November 10th 2008, Consolidated Ranges Amidst

Weak Data

USD

The USD faced cautious trading leading up to the release of the unemployment data on
Friday. The numbers in the reports were negative, the Non Farm Employment Change result
showed a minus -240K, below the expected figure of minus -200K. The Unemployment Rate
provided no relief either coming in at 6.5%, worse than the estimated 6.2%. Upon release of
the above data, the USD became volatile but eventually finished off the day basically where it
started – not losing much ground. Perhaps the reason for this type of trading was that negative
unemployment news had been largely discounted into the USD already. Investors have known
for some time that the unemployment picture in the U.S. has been bleak and it would have
taken a near miracle to produce a good number. There will not be any major U.S. economic
releases today or tomorrow. The U.S economic picture remains gloomy and faces a possible
recession, although the Federal Reserve and U.S. Treasury have taken strong measures
including interest rate cuts and stimulus packages in order to kick start the economy and
protect the financial sector.

It will be a relatively quiet week for U.S. data, tomorrow is the Veterans Day Observance and
banks will be closed. Not until Thursday will investors get more U.S. economic data, this with
its weekly Unemployment Claims numbers and on Friday the release of Retail Sales figures.
Importantly a speech is scheduled by Fed Chairman Bernanke on Friday from Europe.
Investors may look to the equity markets for insight into the currency looking glass the next
few days, also news reported from the political front involving the upcoming change in the
U.S administration may factor into sentiment. This weekend President-elect Obama called on
Congress to pass a fiscal stimulus package for American consumers. There has also been
further debate for the Treasury Department to get involved in the troubled automobile
industry. USD investors will have a broad spectrum of information to monitor this week. The
USD is certain to test it recent range today as traders come back from their weekend.

EUR

The EUR experienced a rather choppy trading session on Friday and ended the day basically
unchanged. The EUR received unpromising data from the German Industrial Production
number coming in with a minus -3.6% outcome, compared to the forecasted minus -1.9%.
Also the French Trade Balance release showed a number of minus -6.3 billion, below the
estimate of minus – 5.0 billion. Today the French Industrial Production number is due and it is
projected to be minus -0.6% and the broad European Sentix Investor Confidence figures are
expected to have a reading of minus -34.0. Tomorrow the German ZEW Economic Sentiment
data is scheduled. All of these releases will put the onus squarely back on fundamentals as
investors judge the scope of the weakening European economy. The European Central Bank
and President Trichet will be in the spotlight this Friday as they hold their 5th ECB Central
Banking Conference. Having faced a consolidated range of trading the past few sessions, the
EUR today is likely to face cautious sentiment again

GBP

The Sterling remained a focal point for investors on Friday after the bold interest rate cut
made by the BoE the day before. The change in monetary policy from the Bank of England
now puts the focus on U.K. economic data. Today the PPI input number is due and it is
forecasted to be minus -2.6%, which would be below its previous result of minus -1.2%.
Tomorrow the U.K. will release its Trade Balance data. Wednesday looks to be an important
day for the GBP because the Bank of England will release its Inflation Report. Due to the
poor circumstances of the U.K. economy and the fear it has slipped into recession, investors
will watch the data closely this week in order to gauge the possibilities of yet another interest
rate cut in December. Investors also should pay attention to the growing dispute via Halifax
Bank of Scotland as they seem to be intent on walking away from the planned merger with
Lloyds TSB. The aggressive action from the BoE last week put the Sterling in the spotlight
and today investors will continue to grapple with the questions surrounding the GBP.
JPY

The JPY lost a bit of ground Friday as global equities markets provided a strong finish to
the day. Importantly for the JPY, the Chinese government announced this weekend that
they are going to initiate a stimulus package of nearly 600 billion dollars in order to help its
own economy. This could have a positive affect on the Japanese economy and other Asian
economies as well, because it is perceived that a portion of this money would create export
demand from China. Strong Asian equity markets today could cause JPY carry traders to
enter the market and thus the JPY to lose ground.

Written by: Robert Petrucci

Bforex Chief Commodity Expert and Forex Analyst

Robert@BForex.com Please contact Robert Petrucci directly with any questions or

comments you may have about the analysis.

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