European Market

The USD weakened against the Euro today in Europe on the back of risks of economic slowdown in the United States. Alan Greenspan, in a speech to the Banking Committee yesterday, said that he saw a dramatic slowdown in the US economy, indicating that rates for now will remain on hold and even the possibility of cutting rates, the first time in two years. The EURUSD opened at 0.8800, briefly touched lows of .8770 and was well bid for the remainder of the session trading to highs of 0.8865 supported by better than expected Pan-German October Manufacturing Orders s/a rise of 3.1% vs. a 4.2% fall in September. In addition, Eichel said that the Euro FX rate confirmed good fundamental data in the Eurozone. USDJPY opened at 110.75 and traded in a 110.66-111.00 range but was soft on the heels of a 1.3% gain in the Tokyo stock market. GBPUSD opened at 1.4340 and traded as high as 1.4395 before a much weaker than expected UK Industrial Output fell 0.2% m/m, +0.5%y/y and Manufacturing was down –0.1% m/m. In addition, the UK CBI-Quarterly Business Optimism Index came in at +2 in November vs. +12 in August, the worst for two years. GBPUSD pared most of its gains by session end and was well offered on any upside move towards 1.4375. USDCHF traded directly off the back of the Euro strength touching lows of 1.7066 from an early high of 1.7188. Going into the New York open, though, the currency pair was somewhat bid ahead of the 1.7090 downside level.

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