MORNING BRIEFING: The Euro continues to fall against the Dollar.

[RTFX-Trading]

MORNING BRIEFING: The Euro continues to fall against the Dollar.

What’s new :
China: growth of 10.70% in Q4 2009.
United States: mixed results for several large banks in the 4th quarter 2009.
United States: 4.0% drop in housing starts in December.
United States: unexpected rise in producer prices in December.
France: the level of exchange Euro - Dollar destabilizes the French economy.
England: the BoE unanimous on interest rates and quantitative easing.
England: sharper drop than expected in the unemployment number in December.

Today:


Rates in Asia and Indices:
EURUSD: 1.4137 - 1.4067.
USDCHF: 1.0469 - 1.0420.
EURUSD: 1.6312 - 1.6248.
EURJPY: 129.20 - 128.53.
USDJPY: 91.65 - 91.19.
Dow Jones: 10’603 -1.14%.
NASDAQ: 1’867 -1.45%.
S & P 500: 1'138 -1.06%.
Nikkei: 10'868 +1.22%.
Shanghai : 3’160 +0.28%.
Gold: $1'114 .10.
Crude oil: $78.07.

Comments:
The Euro fell to its lowest level since five months against the Dollar and against the Pound Sterling, breaking the key technical support, the 200 day moving average at 1.4290, resulting in massive selling. The statements by Mr. Fillon, who said that the level of exchange Euro - Dollar destabilizes the French economy and the persistent problems of Greece, weigh on the single currency. Regarding the Dollar, he enjoys the request of Chinese authorities to the country's major banks to reduce their lending for the rest of January, which is expected to slow China's growth. The EUR/USD is currently around a Fibonacci point at 1.4117, points to watch now are 1.4025 and 1.4250. My feeling is that the EURUSD will be lower in the medium term, my objective is 1.3560.

The greenback also benefits from its status as a safe haven currency; the market is concerned about the difficulties of large US banks. Bank of America, Wells Fargo and Morgan Stanley have announced disappointed results for 4th quarter 2009, the US banking sector is still affected by rising bad debts and asset impairments.

In England, the nine members of the Monetary Policy Committee of the Bank of England voted to maintain interest rates and the program of quantitative easing. The next monetary policy meeting in February will be less crucial for the Pound Sterling, the market expects the BoE stop its program of acquisitions of assets once its goal of £200Bln has been reached.

Have a 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
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