Tuesday, July 03, 2007


US$ Range-Bound Ahead Of Data, Holidays

Reuters reports on currencies. "The Canadian dollar ended higher against the greenback in holiday-quietened trading on Tuesday, sandwiched between Monday's day off for Canada Day and Wednesday's U.S. Independence Day. The Canadian dollar ended at C$1.0605 to the U.S. dollar, or 94.30 U.S. cents, up from C$1.0654, or 93.86 U.S. cents, at Friday's close."

"The U.S. dollar steadied on Tuesday, after sustaining steep losses in recent sessions with investors holding off on any major moves ahead of the Wednesday holiday. 'Overall, a very stable day and I think we'll likely see that continuing through tomorrow and probably remaining pretty much range-bound ahead of the employment data on Friday,' said Matthew Strauss, senior currency strategist at RBC Capital Markets."

"'It was very much a technical flows-driven move that took (the Canadian dollar) to C$1.06,' he said."

"Investors will also be looking to Europe this week, where the Bank of England is widely expected to hike interest rates, while the European Central Bank is seen keeping rates on hold but laying the ground work for a September increase.

"Meantime, firm commodity prices are seen lending support to the Canadian currency. Further strength could come from U.S. crude oil, which is hovering near 10-month highs. 'I think, at the moment, supporting the Canadian dollar is oil above $70,' said Strauss."

"South Korea's won extended its rally against the US dollar for a fourth day, rising past the 920 to the dollar level to hit a seven-month high, as investors bet on a rate hike by the Bank of Korea (BoK) next week, while the US Federal Reserve is seen keeping its rates on hold."

"At 9:40 am here, the won was quoted at 918 to the dollar, up 0.39 pct from yesterday's close and the best level so far this year. The previous high was 913.80 to the dollar seen on December 7."

"'Investors both at home and abroad are continuing their dollar selling, with a Bank of Korea (possible) rate hike serving as a catalyst,' a Kookmin Bank forex dealer said."

The Daily FX. "The US dollar has recovered from Monday’s sharp losses thanks to profit taking and position squaring ahead of the Independence Day holiday. Even though trading tomorrow should be quiet, traders should not become complacent, because we still have very important and market moving data scheduled for Thursday and Friday."

From MarketWatch. "Gold futures closed with a nearly $4-an-ounce loss Tuesday, as traders took in profits from a rally in the previous session, which lifted prices near their highest level in two weeks. The U.S. dollar put some modest pressure on gold Tuesday, with the greenback trading in a tight range, though slightly higher against major currency rivals, ahead of Wednesday's Independence Day holiday."

"But gold investors mostly ignored data that showed further weakening in the U.S. housing market."

"Gold for August delivery fell $3.80 to close at $655.40 an ounce on the New York Mercantile Exchange. On Monday, the benchmark contract rallied $8.30 an ounce, up 1.3%, to reclaim its strongest closing level since June 20."

"Regular metals-futures trading on Nymex will be closed Wednesday and resume Thursday."

"Gold's price action 'was subject to cross-currents coming from a stronger dollar and a still resilient oil price,' said Jon Nadler, an analyst at Kitco Bullion Dealers. 'Continuing elevated apprehension levels surrounding the ramifications of the recent [attempted] attacks in London and Glasgow remain supportive for the save-haven oriented purchases of gold, but market participants remained on alert for any signs of fatigue in the recent rise in prices,' he said."

"Much of the metal's recent gains have been 'due to dealer/investor diversification due to ongoing weakness in the dollar,' said James Moore, analyst at TheBullionDesk.com, in a research report."

"The greenback traded in a tight range, after falling on Monday to a 26-year low against the British pound."

"Oil prices climbed for a fifth-straight session Tuesday, with weekly data on U.S. petroleum supplies delayed to Thursday because of Wednesday's holiday. See Futures Movers."

"September silver fell 5.5 cents to close at $12.685 an ounce and September palladium lost $2.40 to end at $369 an ounce, while October platinum fell by 90 cents to end at $1,294.20 an ounce."

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