Subject: Dollar Climbs on Speculation U.S. Reports Will Show Expansion

Oct. 14 (Bloomberg) -- The dollar had the biggest one-day gain
against the yen in more than three months and rose versus the euro
in New York on speculation earnings, retail sales and factory
reports will add to signs the U.S. economy is expanding.

``Given the economic data and the earnings out of the U.S., the
dollar should retrace some of its recent weakness,`` said Scott
Barlass, who as director of currency risk helps manage $22 billion
at Abbey National Asset Managers in Glasgow, Scotland. The U.S.
currency should do ``reasonably well`` in coming weeks.

The dollar is down 2.2 percent against the euro and 3.7 percent to
the yen since Group of Seven finance ministers called for more
flexible exchange rates Sept. 20. U.S. retail sales excluding autos
rose in September for a fifth month and New York manufacturing
expanded for a sixth, economists expect reports to show tomorrow.
Companies releasing third-quarter earnings today include Intel Corp.

The dollar rose to 110.12 yen at 7:34 a.m. in New York from 108.93
yesterday. It`s the biggest one-day increase since June 26. It
strengthened to $1.1647 per euro from $1.1705. Earlier, the dollar
reached $1.1585 to the euro, the highest against the 12-country
European currency since Oct. 6.

European Central Bank council member Ernst Welteke said today he
doesn`t see dollar weakness lasting because ``everyone responsible
is aware of the situation and there will certainly be a gradual
adjustment and a gradual reduction of the imbalances.`` He was
speaking in a televised interview with Bloomberg News.

Stocks Advance

Companies including Motorola Inc. and PeopleSoft Inc. have raised
their forecasts for this quarter, and the Standard & Poor`s 500
Index yesterday rose to the highest since June 2002. It has
increased 19 percent this year. More than half the members of the
S&P 500 will release results over the next two weeks.

Intel and Merrill Lynch & Co. are scheduled to release earnings
today. Motorola Inc. yesterday beat the company`s forecast for third- quarter profit and sales.

U.S. retail sales excluding autos rose 0.4 percent in September
after gaining 0.7 percent in the previous month, according to the
median forecast of 66 economists surveyed by Bloomberg News.

A separate survey shows that the Federal Reserve Bank of New York
may say its index of regional manufacturing will register at 16 in
October, compared with 18.35 in September. Readings greater than
zero signal manufacturing is improving.

Budget Deficit

The U.S. budget deficit will surge to a record $600 billion in the
fiscal year that began on Oct. 1, some of Wall Street`s biggest bond
trading firms said.

The U.S. must attract $1.5 billion a day in foreign investment to
finance the shortfall in the current account, the broadest measure
of international trade and investment. The deficit widened to a
record $138.7 billion in the second quarter, or 5.1 percent of gross
domestic product.

Ethan Harris, chief economist for Lehman Brothers Holdings Inc.,
said he may boost his firm`s estimate for third-quarter U.S.
economic growth to about 6 percent from a previous prediction of 5
percent. Goldman Sachs Group Inc. yesterday increased its forecast
to 6.5 percent, the fastest in almost four years, from 5 percent.

Abrupt Adjustments

U.S. economic growth will slow to 3.7 percent in the final three
months of the year as household spending cools, according to the
consensus estimate of 53 economists surveyed by Blue Chip Economic
Indicators released Friday.

The euro`s gain against the dollar is ``still within an acceptable
framework because the euro`s exchange rate is at its long-term
average,`` Welteke said today. ``If abrupt exchange rate adjustments
follow, it would disrupt competition and production conditions,
harming the world economy as a whole.``

The euro strengthened more than 8 percent from the beginning of the
year through the start of the G-7 meeting. ECB President Wim
Duisenberg yesterday said traders and investors may
have ``misunderstood`` last month`s G-7 communique.

