Alaron Currency Comment

CHICAGO - Jun 9/08 - SNS -- Following is the currency futures comment from Alaron Trading Corp.

The DX opened higher at 72.44, slid to a morning Lo of 72.41, and rose to a mid-day Hi of 72.98 after a better than expected  Pending Home Sales report showed an increase of +6.3% over the previous month. Equity prices rebounded  as oil prices got hit with some profit-taking,  helping the DX as we move towards the closing half of the day.  

The BP opened higher at 1.9790 and hopped to a morning Hi of 1.9792, after a higher than expected PPI increase of 1.6%, the fastest pace since 1986. This should  keep interest rates on hold through the end of the year,  according to BoE Governor Mervyn King. The rebound in the DX sent prices to a mid-day Lo of 1.9702, early in afternoon trading.

The CD opened lower at .9790 and rose to a morning Hi of .9806, before sliding to a morning Lo of .9761 on DX strength and lower oil/metals prices. Traders are adjusting positions ahead of Tuesday's RBoC rate meeting, where a 25bp rate cut is likely to weigh further on prices.

The EC opened higher at 1.5776, before a stronger DX saw traders taking profit/risk off the table, after rising on comments from ECB President Trichet that a rate increase 'may' be necessary in July to help contain inflation. Prices retraced to a mid-day Lo of 1.5613, before bouncing towards the close

The JY opened lower at .9463 and bounced to a morning Hi of .9471, before a weaker 'coincident index' of 101.7 v a revised May index of +102.4, sent prices lower. The stronger DX weighed on prices and sent the JY to a morning Lo of .9405, before bouncing into the afternoon session.

Bob Kozak

Alaron Research Team

800.462.4691

bkozak.com

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