By GCI Fx Research
€
The euro appreciated vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.2650 level and was supported around the $1.2455 level. The U.S. Treasury announced that its new mortgage relief plan will help up to 9 million homeowners avoid home foreclosure. Mortgage servicers have been authorized to immediately reduce mortgage payments for eligible borrowers. In other U.S. news, the February non-manufacturing PMI survey fell to 41.6 from 42.9 in January, an acceleration in the downturn in the services industry. Likewise, both the new orders and employment sub-indices moved lower. Additionally, the ADP February U.S. private sector jobs survey revealed a loss of 697,000 private sector jobs last month. Most dealers believe these data indicate this Friday’s non-farm payrolls data for February will be extremely weak with some whispers of job losses around 750,000. In eurozone news, the European Commission released proposals today to strengthen financial supervision across the European Union including an early warning system led by the European Central Bank. Central and Eastern European central bankers and regulators released a joint statement today to address the “often simplified and misleading” information about the risks facing the financial sectors in those countries. Data released in the eurozone saw the February services PMI survey decline to 39.2 from 42.2 in January. ECB member Noyer yesterday report he doesn’t see any risk that any eurozone country will collapse and added the ECB may enact additional unconventional monetary policy. Euro bids are cited around the US$ 1.2385 level.
¥/ CNY
The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥99.50 level and was supported around the ¥98.15 level. Bank of Japan ramped up its purchase of corporate bond purchases overnight, part of the central bank’s strategy to steer market interest rates lower and reduce credit strains in the capital market. BoJ Policy Board member Suda spoke today to business leaders. Q4 capital spending data will be released overnight. The Nikkei 225 stock index gained 0.85% to close at ¥7,290.96. U.S. dollar offers are cited around the ¥104.15 level. The euro moved higher vis-à-vis the yen as the single currency tested offers around the ¥125.60 level and was supported around the ¥122.35 level. The British pound moved higher vis-à-vis the yen as sterling tested offers around the ¥140.70 level while the Swiss franc moved higher vis-à-vis the yen and tested bids around the ¥84.85 level. The Chinese yuan depreciated vis-à-vis the U.S. dollar as the greenback closed at CNY 6.8434 in the over-the-counter market, up from CNY 6.8413. Data released in China overnight saw the February Purchasing Managers Index improve to 49.0 in February from 45.3 in January. The Chinese media reported China is considering an additional fiscal stimulus to shore up the domestic economy.
Daily Market Commentary provided by GCI Financial Ltd.
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