Month: April 2010

By Fast Brokers – The Cable has undergone a hefty pullback today as a combination of overbought conditions and negative psychological developments hit the currency pair.  First off, the Cable has been on a tear lately, so today’s weakness is not too shocking.  However, the Cable did react badly to a new poll showing the Conservatives losing some of their advantage over Labor.  Today’s poll contradicts the optimism built off of Sunday’s poll showing the Conservatives gaining ground.  Altogether, the message being sent is that the election is too close to call and the probability of a hung parliament is increasing.  Gordon Brown set an election date for May 6th, bringing parliament into full focus.  The concept of a hung parliament has damaged the Cable recently due to concern that the UK government will not be able to pass austerity measures necessary to tackle deteriorating fiscal conditions.  Meanwhile, it will be interesting to see if the Cable can stabilize from today’s hit and regain the momentum of its uptrend established from March lows.  In addition to chatter about upcoming UK elections, uncertainty has returned in Greece.  Greek officials are expressing their discontent for IMF involvement in any financial aid packages due to stringent fiscal measures being proposed by the monetary fund.  Greek bonds yields are rising on the news and the Euro is taking another downturn.  Hence, investors should keep an eye out for any new developments in the EU since they can impact the risk trade as a whole.  Attention now turns to the U.S. with FOMC meetings due this afternoon.  The UK will return to the data wire tomorrow by releasing Services PMI and Halifax HPI data points.  Since the UK’s GDP is reliant on the services industry, tomorrow’s PMI number could have a noticeable impact on the Cable.

Technically speaking, the Cable is still trading comfortable above downtrends running through March 17 highs, or the 1.5380 area.  Hence, the Cable’s uptrend is still alive and well despite today’s pullback.  Additionally, the Cable has fresh uptrend lines serving as technical cushions along with intraday and 3/31 lows.  On the other hand, the Cable has dropped below April 2nd lows, and it will be interesting to see if the currency pair can stage an intraday recovery.

Present Price: 1.5150
Resistances: 1.5159, 1.5167, 1.5177, 1.5194, 1.5205, 1.5215
Supports: 1.5139, 1.5125, 1.5106, 1.5095, 1.5085, 1.5071
Psychological: 1.53, 1.52, March highs and April Lows

(click chart to enlarge)

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regarded neither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.

Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.

By Fast Brokers – Investors have brushed aside this morning’s RBA rate raise and are punishing the Euro amid new negative psychological pressures coming from Greece.  Greek government officials are becoming vocal about their desire to restructure the EU’s recent financial aid agreement.  It seems Greece is unhappy with the terms and conditions the IMF is proposing should it be called upon to intervene.  Hence, we may see a push from Greece to exclude the IMF from any rescue packages.  However, conceding IMF involvement is what brought Germany to the table, so it’s difficult to believe they are willing to comply with Greece’s request.  Either way, Greece’s vocal disapproval has cast the effectiveness of the aid proposal into doubt, renewing uncertainty regarding fiscal issues in the EU.  Greek bond prices are dropping and yields rising as investors demand a premium for purchasing the nation’s debt.  Therefore, it wouldn’t be surprising to see negative chatter return should bond yields climb higher.  The Euro is continuing to underperform the Pound, highlighted by the EUR/GBP’s downturn.    The EU reported only limited data today, showing psychological forces are in control for the time being.  With U.S. economic data outperforming and uncertainty in the EU returning, it’s understandable that investors are selling EUR/USD.  The data wire will remain quiet until this afternoon’s release of the FOMC Meeting Minutes.  Hence, psychological forces could continue to drive the markets.  Germany will release Factory Orders tomorrow, though investors will likely remain focused on news concerning Greece.  Thursday’s ECB and BoE monetary policy meetings will highlight the week with the BoJ meeting tomorrow as well.  Therefore, investors should expect volatility to pick up as the trading week progresses.

Technically speaking, the EUR/USD has dropped back below 3/31 lows, a negative development.  However, the currency pair does have multiple uptrend lines to fall back on along with the psychological 1.33 level and March lows.  However, the EUR/USD has certainly been dealt a damaging near-term blow.  As for the topside, downtrends are mounting as the EUR/USD drops.  Additionally, the currency pair faces technical barriers in the form of intraday highs and the psychological 1.34 and 1.35 levels should they be tested.

Present Price: 1.3364
Resistances: 1.3374, 1.3383, 1.3395, 1.3403, 1.3411, 1.3422
Supports:  1.3363, 1.3352, 1.3346, 1.3339, 1.3331, 1.3322
Psychological: March lows, 1.35, 1.34, 1.33

(click chart to enlarge)

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regarded neither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.

Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.

