Daily Market Commentary - Share my thought for the day.

The U.K. global goods trade deficit widened unexpectedly in January to its largest level since August 2008 due to weaker exports.

mfsforex@hotmail.com — Tue, 09 Mar 2010 21:28:00 GMT

The U.S. dollar gained versus the euro and British pound on Tuesday, finding support amid ongoing worries about debt problems in the euro zone after Fitch Ratings warned that Portugal remained vulnerable to a downgrade.

The U.K. global goods trade deficit widened unexpectedly in January to its largest level since August 2008 due to weaker exports. Meanwhile, the rise in U.K. house prices slowed sharply in February as supply outpaces demand

China´s passenger car sales totaled 942,900 units in February, up 55.3pct on a year earlier. While the annual growth rate was down from 115.5pct in January, the results are affected by the timing of Chinese New Year.

People´s Bank of China Assistant Gov. Guo Qingping said the central bank will try to ´´prevent asset price bubbles from accumulating´´ this year but didn´t announce any new policy moves. He also said that the central bank wills ´´guard against inflationary expectations intensifying to spill over into real price rises.´´

AUDUSD: The Australian dollar was lower in Asia Tuesday on weakness in gold and the euro in the offshore session, but the local unit found some strength on a surge in business confidence and a private employment index which underscored the health of the country's job market.

Both bond and currency traders are now looking towards Chinese data due Wednesday and Australia's official employment numbers Thursday, which economists expect to show 15,000 jobs were added in February, keeping the jobless rate steady at 5.3%.

Australia's government bonds could face an interesting test of demand at the end of the month when the government ends its offer of a guarantee on term funding for banks, which could prompt some buyers to chase a higher return from non-guaranteed bank debt, rather than sovereign bonds.

We expect a range for today in AUDUSD rate of 0.9100 to 0.9180 (Long at 0.9100, stop loss at 0.9070, target OPEN)

EURUSD: The euro is coming under fresh selling pressure in Europe Tuesday as the market waits to see how U.S. President Barack Obama responds to a request from Greek Prime Minister George Papandreou for help in resolving his country's debt crisis.

Overall, global sentiment has slumped once again as investors take a more realistic view of plans for launching a European Monetary Fund to provide help for euro-zone countries in the future.

Meanwhile, the market is waiting to see how Papandreou's talks with Obama proceed and how much support it might provide for the debt-burdened euro-zone nation as it struggles to impose austerity measures for reducing its deficit.

We expect a range for today in EURUSD rate of 1.3580 to 1.3680 (Long at 1.3580, stop loss at 1.3550, target OPEN)

USDJPY: Dollar/yen currency options rose slightly in Asia Tuesday as the underlying exchange rate retraced some of the gains it made earlier in the week, boosting demand for protection against the dollar's downside.

The U.S. unit changed hands at Y89.98 as of 0300 GMT, down from Y90.33 in New York overnight. That prompted one-month at-the-money currency options to rise slightly to 11.10%/11.80%, compared with 11.05%/11.75% in New York

We expect a range for today in USDJPY rate of 88.80 to 89.50 (Long at 88.80, stop loss at 88.50, target OPEN)

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Growth in the index over the past six months has been the strongest in almost 16 years.

mfsforex@hotmail.com — Mon, 08 Mar 2010 21:45:00 GMT

The dollar turned higher versus the euro on Monday as U.S. stock markets turned lower, erasing an earlier move higher that currency traders interpreted as signs that investors were more comfortable with riskier assets.

A survey by the US Conference Board showed that the job market improved for the sixth straight month. The Employment Trends index lifted from 93.2 to 93.5 in February. Growth in the index over the past six months has been the strongest in almost 16 years.

AUDUSD: After surging over the weekend, the Australian dollar continued its upward move in Asian trade Monday as Friday's strong jobs report in the U.S. and further easing of Greek debt worries continued to drive investors into the local currency.

At the same time, both factors weighed on Australian bond prices, with the yield curve flattening sharply.

Commodities and equities prices were particularly helped, which in turn drove the Australian dollar to its highest point against the U.S. dollar in more than a month. At its peak, the Australian dollar hit US$0.9118, moving above US$0.9100 for the first time since Jan. 21.

