MORNING BRIEFING: European leaders have different views about the strength of the Euro.

[RTFX-Trading]

MORNING BRIEFING: European leaders have different views about the strength of the Euro.

What’s new:
Russia: out of the recession in Q3, rising unemployment.
France: more than 65,000 bankruptcies in the last 12 months.
US: housing starts up, permits down in September.
OPEC: $80 pro barrel crude oil; is not justified.
Finland: Minister says a strong Euro concern the Euro area.
Japan: state borrowing will be increased.

Today:


Rates in Asia and Indices:
EURUSD: 1.4947 - 1.4888.
USDCHF: 1.0155 - 1.0108.
EURUSD: 1.6438 - 1.6346.
EURJPY: 135.75 - 135.19.
USDJPY: 90.91 - 90.60.
Dow Jones 10'041 -0.50%.
NASDAQ: 2'163 -0.59%.
S & P500: 1,091 -0.62%.
Nikkei: 10'340 +0.04%.
Shanghai: 3,086 +0.05%.
Gold: $1'056.
Crude oil: $78.83.
 
Comments:
The Dollar fell to a 14 month low yesterday morning against a basket of currencies. The recovery in the United States isn’t sure, after mixed indicators were published yesterday. Housing starts rose last month (September) by 0.50%. The disappointing housing figures and the index of producer prices indicate that the US Federal Reserve is able to keep rates at current levels for some time, which penalizes the greenback.

Regarding the rising Euro, the Euro-Group has discussed this yesterday. The trio Juncker, Almunia and Trichet will reveal their message when they travel to China soon. Other European officials have already expressed their opinion: France said that the EUR/USD at 1.5000 is a disaster for the industry and the European economy; Finland said that the current level of EUR/USD is a concern for Euro area. The Spanish Treasury Secretary, the member of the ECB's Weber and the German Economic Minister Guttenberg think that the current level of EUR/USD is not worrisome. This contrasts sharply with Japan and more recently with Canada, where one official made a statement in regards to their currencies, which had a very important impact. This is also the case for Switzerland. The EUR/CHF is again in decline and the market expects further intervention by the SNB.

Good day.

Nicolas Longchamp
RTFX Ltd
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