Analysis

	Currency Market Summary for the week of November 12th – 16th, 2007.

However the currency market’s reaction to this is very unique.  When the fear get stronger, investors get rid of the carry trades positions, i.e., they sell dollar against the Japanese yen and the pound and the Euro against the yen, which results in  sharp drops of the crosses pound-yen and Euro-yen. In their turn they pull down the rates pound-dollar and Euro-dollar. Cheap credits in yens invested in risky assets are a distinguishing feature of the market within the last year and a half.
The Euro remains close to the recent highs. There has been no significant correction.  The growth to 1.4750 and higher is possible this week.
The pound is turning below 2.0350-2.0450 with the goals of 2.0660 and 2.0720. The breakthrough will result in testing of 2.0850. One should note that the mortgage crisis and the current state of the British economy have a restrictive effect on the pound, so the increase can any time change into a sharp and significant drop.
At the end of the week the correction both for the Euro and the pound is expected.
The Canadian dollar is still being traded in conditions of increased volatility.  The usual day ranges are passed within a few hours. The resistance is at 0.9900, the support is at 0.9540. A return to the par value will provoke a new wave of dollar sales, and a break through 0.95 will mean an attempt to test 0.9260 and 0.9060.
The yen remained within the range of 109-111.70. The further trend within the next few days will be determined by the news and economic statistics. It’s too early to speak about an upward turn for this pair.
The market does not believe the statements of officials about the strong dollar, but is not so eager to sell it either. This is particularly noticeable with the pound.