We expect a range for today in AUDUSD rate of 0.8930 to 0.9030 (Short at 0.9030, stop loss at 0.9060, target OPEN)

EURUSD: European Monetary Fund to help troubled euro-zone countries, but she said details of

The Greek government last week presented a EUR4.8 billion austerity program that aims to cut the country's budget deficit to 8.7% of gross domestic product this year, from 12.7% last year. It faces its biggest challenge in April, when it will have to refinance more than EUR20 billion in debts.

International Monetary Fund and the E.U. can currently help non-euro-zone countries within Europe, but that there is no such facility for providing E.U. help to countries within the currency bloc.

We expect a range for today in EURUSD rate of 1.3600 to 1.3700 (Long at 1.3600, stop loss at 1.3570, target OPEN)

USDJPY: Dollar/yen currency options edged lower in Asia Monday as the underlying exchange rate remained stable, while encouraging signs of U.S. economic recovery look set to muffle demand for downside hedges against the U.S. unit.

The Japanese yen also rebounded, asserting its role as one of the most in-demand currencies when investors flee risky assets. The dollar gave up earlier gains to buy 90.29 yen, little changed from Friday.

Expectations are mounting that the U.S. unit may extend its gains after better-than-expected U.S. jobs data for February, announced Friday, added to a brightening outlook for the world's biggest economy and boosted player sentiment.

Reflecting this, some market participants sought one-month and three-month dollar-call/yen-put contracts with a Y92 strike price, an options dealer at a major Tokyo bank said. Dollar-call options make money when the U.S. unit rises above the strike price.

We expect a range for today in USDJPY rate of 90.00 to 90.80 (Long at 90.00, stop loss at 89.70, target OPEN)

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US non-farm payrolls (employment) fell by 36,000 in February, better than expectations centered on a 50,000 fall in jobs

mfsforex@hotmail.com — Sun, 07 Mar 2010 21:34:00 GMT

US non-farm payrolls (employment) fell by 36,000 in February, better than expectations centered on a 50,000 fall in jobs. Manufacturing employment expanded for a second straight month, up 1,000. The unemployment rate was unchanged at 9.7pct. And consumer credit rose for the first time in 12 months, up 2.4pct in January.

US treasuries slumped on Friday (yields higher) in response to positive economic data. And traders were wary ahead of heavy new bond issuance totaling US$74bn in the coming week. US 2yr yields lifted 4pts to 0.90pct with US 10yr yields up 8pts to 3.69pct. Over the week US 2yr yields rose by 8pts, reversing previous week losses, with US 10yr yields up 7pts.

The US dollar fell sharply against the Euro and commodity currencies following the latest jobs report. The further signs of healing in the US economy were recognized as being positive for global growth. The Euro rose from lows near US$1.3530 to US$1.3630, ending US trade near US$1.3620. The Aussie dollar rose from lows near US90.00c to US90.90c, ending US trade near US90.75c. But the Japanese yen eased from 89.20 yen per US dollar to JPY90.60, ending US trade near JPY90.30.

AUDUSD: The Aussie dollar rose from lows near US90.00c to US90.90c, ending US trade near US90.75c

AUD/USD 3-month ATMF implied volatility slipped to 13.55% overnight, below 14% range support and looking to test Jan 21 low of 13.25%. Spot cooperating: Aussie trading tight range around entry level, capped by 100-day moving average, now 0.9065

We expect a range for today in AUDUSD rate of 0.9030 to 0.9100 (Short at 0.9090, stop loss at 0.9120, target OPEN)

EURUSD: The dollar fell against the euro Friday after Greece's parliament approved a package of budget cuts to help reduce its deficit, reinforcing perceptions that the nation might be able to sidestep seeking financial help from its European neighbors.

"Resolution of the Greek debt crisis will eventually prove euro-positive and dollar-negative, with the greenback once again vulnerable”

Greece's sale Thursday of a 5 billion euro 10-year bond, with a coupon of 6.2% following the announcement this week of additional austerity measures helped remove some of the Greek-related stress that has plagued the euro.

We expect a range for today in EURUSD rate of 1.3600 to 1.3700 (Long at 1.3610, stop loss at 1.3580, target OPEN)

USDJPY: The dollar rose against the Japanese currency, to buy 89.31 yen, up from 90.42 yen in late North American trading Friday.

The yen weakened in Asian trade after a report suggested the Bank of Japan might consider further easing steps.

We expect a range for today in USDJPY rate of 90.00 to 90.85 (Short at 90.80, stop loss at 91.10, target OPEN)

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