Forex Market Review by Finexo.com

Past Events
• USD ISM Non-Manufacturing PMI, out at 55.4 versus expected 54.1, prior 53.0
• USD Pending Home Sales, out at 8.2% versus expected -0.5%, prior -7.8% (revised)
• Bank Holiday France, Germany, Italy, UK, Canada, Switzerland, Australia and New Zealand

Upcoming Events
• USD Fed Chair Ben Bernanke Speaks (1730 GMT)
• GBP Nationwide Consumer Confidence (2300 GMT)
• GBP Services PMI (0830 GMT)
• EUR Final GDP q/q (0900 GMT)
• EUR German Factory Orders m/m (1000 GMT)
• CAD Building Permits m/m (1230 GMT)
• CAD Ivey PMI (1400 GMT)

Market Commentary
US service industries expanded in March at the fastest pace since May 2006 indicating that the recovery in the US economy has spread beyond the manufacturing sector and is creating jobs. The Institute for Supply Management’s index of non-manufacturing businesses, which comprise almost 90% of the economy, rose to 55.4, a bigger jump than expected and up from 53.0 the previous month. The pace of orders to service industries rose to the highest level since 2005, while backlogs were the highest since August 2007, indicating companies were having trouble meeting demand.

On Friday the US Labor Department said that employers increased payrolls by 162,000 workers last month, the third gain in five months and the largest since March 2007, indicating that companies are increasingly confident regarding economic recovery. Sustained employment gains would boost incomes leading to increased consumer spending which accounts for about 70% of the economy. James O Sullivan, chief economist at MF Global Ltd said “the recovery is looking increasingly self sustaining”.

Also yesterday a report by the National Association of Realtors showed that pending home sales in February jumped the most since 2001. The index of purchase agreements, or pending home sales, rose to 8.2%, the second biggest gain on record and the largest since October 2001. Buyers may be taking advantage of a tax credit that requires contracts to be signed by the end of April, indicating that the market might soon see a rebound in sales.

“Some of this may be an increase in activity ahead of the prospect of the expiration of the homebuyer tax credit,” said Michael Feroli, chief US economist at JPMorgan Chase & Co. in New York. Even so, “if what we’re seeing in the labor market is actually showing decent growth, then I would expect housing would follow.”
Pending sales are considered a leading indicator because they track contract signings. The Realtors’ existing-home sales report tallies closings, which typically occur a month or two later. The pending sales data goes back as far as January 2001.

North of the border in Canada the Loonie again moved closer to parity last week on the back of rising crude oil prices. Oil prices have been rising amid growing optimism that improved US job creation will boost economic recovery and lead to higher demand for crude oil. World oil prices have been on an upward trend partly because of signs of improvement in the US economy, but also because of a weak US Dollar which tends to increase prices of commodities priced in that currency.

Yesterday the Canadian Dollar rose by 0.60% against its American counterpart closing at CAD 1.0019.
Tomorrow will bring the release of Canadian building permits. Permits made a huge jump four month ago before returning to normal. After a fall of 4.9%, permits are expected to rise by 2.1% this time and may give a boost to the currency. Also out tomorrow is the Ivey PMI. This index has shown that the Canadian economy has expanded in the last two months. This time it is expected to show a rise from 51.9 points to 55.1 points.
In the UK, nationwide consumer confidence figures will be published later tonight. The results of this survey were quite good last time, it rose to 80 points, the highest in two years. This time it is expected to show a further small increase. Early tomorrow the services PMI will be released. The service sector in the UK is doing very well, the last time the index showed an increase to 58.4 points, this time it is expected to have come down slightly to 58.2 points.

The Pound ended trading last week by climbing 0.55% against the US Dollar on Friday to end the week at GBP 1.5204. Yesterday against the US Dollar the Pound dropped 0.18% closing at GBP 1.5296. Against the Euro Sterling closed last week up overall and continued to rise yesterday, gaining 0.24% on the Euro to close at GBP 0.8815.

In other news in theUK, Prime Minister Gordon Brown looks set to call a general election for May 6th. The outcome of the vote may determine how quickly Britain can reduce its record budget deficit and trim national debt which looks set to double. If the election fails to result in any one party having a majority and produces a so called hung parliament investors and economists say the government may be too weak to fix the nation’s finances and this may also put the UK’s triple AAA credit rating at risk.

“The markets hate the uncertainty of the possibility of a hung parliament or the possibility of the political parties having to work in a coalition,” said Mark Wickham-Jones, professor of politics at Bristol University. “If no one is in overall control, it will make cutting the deficit difficult because the politics will push it to one side.” This year Sterling has had its worst annual start on the forex market in 13 years, down 2.8% against the US Dollar since the beginning of the year, amid uncertainty about the possible outcome of the general election.

In the Euro Zone, last weeks recovery by the Euro against the US Dollar prompted by the announcement of the long awaited bailout package for Greece seems to be maintaining course. On the market yesterday the Euro gained 0.48% on the US Dollar and closed the day at EUR 1.3422.

