in January.

BBA Mortgage Approvals in February stood at ??5.408 billion from ??5.820 billion in January. (5.30am EST)

• Euro-sterling on the release of the strong UK data drops from 0.6835 to 0.6805 (5.35am EST)
• Euro-land construction production for January was +0.6% m/m +10.4% y/y from +0.9% +8.7% in December (6.00am EST)
• Cable and Euro-sterling higher and lower respectively as stop losses of sterling go through. Sterling-yen also higher from 229.50 to current level of 230.60 (6.05am EST)
• An Asian Central Bank buys Euro-dollar lifting it off the session low of 1.3270 to 1.3285 (6.15am EST)
• Closing levels:-GBP/USD 1.9552/57  EUR/USD 1.3282/85  USD/JPY 117.75/78  USD/CHF 1.2149/53  USD/CAD 1.1761/66  AUD/USD 0.8001/05  NZD/USD 0.7023/27  GBP/JPY 230.25/34  EUR/GBP 0.6791/96 (6.55am EST)
• Canadian CPI for February was +0.7% m/m +2.0% y/y after +1.2% y/y in January. The core CPI was +0.5% m/m in February +2.4% y/y after +2.1% in January. The data was better than market expectations causing the dollar-Canada to drop from 1.1770 to 1.1720 (7.00am EST)

Economic data due out later today

8.30am US Housing starts for February

Today sees the start of the Federal Reserves 2 day meeting on US interest rates where a decision on interest rates will be made tomorrow March 21st at 2.15pm EST. Market consensus is that the Federal Reserve will leave rates unchanged.

Session Ranges

GBP / USD:                 1-9430             1-9565

EUR / USD:                 1-3270             1-3308

USD / JPY:                  117-62             117-98

USD / CHF:                 1-2124             1-2158

USD / CAD                 1.1755             1.1785

AUD / USD                 0-7968             0-8008

NZD / USD                 0-7007             0-7035

GBP / JPY                   228-90             230-60

EUR / GBP                  0-6790             0-6840

World Stock Markets

Dow Jones Industrial Average (Monday close)               12,226-17        +115-76         

Hong Kong ??“ Hang Seng (Tuesday close)                     19,346-00        -304-91          

Japan ??“ Nikkei 225 (Tuesday close)                             17,163-20        +153-65