USD
Yesterday morning the USD fell sharply across the board. The major currencies against the dollar gapped up in the morning and refilled the gap later on. The market believes that the US economy is slowing and next year Q1 will be likely to cut the rate which pressures the dollar. According to the CBOT fed fund futures, traders priced in around 42% chance of rate cut next year Q1, and 100% chance of rate cut at Q2 2007. US 10yr bond yield fell to 4.53% which was the lowest since 2006 Feb. It showed that the long term inflation expectation was moderate and the US economy was slowing down. Investors should aware of today's Consumer confidence index and existing home sales data which will show that the housing market is cooling further and bearish to the dollar.

EUR
EUR/USD rose to 1.3170 and fell to 1.3100 support. Yesterday at the EU finance ministers meeting, some of the EU ministers discussed about the Euro. France finance minister said that needed to collective vigilance on the strengthened Euro. Spain finance minister pointed out that the Eu interest rate was at the historical high level and believed that the high Euro would hurt the export. Belgium finance minister also agreed with the Euro appreciation would hurt the export and unsatisfied with the high Euro interest rate. The Euro appreciated above 1.30 level and the EU finance ministers began to worry about the impact on export which might force the Euro to retrace back down to the support at 1.30 first. Investors should aware of today's EU M4 money supply growth which affected the inflation expectation. Technically, Euro support is at 1.3100 in the short term and the resistance is at around 1.3200.

CHF
CHF maintained the strength yesterday. USD/CHF breached 1.2180 critical support and fell to 1.2020 level. Earlier the strong CHF was driven by the cross rate unwinding. EUR/CHF rose to 1.60 critical resistance and retraced back to 1.5810. GBP/CHF also rose to 2.3850 major resistance and fell to 2.3350 support which supported the CHF. Later GBP/CHF found support at 2.3350 and began to rebound and so as the EUR/CHF which weakened the CHF. Next month SNB would be likely to raise the interest rate again and I believed the CHF will continue to firm against other European currencies in the short term. However, in the medium to long term the EUR/CHF and GBP/CHF will continue the uptrend and bearish to the CHF. Technically, the short term support is at 0.6675 and resistance is at 0.6750.

NZD
NZD/USD rose to 0.6740 but overall was still weakening across the board and fell to 0.6680 support. The Kiwi interest rate is believed to hit the peak and European currencies such as Euro and CHF still had rooms for the rate hike which pressured the Kiwi. EUR/NZD rose to 1.96, GBP/NZD rose to 2.9650, and AUD/NZD also rose to 1.1630 which was bearish to the NZD. Technically, NZD/USD support is at 0.6675 and the resistance is at 0.6750.