Foreign Exchange Daily Updates - Archive

Below is the foreign exchange market update (January 27 2003).

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 rates 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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Foreign Exchange Market Update: Posted, Thursday, January 27, 2003

This week it is crucial to talk to your Foreign Exchange advisor to check the current situation in the Foreign Exchange Markets. Today we get the UN inspectors report on Iraq. Tomorrow is the State of the Union address. President Bush and Prime Minister Blair meet on the 30th. and fears of war dominate the Foreign Exchange and Stock markets. Stocks in Europe today are down 3-4% across the board.

The precious metals continue to push higher. The Swiss Franc, and the commodity based currencies the Australian, Canadian and New Zealand Dollars have solidified their gains and the Euro continues to strengthen as Euro Bonds attract buyers. There is very little up side for the US Dollar with a lot of data out this week including the important consumer confidence number.

Fears the Bank of Japan will intervene to stop the Yen strengthening have dampened its gains and the Pound continues to only make small gains against the US$ because of the UK's geopolitical link to the US on the Iraq situation.

The link between the US$ and US stocks is still strong.

Even though the Euro is very overbought the Euro can still go higher. The 1.0900 technical level held this morning, but with US stocks opening down, 1.1000 looks likely this week.

When the war view changes, gets underway, or is resolved, the US$ will recoup some of its loses. A refocus on economic fundamentals and lower interest rates could be painful for the Euro.