Henrik Gullberg, strategist at Calyon: “The Fed will come under renewed focus as we approach the end of the month and the prospect of yet another rate cut. With the U.S. housing market slump continuing, and with intervention still no more than a distant threat, this is unlikely to be an environment favoring a more sustained correction in the dollar. In other words, upward pressures on euro/dollar are likely to persist.”

GBP/USD chops around $1.9800 after sliding to the lows at $1.9775. Demand interest at $1.9750/40 noted earlier.

USD/JPY rebounds after testing lows around Y103.22. Rate currently holds near Y103.45/55. Offers ahead of Y103.80/00.

The major indices are trending lower, with the S&P 500 giving up nearly all of its gains. Financials (-0.9%) are largely to blame as the sector slips into the red after being up as much as 0.8%.
Gold has come under some selling pressure as the dollar holds most of its gains this session. The precious metal is down 2.4% to $900.60 per ounce. It is still up 7.5% this year, but is down 14.8% from its all-time nominal high of $1033 that was reached about one month ago.

The euro fell the most against the dollar in more than three weeks after Luxembourg's Finance Minister Jean-Claude Juncker signaled concern that the pace of the U.S. currency's decline will hurt economic growth.
The Australian currency rose to a 24-year high against the dollar after a government report showed inflation accelerated above 4% for the first time in seven years.
The euro rose yesterday above $1.60 for the first time as ECB governing council member Christian Noyer said policy makers will ``do what it takes'' to restrain consumer prices. Noyer later told the Wall Street Journal that interest rate ``movements can go both ways.'' He said earlier statements had been over-interpreted, according to the newspaper.
Policy makers are wary inflation will quicken on a 78% surge in crude oil from a year ago.

“There are clear and significant downward risks for the euro,” said Michael Klawitter, a currency strategist at Dresdner Kleinwort. “The perception that the European economy remains resilient seems wrong and Europe's common currency may drop to $1.53 in three months,” he said.

EUR/USD continues to rebound from session lows near $1.5860 and currently holds at $1.5901.

Stocks rose early Wednesday, led by technology, as the market digested a steady stream of corporate earnings reports. Stocks had closed lower Tuesday as markets responded to oil prices near $120 a barrel and discouraging profit forecasts from DuPont and Texas Instruments.

Internet search engine Yahoo reported stronger-than-expected first-quarter earnings after the closing bell Tuesday. Yahoo shares fell more than 1%.

Technology stocks remain in focus Wednesday with tech heavyweights Apple and Amazon.com due to report after the closing bell.

Privately held insurance company Liberty Mutual has offered about $ 6.2 billion to buy Safeco Corp. The deal, which represents a 51% premium to Safeco's closing price on Tuesday, would create the country's fifth-largest property and casualty insurer. Safeco's stock rose more than 46%.

UPS reported a 7.5% increase in first-quarter profit but warned that it expects the U.S. economy to remain weak during the second quarter.

Bond insurer Ambac Financial Group reported a $1.66 billion first-quarter loss on hefty charges related to mortgage-backed bonds. Shares fell more than 27%.

On the bright side, Boeing said profit rose 38% in the first quarter to $1.2 billion. Boeing shares were up nearly 3%.

Drugmaker Schering-Plough said first-quarter earnings fell 48%. The company's results were hindered by a $23 million charge related to an acquisition and $688 million in accounting adjustments.

U.S. light crude oil for June delivery fell to $116.90 a barrel after a government report showed a larger than expected drop in gasoline supplies and a more than expected gain in crude inventories. On Tuesday, oil hit an all-time trading high of $119.90 a barrel.

EUR/JPY continues to rebound, holding around Y164.65, but below overnight highs at Y164.98. Earlier rate printed low on Y163.80.

Bank of America Corp. lowered its forecasts for the dollar as it expects the Federal Reserve to cut the benchmark interest rate to 1.5% by the end of August. The bank predicted the currency will trade at $1.52 per euro by Sept. 30, compared with a previous estimate of $1.50. Against the pound, the U.S. currency will trade at $1.94 versus $1.91, the bank said.

1.G7 statement hasn't affected mkts
2.G7 didn't discuss intervention

WTI Nymex crude oil is moderately higher following release of US weekly DoE inventory data, which showed gasoline and distillate supplies falling more than expected. WTI Nymex crude oil is now at $117.87 a barrel.

