MARKET DRIVERS – CURRENCIES
FX Research • 28.07.2010 • Jyske Markets
Today’s Comment
Yesterday the positive sentiment in the
financial markets supported EUR/CHF. The
Swiss franc fell by more than 1% against the
euro, and technically we are nearing a test of
the levels at about 138.30 (about 5.40 for
CHF/DKK) and then 140 (5.32 for CHF/DKK).
For the long term, we still think that the
downtrend for EUR/CHF is intact, and that
fundamentals point to further appreciation of
the Swiss franc (for instance, it cannot be
ruled out that SNB will raise its rate before the
ECB initiates its tightening cycle). Therefore
we think that investors should take advantage
of a correction up towards 138-139.50 for
EUR/CHF (5.34 - 5.40 for CHF/DKK) to close
any CHF funding.
After some attempts, the yen breached 113.50
against the euro, and overnight in Asia
EUR/JPY tested levels around 114.40. So far
we maintain a negative view of EUR/JPY in the
short term, but if EUR/JPY breaches 114.40, it
may signal the beginning of the depreciation
of the yen that we envisage for the long term.
Read more about our view of the yen in
the upcoming issue of FX – Spot on.
The US consumer confidence figures released
yesterday were a tad below expectations (50.4
Publisher Editor:
Jyske Markets Helle Varming
FX & Interest Rate Research FX & Interest Rates
Vestergade 8-16 +45 89 89 71 05
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against 51), and that reduced optimism Today’s Chart – EUR/JPY
slightly in US equity markets. The sentiment in
Asia is, however, optimistic this morning, and
the reaction in the FX markets were fairly
modest. Today the US economy will again
attract attention when the Fed publishes its
so-called Beige Book. Beige Book is a 129
discussion paper for the monetary-policy
meeting on 10 August, and it includes
comments from businesses on the 124
development in industry, retail trade, the
financial sector, prices and wages as well as
the housing market. Therefore it also 119
constitutes a broad foundation for an update
on the economic situation, and therefore,
through the publication, we gain an insight 114
into what has happened since the last
interest-rate meeting in June when the Fed
109
stated that the economy is growing
moderately. Therefore, focus will be on any
statements indicating whether growth is still
104
seen as moderate or whether the outlook has
become more positive. 10 feb 24 mar 05 maj 16 jun 28 jul
Moving Average (50D ) Moving Average (100D )
Today’s Key Events
N/A Consumer prices, preliminary (DEM)
14:30:00 New orders, durable consumer
goods (USD)
Source: Bloomberg/Jyske Bank
20:00 Fed’s Beige Book
Read more:
Read more FX and interest rate analyses at www.jyskemarkets.com
Disclaimer:
Please see the last page
MARKET DRIVERS – CURRENCIES
FX Research • 28.07.2010 • Jyske Markets

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

target
Majors
EUR/USD 129.96 Focus on internal imbalances in the euro zone, political disagreement and pressure on Southern European govt. bonds sent down EUR - Resistance 130.25 next 131.00
The US is somewhat ahead of Europe in the economic cycle, and for some time economic indicators have shown good trends - Support: 124.80 next 124.00 123
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 573.36 Focus on internal imbalances in the euro zone, political disagreement and pressure on Southern European govt. bonds sent down EUR + Resistance 596.93 next 600.78
The US is somewhat ahead of Europe in the economic cycle, and for some time economic indicators have shown good trends + Support: 571.95 next 568.68 606
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 83.38 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: 83.15 next 82.10 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 893.56 Focus on very negative public finances: Uncertainty about future fiscal tightening (and UK’s rating) may weaken pound sterling - Resistance 895.94 next 907.39
Pound sterling was under massive pressure when the financial crisis peaked, and (too) much misery has already been discounted + Support: 887.40 next 873.35 903
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 114.01 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: 113.45 next 111.65 110
Decent growth in recent months; the economy is, however, still fragile; low growth ahead and deflation may once again be a theme +
JPYDKK 6.54 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 6.57 next 6.67
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 137.68
Please refer to the publication, CHF: stil moving upwards -

CHFDKK 541.15
Please refer to the publication, CHF: stil moving upwards -
MARKET DRIVERS – CURRENCIES
FX Research • 28.07.2010 • Jyske Markets

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

target
Scandinavia
EURNOK 801.64 Continuing improvement of key indicators in Norway: labour market is strong and housing market is close to its record-high levels - Resistance 812 next 818
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: 795 next 788 800
Correction in the equity market/rising risk aversion will still be able to put pressure on the NOK +
NOKDKK 92.87 Continuing improvement of key indicators in Norway: labour market is strong and housing market is close to its record-high levels + Resistance 93.73 next 94.56
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 91.09 93.10
Correction in the equity market/rising risk aversion will still be able to put pressure on the NOK -
EURSEK 948.40 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 925 980
After GDP for Q2, Q3 and Q4 2009 has been revised up, an interest-rate hike in July is very likely +
SEKDKK 78.49 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: 77.22 next 76.03 76.00
After GDP for Q2, Q3 and Q4 2009 has been revised up, an interest-rate hike in July is very likely -
MARKET DRIVERS – CURRENCIES
FX Research • 28.07.2010 • 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 • 28.07.2010 • Jyske Markets

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Risk
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news flow, etc. regarding the issuer may affect the exchange rate/the interest rate/the price of the commodity. See the
front page of the research report for our view of the risk associated with the currency/interest rate/commodity
investment. The risk factors and/or the sensitivity calculations stated in the report should not be regarded as
exhaustive.

Update of the research report

Analyses, recommendations, and ad hoc publications are not updated. A new publication will instead be published if
and when it is found necessary. Market comments are updated daily.

See the front page for the initial date of publication of the report.
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