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IF 200 -- August 29, 2011 -- 5/20

CURRENCIES AT A GLANCE  -  Close as of August 26, 2011
Currency
Last
Price
Year-End
2010
Year-End
2009
Year-End
2008
Year-End
2007
Year-End
2006
Short-Term to Long-Term
Technical Trend
US$ Index
73.81
78.96
77.95
81.21
76.62
83.67
USD treaded water near its month’s low; below 200-50/day moving averages; potential long-term downside risk to 71-65
USD per EUR
1.4499
1.3383
1.4324
1.4007
1.4590
1.3199
EUR recovering from 1.39/1.41 $/€ May/Aug. lows; 200-day MA provided support; constructive bottom pattern
JPY per USD
76.644
81.117
93.035
90.345
111.69
119.07
JPY climbed against USD in August to 76 JPY/$ (potential L/T target 62 JPY/$); potential downside risk to 80 JPY/$ ...chart inverted
JPY per EUR
111.13
108.56
133.28
127.12
163.13
157.07
JPY weaker against EUR in Aug; yet, it could still challenge 106 JPY/€ high of 2010; downside risk to 113 JPY/€
USD per GBP
1.6368
1.5612
1.6152
1.4614
2.0010
1.9589
GBP stronger against the greenback; since 2009, it remained within 1.42-1.70 $/£; pot. downside risk to 1.56-1.44 $/£
EUR per GBP
1.1289
1.1665
1.1275
1.0387
1.3588
1.4841
GBP weaker vs. EUR from 1.16 €/£ Aug. high; potentially, there could be a retracement to 1.15 €/£; momentum remains weak
CHF per USD
0.8063
0.9352
1.0352
1.0690
1.1325
1.2190
CHF plunged to 81 after peaking at 0.71 CHF/$ vs. USD (L/T target 0.67 CHF/$); downside risk to 0.83-0.85 CHF/$ ...chart inverted
CHF per EUR
1.1691
1.2516
1.4829
1.5040
1.6524
1.6090
CHF declined quite substantially against the EUR, after reaching 1.0256 CHF/€ rally high; potential downside risk to 1.24-1.30 CHF/€
CHF per GBP
1.3198
1.4600
1.6720
1.5286
2.2498
2.3890
CHF plunged against GBP after a 1.16 CHF/£ rally high; testing 50-day MA support; potential downside risk to 1.44 CHF/£

When liquidity is abundant and money supply M1 tends to reach out to the sky, gold follows -- see historical charts on bottom of page 4 -- also aided by escalating sovereign debt crises and a global economic cooling sentiment.    In plain English, as savvy investors, facing major real losses, are turning increasingly to gold, paper currencies, even though no longer on a gold standard, are being “redeemed” for gold in the marketplace.    There is out there a crying evidence of general distrust of politics’ ability to lead effectively economies and countries, both in the old and new continent.    Politicians have irresponsibly accumulated large public debt and, as a consequence, reduced the world’s richest nations to the position of the largest global debtors.

Aside from Treasuries and gold, the Swiss Franc has consistently been targeted by global investors seeking a safe haven for their wealth.    The Swiss Franc surge is affecting domestic exports to a point that businesses are exerting significant pressure on politicians and the central bank to take action.    The Swiss National Bank (SNB) expanded sight deposits to 200 billion Swiss Francs from 120 billion and slashed interest rates to zero, while expressing the intention use forex swaps to accelerate the increase in Swiss Francs’ liquidity.    Despite all these measures, the Swiss Franc remains largely overvalued.

 

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