MORNING BRIEFING: Exactly nine years, October 26, 2000, that the EUR/USD had reached its lowest level ever reached at 0.8225.

[RTFX-Trading]

MORNING BRIEFING: Exactly nine years, October 26, 2000, that the EUR/USD had reached its lowest level ever reached at 0.8225.

What’s new:
Germany: German carmaker Karmann near bankruptcy.
IMF: Strauss-Kahn sees the end of the crisis.
France: bankruptcies up 16% in the 3rd quarter.
Euro area: return to growth in manufacturing.
Germany: IFO index rose slightly in October.
England: Britain is in recession in Q3.
Euro area: higher-than anticipated sales in the industry.
Germany: the manufacturing sector is growing again.
France: consumer spending rebounded in September.

Today:


Rates in Asia and Indices:
EURUSD: 1.5063 - 1.4982.
USDCHF: 1.0097 - 1.0052.
EURUSD: 1.6328 - 1.6251.
EURJPY: 138.30 - 137.72.
USDJPY: 92.10 - 91.57.
Dow Jones 9972 -1.08%.
NASDAQ: 2,154 -0.50%.
S & P500: 1'079 -1.22%.
Nikkei: 10'362 +0.77%.
Shanghai: 3'099 -0.28%.
Gold: $1,054.
Crude oil: $79.92.
 
Comments:
The Pound fell Friday after another unexpected contraction in economic activity in Britain in the third quarter, destroying hopes for a return to growth. The Pound plunged almost 2% against its main rivals and closed at 1.6300 against the Dollar, at 0.9225 against the Euro and at 1.6400 against the Swiss France.

Exactly nine years, October 26, 2000, that the EUR/USD had marked its lowest level, ever reached at 0.8225. These were the moments when former ECB President Duisenberg; Welteke , former president of the Bundesbank and others constantly repeated that the Euro is a sound currency and that based on fundamentals it is undervalued. At that time, it took a long time (and some concerted action) until the Euro started finally to grow.

In the current environment, there are no questions about the strength of the Euro. The key question is whether the current strength of the Euro is due to the weak US Dollar? A Chinese report stated that China should increase its holdings of Euro and Yen in foreign exchange reserves has once again shaken the markets. The report sparked buying of the Euro against the Dollar and pushed the currency pair to a new high of 1.5061 in 14 months.

The next FOMC meeting (on 3rd and 4th November) is attracting much attention. Better returns on the Dollar will motivate investors to cover their short Dollar positions, built up in recent weeks.

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.