01:04 2007/04/28
The greenback slumped across the board after US first quarter GDP report
4/27/2007 03:30 pm: EUR/$..1.3641 $/JPY..119.52 GBP/$..1.9974 $/CHF..1.2062 AUD/$..0.8299 $/CAD..1.1155Dollar Slumped on Disappointing GDPThe greenback slumped across the board after US first quarter GDP report showed the nation??™s economy grew at its slowest pace in four year.
US advanced GDP rose at an annual rate of 1.3% in the first quarter, far below the consensus forecast of 1.8% and 2.5% in the fourth quarter. The disappointing GDP number added evidence that the world??™s largest economy is facing a soft landing and the Fed is likely to cut interest rates as early as this Autumn. The dollar fell to an all-time low at 1.3681 versus the euro, eclipsing the previous record low of 1.3666 reached on December 30 2004 and April 25 2007. After climbing more than 100 pips last night, the sterling rose further to 2.0042 versus the dollar. The dollar slid to a 7 year low at 1.1132 against the Canadian dollar.
Later, the University of Michigan consumer sentiment came in at 87.1 in April, compared with an estimate of 85.2 and 88.4 in the previous month.
Before Friday closing, the euro hovers above the 1.36 handle versus the dollar under the support of robust fundamentals in the euro zone and hawkish official comments. The European Central Bank board member Junker said today they are not concerned with the current euro exchange rate.
The sterling fell off the 2 handle versus the dollar before London close as traders took profits before weekend.
EURUSD will face interim resistance at 1.3650, followed by 1.3680 and 1.37. Additional ceilings will emerge at 1.3730, backed by 1.3750. Support starts at 1.36, backed by 1.3580, 1.3550 and 1.3520. Subsequent floors are eyed at 1.35.
GBPUSD encounters interim resistance at 1.9980, backed by 2.0000, and 2.0040. Subsequent ceilings will emerge at 2.0060, followed by 2.0080 and 2.0100. On the downside, support begins at 1.9950, followed by 1.9930 and 1.99. Additional floors are eyed at 1.9870, backed by 1.9850 and 1.9830.
Yen Remains WeakThe yen remains weak after the Bank of Japan released its semi-annual report on economic and inflation outlook. The bank??™s projections were basically in line with market expectations. The yen is likely to weaken further to above 120 in the near term.
USDJPY encounters interim resistance at 119.70, backed by 120 and 120.30. Subsequent ceilings will emerge at 120.50, followed by 120.80 and 121. On the downside, support begins at 119.30 and 119, followed by 118.80. Additional floors are eyed at 118.50, backed by 118.20 and 118.
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