FOREX-Dollar off 5-month low, U.S. debt auctions awaited

TOKYO, May 26 (Reuters) - The dollar rose from a five-month low against a basket of currencies on Tuesday as investors booked profits on a spike in the euro and other higher-yielding currencies, while traders awaited U.S. Treasury auctions to test the strength of investor appetite for dollar assets.

The euro slid against the dollar and the yen after Britain's Daily Telegraph reported that Germany's financial regulator BaFin had warned that toxic debt of the country's banks would blow up "like a grenade" unless they took advantage of government's bad bank plans to prepare for next phase of crisis.

The report was not new, however, as the regulator warned last week that German banks have bad assets of around 200 billion euros ($280 billion).

Traders said speculators used the report as an excuse to sell the European single currency after its jump of about 8 percent in just a month against the dollar, from $1.30 to $1.40.

"The euro, the Australian dollar and sterling all have risen to levels where people would feel they have run their course for now," said Osamu Takashima, chief currency analyst at Bank of Tokyo-Mitsubishi UFJ. "It's understandable to see profit-taking on them."

Activity picked up in Asia as U.S. and British financial markets will resume trading later in the day after a three-day weekend.

The dollar index .DXY, a gauge of the greenback's performance against six other major currencies, edged up 0.2 percent to 80.146.

The index struck a five-month trough of 79.805 last week when concern that U.S. government debt may lose its AAA rating prompted investors to sell the world's reserve currency.

The euro fell to $1.3986 , down from $1.4023 in late Asian trade on Monday. It rose as high as $1.4051 on trading platform EBS on Friday, its highest since early January.

The euro was also under pressure a day after the German-based Ifo think tank's business climate index on Monday fell short of market expectations, suggesting that any recovery in the euro zone's biggest economy will take more time.

The European single currency fell to 132.49 yen down almost 1 yen from late Asian trade on Monday, as funds took profits on the euro's sharp gains against the yen in the past week.

Dollar extends slide but Asian stocks gain

HONG KONG (Reuters) - The dollar fell on Friday to its weakest in almost five months against major currencies on investor worries that the United States would lose its AAA rating, though Asian stocks headed for a solid weekly gain.

The dollar's descent was sparked on Thursday when Standard & Poor's cut its outlook on Britain's top rating to negative, bringing into focus other AAA-rated countries that are running into higher debt in an attempt to boost their economies with big spending plans.

Although signs of hope in the global economy are helping to support Asian stocks, worries are also growing about the strength of any recovery and whether the shift into riskier asset such as oil is justified.

A weaker dollar is also strengthening Asian currencies, which is bound to hurt the export-dependent continent and further raise doubts among investors about whether a gain of more than 50 percent in Asian shares excluding Japan since early March is excessive.

"Markets all around the world appear to be looking for direction, and any chance of a U.S. downgrade would really hit U.S. assets such as the dollar and stocks," said Masayoshi Okamoto, head of dealing at Jujiya Securities.

"For Japan, this situation comes just after earnings have come out and companies have set their currency rates, many of them at 95 yen. The chance of any further yen rise really paints a gloomy picture."

The dollar index .DXY, a gauge of its performance against six major currencies, fell as low as 80.257, its weakest since late December and was last down 0.2 percent at 80.302.

The slide in the U.S. currency comes as investors are finding it harder to ignore the effect of the Federal Reserve's zero interest rate policy and its efforts to keep long-term rates low through direct purchases of U.S. government debt.

The dollar slipped 0.3 percent from late U.S. trade to 94.08 yen after falling as low as 93.86 yen on trading platform EBS, its lowest since mid-March.

The euro rose 0.4 percent to $1.3945, its strongest since early January. Sterling, despite the S&P action, rose as high as $1.5893, its highest since early November according to Reuters data, and was last up 0.2 percent at $1.5885.

"S&P gave a clear criteria that a country whose government debt burden is approaching 100 percent of GDP could have its rating downgraded," said Hideki Amikura, deputy general manager of forex trading at Nomura Trust and Banking.

"That prompted investors to think they should not be so optimistic about credit rating on the United States."

But U.S. Treasuries recovered after concerns about debt levels sent prices tumbling on Thursday. The Treasury's announcement that it would sell $101 billion in notes next week also sparked supply concerns.

Benchmark 10-year U.S. Treasury notes rose about one point, sending yields down to 3.34 percent from the 3.37 percent level hit on Thursday that had marked the highest yield on an intraday basis in nearly two weeks.

Market Commentary

MARKET COMMENTARY ON 22ND MAY 2009

GBP/USD closed higher due to short covering on Thursday as it extends yesterday's high range. The high-range close sets the stage for a steady to higher opening on Friday. Stochastics and the RSI are turning bullish signalling that sideways to higher prices are possible near-term. Closes below the 20-day moving average crossing would temper the near-term friendly outlook in the market. If it renews this month's rally, March's high crossing is the next upside target.

EUR/USD closed higher due to short covering on Thursday as it extends yesterday's high range. The high-range close sets the stage for a steady to higher opening on Friday. Stochastics and the RSI are turning bullish signalling that sideways to higher prices are possible near-term. Closes below the 20-day moving average crossing would temper the near-term friendly outlook in the market. If it renews this month's rally, March's high crossing is the next upside target.

USD/CHF closed higher due to short covering on Thursday as the dollar weakened. The high-range close sets the stage for a steady to higher opening on Friday. Stochastics and the RSI are turning bullish signalling that sideways to higher prices are possible near-term. Closes below the 20-day moving average crossing would temper the near-term friendly outlook in the market. If it renews this month's rally, March's high crossing is the next upside target.

USD/JPY closed higher due to short covering on Thursday as the dollar weakened. The high-range close sets the stage for a steady to higher opening on Friday. Stochastics and the RSI are turning bullish signalling that sideways to higher prices are possible near-term. Closes below the 20-day moving average crossing would temper the near-term friendly outlook in the market. If it renews this month's rally, March's high crossing is the next upside target.

Market Commentary

MARKET COMMENTARY ON 19TH MAY 2009

GBP/USD closed higher on Monday and the high-range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If June extends the rally off April's low, December's high crossing at 1.5545 is the next upside target. Closes below the 20-day moving average crossing at 1.4957 would confirm that a short-term top has been posted.

EU/USD closed higher due to short covering on Monday and above the 10-day moving average crossing at 1.3520. The high-range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are turning bearish signaling that additional profit taking is possible near-term. Closes below the 20-day moving average crossing at 1.3350 would temper the near-term friendly outlook in the market.

USD/CHF closed higher due to short covering on Monday and above the 10-day moving average crossing. The high-range close sets the stage for a steady to higher opening on Tuesday. Despite today's rebound, stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near-term. Closes below the 20-day moving average crossing would confirm that a short-term top has been posted. If June renews the rally off April's low, the 75% retracement level of last fall's rally crossing is the next upside target.

USD/CAD closed higher on Monday due to short covering as it consolidated some of last week's decline and closed above the 10-day moving average crossing. The high-range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are turning neutral signaling that sideways trading is possible near-term. If June renews the rally off March's low, the 50% retracement level of the 2008-2009 decline crossing is the next upside target.

USD/JPY posted a key reversal down due to profit taking on Monday as it consolidated some of last week's rally. The low-range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are overbought and are turning neutral hinting that a short-term top might be in or is near. Closes below the 20-day moving average crossing at 99.80 would confirm that a short-term top has been posted. If June extends this month's rally, March's high crossing at 100.25 is the next upside target.

Market Commentary

MARKET COMMENTARY ON 18TH MAY 2009

GBP/USD closed lower due to profit taking on Friday. The low-range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If June extends the rally off April's low, December's high crossing at 1.5545 is the next upside target. Closes below the 20-day moving average crossing at 1.4918 would signal that a short-term top has been posted.

EUR/USD closed sharply lower due to profit taking on Friday and below the 10-day moving average crossing at 1.3495 signaling that a double top with March's high might have been posted this week. The low-range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI are overbought and are turning neutral to bearish signaling that additional profit taking is possible near-term. Closes below the 20-day moving average crossing at 1.3325 would temper the near-term friendly outlook in the market. If June renews this month's rally, March's high crossing at 1.3700 is the next upside target.

USD/CHF closed sharply lower due to profit taking on Friday and below the 10-day moving average crossing signaling that a short-term top has likely been posted. The low-range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI are overbought and are turning bearish signaling that sideways to lower prices are possible near-term. Closes below the 20-day moving average crossing would confirm that a short-term top has been posted. If June extends the rally off April's low, the 75% retracement level of last fall's rally crossing is the next upside target.

