| Market Overview In the foreign exchanges, the weaker-than-expected payrolls data prompted a surge in risk aversion, with the U.S. dollar rising against the euro but falling against the Japanese yen. However, some of these moves have now been reversed in Asian and early European trading. The dollar rose back slightly against the yen in Asia Friday after tumbling yesterday on weak U.S. jobs data, boosted by demand from Japanese players investing in overseas assets. But some traders said the U.S. currency's recovery may be temporary, and if it begins falling again later in the session, a thin market due to a U.S. holiday could exaggerate its moves. The euro ended Thursday down against most of the majors, gaining only against the commodity dollars, after the European Central Bank left rates unchanged at 1.00 percent, as expected, for the second straight month. ECB President Jean-Claude Trichet said that "current rates are appropriate" and that recovery is expected in mid-2010, but at the same time, he said later on in an interview that rates may not be at their "lowest" level, suggesting that the ECB feels that they may have room to reduce rates further later in the year. The British pound was lower against the dollar after dovish comments from a Bank of England policymaker and continued concerns about the economy. BoE policymaker Tim Besley said it was too early to judge when the central bank will need to start withdrawing the massive stimulus it has delivered. Data showed that an index on purchasing managers' survey on UK construction activity fell to 44.5 in June. The Australian dollar was weaker late Friday, although above its lowest level, after weaker-than-expected U.S. jobs data eroded much of the positive sentiment that has supported the high-yielding currency. Market expectation European stocks are expected to open marginally higher Friday, as investors chase bargains after Thursday's hefty losses. However, the U.S. holiday is likely to limit activity. For EURGBP support noted at stg0.8525/20, though not disregarding the overnight low at stg0.8527, a break below stg0.8520 to open a deeper move toward stg0.8500. Resistance seen placed at stg0.8545/50 ahead of stg0.8565/70 and stg0.8580. Pound offers seen placed between USD1.6430/35 (USD1.6433 50% USD1.6545/1.6323), a break to open a move toward USD1.6460 (Europe high Thursday/61.8%) ahead of USD1.6490/00. Support remains toward USD1.6320, a break to open a deeper move toward USD1.6280, with stops noted through USD1.6275/70. EURUSD expected thin conditions, due to the US market holiday, and talk that a large Asian bid placed around the USD1.3990 level. Offers seen placed toward USD1.4030 USD1.4027 recovery high NY/USD1.4032 38.2% USD1.4202/1.3927) with stops above USD1.4035, which if triggered to open a move toward USD1.4080/85 ahead of USD1.4100. Support seen placed around USD1.3990, a break below to open a deeper move toward USD1.3960/50 ahead of USD1.3927 and stronger area between USD1.3920/00. If U.S. economic worries and higher risk aversion cause the dollar to reverse course against the yen later in the day, a key point to watch will be the JPY95.00 level, traders say: There are automated stop-loss selling orders placed there, and if a dollar fall triggers those, the currency could quickly hit JPY94.50 in a thin market, traders say. Despite the fall in the Australian dollar, analysts said they don't expect it to move outside of its recent range unless there is further weaker-than-expected data in the U.S. or locally. | 
