Forex: EUR/USD higher while the dollar drops following Bernanke speech

The EUR and commodities rose following a speech by Fed chairman, Ben Bernanke. The pair posted an intraday high of 1.4968 before settling to current levels around 1.4960. The pair is considered bearish and finds support at 1.4930 and resistance at 1.5016.

In New York, Ben Bernanke maintained that the US central bank was commited to both job growth and price stability while monitoring the declining dollar closely. However, he pointed to a weak economy for continuing to keep interests at historic lows for an “extended period.” He added: “we are attentive to implications of changes in the value of the dollar and will continue to formulate policy to guard against risks to our dual mandate to foster both maximum employment and price stability.”

Mr Bernanke also acknowledged that the weak dollar benefited commodity prices with investors looking for safe havens. Hence the dollar has “retraced its gains.” The dollar has dropped around 14% against a number of currencies since March.

• EUR/USD

EUR/USD (Nov 17 at 07:28 GMT)

1.4961/65 (-0.06%)

H 1.4999 L 1.4933

S3	S2	S1	R1	R2	R3
1.4882	1.4920	1.4957	1.4975	1.5012	1.5050

[?]Trend Index	[?]OB/OS Index
Strongly Bullish	Neutral
Data updated on Nov 17 at 07:25 (15-minute timeframe)

[ View EUR/USD Technical Studies ]

Asian Shares Mixed, Lag Wall Street But Miners Rise Again

SINGAPORE -- Most Asian share markets were only a little higher Tuesday despite a strong performance on Wall Street and even as mining stocks found buyers, with some broad fatigue setting in after recent gains.

Japan's Nikkei 225 was up 0.3% with Australia's S&P/ASX 200 up 0.3% and South Korea's Kospi Composite up 0.2%. New Zealand's NZX-50 was down 0.3%. Dow Jones Industrial Average futures were flat in screen trade.

The region was not mirroring the size of gains in the U.S., where all three major indexes rose to new closing highs on the year, helped by energy and materials firms.

The continued decline in the U.S. dollar - and consequent strength in Asia-Pacific domestic currencies - was causing some concern for exporter-related stocks. "Most exporters may underperform the market," said Yukio Takahashi, a market analyst at Mizuho Securities in Tokyo.

Commodity-related shares were however rising in Tokyo and Sydney after base metals gained Monday, with LME three-month copper hitting 14-month highs in London, rising more than 5.0%. Spot gold also briefly touched a record high of $1,143.30 a troy ounce in electronic trade.

In Japan, Inpex was up 1.4% with Sumitomo Metal Mining up 1.8% and Mitsui & Co rising 1.5%, while in Sydney BHP Billiton was up 1.8%, Fortescue up 0.5% and Macarthur Coal higher by 3.6%.

"As long as U.S. interest rates remain at current low levels, liquidity and dollar selling will continue to support commodity markets," said Mizuho's Takahashi.

Canon shares meanwhile gained 2.1% in Tokyo, after news it would buy Dutch printer maker Oce NV for EUR730 million in cash, with the Japanese office machine maker aiming to grow amid shaky prospects for corporate spending.

Textile maker Daiwabo Holdings though was ask-only after saying Monday it planned to issue 35 million new shares to raise up to Y11.84 billion in order to pay back loans.

Sellers were coming into Australian banks, with Westpac off 0.9% and ANZ down 0.8%.

"We're seeing a continuation of yesterday's theme -- a switch out of the banks into the resources," said Chris Blair, head of retail broking at Patersons in Sydney. "The market's thinking banks aren't great value where they are, with yields a little low and valuations a little high."

Hynix Semiconductor fell 5.0% in Seoul after creditors said they may attempt to sell their collective 28% stake through a block deal if a public auction proved unsuccessful. Last week, Hyosung Corp. withdrew its bid for the controlling stake in Hynix.

New Zealand share investors were closely watching the currency market, with the Kiwi dollar briefly rising over US$0.75 against the U.S. dollar for the first time since late October.

Infratil slipped 1.3% after the infrastructure investor posted a first-half net loss, largely due to significant write-downs on existing assets.

