Novosti i prognoe: devizno tržište od 07-12-2010

Techs, from SMRA's Michael Sacchitello: " EURUSD needs to hold $1.3249 in order to hold on to the possibility that the post-11/30 correction has room to mature through $1.3538/$1.3716. Conversely, failure to hold $1.3249 reverses short-term euro strength; initially exposing EURUSD to the $1.3204 through $1.3149 area, with settlement below the latter raising the odds of an eventual move to new lows.

The euro erased gains against the dollar as Ireland’s parliament neared a vote on austerity measures that are required to qualify for an 85 billion-euro ($113 billion) aid package.
The Irish vote comes as European leaders continue to discuss how to contain the region’s debt crisis from spreading to other nations.

Ireland’s parliament will vote on its budget around 7 p.m. in Dublin. The budget must be passed for an 85 billion-euro aid package to go into effect. The government was forecast to win approval for austerity measures after independent lawmaker Michael Lowry said late yesterday he will support the budget.
Irish Finance Minister Brian Lenihan said in a speech to the Irish parliament in Dublin that there are “clear signs of hope” as the economy gathers strength.
“We’re getting near the Irish budget vote so we’re seeing a bit of profit-taking ahead of that,” said Kathy Lien, director of currency research at GFT Forex.
Luxembourg Prime Minister Jean-Claude Juncker said late yesterday after chairing the ministers’ meeting that his group would “do everything to secure the financial stability in the euro zone.”
The yen fell from a three-week high against the dollar after President Barack Obama broke a stalemate about extending middle-class tax cuts introduced by the administration of George W. Bush.
Obama said he would accept lower tax rates on high earners’ income, dividends, capital gains and multimillion dollar estates for the next two years in exchange for extending federal unemployment insurance. The current tax rates, enacted in 2001 and 2003, are set to increase Dec. 31.
"The increase in taxes may further widen the budget deficit", said Alan Ruskin at Deutsche Bank AG. “These kinds of agreements ultimately don’t support the idea of fiscal consolidation,” Ruskin said. “That’s a point of particular caution.”
Canada’s dollar dropped, erasing earlier gains, after the Bank of Canada held the benchmark interest rate steady at 1%. It said it will remain careful about future interest- rate increases as falling exports and Europe’s sovereign debt crisis hinder the economic recovery.
The pound rose against the dollar after U.K. manufacturing expanded twice as much as economists forecast in October and retail sales climbed, boosting demand for British assets.

Both the Dow and the S&P 500 have slipped to fresh session lows. The Nasdaq has also been pushed down a bit, but it still isn't yet back to its worst level of the day.

Industrial stocks have been resilient in the face of the broader market's backslide. Collectively they are still up 0.8%, which is double the S&P 500's gain.

Deere & Co. (DE 81.15, +2.11) has been a steady leader in the group today. It even set a new two-year high less than an hour ago.

In contrast, 3M (MMM 83.95, -2.93) has been one of the sector's worst laggards after the company reaffirmed its fiscal 2010 outlook, but issued a disappointing forecast for 2011.

Daily studies plateauing, cautioning bulls as oil fails to maintain a break above $90 and also the daily Bollinger band top. Initial support seen as the 5-DMA at $88.46 and further support as the 7 Oct 2008 low at $87.87.

European session:
03:30    Australia     RBA meeting announcement    4,75%    4.75%     4.75%     
05:00    Japan     Coincident Index     100,7    100.8    102.1    
05:00    Japan     Leading Economic Index     97,2    97.3    98.6    
06:45    Switzerland    Unemployment Rate     3.6%    3.6%     3.6%     
09:30    UK     Industrial Production (MoM)     -0.2%    +0.3%    +0.4%    
09:30    UK     Industrial Production (YoY)     +3.3%    +3.9%    +3.8%    
09:30    UK     Manufacturing Production (MoM)     0.6%    +0.3%    +0.1%    
09:30    UK     Manufacturing Production (YoY)     +5.8%        +4.8%    
11:00    Germany     Factory Orders s.a. (MoM)     1.6%    1.6%    -4.0%    
11:00    Germany     Factory Orders n.s.a. (YoY)     17.9%    18.6%    14.0%


The dollar weakened against most major counterparts after President Barack Obama said he would agree to sustain tax cuts, boosting investor demand for higher- yielding assets.
The dollar reached a three-week low against the yen after Obama broke a stalemate over extending middle-class tax cuts, introduced by the administration of George W. Bush, before Congress adjourns.
The current tax rates, enacted in 2001 and 2003, are set to increase Dec. 31.
"Risk has taken a bit of a bid tone today and part of that was due to some of the concessions last night by Obama,” said Lauren Rosborough, a senior strategist at Westpac Banking Corp. in London. “The suggestion is that the extension of the Bush tax credits will add stimulus for the U.S. economy.”

EUR/USD: gained to $1.3390, before traded within $1.3390/50 range.

GBP/USD: Demand building strongly post UK production data now as cable break $1.5800 and supported by middle eastern demand in the euro dollar. Cable has posted a high on the day at $1.5820 before eased back under the figure.

USD/JPY:  traded within Y82.30-Y82.80 range.

See contraction between EU economy, markets

Expect Portugal to specify 2011 measures

EU is beefing up systemic response to the crisis

EU will start new round of bank stress tests in Feb

New bank tests will include liquidity test

The dollar weakened against most major counterparts after President Barack Obama said he would agree to sustain tax cuts, boosting investor demand for higher- yielding assets. The dollar reached a three-week low against the yen after Obama broke a stalemate over extending middle-class tax cuts, introduced by the administration of George W. Bush, before Congress adjourns.

The current tax rates, enacted in 2001 and 2003, are set to increase Dec. 31. "Risk has taken a bit of a bid tone today and part of that was due to some of the concessions last night by Obama,” said Lauren Rosborough, a senior strategist at Westpac Banking Corp. in London. “The suggestion is that the extension of the Bush tax credits will add stimulus for the U.S. economy.”