Slides to $1.5870/80 area now as earlier reported stops flush out under $1.5900, those sellers said to be relatively short-term accounts for the most part. Euro has been weighed by a series of factors today, euro sales by quality names, perhaps official, earlier in the day, and then by rumors of subprime losses affecting a German bank, and more recently by a weak BNB business survey which may have implications for the Thursday Ifo report, a trader says. Another trader eyeing support in the pair around $1.5845/55 area, and the Tues low at $1.5830 area also offers that potential.

EUR/USD: $1.6000
USD/JPY: Y103.50
EUR/JPY: Y160.50
AUS/USD: $0.9395, $0.9315

Stocks were poised for a mixed open Wednesday as investors weighed a flurry of corporate earnings news including bigger-than-expected losses from both Delta Air Lines and the bond insurer Ambac.
Less than an hour before the start of trading, S&P futures were lower while Nasdaq futures were higher, suggesting a negative start for stocks.
In focus for investors was a devastating loss by Delta. The airline blamed exorbitant fuel prices for its massive first-quarter loss of $6.4 billion.
Ambac Financial Group (ABK) also reported a $1.66 billion loss, as it stopped underwriting risky bonds. The bond insurer grabbed headlines earlier this year after rating agencies threatened to strip the company of its sterling AAA rating, which could have sparked another wave of devastating writedowns at the nation's largest financial firms.
Offsetting that negative news were better-than-expected results from planemaker Boeing which earned $1.2 billion in the first quarter.
Investors will be keeping a close eye on tech sector once again Wednesday after Yahoo reported solid profit and sales that topped Wall Street's estimates just a day earlier. Both Apple and Amazon.com are due to report after the closing bell.
While Yahoo's results were strong, the company has until Saturday to accept Microsoft's takeover offer or face a proxy fight. It remains unclear whether Microsoft will be swayed to raise its offer. If it doesn't, the takeover battle could turn ugly.

Dollar spikes up from around C$1.0135 to C$1.0175, as Canadian retail sales data comes in weaker than expected. Offers have been reported in place to C$1.0180, with further interest positioned on the approach to C$1.0200. A break above this latter level to open a move on toward C$1.0230. Bids C$1.0100, more at C$1.0085/80.

the next data was issued
08:00 EU(15) PMI (April) flash 50.8 52.0
08:00 EU(15) PMI services (April) flash 51.8 51.7
08:30 UK BoE meeting minutes (09-10.04)
09:00 EU(15) Industrial orders (February) 0.6% 2.0%
09:00 EU(15) Industrial orders (February) Y/Y 9.9% 7.3%

The euro fell against the dollar after Luxembourg's Finance Minister Jean-Claude Juncker signaled concern over the U.S. currency's decline saying he didn't like ``the way things are developing'' in the foreign-exchange markets.
The British pound pared earlier declines against the dollar and erased them versus the euro after the minutes of the Bank of England's last policy meeting showed two of the nine policy makers voted against cutting the benchmark interest rate to 5 percent this month.
The 15-nation European currency earlier strengthened against the dollar after an industry report showed growth in Europe's service industries unexpectedly accelerated in April, giving the European Central Bank more reason to keep interest rates on hold.

EUR/USD:Euro-dollar opened in Europe coming back to test the NY/Asia lows, stops triggered through here and on the break of $1.5950 as two major US names sold. Rate then found good demand to buy the dip at $1.5940, with one of those US names cited for buying a good chunk back, lifting the pair back above $1.5990. Rate eased back from here to end the morning around $1.5965. Small offers $1.6010, stronger $1.6020, stops $1.6025, bids $1.5940
GBP/USD: Opened early Europe at $1.9942. Sterling came under further pressure in early Europe, sales taking cable below $1.9900 before meeting decent support around $1.9870, . Cable recovered to $1.9920 ahead of BOE Minutes but dropped to $1.9895 into the release, spiking on the surprise 2-6-1 split to $1.9973 on second wave buys. Cable eased off highs, eventually breaking under $1.9900 to $1.9875.
USD/JPY: European trade opened with dollar-yen slipping back towards the day's lows, though momentum was lacking to take the pair further, with rate recovering steadily from here to make highs for the day at Y103.32 but eased back under Y103.00. Dlr-yen offers Y103.50/55, stops above, offers Y104.00, bids Y102.80

Canada retail trade for February is due at 1230GMT

- German government expects employment to rise by 400,000 in 2008, by 30,000 in 2009
- German government expects unemployment to fall by 500,000 in 2008, by around 40,000 in 2009.