In currency trade the euro was nudging higher against the U.S. dollar and Japanese yen, at $1.4980 from $1.4972 in New York, and Y133.44 from Y133.34, with the U.S. dollar at Y89.10 against the Japanese yen, from Y89.08.

"The main focus in the G3 space is whether the euro can soon push through its 2009 high of $1.5063," said analysts at UBS. "With positioning a lot lighter than a few weeks ago, if the market makes it through the next stopping point could arguably be $1.55."

Lead Japanese government bond futures were 0.35 higher at 139.21 points, but traders expected some resistance around 139.40. "Given the new government's stance on debt issuance remains uncertain, it's difficult for players to keep buying JGBs actively," said Katsutoshi Inadome, an analyst at Mitsubishi UFJ Securities.

Spot gold was down 25 cents from New York levels, at $1,139.15 a troy ounce, though traders said momentum pointed to further gains in the short term. Some were still talking about heavy Comex call option positioning at a strike price of $1,200, which may cause some volatility until its expiry next week.

Front-month Nymex crude oil futures were five cents higher on Globex at $78.95 a barrel, having risen $2.55 or 3.3% in New York.

Forex: NZD/USD gains at risk appetite returns

The Kiwi rose against the dollar and the euro to 3-week highs. The NZD rose on the back of negative sentiment against the US economy and the return of risk appetite. The pair is currently trading at 0.7496 finding support at 0.7455 and resistance at 0.7504. Outlook for the pair is slightly bearish.

In the US, the Fed reaffirmed its commitment to keeping interests at historic lows in order to boost the economy. Traders saw that as a sign of continuing weakness in the dollar selling the currency against the EUR opting for high-yielding currencies such as the Kiwi.

• NZD/USD

NZD/USD (Nov 17 at 07:24 GMT)

0.7479/86 (-0.04%)

H 0.7501 L 0.7459

S3	S2	S1	R1	R2	R3
0.7433	0.7451	0.7470	0.7488	0.7507	0.7525

[?]Trend Index	[?]OB/OS Index
Neutral	Neutral
Data updated on Nov 17 at 07:15 (15-minute timeframe)

[ View NZD/USD Technical Studies ]

UPDATE:Asian Shares Modestly Higher; Commodity Firms Support

SINGAPORE -- Most Asian share markets were only a little higher Tuesday despite a strong performance on Wall Street and even as mining stocks found buyers, with some broad fatigue setting in after recent gains.

Japan's Nikkei 225 was down 0.1% with Australia's S&P/ASX 200 0.1% lower and South Korea's Kospi Composite falling 0.1%. Hong Kong's Hang Seng Index fell 0.4%. Dow Jones Industrial Average futures were down 17 points in screen trade.

The region was not mirroring the size of gains in the U.S., where all three major indexes rose to new closing highs on the year, helped by energy and materials firms.

The continued decline in the U.S. dollar - and consequent strength in Asia-Pacific domestic currencies - was causing some concern for exporter-related stocks. "Most exporters may underperform the market," said Yukio Takahashi, a market analyst at Mizuho Securities in Tokyo.

Commodity-related shares were however rising across the region after base metals gained Monday, with LME three-month copper hitting 14-month highs in London, rising more than 5.0%. Spot gold also briefly touched a record high of $1,143.30 a troy ounce in electronic trade.

In Japan, Inpex was up 0.5% with Sumitomo Metal Mining up 1.4% while in Sydney BHP Billiton was up 1.9% and Macarthur Coal was higher by 3.8%. In Hong Kong, CNOOC was up 0.3% while China Shenhua rose 0.8% and in Indonesia, Antam was up 4.2%.

"As long as U.S. interest rates remain at current low levels, liquidity and dollar selling will continue to support commodity markets," said Mizuho's Takahashi.

In Shanghai, China Merchant Securities disappointed on debut with the stock opening only 12.9% higher at CNY35.01, under market expectations for gains in the 20% to 30% range. The brokerage sold 358.5 million yuan-denominated A shares and raised $1.62 billion, after attracting CNY1.04 trillion in subscriptions.

