22 August 2001, 20:32  US FX Daily Outlook: Euro rallies vs dlr on strong Ifo reading

By Cornelius Luca
New York, Aug. 22 (BridgeNews) - The euro extended Tuesday's steep gains made in the wake of the Federal Reserve rate cut with help from an unexpectedly strong German Ifo survey of business sentiment. The 12-nation currency climbed to a five-month high of 92.40 cents after July's German Ifo survey rose to 89.8 from June's five-year low of 89.5. The recent bullish momentum of the euro is encouraging for the bulls seeking euro parity with the dollar.
Sterling/dollar also marked a five-month high, rising to 1.4584, while dollar/Swiss franc dropped to a five-month low of 1.6450. Dollar/yen climbed back into positive territory from a one-week low of 119.33 with help from the euro/yen, while dollar/Canada marked time within Tuesday's range, when it climbed to a three-month high of 1.5502.
Despite bouts of profit-taking, the dollar will remain under selling pressure versus the major European currencies, which otherwise are in an overbought condition. Dollar/yen will likely tread around the 119.65 Gann 50-point pivot in a market devoid of any significant domestic event.
The Bush administration on Wednesday slashed its estimate of the U.S. fiscal 2001 budget surplus to $158 billion from its February estimate of $281 billion. The administration also pared its estimate of the fiscal 2002 surplus to $173 billion from $231 billion. The downward revisions will reinforce criticisms of the administration's 11-year tax-cut program, which Democrats have argued are excessive.

Current Previous Change Global Global
NY open NY close low high

USD/JPY 119.78 119.57 0.21 119.33 120.10
EUR/USD 0.9206 0.9179 0.0027 0.9135 0.9240
EUR/JPY 110.25 109.75 0.50 109.50 110.56
GBP/USD 1.4557 1.4537 0.0020 1.4520 1.4584
USD/CHF 1.6508 1.6540 -0.0032 1.6450 1.6611
USD/CAD 1.5478 1.5484 -0.0006 1.5458 1.5494
AUD/USD 0.5379 0.5342 0.0037 0.5344 0.5390
NZD/USD 0.4441 0.4388 0.0053 0.4391 0.4445
SP.1 1164.20 7.90 1156.00 1167.00 ND.1 1504.50 28.50 1473.00 1506.00

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