MARKET DRIVERS – CURRENCIES
FX Research • 2 August 2010 • Jyske Markets
Today’s Comment
We have decided to revise down our 1-month
forecast of EUR/SEK to 940.
SEK has gradually appreciated over a long
period of time in step with the Swedish
economy gaining a foothold after the crisis,
and EUR/SEK has for a long period of time
traded relatively stable below the 50-day
moving average. Economic growth has also so
far been a positive surprise this year, and
Friday’s GDP data disclosed that the positive
trend continued into Q2. If the markets are
generally able to maintain a more positive
momentum over the coming weeks, we
anticipate that the positive signals in Swedish
economic fundamentals will contribute to
supporting SEK up to the next monetary-policy
meeting at Riksbanken on 2 September.
Technically, EUR/SEK has moved into the
trading range (approx. 910 to 955) within
which the cross was trading before the
financial crisis set in, and therefore we do not
anticipate any significant appreciation of SEK
from the present levels. In addition, EUR/SEK
enjoys short-term support around a falling line
of support (at approx. 9.35). Moreover, the
present market has practically already
discounted an interest-rate hike at its next
monetary-policy meeting at Riksbanken, and
therefore we are only slightly optimistic about
Publisher: Editor:
Jyske Markets Helle Varming
FX & Interest Rate Research FX & Interest Rates
Vestergade 8-16 +45 89 89 71 05
DK-8600 Silkeborg hv@jyskebank.dk
SEK at the present point in time. Today’s Chart – EUR/SEK
Poor figures from the US GDP were offset by
good consumer confidence from Michigan and
good Chicago PMI. We saw a minor increase of
12,0
EURUSD this morning, and it is now trading at
130.80. We still see 131 as an important point
11,5
of resistance on the upside, and keep an eye
on 129.85 as the point of support. The
business trend indicator for US manufacturing
11,0
industry, ISM, for July will be released today.
ISM sends signals about growth in
manufacturing industry and is therefore a 10,5
good indicator of how hard manufacturing
industry is hit by the general economic
slowdown. The indicator fell in June, and we 10,0
expect a marginal decline for July. ISM is still
at a level signaling solid growth, and our
economic model for the next two months 9,5
points to a marginal increase.
Today’s Key Events 9,0
08:30 PMI manufacturing (SEK)
09:00 PMI manufacturing (NOK) 8,5
09:15 Retail sales (CHF)
10:00 PMI manufacturing (EUR)
06 07 08 09 10
10:30 PMI manufacturing (GBP)
16:00 ISM manufacturing (USD)
22:00 Geithner gives his comments on Source: Reuters EcoWin
financial reform (USD)
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Please see the last page
MARKET DRIVERS – CURRENCIES
FX Research • 2 August 2010 • Jyske Markets

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

target
Majors
EUR/USD 130.66 Focus on internal imbalances in the euro zone, political disagreement and pressure on Southern European govt. bonds sent down EUR - Resistance 131.00 next 132.70
The US is somewhat ahead of Europe in the economic cycle, and for some time economic indicators have shown good trends - Support: 130.00 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 570.17 Focus on internal imbalances in the euro zone, political disagreement and pressure on Southern European govt. bonds sent down EUR + Resistance 573.11 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: 568.73 next 561.45 606
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 83.04 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 897.07 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 113.10 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 6.59 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 • 2 August 2010 • Jyske Markets

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

target
Scandinavia
EURNOK 789.03 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: 788 next 781 800
Correction in the equity market/rising risk aversion will still be able to put pressure on the NOK +
NOKDKK 94.36 Continuing improvement of key indicators in Norway: labour market is strong and housing market is close to its record-high levels + Resistance 94.55 next 95.40
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: 91.75 next 91.08 93.10
Correction in the equity market/rising risk aversion will still be able to put pressure on the NOK -
EURSEK 938.45 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 79.37 Still risk that SEK will suffer a blow in the event of risk aversion + Resistance 79.68 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 • 2 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

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 • 2 August 2010 • Jyske Markets

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