USD/CAD closed lower on Friday as it extended this week's decline below the 10-day moving average crossing. The low-range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near-term. Closes below the 20-day moving average crossing would confirm that a short-term top has been posted.

USD/JPY closed higher on Friday as it extended this week's rally. The high-range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI are becoming overbought but remain bullish signaling that sideways to higher prices are possible near-term. If June extends this week's rally, March's high crossing at 99.25 is the next upside target. Closes below the 20-day moving average crossing at 93.10 would confirm that a short-term top has been posted.

FOREX-Dollar hits 4-month lows, extends broad slide

TOKYO, May 13 (Reuters) - The dollar hit a four-month low against a basket of currencies and a seven-week trough versus the euro on Wednesday, facing renewed selling amid a recovery in risk appetite that has curbed safe-haven buying of dollars.

Traders said the dollar also came under pressure due to an article in the Financial Times that touched on the risk of the United States losing its triple-A credit rating and refocused attention on rising U.S. debt issuance.

While the content of the FT opinion piece was unsurprising it added to pressure on the dollar, which was already looking vulnerable on technical charts, traders said.

"I think the market overall wanted to test the (dollar's) downside and the FT story linked well with that trend," said a trader for a Japanese trust bank.

The recent recovery in risk appetite and falls in dollar funding costs point to a decline in market players' demand for dollars, leaving the U.S. currency vulnerable, said Takahide Nagasaki, chief foreign exchange strategist for Daiwa Securities SMBC.

"Concerns related to dollar funding have receded somewhat, and the focus turned towards topics that are negative for the United States such as the fiscal deficit," Nagasaki said.

The dollar index, which measures its performance against a basket of six currencies, hit a four-month low of 81.871 .DXY. After trimming some losses, it was down 0.2 percent on the day at 82.140.

Last week, the dollar index breached support at the 200-day moving average while the euro broke above a similar moving average against the dollar.

In addition, the dollar breached key support against the yen earlier this week, when it fell below the top of the cloud on daily Ichimoku charts.

The euro hit a seven-week high of $1.3722 on trading platform EBS, but after shedding some gains it was up 0.2 percent from late U.S. trading on Tuesday at $1.3674 .

FOREX-Yen gains as nerves set in about US stress tests

LONDON, May 6 (Reuters) - The yen gained broadly on Wednesday, while the dollar edged up versus the euro, as nervousness ahead of U.S. stress test results on banks encouraged investors to pare back exposure to risk.

Concerns about these results, which are due on Thursday, were heightened after a source familiar with the tests said Bank of America required as much as $34 billion in additional capital.

This prompted investors to buy back the yen and the dollar -- which typically gain in times of heightened risk aversion -- after recent optimism that the global economy may be over the worst had led them to take on more risk.

The single currency pared some losses after a better-than-expected survey on the euro zone services sector, but wariness about event risks this week kept it in negative territory against both the U.S. and Japanese currencies.

As well as the stress tests, markets were cautious ahead of Thursday's policy decisions by the European Central Bank and the Bank of England and key U.S. jobs data on Friday.

Later on Wednesday, investors will be watching out for U.S. ADP unemployment data, which could provide some clues on how bad the state of the U.S. jobs market is.

"There is still some bullish news around and there have been some bright sparks recently, but people are wary that there could be things waiting around the corner to trip things up," CMC Markets analyst James Hughes said.

"The stress test results will be key as there is still a lot of underlying nervousness surrounding the banking sector," he added.

Market Commentary

MARKET COMMENTARY ON 05TH MAY 2009

GBP/USD closed higher on Monday and above the 20-day moving average crossing confirming that a short-term high has been posted. The high-range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are bullish signalling that sideways to higher prices are possible near-term. If it extends last week's rally, the reaction high crossing is the next upside target. Closes below the 10-day moving average crossing would confirm that a short-term bottom has been posted.

EUR/USD closed higher on Monday and above the 20-day moving average crossing confirming that a short-term high has been posted. The high-range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are bullish signalling that sideways to higher prices are possible near-term. If it extends last week's rally, the reaction high crossing is the next upside target. Closes below the 10-day moving average crossing would confirm that a short-term bottom has been posted.


USD/CHF closed higher on Monday and above the 20-day moving average crossing confirming that a short-term high has been posted. The high-range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are bullish signalling that sideways to higher prices are possible near-term. If it extends last week's rally, the reaction high crossing is the next upside target. Closes below the 10-day moving average crossing would confirm that a short-term bottom has been posted.


USD/JPY closed higher on Monday and above the 20-day moving average crossing confirming that a short-term high has been posted. The high-range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are bullish signalling that sideways to higher prices are possible near-term. If it extends last week's rally, the reaction high crossing is the next upside target. Closes below the 10-day moving average crossing would confirm that a short-term bottom has been posted.

FOREX-Dollar slides broadly as risk demand picks up

LONDON, April 30 (Reuters) - The dollar fell broadly on Thursday, hitting a three-week low against a basket of currencies as speculation that the global economic downturn is slowing continued to raise demand for riskier assets.

Concerns about the spread of swine flu waned on the view that the disease thus far would have limited economic impact, and a report of an imminent bankruptcy filing by Chrysler did little to stifle the risk rally, with analysts saying that markets have already priced in the U.S. automaker's failure.

The euro climbed along with high yielders as investors looked beyond a weak headline reading of U.S. growth and focussed on signs the economy may pick up in the coming months, which boosted currencies perceived to be higher risk.

"We've seen the stabilisation in the market, so the downside momentum is slowing, that is what the leading indicators are telling us, be it in the U.S. or the euro zone," said Michael Klawitter, senior forex strategist at Dresdner Kleinwort in Frankfurt.

"Despite the discussion of swine flu, the market no longer sees this as an economic risk, so risk aversion continues to decline, as reflected in equity markets, and in this environment, risk is to the upside."

European shares .FTEU3 rose nearly 2 percent in early trade.

Analysts said that optimistic market sentiment would likely continue so long as economic data does not significantly alter the view that the global economy is starting to show signs of recovery.

The dollar index .DXY, which tracks the U.S. currency's performance against the nation's biggest trading partners, was 0.8 percent lower at 83.948 by 0754 GMT, having fallen as low as 83.911, its lowest since early April.

Losses in the index were driven by a 0.8 percent climb in the euro to $1.3370 , which rose as high as around $1.3385 in early trade to hit its strongest in more than two weeks.

Market Commentary

MARKET COMMENTARY ON 30STH APRIL 2009

GBP/USD closed higher on Wednesday as it extends the rebound off last week's low. The high-range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are neutral hinting that sideways to higher prices are possible near-term. Today's close above the 10-day moving average crossing at 1.4690 confirms that a short-term low has been posted. If June extends today's rally, this month's high crossing at 1.5050 is the next upside target. Closes below last week's low crossing at 1.4417 would renew the decline off April's high and could lead to a test of the reaction low crossing at 1.4175. First resistance is today's high crossing at 1.4820. Second resistance is April's high crossing at 1.5050. First support is last week's low crossing at 1.4417. Second support is the reaction low crossing at 1.4175.

EUR/USD closed higher on Wednesday renewing the rally off last week's low. The high-range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near-term. If June extends today's rally, the reaction high crossing at 1.3400 is the next upside target. Closes below last week's low would open the door for a possible test of March's low crossing at 1.2620.

USD/CHF closed higher on Wednesday renewing the rally off last week's low. The high-range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near-term. If June extends today's rally, the reaction high crossing is the next upside target.

USD/CAD closed sharply higher on Wednesday renewing the rally off last week's low. The high-range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near-term. If June extends today's rally, April's high crossing is the next upside target. Closes below the 20-day moving average crossing would temper the friendly outlook.

USD/JPY closed lower on Wednesday due to profit taking as it consolidated some of this month's rally. The low-range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI are overbought and are turning neutral to bearish hinting that a short-term top might be near. Closes below the 20-day moving average crossing at 97.00 would signal that a short-term top has been posted. If June extends this month's rally, March's high crossing at 99.10 is the next upside target.

