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FXCM FINANCIAL NEWS [01:55 MOF/BOJ Prepare For Speculative Assault On USD/JPY - Nikkei] Sydney, September 28: Saturday"s Nikkei has 2 articles talking about steps that the Japanese government and BOJ will take in anticipation of a "speculative assault on the dollar that could occur during the new year period when trading is especially thin." The Nikkei learned that as part of its efforts to halt the JPY"s appreciation in the FX market, the government reached an agreement with the BOJ to sell U.S. Treasuries to the BOJ in the vent that it needs money to finance the FX interventions. The agreement is effective through March 31 2004 and allows the government to sell as much as 10 tln JPY in U.S. Treasuries held as foreign currency reserves. The agreement calls for the government selling the U.S. Treasuries to the BOJ with the proviso that it will buy them back within 3 months. The government will shoulder any FX losses resulting from the sales.-- John.Noonan@thomson.com ------------------------------------- [01:43 Japan Firms Make More Money In Europe, Asia Than In US-Nikkei] Sydney, December 28: Sunday"s Nikkei reports that their survey shows that for the 6- month period ended September, the combined operating profit made by listed Japanese companies in Asia and Europe exceeded the amount they made in North and South America. Profit in the Americas dropped 15% Y/Y due to the decline of the USD/JPY. In contrast, their profit in Europe nearly doubled in part thanks to the strength of the euro. --John.Noonan@thomson.com -------------------------------- [01:32 USD Weakness Perhaps Only "Dark Economic Cloud" - Wash. Post] Sydney, December 28: There was an article in the Washington Post on Friday by John Berry and Jonathon Weisman that suggested that the falling USD was starting to cause alarm on Wall Street. The article suggests that U.S. President Bush is sailing into the 2004 election with an expanding economy, low interest rates and low inflation, but the shrinking USD could be the one "dark economic cloud on the horizon." In the past 23 months the USD has fallen 11% against all currencies and currency analysts expect the trend to continue well into next year. Economists say that the USD decline has been a boon to the U.S. economy until now, but concerns are growing on Wall Street that the USD slide will eventually drive up long-term rates and could force the Fed to raise rates as well. If this were to transpire it could slow the nascent economic recovery, swell the already record U.S. budget deficit and resurrect inflation. Analysts fear that the U.S. twin deficits will eventually bring pain in the form of rising interest rates and slowing increases in the standard of living. Berry and Weisman said that the big question about the USD isn"t why it has fallen to a record low against the euro, but why it remained so strong fir so long while the U.S. was racking up a widening trade deficit. Ted Truman a former official at the Fed and Treasury said that it is impossible to predict with any precision what will happen to the dollar. But if the 500 bln adjustment to the current account deficit was to be made through the exchange rate, then there is another 40% decline in the USD to go. Pessimists like Soros and Buffet believe the fallout has already begun. According to the article they already have been snapping up currencies in anticipation of a further USD slide. This is something that Buffet said he has not done before in his 72 years.--John.Noonan@thomson.com -------------------------------- [01:04 Mad Cow Infected Cow Traced To Canada - Washington Post] Sydney, December 28: The cow from Washington state that is infected with Mad Cow"s disease was imported from Alberta in Canada according to an ear tag found on the cow. The discovery has raised fears that there could be more than one animal infected with the dreaded disease in North America. Canada has taken issue with the U.S. assertion that the cow probably came from Canada and are saying that it is too early to tell if that is the case. -- John.Noonan@thomson.com ---------------------------------- [00:44 Up To 13 Die From Attacks in Southern Iraq - New York Times] Sydney, December 28: The fragile calm in Southern Iraq was shattered on Saturday when at least 6 coalition soldiers and 7 Iraqis were killed and 129 people were wounded in a rampage of mortar and machine gun fire and a car bomb in the Shiite holy city of Karbala. Insurgents attacked Karbala"s city hall and 2 military bases in what is being called the worst bloodshed since the capture of Saddam 2 weeks ago.-- John.Noonan@thomson.com ------------------------------------ Currency Information [IFR Forex Watch] .2825(M) |monthly high Dec 96 |flat on a failure | [FLAT at] : 1.2715(M) |monthly high Jan 97 |take profit | [1.2375] : 1.2595(S) |monthly low Jul 96 |take profits, buy break | : 1.2445(M) |daily high Dec 22 |buy a break above |Open|19/12/03 : | TIME 15 38| : 1.2385(M) |pullback low Dec 23 |buy a bounce | | : 1.2355(M) |daily uptrend (1.1380) |buy a bounce |TGT | : 1.2295(S) |daily low Dec 17 |buy bounce, sell break |Stop| : 1.2250(M) |61.8% of 1.2130 - 1.2445 |cover on a bounce | ============|==========================|=========== Long position adopted on the move to fresh trend highs above 1.2445 Wed. Our target is the July 1996 high at 1.2605. A secondary target is the upper channel line taken off the Nov lows, today at 1.2635. Prices remain overbought on the daily charts. The very recent sideways action has left intraday charts neutral to negative. Primary trend remains up. (RD/tr) [17:54 GMT] | |||||||||||||
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