Foreign Exchange Daily Updates - Archive

Below is the foreign exchange market update (Feb 18/03).

Note: The weekly foreign exchange updates give you a foreign exchange expert trader's view of the volatile foreign exchange markets. It is a great source of insight into the complexities of foreign exchange and issues. It is a valuable source of information with respect to the factors that affect foreign exchange rates at the macro level.

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Weekly Foreign Exchange Report .... Feb 18/03

Euro zone Economy sinks further.

Market Update: Tuesday, February 18, 2003

Dire Industrial production and manufacturing data, the worst ever for the Euro zone, and a downward revision for the previous month, cements our view that Germany will be in recession by the end of the 1st.Q.

Germany and France have agreed that a time table will have to be set on Iraq and Tony Blair made another speech on Iraq today leaving no doubt that the UK stands firmly with the US.

The US Dollar should have weakened on the Iraq news but it was offset by the bad EU economic data and is almost unchanged overnight as Europe waits for the US markets.
The daily fluctuations of between 1/2% and 2% continue, so please call your foreign exchange market advisor for the latest analysis.

Our longer term view is unchanged.
The interest rate differential benefit for the Euro v the US$ is eroding, 10 year bunds are now below 4%, and with the European Central Bank expected to cut rates in March, the Euro could have seen its top, not withstanding geopolitical pressures.

Precious metals, the Swiss Franc, the Canadian Dollar, Australian Dollar and New Zealand Dollars all strengthen if war with Iraq is more likely and loose value if it seems less likely.

The Yen strengthened overnight as Japan continued to buy yen to repatriate its funds from US Bond coupon payments, and it was revealed that currencies would not be discussed at this weekends G7 meeting. There was no Bank of Japan intervention as 120.00 was breached.