Market Commentary

MARKET COMMENTARY ON 29TH APRIL 2009

GBP/USD closed lower on Tuesday due to profit taking as it extends last week's trading range. The mid-range close sets the stage for a steady opening on Wednesday. Stochastics and the RSI are neutral hinting that a short-term low might be in or is near. Closes above the 10-day moving average crossing at 1.4685 are needed to confirm that a short-term low has been posted. If June renews the decline off April's high, the reaction low crossing at 1.4145 is the next downside target. First resistance is last Friday's high crossing at 1.4755. Second resistance is April's high crossing at 1.5010. First support is last week's low crossing at 1.4410. Second support is the reaction low crossing at 1.4145.

EUR/USD closed higher on Tuesday as it consolidated some of Monday's decline. The high-range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near-term. If June extends last week's rally, the reaction high crossing at 1.3345 is the next upside target. Closes below last week's low would open the door for a possible test of March's low crossing at 1.2575.

USD/CHF closed higher on Tuesday as it consolidated some of Monday's decline. The high-range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near-term. If June renews last week's rally, the reaction high crossing at 1.1565 is the next upside target.

USD/CAD closed slightly higher on Tuesday as it consolidates above the 10-day moving average. The high- range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near-term. If June renews last week's rally, April's high crossing is the next upside target. Closes below the 20-day moving average crossing would temper the friendly outlook.

USD/JPY closed higher on Tuesday as it extends this month's decline. Profit taking tempered early gains and the low-range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI are neutral to bullish but are overbought hinting that a short-term top might be near. If June extends this month's rally, March's high crossing at 101.10 is the next upside target. Closes below the 20-day moving average crossing at 99.20 would signal that a short-term top has been posted.

Euro May Decline to 10-Week Low Against Yen: Technical Analysis

April 28 (Bloomberg) -- The euro may decline to a 10-week low against the yen after falling below so-called support at 126.42, said Tsutomu Soma, a bond and currency dealer at Okasan Securities Co., citing trading patterns.

Support at 126.42 yen represents the neckline of a so- called “head-and-shoulders” pattern, which was completed when the euro closed at 126.14 yen yesterday, Tokyo-based Soma said. A head and shoulders is formed when a currency makes three consecutive peaks, with the middle being the highest. The neckline is drawn across the base of the three peaks.

“The euro-yen has broken below the neckline of the head and shoulders, which means it’ll probably go down more,” Soma said. “The target is around 115.38 yen.”

Europe’s single currency dropped to 124.59 yen as of 7:39 a.m. in London from 126.14 yen in New York yesterday. It earlier reached 124.54 yen, the lowest level since March 12. The 115.38 yen level was last seen on Feb. 12, according to data compiled by Bloomberg.

In technical analysis, investors and analysts study charts of trading patterns and prices to forecast changes in a security, commodity, currency or index. Support is a level where buy orders may be clustered and resistance is where there may be sell orders.

FOREX-Yen jumps on US bank concerns, flu fears

LONDON, April 28 (Reuters) - The yen jumped to a seven-week high against the euro and a one-month peak against the dollar on Tuesday, on a report that regulators have told Bank of America (BAC.N) and Citigroup (C.N) they may need to raise more capital.

The yen extended gains as the report intensified investors' aversion to risk, already heightened by fears of a flu pandemic hampering any recovery in the global economy.

Higher yielding currencies such as the Australian and New Zealand dollars came under pressure.

The Wall Street Journal said regulators have told Citigroup and Bank of America they may need to raise more capital based on early results of government stress tests on banks.

The results of these tests are set to be unveiled on May 4.

"All this results in a higher risk perception, which is why we are seeing a stronger yen," Commerzbank currency strategist in Frankfurt Lutz Karpowitz said.

At 0755 GMT, the dollar slid 0.8 percent against the yen to 95.87 yen , just shy of an earlier one-month low of 95.63.

The euro lost 0.8 percent against the Japanese currency to 124.81 yen , having hit a seven-week low around 124.38 yen. The yen's gains were helped by steep falls in equities, with European stocks tumbling 2.3 percent .FTEU3.

Against the dollar, the euro was steady at $1.3020 .

The Australian dollar fell 1.2 percent against its U.S. counterpart , while the New Zealand dollar lost 1.6 percent .

FOREX-Yen jumps on US bank concerns, flu fears

LONDON, April 28 (Reuters) - The yen jumped to a seven-week high against the euro and a one-month peak against the dollar on Tuesday, on a report that regulators have told Bank of America (BAC.N) and Citigroup (C.N) they may need to raise more capital.

The yen extended gains as the report intensified investors' aversion to risk, already heightened by fears of a flu pandemic hampering any recovery in the global economy.

Higher yielding currencies such as the Australian and New Zealand dollars came under pressure.

The Wall Street Journal said regulators have told Citigroup and Bank of America they may need to raise more capital based on early results of government stress tests on banks.

The results of these tests are set to be unveiled on May 4.

"All this results in a higher risk perception, which is why we are seeing a stronger yen," Commerzbank currency strategist in Frankfurt Lutz Karpowitz said.

At 0755 GMT, the dollar slid 0.8 percent against the yen to 95.87 yen , just shy of an earlier one-month low of 95.63.

The euro lost 0.8 percent against the Japanese currency to 124.81 yen , having hit a seven-week low around 124.38 yen. The yen's gains were helped by steep falls in equities, with European stocks tumbling 2.3 percent .FTEU3.

Against the dollar, the euro was steady at $1.3020 .

The Australian dollar fell 1.2 percent against its U.S. counterpart , while the New Zealand dollar lost 1.6 percent .

Market Commentary

MARKET COMMENTARY ON 28TH APRIL 2009

GBP/USD closed lower on Monday due to profit taking as it extends last week's trading range. The high-range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are turning neutral hinting that a short-term low might be in or is near. Closes above the 10-day moving average crossing at 1.4720 are needed to confirm that a short-term low has been posted. If June extends the decline off April's high, the reaction low crossing at 1.4130 is the next downside target. First resistance is last Friday's high crossing at 1.4750. Second resistance is April's high crossing at 1.5045. First support is last week's low crossing at 1.4410. Second support is the reaction low crossing at 1.4130.

EUR/USD closed lower on Monday as it consolidated some of last week's rally. The low-range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near-term. If June extends last week's rally, the reaction high crossing at 1.3385 is the next upside target. Closes below last week's low would open the door for a possible test of March's low crossing at 1.2660.

USD/CHF closed sharply lower on Monday due to profit taking as it consolidated some of last week's rally. The low-range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near-term. If June extends last week's rally, the reaction high crossing is the next upside target.

USD/CAD posted an inside day with a lower close on Monday as it consolidates some of last week's rally but remains above the 10-day moving average. The low-range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are turning bullish signaling that sideways to higher prices are possible near-term. If June extends last week's rally, April's high crossing is the next upside target. Closes below the 20-day moving average crossing at would temper the friendly outlook.

USD/JPY closed higher on Monday as it extends this month's decline. The mid-range close sets the stage for a steady opening on Tuesday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If June extends this month's rally, the reaction high crossing at 99.70 is the next upside target. Closes below the 20-day moving average crossing 95.20 would signal that a short-term top has been posted.

Market Commentary

MARKET COMMENTARY ON 27TH APRIL 2009

GBP/USD closed lower on Friday due to profit taking overnight as it consolidates some of Thursday's rally. Stochastics and the RSI remain bearish signalling that sideways to lower prices are possible near-term. If it renews last week's decline, the reaction low crossing is the next downside target. Closes above the 10-day moving average crossing would confirm that a short-term low has been posted.

EUR/USD closed higher on Friday and trading above the 20-day moving average crossing. Stochastics and the RSI have turned bullish signalling that a short-term low might be in or is near. Closes above the 20-day moving average crossing would confirm that a short- term low has been posted. If it renews this month's decline, the reaction low crossing is the next downside target.

USD/CHF closed lower on Friday and is trading below the 20-day moving average crossing. Stochastics and the RSI are turning bearish signalling that a short-term high might be in or is near. Closes below the 20-day moving average crossing are needed to confirm that a short-term high has been posted. If it renews this month's rally, March's high crossing is the next upside target.

USD/CAD closed higher on Friday and is trading above the 10-day moving average crossing. Stochastics and the RSI are turning neutral to bullish hinting that sideways to higher prices are possible near-term. Closes above the 10-day moving average crossing would temper the near-term bearish outlook in the market.

USD/JPY closed lower on Friday as it extends last week's decline. Stochastics and the RSI remain bearish signalling that sideways to lower prices are possible near-term. If it extends last week's decline, the reaction low crossing is the next downside target. Closes above last Friday's high crossing would confirm that a short-term bottom has been posted.

