MARKET DRIVERS – CURRENCIES

FX Research • 10.08.2010 • Jyske Markets

Today’s Comment period of time. The expectations of the Today’s Chart – EUR/USD
Last night at 1 a.m., the RICS house price short-term growth scenario may be lowered.
survey was published in the UK; Offhand a downgrade of the short-term
1,55
expectations pointed to +5, yet the survey scenario will be bad news to the dollar, but
came out at -8. Therefore pound sterling fell on the other hand, due to the most recent 1,50
against the US dollar, from 159 to 158, and increase in EUR/USD and the very low 2-
due to this EUR/USD fell at the same time year yield on US government bonds, quite a 1,45
from 132.30 to 131.36. lot of 'adversity' should be discounted in the
dollar rate. 1,40
Bank of Japan maintained its rate at 0.10 1,35
and stated that it will keep up the monthly
purchases of government bonds at the level 1,30
of about JPY 1,800bn. Today’s Key Events
• 10:00 Consumer prices (NOK) 1,25
Today primarily the interest rate meeting of • 10:00 Producer prices (NOK)
the Fed will attract attention, but focus will 1,20
• 10:30 Trade balance (GBP)
not least be on the subsequent statements • 14:30 Productivity (USD)
and any further quantitative easing in the 1,15
• 14:30 Unit wages (USD)
form of buybacks of government bonds. Due 01 dec 12 jan 23 feb 06 apr 18 maj 29 jun 10 aug
• 20:15 Fed’s interest-rate announcement
to the weak economic indicators over the
(USD) Moving Average (20D ) Moving Average (100D )
past two months it is doubtful whether the
Fed will change its view of the growth
prospects and possibly initiate measures to Source: Bloomberg/Jyske Bank
counteract the slowdown of economic
growth. We expect that the Fed will
maintain its interest rate and reiterate its
promise to maintain its rate at an
extraordinary low level over a prolonged

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MARKET DRIVERS – CURRENCIES
FX Research • 10.08.2010 • Jyske Markets

Currency Spot Short-term market drivers Technical levels 1-month

target
Majors
EUR/USD 131.54 Future focus on internal imbalances in the euro zone, political disagreement and pressure on Southern European govt. bonds - Resistance 135.00 next 136.00
The US is somewhat ahead of Europe in the economic cycle - Support: 131.20 next 130.12 126
The Fed’s quantitative easing keeps the USD value low; higher government debt does not result in increases in the US market rate as it should +
USDDKK 566.38 Future focus on internal imbalances in the euro zone, political disagreement and pressure on Southern European govt. bonds + Resistance 567.84 next 572.56
The US is somewhat ahead of Europe in the economic cycle + Support: 551.86 next 547.80 592
The Fed’s quantitative easing keeps the USD value low; higher government debt does not result in increases in the US market rate as it should -
EURGBP 83.27 Focus on very negative public finances: Uncertainty about future fiscal tightening (and UK’s rating) may weaken pound sterling + Resistance 83.95 next 85.30
Pound sterling was under massive pressure when the financial crisis peaked, and (too) much misery has already been discounted - Support: 82.10 next 80.70 82.50
We expect that the quantitative easing came to an end in February and that the BoE will start normalising its monetary policy in H2 -
GBPDKK 894.54 Focus on very negative public finances: Uncertainty about future fiscal tightening (and UK’s rating) may weaken pound sterling - Resistance 907.44 next 923.18
Pound sterling was under massive pressure when the financial crisis peaked, and (too) much misery has already been discounted + Support: 887.44 next 873.40 903
We expect that the quantitative easing came to an end in February and that the BoE will start normalising its monetary policy in H2 +
EURJPY 113.02 Focus on debts in Southern Europe has caused pressure on the single European currency and shifted the balance of power between EUR and JPY - Resistance 114.40 next 115.50
Risk of renewed risk aversion supports JPY slightly - Support: 111.55 next 110.00 110
Decent growth in recent months; the economy is, however, still fragile; low growth ahead and deflation may once again be a theme +
JPYDKK 6.59 Focus on debts in Southern Europe has caused pressure on the single European currency and shifted the balance of power between EUR and JPY + Resistance 6.68 next 6.77
Risk of renewed risk aversion supports JPY slightly + Support: 6.51 next 6.45 6.77
Decent growth in recent months; the economy is, however, still fragile; low growth ahead and deflation may once again be a theme -
EURCHF
Please refer to the publication, CHF: stil moving upwards -

CHFDKK
Please refer to the publication, CHF: stil moving upwards -
MARKET DRIVERS – CURRENCIES
FX Research • 10.08.2010 • Jyske Markets

Currency Spot Short-term market drivers Technical levels 1-month

target
Scandinavia
EURNOK 791.11 Continuing improvement of key indicators in Norway: labour market is strong and housing market is close to its record-high levels - Resistance 812 next 820
Norges Bank was one of the first ones to raise its interest rate. Even though we may be in for a slow start, we foresee 3% in the 1-year term - Support: 781 next 769 800
Correction in the equity market/rising risk aversion will still be able to put pressure on the NOK +
NOKDKK 94.14 Continuing improvement of key indicators in Norway: labour market is strong and housing market is close to its record-high levels + Resistance 95.39 next 96.94
Norges Bank was one of the first ones to raise its interest rate. Even though we may be in for a slow start, we foresee 3% in the 1-year term + Support: 91.75 next 90.85 93.10
Correction in the equity market/rising risk aversion will still be able to put pressure on the NOK -
EURSEK 940.98 Still risk that SEK will suffer a blow in the event of risk aversion - Resistance 965 next 980
Riksbanken expresses optimism about the economy and thinks Sweden has been through the worst part of the crisis + Support: 935 next 925 940
After GDP for Q2, Q3 and Q4 2009 has been revised up, we anticipate interest-rate hikes at the remaining monetary meetings in July +
SEKDKK 79.16 Still risk that SEK will suffer a blow in the event of risk aversion + Resistance 79.68 next 80.54
Riksbanken expresses optimism about the economy and thinks Sweden has been through the worst part of the crisis - Support: 77.20 next 76.02 79.00
After GDP for Q2, Q3 and Q4 2009 has been revised up, we anticipate interest-rate hikes at the remaining monetary meetings in July -
MARKET DRIVERS – CURRENCIES
FX Research • 10.08.2010 • Jyske Markets

Current Strategies
Currency Strategy Description of Strategy Date of Entry Target Stop READ
Entry Level Loss MORE

Due to deflation in Japan, BoJ will keep rates unchanged for quite som time into 2011
USD/JPY Option Widening of the interest-rate spread to the US and the euro zone, among others, will put the yen under pressure 16-12-2009 89.68 106 N/A CLICK HERE
In the long term, the dollar will strengthen due to a faster economic recovery and stronger rate hikes in the US

Note: We point out that FX investment is currently associated with extraordinarily high uncertainty. But for
long-term risk tolerant investors, there may be good investment opportunities in these turbulent times. This
recommendation is only relevant for very risk-tolerant clients with the right risk profile and the overall
financial strength to cope with any loss that may be incurred.
MARKET DRIVERS – CURRENCIES
FX Research • 10.08.2010 • Jyske Markets

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