NEWS / Foreign Exchange

U.S. Forex Market Commentary

EURO

The euro came off marginally vis-? -vis the U.S. dollar today as the single currencytested bids around the US$ 1.3350 level and was capped around the $1.3380level.  Liquidity was thin inAustralasian and Europe today on account ofthe ongoing Easter holiday period and will return to normal overnight.  Traders pushed the U.S. dollar higher todayfollowing Friday??™s strong jobs report that saw more jobs created last month anda downtick in the unemployment rate.  Theperception held by some traders that the Fed may be forced to lower interestrates in Q3 is diminishing.  Tradersawait the Group of Seven meeting in Washington, D.C. later this week in whichexchange rates are not expected to be a major topic.  Euro bids are cited around the US$ 1.3300figure.

JPN/CNY

The yengained marginal ground vis-? -vis the U.S. dollar today as the greenback tested bids around the ??119.20 leveland was capped around the ??119.40 level. Technically, today??™s intraday low was right around the 38.2% retracementof the move from ??114.45 to ??122.15.  Bankof Japan??™s Policy Board meeting began overnight and policymakers are notexpected to change policy for at least several months.  If BoJ officials including Governor Fukuiindicate that rates are heading higher in due course, this may discourage someshort yen carry trades that have propelled the yen to all-time lows in some ofits crosses.  Data released in Japan overnightsaw February machinery orders up 1.9% y/y while the March economy watchers??™index climbed 1.6 index points m/m.  TheNikkei 225 stock index climbed 1.48% to close at ??17,743.76.  Dollar bids are cited around the ??118.45level.  The euro weakened vis-? -vis the yen as the single currency testedbids around the ??159.25 level and was capped around the ??159.60 level.  TheBritish pound and Swiss franc came off vis-? -vis the yen as the crossestested bids around the ??233.75 and ??97.35 levels, respectively.  TheChinese yuan weakened vis-? -vis the U.S. dollar as the greenback closed atCNY 7.7340 in the over-the-counter market, up from CNY 7.7213.  Data released in China today saw Q1 consumerconfidence print at 95.8.  The big newsinvolving China over theweekend is a story that the Bush administration is preparing to take China to the World Trade Organization regarding China??™spractices of pirating movies, music, and books.

STERLING

The British pound weakened vis-? -vis the U.S. dollar today as cable tested bids aroundthe US$ 1.9605 level and was capped around the US$ 1.9655 level.  Technically, today??™s intraday high was rightaround the 23.6% retracement of the move from $1.8835 to $1.9845.  Liquidity was thin today on account of theEaster holiday weekend.  Cable bids arecited around the US$ 1.9580/ 50 levels. Theeuro moved higher vis-? -vis the British pound as the single currency testedoffers around the ?‚¤0.6815 level and was supported around the ?‚¤0.6795 level.

SWISS

The Swiss franc came off vis-? -vis the U.S. dollartoday asthe greenback tested offers around the CHF 1.2250 level and was supportedaround the CHF 1.2215 level.  Technically,today??™s intraday low was right around the 38.2% retracement of the move fromCHF 1.2770 to CHF 1.1875.  Dollar offersare cited around the CHF 1.2280/ 1.2325 levels. The euro moved highervis-? -vis the Swiss franc as the single currency tested offers around the CHF1.6375 level while the British poundcame off vis-? -vis the Swiss franc and tested bids around the CHF 2.3990level.

AUD

The Australian dollar gained marginal groundvis-? -vis the U.S. dollar today as the Aussie tested offers around the US$ 0.8175level and was supported around the $0.8150 level.  Technically, today??™s intraday high was rightaround the 23.6% retracement of the move from US$ 0.8065 to $0.8210.  Australian dollar bids are cited around theUS$ 0.8120/ 0.8085 levels.

CAD

The Canadiandollar lost marginal ground vis-? -vis the U.S. dollar today as the greenback testedoffers around the C$ 1.1525 level and was supported around the C$ 1.1500figure. Bank of CanadaDeputy Governor Kennedy will speak on Thursday. U.S. dollar bids are cited around the C$ 1.1450 level.