European equity bourses are under pressure - the move comes after Unicredit spokesman is quoted on wires saying it will comment on HVB shortly. This announcement comes following earlier unsubstantiated market rumour of German bank due to report large writedown - market talk E50.0bln. The rumours come after HVB Group CEO Wolfgang Sprissler at a press conference late Tuesday, said that it expects "significant" losses related to the credit crisis in the first quarter. CAC-40 is dowm 0.14%, Xetra-DAX is down 0.8% and FTSE-100 is down 0.64%.

The euro fell against the dollar after Luxembourg's Finance Minister Jean-Claude Juncker signaled concern over the U.S. currency's decline.
The euro retreated from a record versus the U.S. currency after Juncker, who heads a group of counterparts from the euro area, told reporters he didn't like ``the way things are developing'' in the foreign-exchange markets. The Australian dollar rose to a 24-year high against the dollar after a government report showed inflation accelerated above 4 percent for the first time in seven years.
The British pound pared earlier declines against the dollar and erased them versus the euro after the minutes of the Bank of England's last policy meeting showed two of the nine policy makers voted against cutting the benchmark interest rate to 5 percent this month.
The 15-nation European currency earlier strengthened against the dollar after an industry report showed growth in Europe's service industries unexpectedly accelerated in April, giving the European Central Bank more reason to keep interest rates on hold.
The euro has risen 2.3 percent in April and 9.5 percent this year against the dollar on speculation inflation will discourage the ECB from lowering its 4 percent main refinancing rate. Inflation accelerated to a 16-year high of 3.6 percent in March, a European Union report showed last week.

Resistance 3: Y104.60
Resistance 2: Y104.00
Resistance 1: Y103.50
Current price: Y102.88
Support 1: Y102.70

Support 2: Y102.20

Support 3: Y101.70

Comments: Dollar dips. Support is around session low on Y102.70, stronger – at Y102.20. Below losses may widen to Y101.70. Minor resistance comes around Y103.50, stronger – on Y104.00 (Monday’s high), with a break above will open the way to Y104.60.

Resistance 3: Chf1.0280
Resistance 2: Chf1.0200
Resistance 1: Chf1.0080

Current price: Chf1.0068

Support 1: Chf1.0020
Support 2: Chf1.0000

Support 3: Chf0.9960

Comments: Dollar remains stable. Support comes at session low on Chf1.0020. Stronger level on Chf1.0000 with a break under widens losses to Chf0.9960. Resistance is around Chf1.0080, then – Chf1.0200. Stronger level is around Chf1.0280 (Apr 18 highs).

Resistance 3: $2.0090
Resistance 2: $2.0050
Resistance 1: $2.0000
Current price: $1.9906
Support 1: $1.9860
Support 2: $1.9780
Support 3: $1.9630
Comments: Pound corrects. Support comes at session low on $1.9860, then - $1.9780. Stronger level is around trend support line from Apr 2006 at $1.9630. Resistance comes near yesterday's high at $2.0000, further – on $2.0050 and $2.0080/90.

Ambac has reported a Q1 net loss of $1.66 bln or $11.69 per share much worse than estimates. The company said that the loss was due primarily to non-cash, mark-to-market losses on credit derivative exposures amounting to $1.725 bln.

Resistance 3:$1.6090
Resistance 2: $1.6040Resistance 1: $1.6020Current price: $1.5969

Support 1: $1.5880
Support 2: $1.5820
Support 3: $1.5710

Comments: Euro consolidates within the narrow range. Resistance comes at resent peak $1.6015/20. A break above will open the way to $1.6040. Strong support is around $1.5880. Below correction may dip to $1.5820/00. Stronger level comes at Apr 18 lows on $1.5710.

EUR/USD: $1.6000
USD/JPY: Y103.50
EUR/JPY: Y160.50
AUS/USD: $0.9395, $0.9315

Naomi Hasegawa, senior strategist at Mitsubishi UFJ Securities - "There is talk that the Fed may cut interest rates by 25 basis points instead of 50 to 75 basis points as expected previously."

Needed To Avoid Excessive Gain In Spare Capacity
BOE Hawks:Oil Prices, GBP Pose Further 'Inflationary Impetus'

Services 51.8 vs 51.6 final.

