Archived IMT (2008.10.22)

EURUSD extends declines to a 24-month low of $1.2734, while bouncing by as much as 5 pence against GBP to a one-week high of 79.10 pence. Euros selloff against the dollar is a largely a result of collective outflows into USD-based funds, whether comprising forced selling due to client redemptions or mobilization of capital to USD-based cash such as T-bills. Oils decline below $70 and golds drop to a 7-week low of $747, is $10 above the 1-year low reached on September 11. Having breached below our $1.2870 target, EURUSD faces $1.2480, which is the low from Oct 2006, lying just above the 50% retracement of the rise from the Feb 2002 low (0.8605) to this years record high ($1.6038).