Market Commentary

MARKET COMMENTARY ON 24TH APRIL 2009


GBP/USD closed higher due to short covering on Thursday as it consolidated some of this month's decline. The high-range close sets the stage for a steady opening on Friday. Stochastics and the RSI remain neutral to bullish signalling that sideways to higher prices are possible near-term. Closes above the 20-day moving average crossing would temper the near-term bullish outlook.

EUR/USD closed higher due to short covering on Thursday as it consolidated some of this month's decline on evidence the worst of Europe’s economic slump may be over. The high-range close sets the stage for a steady opening on Friday. Stochastics and the RSI remain neutral to bullish signalling that sideways to higher prices are possible near-term. Closes above the 20-day moving average crossing would temper the near-term bullish outlook.

USD/CHF closed higher due to short covering on Thursday as it consolidated some of this month's decline. The high-range close sets the stage for a steady opening on Friday. Stochastics and the RSI remain neutral to bullish signalling that sideways to higher prices are possible near-term. Closes above the 20-day moving average crossing would temper the near-term bullish outlook.

USD/CAD closed higher on Thursday and is trading above the 10-day moving average crossing. The high-range close sets the stage for a steady to higher opening on Friday. Stochastics and the RSI are turning neutral to bullish hinting that sideways to higher prices are possible near-term. Closes above the 10-day moving average crossing would temper the near-term bearish outlook in the market.

USD/JPY closed higher due to short covering on Thursday as it consolidated some of this month's decline. The high-range close sets the stage for a steady opening on Friday. Stochastics and the RSI remain neutral to bullish signalling that sideways to higher prices are possible near-term. Closes above the 20-day moving average crossing would temper the near-term bullish outlook.

FOREX-Yen Rises Vs Dollar on U.S. Bank Jitters

TOKYO, April 23 (Reuters) - The yen rose broadly on Thursday, climbing back towards a three-week high against the dollar touched the previous day, as U.S. stock futures fell and concerns about the banking sector re-emerged after disappointing earnings from Morgan Stanley.

S&P futures fell 0.3 percent SPc1 after U.S. stocks faced a late hour sell-off on Wednesday, with investors concerned about the outlook for banks ahead of the U.S. government's "stress test" results.

The Wall Street Journal reported that U.S. banks will be briefed by regulators as early as Friday on how they performed in the tests before the results are made public later.

Some estimates of banks' likely losses that were used in the stress tests were tougher than expected, the newspaper said.

That fanned fears about more losses at the banks included in the tests after some upbeat earnings reports earlier this month, prompting investors to cut riskier trades in which they had sold the yen against other majors, traders said.

"The currency market is lacking a clear direction, just as U.S. stocks are," said a trader at a Japanese bank.

"We have two big factors that are swinging the markets between optimism and pessimism: the eventual state of the troubled U.S. automakers, and the results of bank stress tests," the trader said.

The dollar fell 0.2 percent to 97.79 yen , sliding back near a three-week trough of 97.57 yen touched on Wednesday.

The euro fell 0.4 percent to 126.99 and dropped 0.1 percent to $1.2987 .

The Australian dollar gave up earlier gains against the yen and the dollar as most Asian stocks fell and metals like Shanghai copper dropped amid the bleak outlook for the global economy.

The International Monetary Fund cut growth forecasts for every major economy, in line with the fund's assessment that the world was in its deepest post-World War Two recession.

Market Commentary

MARKET COMMENTARY OF 23RD APRIL 2009

GBP/USD posted an inside day with a lower on Wednesday as it extends its decline against the dollar. The low-range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI remain neutral to bearish signalling that sideways to lower prices are possible near-term. Closes above the 10-day moving average crossing would confirm that a short-term low has been posted. If it renews this year's decline, monthly support crossing is the next downside target.

EUR/USD closed higher due to short covering on Wednesday as it consolidated some of this month's decline. The mid-range close sets the stage for a steady opening on Thursday. Stochastics and the RSI remain neutral to bullish signalling that sideways to higher prices are possible near-term. Closes above the 20-day moving average crossing would temper the near-term bullish outlook.

USD/CHF closed higher due to short covering on Wednesday as it consolidated some of this month's decline. The mid-range close sets the stage for a steady opening on Thursday. Stochastics and the RSI remain neutral to bullish signalling that sideways to higher prices are possible near-term. Closes above the 20-day moving average crossing would temper the near-term bullish outlook.

USD/JPY posted a key reversal and closed higher due to short covering on Wednesday as it consolidated some of this month's decline. The mid-range close sets the stage for a steady opening on Thursday. Stochastics and the RSI remain neutral to bullish signalling that sideways to higher prices are possible near-term. Closes above the 20-day moving average crossing would temper the near-term bullish outlook.

Yen Rises on Concern U.S. Stress Tests May Show Crisis Not Over

April 22 (Bloomberg) -- The yen rose against all 16 of the most-active currencies on speculation stress tests on the largest U.S. banks will show additional loan losses, boosting demand for the yen as a refuge from the global financial crisis.

Japan’s currency also advanced after a government report showed a slump in the nation’s exports slowed in March, ending a four-month streak of record drops and adding to signs the recession may have started to ease. Australia’s dollar slid against the greenback and the yen after a report showed the nation’s inflation rate fell to an 18-month low, giving policy makers more room to cut interest rates.

“Investors remain averse to taking on risk amid lingering worries over the financial turmoil,” said Tsutomu Soma, a bond and currency dealer at Okasan Securities Co. in Tokyo. The yen was bought because it is a “safe-haven” currency, he said.

The yen climbed to 126.99 per euro as of 7:55 a.m. in London from 127.81 in New York yesterday, when it reached 126.09, the highest level since March 16. Japan’s currency advanced to 98.22 against the dollar from 98.73.

The dollar was at $1.2931 against the euro from $1.2948 in New York yesterday. It touched $1.2889 on April 20, the strongest since March 16.

Australia’s dollar declined to 69.20 U.S. cents from 71.14 cents in New York yesterday, and dropped to 69.20 yen from 70.24 yen. New Zealand’s dollar fell to 55.77 cents from 56.40 cents, and weakened to 54.58 yen from 55.66 yen.

The British pound fell to $1.4609 versus the British pound from $1.4673 before Chancellor of the Exchequer Alistair Darling delivers today a U.K. budget with what may be the biggest deficit on record.

Market Commentary

MARKET COMMENTARY ON 22ND APRIL 2009

GBP/USD closed higher due to short covering on Tuesday as it consolidated some of this month's decline. The mid-range close sets the stage for a steady opening on Wednesday. Stochastics and the RSI remain neutral to bullish signalling that sideways to higher prices are possible near-term. Closes above the 20-day moving average crossing would temper the near-term bullish outlook.

EUR/USD closed higher due to short covering on Tuesday as it consolidated some of this month's decline. The mid-range close sets the stage for a steady opening on Wednesday. Stochastics and the RSI remain neutral to bullish signalling that sideways to higher prices are possible near-term. Closes above the 20-day moving average crossing would temper the near-term bullish outlook. closed higher due to short covering on Tuesday as it consolidated some of this month's decline. The mid-range close sets the stage for a steady opening on Wednesday. Stochastics and the RSI remain neutral to bullish signalling that sideways to higher prices are possible near-term. Closes above the 20-day moving average crossing would temper the near-term bullish outlook.

USD/CHF closed higher due to short covering on Tuesday as it consolidated some of this month's decline. The mid-range close sets the stage for a steady opening on Wednesday. Stochastics and the RSI remain neutral to bullish signalling that sideways to higher prices are possible near-term. Closes above the 20-day moving average crossing would temper the near-term bullish outlook.

USD/JPY closed lower on Tuesday as it extends the decline off March's high. The low-range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI remain bearish signalling that sideways to lower prices are possible near-term. If it extends today's decline, the reaction low crossing is the next downside target. Closes above the 20-day moving average crossing are needed to confirm that a short-term low has been posted.

FOREX-Euro up from near 1-month lows; ZEW eyed

LONDON, April 21 (Reuters) - The euro rose on Tuesday after hitting one-month lows against the dollar and yen as investors took profits, although nervousness about corporate earnings announcements and the health of banks kept gains in check.

The yen crosses and commodities currencies have taken the brunt of the impact from a steep slide in U.S. equities after Bank of America (BAC.N) reported a jump in non-performing assets, underscoring the banking sector's troubles.

