Alaron Currency Comment

CHICAGO - Mar 3/08 - SNS -- Following is the currency futures comment from Alaron Trading Corp.

The EC opened lower at 1.5181 against the DX as carry-traders took profit/risk off the table over-night as equity markets tumbled. Prices rose to another 'new' contract Hi of 1.5270 after weaker than expected U.S. economic data sent the DX lower against most other major foreign currency markets. Profit-taking continued to weigh on prices, hitting a mid-day Lo of 1.5155 as concern over the rapid increase in the EC may effect monetary policy-making decisions.

The DX opened lower at 73.645 and retraced to a morning Lo of 73.40 after weaker than expected construction spending and a ISM Mfg. Index of 48.3, below the 50.0 expansion/contraction level. Prices rebounded as profit-taking  hit the EC after ECB President Trichet acknowledged the  U.S. 'strong-dollar' policy.  

The CD opened lower at 1.0159 and slid to a morning Lo of 1.0099 as concerns that the 'slowing' U.S. economy will weigh on the Canadian economy, leading to lower exports and needs for further rate cuts. Despite higher commodity prices, which should increase export revenue, the amount sold to the U.S. will be less and less, even with further rate cuts. Prices bounced to a mid-morning Hi of 1.0143, but lacked follow-through buying.

The BP opened lower at 1.9840 and rose to a morning Hi of 1.9925, before profit-taking sent prices to a mid-day Lo of 1.9800.

The JY opened higher at .9693 as carry-traders took profit/risk off the table as Asian equity markets retraced over 600 pts., sending traders into a 'safe-haven' mode and covering JY shorts. Prices rose to a morning Hi of .9736, before sliding to a mid-day Lo of .9655.    

Bob Kozak

Alaron Research Team

800.462.4691

bkozak.com

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