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201834 Resource 128466 128654 128654 1208322935714 1208322935714 Controlled European Morning Update 16th April 2008

Quiet morning provides the Dollar with no momentum

Releases from Australia:                                                            Prior      Current  February Westpac Leading Index   (YoY) +4.1%    +3.3%The annualized growth rate of the Westpac leading index of economic activity slowed to 3.3% in February from 4.1% in January. This is the 3rd consecutive decline and brings it to below its longer-term trend rate of 4.1%.Westpac commented, “Growth in the index has slowed markedly in the last few months. After peaking at a solid 6.5% in November last year it has slowed to 3.3% - appreciably below long-run trend for the first time since October 2005.The leading index was consistent with the view that domestic demand will slow through 2008 as consumers and companies alike view falling global business sentiment and demand. “The outlook for a slowdown in domestic spending will give the bank sufficient comfort that inflation will return to the 2 percent to 3 percent target range by 2010," the report quoted. "However, at this stage Westpac does not expect that the economy will slow quickly enough for the bank to feel comfortable to reduce rates any time in 2008.” The following economic releases are due today:February Italian Trade Balance (Total)        EUR  Italian Trade Balance (EU)           EUR   U.K. ILO Unemployment Rate                  5.2%March Japan Machine Tool Orders (F)   (YoY)    +2.9% German CPI (F)                       (MoM)    +0.5% German CPI (F)                        (YoY)    +3.1% U.K. Jobless Claims Change                   - 1.8K U.K. Claimant Count Rate                        2.5% Euro-zone CPI                         (MoM)    +0.9% Euro-zone CPI                          (YoY)    +3.5% U.S. CPI                                 (MoM)    +0.3% U.S. CPI                                  (YoY)    +4.0% U.S. CPI ex food & energy        (MoM)    +0.2% U.S. CPI ex food & energy         (YoY)    +2.4% U.S. Building Starts                               1020K U.S. Building Permits                              970K U.S. Industrial Production         (MoM)    - 0.1%April Bloomberg Global Confidence The Fed is due to publish its Beige Book The Dollar’s upside proved the correct direction yesterday and I’d still like to stick to this but there are some mild contra-indications in one or two currency pairs. Some appear to be short term conflicts within a modest Dollar bullish move while others are just contributing to a degree of confusion.While the Dollar moved higher in general across the board the degree of the gains rather disappointed against the Euro. For example, Dollar-Yen reached and slightly breached the 101.80 target while the Swissie fell a little short at 1.0109. On the other hand the Pound exceeded its initial target. The problems raised with this is that the Dollar should now pullback against the Yen and Pound while it should still rally a little further against the Swissie and comparatively more against the Euro. Therefore the correlation breaks down.It could be that the Dollar’s initial move higher is not complete and could see more twists and turns or of course it could mean that it will simply resume its losses. So I’ll be erring on the Dollar bullish side but we should take good note of the levels that would reverse the picture once again. Note important support and resistance areas:         USDJPY        EURUSD       USDCHF       GBPUSD Res:  102.54-93    1.5912-34    1.0217-49    1.9711-46 Res:  101.91-26    1.5810-45    1.0127-51    1.9637-57Spt:   101.10-40    1.5720-50    1.0049-70    1.9554-90 Spt:   100.29-59    1.5668-99    0.9955-86    1.9405-36 9 application/xml false Australia currencies Forex FX growth inflation interest rates leading index westpac Thinking of trading currencies? Read more about the Forex market http://www.gftforex.com/land/index.asp?aid=446 Mozilla/4.0 (compatible; MSIE 7.0; Windows NT 5.1; hc; .NET CLR 1.1.4322; .NET CLR 2.0.50727; MS-RTC LM 8) 127.0.0.1 127.0.0.1 ICopsey 202.216.243.97 false true false false true 128466 blog blogsite/GFTForex/web