The Japanese currency hit its highest since mid-March against the euro and a three-week peak against the British pound as the bank sector concerns tempered risk appetite and triggered buying back of yen.

It later retreated after its gains cleared out near-term sell orders for its rivals, helping the euro, sterling and the Australian dollar to recover some ground against the dollar as well, but that is likely to prove short-lived, analysts say.

"The recent correction will likely continue and we may see euro and cable and Aussie dollar pull lower in the next couple of days," said Ian Stannard, senior foreign exchange strategist at BNP Paribas.

By 0753 GMT, the euro rose 0.2 percent against the dollar to $1.2947 , but was not far from a one-month low of $1.2888 hit on trading platform EBS on Monday.

The euro was up 0.2 percent at 126.77 yen after hitting a low of 126.10 yen on EBS.

The dollar was flat at 97.94 yen , up from a three-week low of 97.66 yen hit on Monday.

Data on Tuesday is expected to show German investor sentiment rose into positive territory for the first time in roughly two years. The ZEW think tank's economic sentiment index is forecast to rise to 1.5 in March from -3.5 the previous month.

Yen Weakens, Snaps 3-Day Gain, as Trade Deficit May Damp Demand

April 21 (Bloomberg) -- The yen declined for the first time in four days against the euro and the dollar before a government report tomorrow that may show Japan posted a trade deficit last month, damping the currency’s appeal.

Japan’s currency fell from a five-week high versus the euro as technical indicators showed recent gains were excessive. The euro climbed from the lowest in a month against the dollar on speculation a German report today will show investor confidence turned positive for the first time in two years. South Korea’s won slid the most in two weeks as widening U.S. credit losses tempered demand for emerging-market assets.

“The Japanese economy is in a terrible way and people are very pessimistic,” said Sean Callow, senior currency strategist in Sydney at Westpac Banking Corp., Australia’s biggest bank by market value. “If we get much further deterioration in the trade position, it should be a yen negative.”

The yen dropped to 127.38 per euro as of 6:15 a.m. in London from 126.48 in New York yesterday. It gained 3 percent against the euro in the past week and earlier reached 126.09, the strongest level since March 16. Japan’s currency declined to 98.37 per dollar from 97.89, and weakened to 69.11 against Australia’s dollar from 68.20.

The greenback traded at $1.2952 per euro from $1.2921 yesterday, when it reached $1.2889, the highest level since March 16. The won fell 1.2 percent, the most since April 8, to 1,350.25 per dollar.

Trade Deficit

The yen weakened against 15 of the 16 most-traded currencies before Japan’s finance ministry releases its trade report in Tokyo tomorrow. The nation had a trade deficit of 27 billion yen ($275 million) in March, the fifth shortfall in six months, according to a Bloomberg News survey of economists.

The yen fell from a five-week high versus the euro as the European currency’s 14-day stochastic oscillator against Japan’s dropped to 11 today, below the 20 level that signals the euro may have fallen too quickly and is poised to strengthen.

“There’s a sense the yen has been overbought,” said Toshihiko Sakai, head of trading for foreign exchange and financial products in Tokyo at Mitsubishi UFJ Trust & Banking Corp., a unit of Japan’s largest bank. “Market participants are probably unwinding long yen positions.” A long position is a bet an asset will gain.

Market Commentary

MARKET COMMENTARY ON 21ST APRIL 2009

GBP/USD closed lower on Monday as it extends the decline off March's high. The low-range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI remain bearish signalling that sideways to lower prices are possible near-term. If it extends today's decline, the reaction low crossing is the next downside target. Closes above the 20-day moving average crossing are needed to confirm that a short-term low has been posted.

EUR/USD closed lower on Monday as it extends the decline off March's high. The low-range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI remain bearish signalling that sideways to lower prices are possible near-term. If it extends today's decline, the reaction low crossing is the next downside target. Closes above the 20-day moving average crossing are needed to confirm that a short-term low has been posted.

USD/CHF closed sharply lower on Friday and below the previous reaction low crossing. The low-range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI are diverging but are bearish signalling that sideways to lower prices are possible near-term. If it extends today's decline, March's low crossing is the next downside target. Closes above the reaction high crossing would confirm that a short-term low has been posted.

USD/JPY closed higher due to short covering on Monday as it consolidated some of this month's decline. The mid-range close sets the stage for a steady opening on Tuesday. Stochastics and the RSI remain neutral to bullish signalling that sideways to higher prices are possible near-term. Closes above the 20-day moving average crossing would temper the near-term bearish outlook. If it extends this month's decline, the 75% retracement level of last fall's rally crossing is the next downside target.

Euro Falls to 1-Month Low on Concern ECB Disagreement to Deepen

April 20 (Bloomberg) -- The euro fell to a one-month low against the dollar and weakened against the yen as European Central Bank policy makers disagreed on the measures needed to combat the recession.

The euro fell versus 10 of the 16 most-active currencies after ECB Executive Board member Lorenzo Bini Smaghi said the bank’s benchmark 1.25 percent interest rate is “very close” to its floor, Financial Times Deutschland reported. Two council members last week said they may support a rate under 1 percent. The Dollar Index approached the strongest level in three weeks on speculation a U.S. report today will show a gauge of the economy’s outlook improved.

“Investors fear that European policy makers aren’t doing enough to safeguard the economy,” said Danica Hampton, a currency strategist at Bank of New Zealand Ltd. in Wellington. “Any sign that the euro zone economy is deteriorating will likely add to the downward pressure on the euro.”

The euro dropped to $1.2992 as of 7:49 a.m. in London from $1.3044 in New York on April 17. It earlier declined to $1.2967, the lowest level since March 17. Europe’s currency fell to 128.53 yen from 129.33 yen, after touching 128.17, the weakest since March 30.

The yen climbed to 98.93 per dollar from 99.16 last week. It advanced to 56.10 versus the New Zealand dollar from 56.32, and rose to 71.13 versus the Australian currency from 71.64.

Market Commentary

MARKET COMMENTARY ON 20TH APRIL 2009

GBP/USD closed lower on Friday due to profit taking as it consolidated some of this month's decline. The low-range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI are overbought and are turning neutral hinting that a short-term top might be in or is near. Closes below the 20-day moving average crossing at 1.4630 are needed to confirm that a short-term top has been posted. If June extends the rally off March's low, January's high crossing at 1.5280 is the next upside target. First resistance is Monday's high crossing at 1.4960. Second resistance is January's high crossing at 1.5280. First support is today's low crossing at 1.4755. Second support is the 20-day moving average crossing at 1.4630.

EUR/USD closed lower on Friday as it extends the decline off March's high. The low-range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near-term. If June extends today's decline, the reaction low crossing at 1.2840 is the next downside target. Closes above the 20-day moving average crossing at 1.3330 are needed to confirm that a short-term low has been posted. First resistance is the 10-day moving average crossing at 1.3245. Second resistance is the 20-day moving average crossing at 1.3330. First support is today's low crossing at 1.3020. Second support is the reaction low crossing at 1.2840.

USD/CHF closed sharply lower on Friday and below the previous reaction low crossing. The low-range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI are diverging but are bearish signaling that sideways to lower prices are possible near-term. If June extends today's decline, March's low crossing is the next downside target. Closes above the reaction high crossing would confirm that a short-term low has been posted.

USD/CAD closed lower on Friday as it consolidates some of this month's rally but remains above the 10-day moving average. The mid-range close sets the stage for a steady opening on Monday. Stochastics and the RSI are overbought and are turning bearish signaling that a short-term top might be in or is near. Closes below the 20-day moving average crossing are needed to confirm that a short-term top has been posted. If June extends the rally, January's high crossing is the next upside target.

USD/JPY closed slightly higher due to short covering on Friday as it consolidated some of this month's decline. The mid-range close sets the stage for a steady opening on Monday. Stochastics and the RSI remain neutral to bullish signaling that sideways to higher prices are possible near-term. Closes above the 20-day moving average crossing at 100.75 would temper the near-term bearish outlook. If June extends this month's decline, the 75% retracement level of last fall's rally crossing at 98.00 is the next downside target.

Euro Falls After Trichet Says ECB Must Do Everything Possible

April 17 (Bloomberg) -- The euro fell to a one-month low against the dollar after European Central Bank President Jean- Claude Trichet said the central bank must do everything possible to restore confidence, signaling further interest-rate cuts.

