MORNING BRIEFING: The single currency hit a new high since August 2008 to 1.4900.

[RTFX-Trading]

MORNING BRIEFING: The single currency hit a new high since August 2008 to 1.4900.

What’s new:
Japan: BoJ keeps key interest rate to 0.10%.
Oil: US crude up over $75 a barrel.
Gold: new record for against the Dollar at $1'066.
United States: Kohn (FED) said that weak growth will curb inflation.
France: Noyer sees no reason to change monetary policy of the ECB.
Germany: Surprise decrease of the ZEW index in October.
England: Annual inflation at its lowest for 5 years at 1.10% annual rate.
Switzerland: PPI index down 4.90% in September over a year.
France: the current account deficit widens to EUR 3.7Mrds in August.

Today:



Rates in Asia and Indices:
EURUSD: 1.4900 - 1.4839.
USDCHF: 1.0227 - 1.0181.
EURUSD: 1.5993 - 1.5903.
EURJPY: 133.49 - 132.25.
USDJPY: 89.89 - 88.83.
Dow Jones : 9'871-0.15%.
NASDAQ: +0.04% 2'139.
S & P500: -0.28% 1,073.
Nikkei: 10'077 +0.01%.
Shanghai: 3'009 +2.50%.
Gold: $1'066.
Crude oil: $75.
 
Comments:

That night, the Bank of Japan maintained as expected interest rates at 0.10%. On the subject of ending of the purchases program of bonds and Treasury notes, the BoJ has made no comment. The Japanese central bank has only reaffirmed a slight upturn in the financial sector and manufacturing activity. It also revised upwards its economic outlook. The Yen is up after this report, rose to 89.00 against the US Dollar.

The US Dollar continues to weaken against all other currencies. The single currency hit a new high since August 2008 at 1.4900. The greenback continues to be penalized by expectations that US interest rates remain very low for much of 2010, due to weak economic recovery. The vice chairman of the Fed, Donald Kohn also pointed out to expect a sluggish recovery in the United States. Some analysts even expect that other central banks around the world begin to tighten monetary policy before the US Federal Reserve.

The diversification of currency reserves into Euros from US Dollar from Iran also worried investors. Mr. Ghazavi said that the Euro has now surpassed the US Dollar in the percentage of foreign exchange reserves of Iran. He also added that the amount of such reserves exceed $ 100Mrds.

The market is very bearish on the greenback, which in my opinion, is not to displease the U.S. authorities, a weak dollar benefits the US economy. The question I ask myself is "when will the European authorities and Switzerland begin to act to limit the rise of the Euro and the Swiss Franc? I remember that Asian banks are already intervened on the foreign exchange market to support the US Dollar against their respective currencies.

Good day.

Nicolas Longchamp
RTFX Ltd
Head Office
The Cornerstone Complex, 16th September Square | Mosta MST 1180 | Malta
Tel:  +356 23 31 00 00
Fax: +356 21 41 24 58
Web: www.rtfx.com

This message and any attachments (the "message") are intended solely for the addressees and are confidential. If you receive this message in error, please delete it and immediately notify the sender. Any use not in accordance with its purpose, any dissemination or disclosure, either whole or partial, is prohibited except with formal approval. The internet cannot guarantee the integrity of this message. RTFX Ltd (and its subsidiaries) shall (will) not therefore be liable for the message if modified. Do not print this message unless it is necessary, consider the environment. RTFX Ltd holds a Category 3 license issued by the Malta Financial Services Authority.