NEWS / Foreign Exchange

U.S. Forex Market Commentary

EURO

The euro appreciated vis-? -vis the U.S. dollar today as the single currencytested offers around the US$ 1.3440 level and was supported around the US$ 1.3355level.  Technically, today??™s intraday lowwas right around the 61.8% retracement of the move from $1.3410 to$1.3255.  Traders continued to squarepositions ahead of the long Easter holiday weekend and liquidity will return tonormal on Tuesday.  Data released in theU.S. today saw weekly jobless claims climb 11,000 to 321,000 while continuingjobless claims were off 25,000 to 2.49 million. Traders await tomorrow??™s all-important March non-farm payrolls data withmany estimates focusing on 150,000 new jobs created.  Dealers are also curious to see if January??™sand February??™s job tallies were revised. In eurozone news, German February industrial output was up 0.9% m/m,above expectations.  Most traders expectthat European Central Bank will tighten monetary policy again in the nearfuture.  Euro bids are cited around theUS$ 1.3350 level.

JPN/CNY

The yen gainedmarginal ground vis-? -vis the U.S. dollar today as the greenback tested bids around the ??118.45 leveland was capped around the ??118.95 level. Technically, today??™s intraday low was right around the 76.4% retracementof the move from ??121.40 to ??109.00. There was a dearth of economic news in Japan today and traders await therelease of the February leading and coincident indices overnight.  Traders also await the release of Japan??™sofficial foreign reserves tally overnight. The Nikkei 225 stock index lost 0.30% to close at ??17,491.42.  Dollar bids are cited around the ??117.70/ 40levels.  The euro appreciated vis-? -vis the yen as the single currencytested offers around the ??159.35 level and was supported around the ??158.40level.  The British pound weakened vis-? -vis the yen as sterling testedbids around the ??233.55 level while theSwiss franc gained ground vis-? -vis the yen and tested offers around the??97.80 level.  The Chinese yuan appreciated vis-? -vis the U.S. dollar as thegreenback closed at CNY 7.7243, down from CNY 7.7325, a post-revaluation low.People??™s Bank of China tightened monetary policy further overnight, lifting thereserve requirement by 0.5% effective 16 April. This represents PBOC??™s sixthsuch move in leass than one year.  PBOCDeputy Governor Wu Xiaoling indicated Chinawill seek to reduce its trade gap with the U.S.  Data released in China today saw the Q1 businessclimate index climb 8.2 index points y/y.

STERLING

The British pound came off vis-? -vis the U.S. dollar today as cable tested bids aroundthe US$ 1.9670 level and was capped around the $1.9765 level.  Technically, today??™s intraday low was rightaround the 23.6% retracement of the move from $1.9185 to $1.9820.  As expected, Bank of England??™s MonetaryPolicy Committee did not lift interest rates today but most traders believe theMPC will hike rates again soon, possibly as early as next month.  Data released in the U.K. today sawFebruary manufacturing output off 0.6% m/m, the largest decline since October2005.  Also, Halifax March house prices were up 1.0% m/mand 11.0% y/y.  Cable bids are citedaround the US$ 1.9635 level.  The euro moved higher vis-? -vis theBritish pound as the single currency tested offers around the ?‚¤0.6815 level andwas supported around the ?‚¤0.6760 level.

SWISS

The Swissfranc appreciated vis-? -vis the U.S. dollar today as the greenback testedbids around the CHF 1.2120 level and was capped around the CHF 1.2210level.  Technically, today??™s intraday lowwas right around the 23.6% retracement of the move from CHF 1.2435 to CHF1.2025.  Dollar offers are cited aroundthe CHF 1.2215 level.  The euro and British pound came offvis-? -vis the Swiss franc as the crosses tested bids around the CHF 1.6290 andCHF 2.3910 levels, respectively.

AUD

The Australiandollar gained marginal ground vis-? -vis the U.S. dollar today as the Aussie tested offersaround the US$ 0.8210 level and was supported around the $0.8165 level.  Technically, today??™s intraday low was justabove the 23.6% retracement of the move from $0.8030 to $0.8195.  Reserve Bank of Australia voted to keep interestrates unchanged at 6.25% yesterday but most traders expect RBA to lift rates by+25bps to 6.50%.  Australian dollar bidsare cited around the US$ 0.8130 level.

CAD

The Canadiandollar appreciated sharply vis-? -vis the U.S. dollar today as the greenback testedbids around the C$ 1.1485 level and was capped around the C$ 1.1595 level.  Technically, today??™s intraday high was rightaround the 23.6% retracement of the move from C$ 1.1875 to C$ 1.1495.  Stops were hit below the C$ 1.1510 level,representing the move from $1.0925 to $1.1875. Data released in Canada today saw the March net change in employmentclimb +54,000 while the March unemployment rate was unchanged at +6.1%.  Also, the Ivey March Purchasing ManagersIndex came in stronger-than-expected. U.S. dollar bids are cited around the C$ 1.1400 figure.