The Dollar Index rose for a fourth day before a U.S. report today that may show consumer confidence in the world’s largest economy rose for a second month, providing signs its recession may be easing. South Korea’s won was set for a sixth weekly advance, its best winning streak in 18 months, on optimism record-low borrowing costs and government stimulus plans will help salvage an economy on the brink of recession.

“Economies around the world, particularly Europe, are still in a recession,” said Yuji Saito, head of the foreign- exchange group in Tokyo at Societe Generale SA, France’s third- largest bank. “ECB officials are increasing their rhetoric that they’ll cut rates. The bias for the euro is to the downside.”

The euro fell to $1.3090 at 6:20 a.m. in London from $1.3186 in New York yesterday. It reached $1.3068, the lowest since March 18, and was set for a second weekly loss. The currency slid to 130.22 yen from 130.90 yen. The dollar traded at 99.47 yen from 99.27 yen, and was poised for a two-week loss.

The won rose 0.1 percent to 1,330.75 per dollar, according to data compiled by Bloomberg. It touched a three-month high of 1,298.05 on April 10 and gained 0.1 percent this week.

Trichet also said in a speech in Tokyo today that any ambiguity in the direction of policy will delay a recovery in the 16-nation region’s economy, damping speculation that there is policy disagreement within the central bank.

‘Delay the Return’

“Any ambiguity in our medium-term policy direction would delay the return of sustainable prosperity, because that would undermine confidence, which is the most precious ingredient in the present circumstances,” Trichet said.

ECB council member Axel Weber said on April 15 the bank shouldn’t cut interest rates below 1 percent, putting him at odds with policy makers who say borrowing costs must fall close to zero. Council members George Provopoulos from Greece and Athanasios Orphanides of Cyprus have indicated they may support cutting the 1.25 percent target rate below 1 percent and purchasing debt securities to pump money into the economy.

The ECB probably will announce May 7 whether it will follow counterparts in the U.S. and U.K. in pumping money into the economy by purchasing assets. The central bank will lower the benchmark rate by a quarter-percentage point to 1 percent at the May meeting, according to a Bloomberg News survey of economists.

Gains in the yen were tempered on speculation a rise in Asian stocks will spur investors to buy riskier assets. The MSCI Asia-Pacific Index of regional shares rose 0.7 percent and the Nikkei 225 Stock Average climbed 1.4 percent.

‘Fear Gauge’

The VIX index, a measure of market volatility known as Wall Street’s “fear gauge,” fell as low as 34.88 yesterday, the smallest figure since Sept. 26, indicating traders are becoming more confident about stock market advances.

“When investors are in the mood to take on risk, they sell the yen and the dollar,” said Michiyoshi Kato, senior vice president of foreign-currency sales in Tokyo at Mizuho Corporate Bank Ltd., a unit of Japan’s second-largest bank by assets.

The Dollar Index advanced as economists estimated the Reuters/University of Michigan preliminary index of consumer sentiment increased to 58.5 in April from 57.3 in March, according to a Bloomberg survey. The gauge will be released at 10 a.m. in New York.

Initial jobless claims in the U.S. decreased by 53,000 to 610,000 in the week ended April 11, the fewest since January, the Labor Department said yesterday in Washington.

‘Long’ Dollar

“Traditionally, the U.S. economy picked up ahead of the U.K., Asia and the euro zone,” Benedikt Germanier, a currency strategist at UBS AG in Stamford, Connecticut, wrote in a research note yesterday. “Accordingly, we would favor to be long the U.S. dollar and the British pound against the euro.”

A long position is a bet that an asset will rise. The Dollar Index, which the ICE uses to track the greenback against the euro, yen, pound, Canadian dollar, Swiss franc and Swedish krona, rose to 85.605 from 85.227 yesterday.

Euro Falls to Lowest in a month Vs DLR after Trichet

TOKYO, April 17 (Reuters) - The euro fell to its lowest in a month against the dollar on Friday, dropping below $1.3090 for the first time since mid-March and triggering sell orders that deepened its fall.

The euro fell as far as $1.3065 from just above $1.3100 after ECB President Jean-Claude Trichet said he appreciated U.S. comments that a strong dollar was in its interests.

Market Commentary

MARKET COMMENTARY ON 17TH APRIL 2009

GBP/USD closed lower on Thursday despite rallying to $1.50 for the first time in three months. The mid-range close sets the stage for a steady to lower opening on Friday. Stochastics and the RSI remain bearish signalling that sideways to lower prices are possible near-term. Closes below last week's low crossing would confirm that a short-term top has been posted. If it renews last week's rally, March's high crossing is the next upside target.

EUR/USD closed lower on Thursday as it consolidates last week's rally. The mid-range close sets the stage for a steady to lower opening on Friday. Stochastics and the RSI remain bearish signalling that sideways to lower prices are possible near-term. Closes below last week's low crossing would confirm that a short-term top has been posted. If it renews last week's rally, March's high crossing is the next upside target.

USD/CHF closed lower on Thursday as it lost momentum versus the dollar. The mid-range close sets the stage for a steady to lower opening on Friday. Stochastics and the RSI remain bearish signalling that sideways to lower prices are possible near-term. Closes below last week's low crossing would confirm that a short-term top has been posted. If it renews last week's rally, March's high crossing is the next upside target.

USD/JPY closed lower on Thursday as it lost momentum versus the dollar. The mid-range close sets the stage for a steady to lower opening on Friday. Stochastics and the RSI remain bearish signalling that sideways to lower prices are possible near-term. Closes below last week's low crossing would confirm that a short-term top has been posted. If it renews last week's rally, March's high crossing is the next upside target.

Asian Shares Pare Gains after China Disappoints

HONG KONG (Reuters) - Asian stocks pulled back from a six-month high on Thursday, while the safe-haven yen gained after China posted its slowest ever quarterly growth in a signal of the frailty of the global economy.

A day after a mixed set of economic data from the United States, it was China's turn, saying its economy grew a slower-than-expected 6.1 percent in the first quarter, but posting other data, such as industrial output, that signaled some optimism.

After an impressive month-long rally in global equities investors still appear conflicted between seeing glimmers of hope that the world economic downturn is showing signs of easing and other indicators that point to more pain ahead.

Riskier assets, such as oil, also pared gains but not by too much, helped as well by speculation that China could implement a new stimulus package reinforced hopes that policy maker worldwide are in battle mode amidst the worst global downturn in decades.

Central bankers are cutting interest rates and flooding liquidity into financial systems, further reinforcing some of these hopes.

"No doubt China has felt the ramifications of the global crisis and growth has moderated, but the economy is showing signs of stabilizing and we can expect a recovery in the second half," said Su-Lin ong, a senior economist at RBC Capital Markets in Sydney.

The MSCI index of Asia-Pacific stocks outside Japan gained 0.8 percent as of 0245 GMT. The index had gained as much as 2.1 percent earlier in the day that brought it to its highest since October 15.

Contributing to the reversal, indexes in Hong Kong erased earlier gains to edge lower, while shares in Shanghai were down 0.5 percent.

However, other major indexes maintained their strength, with South Korea and Taiwan up nearly 2 percent each.

Japan's Nikkei average was up 2.9 percent.

Contradictory signals are also afflicting the U.S. economy.

On Wednesday, data showed U.S. consumer prices in March posted their first 12-month drop in nearly 54 years, while industrial production slipped further. However, other reports suggest the steep descent in the world's largest economy may be slowing.

The Federal Reserve said economic activity in some parts of the economy appeared to be stabilizing, and other data showed that a decline in factory activity in New York state eased this month and that national homebuilder sentiment jumped.

The yen benefited from the uncertainty, as it typically does at times of volatility, while investors sold riskier currencies.

Market Commentary

MARKET COMMENTARY ON 16TH APRIL 2009

GBP/USD closed higher on Wednesday as it extends this week's rally. The high-range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI remain bearish signalling that sideways to lower prices are possible near-term. Closes below last week's low crossing would confirm that a short-term top has been posted. If it renews last week's rally, March's high crossing is the next upside target.

EUR/USD closed lower on Wednesday as it consolidates some of this week's rally. The mid-range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI remain bearish signalling that sideways to lower prices are possible near-term. Closes below last week's low crossing would confirm that a short-term top has been posted. If it renews last week's rally, March's high crossing is the next upside target.

USD/CHF closed lower on Wednesday as it continues to consolidate Monday's rally. The mid-range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI remain bearish signalling that sideways to lower prices are possible near-term. Closes below last week's low crossing would confirm that a short-term top has been posted. If it renews last week's rally, March's high crossing is the next upside target.