Resistance 3: Y105.00

Resistance 2: Y104.60
Resistance 1: Y104.00
Current price: Y102.98
Support 1: Y102.70

Support 2: Y102.20

Support 3: Y101.70

Comments: Dollar tries to rebound. Minor resistance comes around Y104.00, stronger – on Y104.60 (Monday’s high), with a break above will open the way to Y105.00. Support is around session low on Y102.70, stronger – at Y102.20. Below losses may widen to Y101.70.

Resistance 3: Chf1.0280
Resistance 2: Chf1.0200
Resistance 1: Chf1.0120Current price: Chf1.0043

Support 1: Chf1.0020
Support 2: Chf1.0000

Support 3: Chf0.9960

Comments: Dollar remains stable. Support comes at session low on Chf1.0020. Stronger level on Chf1.0000 with a break under widens losses to Chf0.9960. Resistance is around Chf1.0120, then – Chf1.0200. Stronger level is around Chf1.0280 (Apr 18 highs).

The S&P June contract was last 1.00 points higher at 1381.80, with the Nasdaq June contract last up 4.50 points higher at 1899.5.

Resistance 3: $2.0090
Resistance 2: $2.0050
Resistance 1: $2.0020
Current price: $1.9885
Support 1: $1.9880
Support 2: $1.9780
Support 3: $1.9630

Comments: Pound corrects its resent gains. Support comes at session low on $1.9880, then - $1.9780. Stronger level is around trend support line from Apr 2006 at $1.9630. Resistance comes near Monday high at $2.0000/20, further – on $2.0050 and $2.0080/90.

The benchmark Nikkei 225 was ahead by 31.34 points, or 0.23%, at 13579.16. The broader-based TOPIX gained 2.93 points to stand at 314.39.

Resistance 3:$1.6090
Resistance 2: $1.6040

Resistance 1: $1.6020

Current price: $1.5966

Support 1: $1.5880
Support 2: $1.5820
Support 3: $1.5710

Comments: Euro consolidates within the narrow range, holding below new records. Resistance comes at resent peak $1.6015/20. A break above will open the way to $1.6040. Strong support is around $1.5880. Below correction may dip to $1.5820/00. Stronger level comes at Apr 18 lows on $1.5710.

The benchmark Shanghai Comp ended the morning up 97.06 points or 3.08 pct at 3,244.86. The Shanghai A-share Index rose 101.81 points to 3,404.90, while the Shenzhen A-share Index was up 29.23 points at 988.83. The FTSE/Xinhua China A 50 Index was up 417.41 points at 12,939.21 and the FTSE/Xinhua China A 200 Index rose 302.91 points to 9,627.33.

High Low Close
EUR/USD 1.6017 1.5830 1.5994
USD/JPY 103.51 102.67 102.84
GBP/USD 1.9997 1.9745 1.9957
USD/CHF 1.0130 0.9996 1.0027

EUR/JPY 164.91 163.26 164.53
EUR/GBP 0.8048 0.7979 0.8013
GBP/JPY 206.08 203.33 205.30
GBP/CHF 2.0134 1.9919 2.0015

Change% ChangeLast

Nikkei 225 -148.73 -1.1% 13,547.82
Topix -20.05 -1.5% 1,311.46
FTSE 100 -18.30 -0.30% 6,034.70
CAC 40 -37.71 -0.77% 4,872.64
Xetra Dax -58.25 -0.86% 6,728.30
DOW -104.71 -0.82% 12,720.31
NASDAQ -31.10 -1.29% 2,376.94
S&P 500 -12.22 -0.88% 1,375.95
10yr Note +0.0800 +0.022% 3.720%
NYMEX Crude Oil +1.89 +1.61% 119.50
Gold +7.60 +0.83% 925.20

08:00 EU(15) PMI (April) flash - 52.0
08:00 EU(15) PMI services (April) flash - 51.7
08:30 UK BoE meeting minutes (09-10.04)
09:00 EU(15) Industrial orders (February) - 2.0%
09:00 EU(15) Industrial orders (February) Y/Y - 7.3%
12:30 Canada Retail sales (February) - 1.5%
12:30 Canada Retail sales excluding auto (February) - 1.3%
19:00 New Zealand RBNZ meeting announcement 8.25% 8.25%