MARKET DRIVERS – CURRENCIES

FX Research • 3 August 2010 • Jyske Markets

Today’s Comment Today’s Chart - EUR/USD

Not much news. The US dollar continues its
downturn and hence a higher EUR/USD. The
trend of the US dollar is still down, and not even
better ISM data (at first glance) from the
manufacturing industry could change the trend. 1,50
In the present scenario where we do not see any
good growth prospects from the US with 1,45
resultant rising interest rates nor any
considerable ailments with resultant rising risk
aversion – the US dollar leads a turbulent life
1,40
with moderate interest.
Pending home sales in the US for June will be
1,35
released today. The data is a good indicator of
home sales and dropped back by 30% in May 1,30
after the repeal of the tax rebate. We anticipate a
reasonable increase compared with May since 1,25
the fundamental conditions for home purchases
are still favourable. This is mirrored in the low
mortgage rates, signs of stabilisation of house 1,20
prices as well as an increase in employment.
Today’s Key Events 1,15
09:15 Consumer prices (CHF) 24 nov 05 jan 16 feb 30 mar 11 maj 22 jun 03 aug
11:00 Producer prices (EUR)
14:30 Personal income & consumption (USD)
Moving Average (55D ) Moving Average (100D )
16:00 Factory orders (USD)
16:00 Pending home sales (USD)
23:00 Car sales (USD) Source: Bloomberg/Jyske Bank

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MARKET DRIVERS – CURRENCIES
FX Research • 3 August 2010 • Jyske Markets

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

target
Majors
EUR/USD 131.57 Focus on internal imbalances in the euro zone, political disagreement and pressure on Southern European govt. bonds sent down EUR - Resistance 132.70 next 135.00
The US is somewhat ahead of Europe in the economic cycle, and for some time economic indicators have shown good trends - Support: 131.20 next 128.50 123
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 566.20 Focus on internal imbalances in the euro zone, political disagreement and pressure on Southern European govt. bonds sent down EUR + Resistance 567.87 next 579.80
The US is somewhat ahead of Europe in the economic cycle, and for some time economic indicators have shown good trends + Support: 561.45 next 551.88 606
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 82.86 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 898.97 Focus on very negative public finances: Uncertainty about future fiscal tightening (and UK’s rating) may weaken pound sterling - Resistance 907.48 next 923.22
Pound sterling was under massive pressure when the financial crisis peaked, and (too) much misery has already been discounted + Support: 887.48 next 873.43 903
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 113.76 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 6.55 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 • 3 August 2010 • Jyske Markets

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

target
Scandinavia
EURNOK 787.16 Continuing improvement of key indicators in Norway: labour market is strong and housing market is close to its record-high levels - Resistance 788 next 812
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 94.59 Continuing improvement of key indicators in Norway: labour market is strong and housing market is close to its record-high levels + Resistance 95.40 next 96.95
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: 94.55 next 91.75 93.10
Correction in the equity market/rising risk aversion will still be able to put pressure on the NOK -
EURSEK 934.52 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 79.71 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: 77.21 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 • 3 August 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 • 3 August 2010 • Jyske Markets

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