USD/JPY closed lower on Wednesday as it consolidates some of this week's rally. The mid-range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI remain bearish signalling that sideways to lower prices are possible near-term. Closes below last week's low crossing would confirm that a short-term top has been posted. If it renews last week's rally, March's high crossing is the next upside target.

Asia Stocks Retreat, China Hopes Limit Drop

HONG KONG (Reuters) - Asian stocks pulled back from six-month highs on Wednesday but held up after the drop on Wall Street overnight, with hopes for more Chinese stimulus spending helping offset reports of weak first-quarter growth.

Investors were cashing in on gains after many equity markets have jumped between 20 percent and 30 percent since early March, with Asian markets leading the charge higher as investors counted on China helping drive a regional growth pick-up, analysts said.

Higher-yielding currencies such as the Australian dollar relinquished some of their hefty gains in the past month after data showing a surprisingly big drop in U.S. retail sales last month highlighted the bumpy road to recovery in the recession-hit global economy.

But gains in safe-have government bonds were limited as investors fret about the wave of coming supply to fund government spending aimed at reviving growth, as well as signs that Asian central banks may have finished with their aggressive rate cuts.

The Shanghai Composite index -- the world's best performing market this year after being the hardest hit in 2008 -- held up the best, dipping just 0.5 percent.

A report on the Shanghai Securities News website said that Chinese annual economic growth, due to be released on Thursday, was between 6.0 percent and 6.8 percent in the January-March quarter, what would be the lowest on quarterly records going back to 1992.

Speculation has been rife in the past few days that China might announce a new package focused on boosting consumer spending on top of the $585 billion plan aimed at infrastructure spending.

"Investors are being more cautious, wanting to confirm quarterly results and outlook comments before making investment decisions," said Kim Joon-kie, a market analyst at SK Securities in Seoul.

The MSCI index of Asia-Pacific stocks outside Japan fell 1.1 percent, led by a drop in consumer discretionary and technology shares -- some of the biggest gainers in the rally.

On Tuesday the U.S. S&P 500 shed 2 percent, and S&P futures were pointing to further losses with a drop of 0.6 percent in Asia.

After the closing bell, Intel Corp said the worst was over for the battered tech sector but its shares tumbled after it failed to give a clear revenue forecast, citing the economic uncertainty.

U.S. corporate earnings season has kicked into high gear this week, stirring some caution among investors.

Japan's Nikkei average fell 0.8 percent, pulling further away from a three-month peak reached last week.

Market Commentary

MARKET COMMENTARY ON 15TH APRIL 2009

GBP/USD closed higher on Tuesday as it extends Monday's rally, breaking out above March's high crossing. The high-range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI remain bearish signalling that sideways to lower prices are possible near-term. Closes below last week's low crossing would confirm that a short-term top has been posted. If it renews last week's rally, March's high crossing is the next upside target.

EUR/USD closed lower on Tuesday as it consolidates some of Monday's rally. The mid-range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI remain bearish signalling that sideways to lower prices are possible near-term. Closes below last week's low crossing would confirm that a short-term top has been posted. If it renews last week's rally, March's high crossing is the next upside target.

USD/CHF closed lower on Tuesday as it consolidates some of Monday's rally. The mid-range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI remain bearish signalling that sideways to lower prices are possible near-term. Closes below last week's low crossing would confirm that a short-term top has been posted. If it renews last week's rally, March's high crossing is the next upside target.

USD/JPY closed higher on Tuesday as it extends Monday's rally. The high-range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI remain bearish signalling that sideways to lower prices are possible near-term. Closes below last week's low crossing would confirm that a short-term top has been posted. If it renews last week's rally, March's high crossing is the next upside target.

Asian Shares Advance Despite Plenty of Fears

HONG KONG (Reuters) - Asian shares rose to a six-month high on Tuesday after Goldman Sachs' stronger-than-expected profit signaled the worst could be behind for U.S. banks, emboldening investors to chase after riskier assets.

Asian credit markets continued to improve, while the yen, a currency that benefits during fearful times, fell to a six-month low against the Australian dollar.

However, there are also plenty of doubts about how much longer the rally in Asian stock markets can be sustained given that some analysts believe the full brunt of the deep global recession has yet to be reflected.

Singapore eased monetary policy to effectively devalue its currency after posting on Tuesday its worst quarterly economic contraction ever, while a forecast for weaker demand for oil by the International Energy Agency sent crudes tumbling to below $50 a barrel.

Asian automaker shares slid on fears General Motors Corp (GM.N) was being pushed into bankruptcy by the U.S. government, helping send Japan's Nikkei average .N225 down 1.3 percent.

"If GM were to go bankrupt, that would raise questions about what would happen to Japanese auto-parts makers and Japanese automakers' dealer networks. The implications are broad," said Takahiko Murai, general manager of equities at Nozomi Securities.

"Although the financial sector seems to have seen the worst, a recovery for manufacturers has been slow and worries remain."

The MSCI index of Asia-Pacific stocks outside Japan .MIAPJ0000PUS at one point hit its highest since mid-October, when shares were in the midst of a slide following the collapse of Lehman Brothers in the previous month.

The MSCI gauge was up 1.5 percent as of 0240 GMT, as major markets such as in Hong Kong .HSI and Australia .AXJO gained more than 2 percent each after a four-day weekend also seen in other Asian countries.

The gains came after Goldman Sachs Group Inc (GS.N) on Monday posted much higher-than-expected first-quarter profit as it took more trading risk, and said it plans a $5 billion common share sale to help pay back government funds.

The results followed Wells Fargo & Co's (WFC.N) surprising announcement last week that it expects to report a record first-quarter profit.

Though Goldman and Wells Fargo did not suffer as much as other U.S. financial firms, at least their announcements were seen providing some signs the U.S. banking industry is finally stabilizing after months of credit-related losses.

Markets in South Korea , Taiwan and Shanghai .SSEC were largely unchanged on the day.

Market Commentary

MARKET COMMENTARY ON 14TH APRIL 2009

GBP/USD closed higher on Monday as it extends last week's decline. The high-range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are overbought and are neutral to bearish signalling that sideways to higher prices are possible near-term. Closes below the 20-day moving average crossing are needed to confirm that a short-term top has been posted. If it extends the rally off March's low, January's high crossing is the next upside target.

EUR/USD closed lower on Monday and below the 20-day moving average crossing. The low-range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are bearish signalling that sideways to lower prices are possible near-term. Closes below last Monday's low crossing are needed to confirm that a short-term top has been posted. If it renews last week's rally, March's high crossing is the next upside target.

USD/CHF closed higher on Monday and below the 20-day moving average crossing. The high-range close sets the stage for a steady to higher opening on Teusday. Stochastics and the RSI remain bearish signalling that sideways to lower prices are possible near-term. Closes below last Monday's low crossing would confirm that a short-term top has been posted. If it renews last week's rally, March's high crossing is the next upside target.

USD/JPY closed higher on Monday as it consolidated some of this month's decline. The high-range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are oversold but are neutral to bullish signalling that sideways to higher prices are possible near-term. Closes above the 20-day moving average crossing would temper the near-term bearish outlook. If it extends this month's decline, the 75% retracement level of last fall's rally crossing is the next downside target.

FOREX-Dollar edges up Vs Yen before US Bank earnings

TOKYO, April 13 (Reuters) - The dollar edged up against the yen in quiet trade on Monday with many overseas players still away for the Easter holiday and others waiting until the U.S. corporate earnings season gets into full swing.

U.S. banks including Goldman Sachs (GS.N), JPMorgan (JPM.N) and Citigroup (C.N) are set to report first-quarter results this week, and traders are keen to see how stock markets react to these earnings reports.

But after a relaxation of industry accounting standards, analysts say it will be difficult to gauge losses from bad loans in areas like real estate and consumer credit. "Market participants generally stayed on the sidelines before the U.S. bank earnings and they are waiting for stocks' moves following the results," said a dealer at a Japanese bank.

Last week, the dollar rose against the yen, buoyed by a rally in U.S. shares after positive earnings guidance from U.S. bank Wells Fargo (WFC.N). "If U.S. earnings results show signs that the U.S. is pulling away from the worst of the economic downturn, risk appetite is expected to grow, putting pressure on the yen," said Yoshihisa Kanzaki, a currency dealer at Shinkin Central Bank.