USD OUTLOOK by James Weiss, Managing Director-CCM
Economic Data
MONDAY June 2
-US May ISM Index - 10:00 am
-US Apr Construction Spending - 10:00 am
-US May Auto/Truck Sales - Noon
-UK May Reuters PMI Mfg.

TUESDAY June 3
-Canada Interest Rate Decision
-Euro Apr Employment Figures

WEDNESDAY June 4
-US Weekly Oil and Gas Inventories
-US May ISM Services - 10:00 am
-US Q1 Productivity - 8:30 am
-UK May Reuters PMI Services
-Australia Q1 GDP
-Australia Interest Rate Decision
-Euro Mar Retail Trade

THURSDAY June 5
-US Weekly Jobless Claims - 8:30 a.m.
-US Apr Factory Orders - 10:00 am
-UK Interest Rate Decision
-Euro Q1 GDP
-Euro Interest Rate Decision
-New Zealand Interest Rate Decision
-Sweden Interest Rate Decision

FRIDAY June 6
-US May Non Farm Payrolls - 8:30 am
-US May Employment Figures - 8:30 am
-US Apr Consumer Credit - 3:00 pm

EURUSD
Eur-usd failure on Friday to capitalize on Thursday’s bullish candle formation and the likelihood of a gap down at the open of trading this week on Bush’s remarks regarding continued U.S. policy of strong USD on Sunday coupled with recent strength in U.S. Equity markets could fuel demand for USD and increases the odds of further weakness into Monday. For now initiated a short at 1.1767, look for choppy trade, tight stops, target 1.1526 as low for the week.

USDCHF
Usd-chf breaks 1.3015 to trigger attempts on 1.3069 and reinforce further gains into Monday noting a settlement above 1.3000 confirms an engulfing bullish candle pattern. However, some form of mild correction is likely from the mid-upper 1.30-s. buy dips.

USDJPY
Usd-jpy: the May inverse head-&-shoulders and the subsequent 3-day bullish flag both target gains above 121.26 by the end of the week. Strategies favor buying into the mid 118-s.


GBPUSD
Gbp-usd: Friday’s small 48-hour double top contrasts with bullish signals generated by Thursday’s break above the 1.6473 former 7-day range top For now
Initiated new short at 1.6346, also keeping in mind break of 1.6309 reinforces the reversal picture to target 1.5926 on the week.

EURGBP
The eur-gbp major uptrend stalled in late May. Gains above 0.7217 are needed to
Re-target 0.7254/62. Otherwise a bearish break of 0.7191 will confirm the up-trend short term reversal, new short initiated at 1.7199 with initial target of 0.7145 & 0.7103 on the week.












us dollar
eur-usd short
1.1767 Week’s target 1.1526 stop
1.1817
usd-jpy buy
at 118.67 Week’s target 121.26 stop at 118.37
gbp-usd Short
1.6346 Week’s target 1.5926
stop 1.6416
usd-chf buy at 1.3045 Week’s target 1.3263 stop at 1.2985










crosses
eur-jpy short at 140.60 Week’s target 138.55 stop at 140.95
eur-gbp short at 0.7199 Week’s target 0.7103 stop at 0.7225
eur-chf short at 1.5292 Week’s target 1.5143
stop 1.5339
gbp-jpy short at 194.92 Week’s target 192.46 stop at 195.85

DISCLAIMER: Commentary and market information is provided for informational purposes only.
The information contained in this report is gathered from reputable sources and is not intended to be used as investment advice. Clearview Capital Management, Inc. assumes no responsibility or liability from gains or losses incurred by the information herein contained.

Source: http://www.clearviewcap-fx.com

I see that USD is down this week.
Geopolitical concerns.
The slower pace of hiking rate anticipation.
The speculation of another 25 basis point in UK later this week.
The pair can gain momentum from crossing 1.234 to rethreat this year high at .1.2935.
I do not see a constant decline of oil prices and it is just a temporary impact.
The unsustainable US trade deficit can press on the USD across the broad this week.
Follow this week greenspan toon