Message-ID: <27676160.1075861041983.JavaMail.evans@thyme> Date: Mon, 18 Feb 2002 04:36:04 -0800 (PST) From: info@forexnews.com To: sara.shackleton@enron.com Subject: US Trading Preview Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: quoted-printable X-From: @ENRON X-To: Shackleton, Sara X-cc: X-bcc: X-Folder: \Sara_Shackleton_Mar2002\Shackleton, Sara\Deleted Items X-Origin: Shackleton-S X-FileName: sshackl (Non-Privileged).pst [IMAGE] Forums Discuss these points in the Forums: Forexnews Forum T= echnicals Live Charts Analysis available from: Cornelius Luca J.P. Chorek= Technical Research Ltd. Charts & News featuring Standard & Poor's = Interest Rates US: Japan: Eurozone: UK: Switzerland: 1.75% 0.15% 3.= 25% 4.0% 1.25-2.25% [IMAGE] =09 [IMAGE] Euro Falls on EMU Concerns= , JPY Steady After Bush Visit February 18, 7:00 AM: EUR/$..0.8711 $/JPY..1= 32.74 GBP/$..1.4282 $/CHF..1.6996 Euro Falls on EMU Concerns, JPY Steady A= fter Bush Visit by Jes Black Market Holiday The euro came under renewed p= ressure today as the European Monetary Union's credibility came back into q= uestion. EUR/USD fell 1/3 cent from a day's high of 87.40 to a low of 87.11= after trading most of the day in a tight 10 pip range. First to knock the = euro was an unexpectedly pessimistic EMU report from Sweden that warned a m= onetary union area may not become a stable low inflation, low interest rate= environment as hoped. Therefore, it is not certain that the euro will be a= stable "hard currency" area. Moreover, the report highlighted the latent t= hreat of diverging national growth dynamics within the union. This brings = to mind Germany's dilemma of needing a boost from either lower interest rat= es or higher fiscal spending. But the European Central Bank has been unwill= ing to lower rates below 3.25% for fear of stoking inflation. Meanwhile, th= e European Union government would like to censure Germany for irresponsible= spending which is pushing their debt levels close to the 3% of GDP limit s= et out in the Maastrict treaty. Further weighing on the euro was German C= hancellor Schroeder's remark today that his government has not come up with= a list of spending cuts or tax hikes to reign in Germany's budget deficit.= German states do not want to reduce spending and this now compromises Fin = Min Eichel's promise to the EU that the government would bring the budget c= lose to balance by 2004, which was part of the compromise under which Germa= ny avoided an embarrassing censure from the EU this month for its rising de= ficit. This also suggests that there is no way Eichel's promise can be met = and that they may indeed face a fine from the EU this year if their growth = projections are too high and revenue therefore too low, which would push th= e deficit to GDP ratio above the 3% limit. EUR/USD fell to key support at = 87.10 and could threaten the 86.80 level which marks the 50% retracement of= the 85.63 to 88.03 move. Follow up support is seen at 86.50 and this month= 's 6 month low of 85.63. Failure to regain the key 87.40/50 mark will likel= y keep pressure on the pair after it rebounded from last week's low of 86.8= 0 but met with heavy resistance at 87.46. GBP/USD also fell to a day's low= of 1.4282 after rising to a day's high of 1.4330 but failing to break key = resistance around1.4340/50. Sterling also failed to break resistance at the= 60.80 pence level against the euro and subsequently fell to a day's low of= 61.01. On Thursday, GBP/USD briefly rose to a new 3-week high of 1.4362 fo= llowing surprisingly upbeat UK jobs data which raised the expectations of t= he Bank of England raising rates later this year, which tend to benefit ste= rling. However, 1.4340/50 marks the 61.8% retracement of the move from 1.45= 15-1.4040 move and has so far provided tough resistance. Without a break of= that level, the pair remains heavy, dealers say. Support seen at previous = resistance levels of 1.4235 and 1.4180. USD/CHF rose to a day's high of 1.= 7004 from a low of 1.6968 after holding above support at 1.6960/50. Resista= nce is now seen at 1.7055 which marks the 61.8% retracement of the 1.7229-1= .6770 move. Support is seen at 1.6960, 1.6890 and 1.6820. Meanwhile, the y= en was little changed today, as the market remained cautious about the dire= ction of USD/JPY after today's comments from Tokyo had little sway in the c= urrency market. At Japan's news conference President Bush and PM Koizumi sp= oke about the non-performing loan and deflation problems hurting the Japane= se economy. But the only movement came after Bush said he and Koizumi had s= poken about "devaluation," confusing it with deflation, and sending USD/JPY= spiking higher. JPY fell to a day's low of 132.85 against the dollar and 1= 16.00 against the euro following the remarks. But markets quickly adjusted = for the gaff and currencies are expected to remain steady today with no key= data from the Eurozone and a Federal holiday in the US. President Bush sa= id he saw signs of a US economic recovery but maintained that Japan needed = to stay vigilant about structural reforms. PM Koizumi repeated his pledge t= o tackle deflation and prevent a financial crisis. He also defended his adm= inistration's progress on reform, saying tough measures cannot be completed= in only one year. However, the market was disappointed by Japan's shying= away on the injection of public funds into the troubled banking sector. Th= e Nikkei rallied from 18-year lows this month following reassurances from t= he government that they stood ready to give troubled banks money. But today= Japanese ministers again played down the need for any such action saying t= hey saw no risk of a financial crises. Banking analysts were less certain, = saying a bailout is inevitable given the precarious position of falling rev= enues and rising problem loans. In the meantime, USD/JPY will remain const= rained by repatriation flows back to Japan ahead of the March 31 book closi= ng. Afterwards, the yen is likely to come back under pressure as Japan begi= ns to tackle deflation and prevent a financial crisis. There is no key dat= a from the US today as the market observes a Federal holiday. Trading is ex= pected to be thin. =09[IMAGE] Audio Mkt. Analysis JPY, EUR rebound vs USD = Articles & Ideas GBP: Old Lady Faces Old Problem Euro Rally Runnin= g Out of Steam Articles & Ideas Forex Glossary Economic Indicators = Forex Guides Link Library [IMAGE] =09 =09=09[IMAGE][IMAGE] [IMAGE][IMAGE]=09 =09=09 This e-mail is never sent unsolicited. If you wish to unsubscribe f= rom this or any other Forexnews.com newsletters, please click here . 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