Others said the currency market has priced in positive U.S. earnings figures, so downward pressure on the yen could be limited even if the results are better than expected, and that the market is more likely to swayed by negative surprises.

The dollar was trading around 100.37 yen compared with 100.22 yen in late Tokyo trading on Friday. The U.S. currency touched 101.45 yen last week, its highest in six months.

The euro was quoted at $1.3165 , down from $1.3186 on Friday when it also slipped to $1.3090, a level not seen since mid-March.

Against the yen, the euro was at 132.16 yen , down from 132.24 yen. It climbed to 137.42 yen last week, its highest point in six months.

The Australian dollar rose above 73.00 yen , the highest since October, before falling back to 72.51 yen.

Market Commentary

MARKET COMMENTARY ON 13TH APRIL 2009

GBP/USD closed lower on Thursday as it extends last week's decline. The mid-range close sets the stage for a steady opening on Monday. Stochastics and the RSI are overbought and are neutral to bearish signalling that sideways to higher prices are possible near-term. Closes below the 20-day moving average crossing are needed to confirm that a short-term top has been posted. If it extends the rally off March's low, January's high crossing is the next upside target.

EUR/USD closed lower on Thurs and below the 20-day moving average crossing. The low-range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI are bearish signalling that sideways to lower prices are possible near-term. Closes below last Monday's low crossing are needed to confirm that a short-term top has been posted. If it renews last week's rally, March's high crossing is the next upside target.

USD/CHF closed higher on Thursday and below the 20-day moving average crossing. The high-range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI remain bearish signalling that sideways to lower prices are possible near-term. Closes below last Monday's low crossing would confirm that a short-term top has been posted. If it renews last week's rally, March's high crossing is the next upside target.

USD/JPY closed higher on Thursday as it consolidated some of this month's decline. The high-range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI are oversold but are neutral to bullish signalling that sideways to higher prices are possible near-term. Closes above the 20-day moving average crossing would temper the near-term bearish outlook. If it extends this month's decline, the 75% retracement level of last fall's rally crossing is the next downside target.

Market Commentary

MARKET COMMENTARY 09TH APRIL 2009

GBP/USD posted an inside day with a lower close on Wednesday as it extends this week's decline. The mid-range close sets the stage for a steady opening on Thursday. Stochastics and the RSI are overbought and are turning neutral to bearish signaling that sideways to higher prices are possible near-term. Closes below the 20-day moving average crossing at 1.4435 are needed to confirm that a short-term top has been posted. If June extends the rally off March's low, January's high crossing at 1.5150 is the next upside target. First resistance is Monday's high crossing at 1.4962. Second resistance is January's high crossing at 1.5150. First support is the 10-day moving average crossing at 1.4555. Second support is the 20-day moving average crossing at 1.4435.

EUR/USD closed lower on Wednesday as it extends Tuesday's close below the 20-day moving average crossing at 1.3330. The mid-range close sets the stage for a steady opening on Thursday. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near-term. Closes below last Monday's low crossing at 1.3150 are needed to confirm that a short-term top has been posted.

USD/CHF closed lower on Wednesday and below the 20-day moving average crossing. The low-range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near-term. Closes below last Monday's low crossing would confirm that a short-term top has been posted. If June renews last week's rally, March's high crossing is the next upside target.

USD/CAD closed slightly higher on Wednesday as it consolidates above the 10-day moving average. The high- range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI remain neutral to bullish signaling that sideways to higher prices are possible near-term. If June extends the rally, March's high crossing is the next upside target. Closes below last Wednesday's low crossing are needed to confirm that a short-term top has been posted.

USD/JPY closed higher due to short covering on Wednesday as it consolidated some of this month's decline. The high-range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are oversold but are turning neutral to bullish signaling that sideways to higher prices are possible near-term. Closes above the 20-day moving average crossing at 101.75 would temper the near-term bearish outlook. If June extends this month's decline, the 75% retracement level of last fall's rally crossing at 98.10 is the next downside target.

Market Commentary

MARKET COMMENTARY ON 08TH APRIL 2009

GBP/USD closed higher due to short covering on Tuesday as it consolidated some of Monday's decline. The high- range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If June extends the rally off March's low, January's high crossing at 1.5280 is the next upside target. Closes below the 20-day moving average crossing at 1.4400 are needed to confirm that a short-term top has been posted. First resistance is Monday's high crossing at 1.4960. Second resistance is January's high crossing at 1.5280. First support is the 10-day moving average crossing at 1.4535. Second support is the 20- day moving average crossing at 1.4400.

EUR/USD closed lower on Tuesday and below the 20-day moving average crossing at 1.3300. The low-range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near-term. Closes below last Monday's low crossing at 1.3120 are needed to confirm that a short- term top has been posted.

USD/CHF closed lower on Tuesday as it extended Monday's decline. The mid-range close sets the stage for a steady opening on Wednesday. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near- term. Closes below the 20-day moving average crossing would confirm that a short-term top has been posted. If June extends last week's rally, March's high crossing is the next upside target.

USD/CAD closed higher on Tuesday as it consolidates above the 10-day moving average. The high-range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near-term. If June extends the rally, March's high crossing is the next upside target. Closes below last Wednesday's low crossing would confirm that a short-term top has been posted.

USD/JPY closed higher due to short covering on Tuesday as it consolidated some of this month's decline. The mid-range close sets the stage for a steady opening on Wednesday. Stochastics and the RSI remain neutral to bearish signaling that sideways to lower prices are possible near-term. If June extends this month's decline, the 75% retracement level of last fall's rally crossing at 98.10 is the next downside target. Closes above the 20-day moving average crossing at 101.50 would temper the near-term bearish outlook.

Market Commentary

MARKET COMMENTARY ON 07TH APRIL 2009

GBP/USD closed lower due to profit taking on Monday as it consolidated some of last week's rally. The low-range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near-term. If June extends the week's rally, January's high crossing at 1.5270 is the next upside target. Closes below the 20-day moving average crossing at 1.4349 are needed to confirm that a short-term top has been posted. First resistance is today's high crossing at 1.4960. Second resistance is January's high crossing at 1.5270. First support is the 10-day moving average crossing at 1.4530. Second support is the 20-day moving average crossing at 1.4349.

EUR/USD closed lower due to profit taking on Monday as it consolidated some of last week's rally but remains above the 10-day moving average crossing at 1.3390. The low-range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI have turned bullish signaling that sideways to higher prices are possible near-term. If June extends last week's rally, March's high crossing at 1.3730 is the next upside target. Closes below last Monday's low crossing at 1.3120 are needed to confirm that a short-term top has been posted.

USD/CHF posted a key reversal down on Monday as it consolidated some of last week's rally. The low-range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are still possible. If June extends last week's rally, March's high crossing is the next upside target. Closes below the 20-day moving average crossing would confirm that a short-term top has been posted.

USD/CAD closed lower on Monday due to profit taking as it consolidated some of last week's rally but remains above the 10-day moving average. The low-range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near-term. If June extends the rally, March's high crossing is the next upside target. Closes below last Wednesday's low crossing would confirm that a short- term top has been posted.

USD/JPY closed lower on Monday as it extends this month's decline. The low-range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI remain neutral to bearish signaling that sideways to lower prices are possible near-term. If June extends this month's decline, the 75% retracement level of last fall's rally crossing 98.10 is the next downside target. Closes above the 20-day moving average crossing 101.90 would temper the near-term bearish outlook.

3-mth Dollar, Euro, Sterling interbank rates slip

LONDON, April 6 (Reuters) - Interbank lending rates for three-month euro, dollar and sterling funds eased on Monday, as bets that the worst of the financial market crisis may be over suggested banks may be more willing to lend. Japan said it would spend at least $100 billion more to boost its economy, while global equities and commodities extended last week's rebound.

The picture wasn't uniformly rosy, however: two-year U.S. interest rate swaps spreads widened slightly and euro zone banks' overnight deposits at the European Central Bank rose to their highest in a month.

Three-month euro deposit rates were indicated between 1.20 and 1.43 percent versus 1.20-1.46 percent early in London on Friday.

Three-month dollar deposit rates were indicated in a range of between 1.10 and 1.45 percent, compared with 1.20-1.45 percent while three-month sterling funds were quoted in a 1.05-1.40 percent range compared with 1.38-1.48 percent.

Interbank deposit rates are only indicative prices of where banks are lending to each other, which institutions use as a base to set their own lending rates.