MARKET DRIVERS – CURRENCIES

FX Research • 09.08.2010 • Jyske Markets

Today’s Comment The Scandinavian currencies were able to Today’s Chart –

pull through. They weakened a bit against
The somewhat weaker-than-expected job
the euro but not to any significant degree.
report from the US (Non Farm Payrolls - NFP)
got things moving Friday afternoon. The
Today the Bank of Japan has its monetary- 1,50
market was taken by surprise as earlier in
policy meeting. We expect that despite the
the week there were indications that the
strong economic growth, it will still be a 1,45
NFP would be good. As mentioned the
while before any monetary tightening will be
figures turned out to be somewhat weaker
implemented as Japan is still seeing 1,40
and immediately the dollar traded down. So
deflation. Therefore we expect the monetary
far, the peak for EUR/USD has been at 1,35
policy to remain unchanged and that
133.35. The pressure on the dollar has,
tightening will not be an issue until the
however, eased a bit overnight. USD/JPY 1,30
inflation figures are again positive. We do
traded down from 85.80 to about 85.00.
not expect that this will happen until late 1,25
2011.
There is no doubt that the market has begun
to be a bit more sceptical with respect to the 1,20
US and expects lower interest rates for a Today’s Key Events
longer period than anticipated until now. We 08:00 Trade balance (DEM) 1,15
look forward to the FOMC meeting on N/A BoJ’s interest-rate announcement 30 nov 11 jan 22 feb 05 apr 17 maj 28 jun 09 aug
Tuesday where the probability of new (JPY)
initiatives has increased in the wake of the Moving Average (50D ) Moving Average (200D )
weak report on Friday – the dollar will most
likely be under pressure until then. It is
important to keep an eye on the level at Source: Bloomberg/Jyske Bank
135.00. We await the FOMC meeting on
Tuesday and maintain our negative bias on
EUR/USD in the one month term.

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MARKET DRIVERS – CURRENCIES
FX Research • 09.08.2010 • Jyske Markets

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

target
Majors
EUR/USD 132.89 Future focus on internal imbalances in the euro zone, political disagreement and pressure on Southern European govt. bonds - Resistance 135.00 next 136.00
The US is somewhat ahead of Europe in the economic cycle - Support: 132.50 next 131.20 126
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 560.67 Future focus on internal imbalances in the euro zone, political disagreement and pressure on Southern European govt. bonds + Resistance 562.32 next 567.90
The US is somewhat ahead of Europe in the economic cycle + Support: 551.91 next 547.85 592
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 83.12 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 896.27 Focus on very negative public finances: Uncertainty about future fiscal tightening (and UK’s rating) may weaken pound sterling - Resistance 907.53 next 923.27
Pound sterling was under massive pressure when the financial crisis peaked, and (too) much misery has already been discounted + Support: 887.53 next 873.48 903
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 113.70 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 -

Please refer to the publication, CHF: stil moving upwards -

Please refer to the publication, CHF: stil moving upwards -

MARKET DRIVERS – CURRENCIES
FX Research • 09.08.2010 • Jyske Markets

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

target
Scandinavia
EURNOK 789.57 Continuing improvement of key indicators in Norway: labour market is strong and housing market is close to its record-high levels - Resistance 812 next 820
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 94.29 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: 91.76 next 90.86 93.10
Correction in the equity market/rising risk aversion will still be able to put pressure on the NOK -
EURSEK 940.46 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 79.20 Still risk that SEK will suffer a blow in the event of risk aversion + Resistance 79.69 next 80.55
Riksbanken expresses optimism about the economy and thinks Sweden has been through the worst part of the crisis - Support: 77.21 next 76.03 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 • 09.08.2010 • 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

Please 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 • 09.08.2010 • Jyske Markets

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