In Taiwan, the index was 0.1% lower as financial stocks fell despite news that Taiwan and China had signed the long-awaited financial memorandum of understanding late on Monday. IBT Securities analyst Regina Lee said profit-taking likely hurt the financial sector, but "the long-term strength of financial shares remains." Yuanta Financial was down and Mega Financial slipped 3.0%.

Elsewhere, the Shanghai Composite Index rose 0.3%. Singapore's Straits Times Index was down 0.4%, Malaysia's Kuala Lumpur Composite Index was up 0.4% and Philippine shares were up 0.2%. In Indonesia, stocks rose 0.4% while Thailand shares were 0.4% higher and New Zealand's NZX-50 was down 1.1%

In Tokyo, Canon shares rose 2.7% after news it would buy Dutch printer maker Oce NV for EUR730 million in cash, with the Japanese office machine maker aiming to grow amid shaky prospects for corporate spending.

Sellers were active in Australian banks, with Westpac off 2.2% and ANZ down 1.5%.

"We're seeing a continuation of yesterday's theme -- a switch out of the banks into the resources," said Chris Blair, head of retail broking at Patersons in Sydney. "The market's thinking banks aren't great value where they are, with yields a little low and valuations a little high."

Hynix Semiconductor fell 6.4% in Seoul after creditors said they may attempt to sell their collective 28% stake through a block deal if a public auction proved unsuccessful. Last week, Hyosung Corp. withdrew its bid for the controlling stake in Hynix.

New Zealand share investors were closely watching the currency market, with the Kiwi dollar briefly rising over US$0.75 against the U.S. dollar for the first time since late October.

Infratil slipped 1.3% after the infrastructure investor posted a first-half net loss, largely due to significant write-downs on existing assets.

In currency trade, tepid equities trade kept the euro contained at $1.4951 from $1.4972 in New York against the U.S. dollar and at Y133.26 from Y133.34 against the Japanese yen while the U.S. dollar was at Y89.04 against the Japanese yen, from Y89.08.

The Australia dollar came off 40 points to US$0.9334 after minutes from the Reserve Bank of Australia raised doubts about whether the central bank will continue to raise rates at its next policy meeting on Dec. 1. The Reserve Bank of Australia flagged further gradual increases in interest rates but said it is unsure how quickly it will make the policy adjustments.

Hayden Atkins, an economist at Macquarie Bank, said the RBA's minutes illustrate that while the bank remains committed to further tightening, much will depend on the data flow between now and the December meeting.

Lead December Japanese government bond futures were 0.27 higher at 139.13 points, but traders expected some resistance around 139.40. "Given the new government's stance on debt issuance remains uncertain, it's difficult for players to keep buying JGBs actively," said Katsutoshi Inadome, an analyst at Mitsubishi UFJ Securities.

The London Mercantile Exchange 3-month copper contract was down $51 at $6,798 per ton from the PM kerb on profit taking after a robust rise Monday, while LME nickel was up $50 at $16,850 from Monday's kerb.

Spot gold was down $1.20 from New York levels, at $1,138 a troy ounce.

Front-month Nymex crude oil futures were 31 cents lower on Globex at $78.59 a barrel, having risen $2.55 or 3.3% in New York.

Forex: EUR/AUD up and trading at 1.6010

The EUR gained on the AUD after the pair opened 1.5976 and rose to an intraday high of 1.6016. The pair has since been trading in a narrow band around 1.6000 and finds support at 1.5960 and resistance at 1.6500.

In Australia however, the RBA has left open the possibility of further rises but it remains unclear on the timing. The RBA also felt it prudent “over time” to gradually reduce fiscal support. Given that recent data from Australia points to a mixed basket, overall, the Australain economy is in relatively good shape and may pave the way for a further rate rise in December.

• AUD/USD
• EUR/USD
• EUR/AUD

AUD/USD (Nov 17 at 07:22 GMT)

0.9336/42 (-0.34%)

H 0.938 L 0.932

S3	S2	S1	R1	R2	R3
0.9287	0.9311	0.9334	0.9348	0.9371	0.9395

[?]Trend Index	[?]OB/OS Index
Slightly Bearish	Neutral
Data updated on Nov 17 at 07:15 (15-minute timeframe)

[ View AUD/USD Technical Studies ]