[IMAGE] Forums Discuss these points in the Forums:  Forexnews Forum       Technicals Live Charts Analysis available from: Cornelius Luca   J.P. Chorek   Technical Research Ltd.   Charts & News featuring Standard & Poor's       Interest Rates   US: Japan: Eurozone: UK: Switzerland:   2.5%  0.15%  3.75%  4.5%  1.75-2.75%       [IMAGE] 	 [IMAGE]  USD Hits New Multi-Week Highs As Recovery Story Continues  October 23, 7:00 AM: EUR/$..0.8884 $/JPY..122.67 GBP/$..1.4207 $/CHF..1.6658  USD Hits New Multi-Week Highs As Recovery Story Continues by Jes Black  At 9:00:00 AM US BTM/UBSW sales (exo n/a, prev -1.3%) US Redbook (exp 0.7%, prev 0.6%) Event: Chairman Greenspan to speak at 8:00 AM to a meeting of the American Bankers' Association in Washington  The dollar added to Monday's gains, reaching fresh multi-week highs across the board on continued optimism for the US economic future. There is confidence the US economy can recover from this terrible third quarter and this is being reflected in US equity market strength and subsequently the dollar. USD hit six-week highs of 88.72 vs. EUR and 1.6674 against CHF in European trade after a sleepy Asian session. The dollar also hit fresh nine-week highs of 1.4201 against sterling and 122.84 yen.  Dealers drove the dollar higher for both domestic and external reasons. Fueling gains at home is the fact that of 225 companies in the S?500 reporting Q3 earnings so far, 85% matched or exceeded projected targets. Therefore, investors are looking ahead to an economic recovery next year and pushing up stocks now. Fears about the war on terrorism and concerns about the current economic environment have been discounted. Case in point: yesterday's surprise announcement of two deceased postal workers who were exposed to anthrax failed to substantially move the dollar lower. For that reason, the risk-aversion problem is fading for the dollar, and USD has now moved beyond September 11 attack levels. In fact, after dealers put fears of war aside they began to reassess relative growth rates amongst the majors and found the US economy to have better long-term prospects.  USD/JPY advanced above its offshore high of 122.60 to a fresh 9-week high of 122.84. Support is seen at 122.60 and the dollar's upswing may intensify should it break 122.80, where stop-loss orders are rumored to be placed. Major technical resistance is seen around 123.25. Weighing on the yen was today's economic data from Japan which showed consumer confidence fell in September fell to 36.9, down four points from June and the weakest reading since 35.2 in September 1998.   Sterling also dipped below yesterday's nine-week low of 1.4215, to a new low of 1.4208. Dealers say comments made by Bank of England member Allsopp that he was concerned by the  four-year long overvaluation of sterling  pressured the pound. Allsopp, who is an external member, said a fall in sterling's value of as much as 10% would be welcome. He also felt UK interest rates should be cut further to tackle a combination of a weakening global economy and a slowdown in UK consumer demand. Minutes of the MPC's September and October meetings, released last week, showed that when the committee voted 7-2 on September 18 for a 25 basis point rate cut, Allsopp was one of two members to vote for a half point cut.   Sterling is now hovering below the 50% Fibonacci retracement of this year's uptrend from around 1.37 to 1.48. If sterling's 6-cent slide in two weeks does not stabilize as investors take profit from the recent sell-off, cable will target 1.4120, the 61.8% Fibonacci retracement of this year's same uptrend from June. Boding well for the pound is the fact that the Bank of England appears ready to ease monetary policy again in order to bolster economic growth. The decline in September inflation below the 2.5% target will provide the central bank with leeway to cut interest rates again by another 25-bp this year and the BoE's willingness to spur growth (unlike the ECB) will benefit the pound.   EUR/USD came under further pressure on Monday following bearish economic forecasts from Germany's six leading economic institution as well as uninspiring comments from ECB members about the plunge in growth. This stands in sharp contrast with market perception that aggressive fiscal and monetary policy will pay off for investors who bet on the US recovery. Some investors chose not to wait until Thursday's ECB meeting because aside from reassurances that inflation would fall below the targeted 2.0% level by next year, the ECB appears reluctant to give another 25 basis point cut this week. This will likely keep pressure on the euro. However, even if the ECB were to lower rates, the market reaction could be muted because it has already been priced in for some time now. Therefore, the euro again finds itself in a lose/lose situation because the ECB has failed to promote growth. A break of 88.70 sees EUR/USD targeting 88.25/50 area followed by 87.25, the 61.8% Fibonacci retracement of this year's uptrend from 83.45 to 93.35.  USD/CHF passed yesterday's 6-week high of 1.6640, to reach a fresh high of 1.6680. Gains against the Swiss franc highlighted the fact that the risk premium that investors paid to be in the franc has faded. USD/CHF is now above September 11 attack levels and even though the dollar has corrected against the European currencies it still has more room to rise, especially against the Swiss franc, dealers say. Target is the 1.6735 area. However, any major negative developments for the US, at home or abroad, would quickly translate into gains for the franc  Meanwhile, amid a lack of key data, dealers will await any possible direction Greenspan might give them this week from three scheduled appearances. Greenspan is scheduled to speak today at 8:00 AM at a meeting of the American Bankers' Association in Washington and has other appearances as well on Wednesday and Friday via satellite.   Dealers will also look to see if Wall Street enjoys Tuesday as well as it did yesterday in the face of earnings reports for Q3. So far, of 225 companies in the S?500 reporting Q3 earnings, 85% matched or exceeded projected targets. This has fueled gains in the Dow and Nasdaq and today's futures are up 33 and 9 points respectively. Xerox, Daimler Chrysler, and Exxon are reporting before the market open and only one major company, ATT&T, is reporting after the bell.  	[IMAGE] Audio Mkt. Analysis USD Extends Broad Rally to Pre Sep 11 Highs       Articles & Ideas  EURO: German IFO Will Remind ECB to Build Growth    Dollar Comeback Stopped by Risk of Terrorism       Articles & Ideas Forex Glossary   Economic Indicators   Forex Guides   Link Library      [IMAGE] 	
		[IMAGE][IMAGE] [IMAGE][IMAGE]	
		  This e-mail is never sent unsolicited. If you wish to unsubscribe from this or any other Forexnews.com newsletters, please click here .