The final European GDP is due to be published tomorrow morning. The figure is expected to confirm the limited growth rate of 0.1% in the fourth quarter. The German economy, the Euro Zones largest did not grow at all in the fourth quarter. Also tomorrow German factory orders will be published. The last report surprised the market with a large increase in orders of 4.3%. This time it is expected to show a small decrease.

Forex Market Review & Analysis by Finexo.com

Disclaimer: Trading the foreign exchange (Forex) carries a high level of risk, and may not be suitable for all investors.

By Greg Holden – Given the thin trading conditions currently in the market, the Danish Krone appears to be offering a good opportunity to learn a good lesson about reading technical analysis. The chart displayed below is the 4-hour chart of the USD/DKK currency pair (courtesy of ForexYard).

– To start, I’d like to first draw your attention to the recent “inverted head-and-shoulders” formation on the chart (the lines marked 1, 2, 4, and 5 are outlining this formation).

– Typically following this type of formation you can usually delineate precise support and resistance levels much more clearly than in normal market conditions.

– Point 1: This line represents the “neckline” of the head-and-shoulders formation and is the most important resistance line of this chart. The price’s ability to breach, or not breach, this level will signify which levels to pay attention to next.

– Point 2: If the price fails to breach past Point 1, this point represents the first price target for a Sell position.

– Point 3: If the price breaches the resistance level at Point 1, this is your target price for a Buy position.

– Point 4: If the price fails to breach past Point 1, and drops to the support level at Point 2, there is a good chance it will breach past that level as well and continue to drop to this point for additional profits on a Sell position.

– Point 5: The final support level below Point 4, which the price will fall towards if Points 2 and 4 are breached, is represented at this point.

– All of these levels represent excellent Stop/Limit price levels for more successful trading, and clear signals of when to buy and sell.

– Point 6: The Stochastic (slow) is showing that a bearish cross is impending. It has not yet formed which means there is still upward momentum, but once this cross has taken place, strong downward pressure should be experienced. This simply gives us a higher probability of a downward price move as opposed to an upward price move (not much of a difference, but say a 60% – 40% probability, roughly).

USD/DKK 4-Hour Chart

Forex Market Analysis provided by Forex Yard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

By Anton Eljwizat – Crude oil prices soared today to the highest level since October 2008 as belief in the U.S. recovery from the global recession gained strength.

Oil traders were reacting to a flurry of encouraging news during the last few days, including Friday’s Labor Department data showing that U.S. payrolls had risen by 162,000 in March and Thursday’s reports from automobile manufacturers indicating that sales had accelerated in March by more than 24% from the same month a year earlier. However, as I will demonstrate below, the price of oil may very well be heading for a reversal. Forex traders can take advantage of this impending movement by having their Entry Orders in place to capture this reversal.

• Point 1: The Relative Strength Index (RSI) indicates that the price of this cross currently floats in the overbought territory, signaling downward pressure.

• Point 2: The Slow Stochastic indicates a bearish cross, signaling that the next move may be in a downward direction.

• Point 3: The Williams Percent Range has peaked near at the 0 marker, which means that there may actually be a strong level of downward pressure.

Crude Oil Daily Chart

Forex Market Analysis provided by Forex Yard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

Source: Forex Yard

Following Friday’s U.S. Employment figure, the best in three years, risk taking returned to the marketplace. Additionally, the U.S. economy saw further signs of improvement after yesterday’s ISM Non-Manufacturing PMI and Pending Home Sales reports. While risk taking caused the Euro to trade above the 1.3500 level throughout yesterday, it has since fallen almost 100 pips to its current level of 1.3430.

Economic News

USD – Unexpectedly Higher Pending Home Sales Leads to Dollar Gains

The Dollar had a mixed trading day yesterday in response to a number of economic indicators, including Friday’s employment data. The Pending Home Sales figure came in at 8.2%, significantly higher then expected, while the ISM Non-Manufacturing PMI also exceeded predictions.

The greenback was able to capitalize on the positive data, making fairly significant gains against the Euro and British Pound. EUR/USD, currently trading around the 1.3415 level, is down over 60 pips since last night. Similarly, GBP/USD has fallen some 80 pips to its current level of 1.5214. That being said, it appears that the Dollar’s record highs against the Yen have begun to reverse. While USD/JPY is still trading around the 94.00 level, it has dropped some 50 pips since yesterday afternoon. The dollar was also lower against commodity currencies such as the CAD, with the pair currently trading at 1.0019, down 50 pips from yesterday.

Apart from the Federal Open Market Committee (FOMC) meeting minutes, there is no other significant U.S. news scheduled to be released today. Traders will want to pay attention to a number of important indicators later in the week, including the Consumer Credit report set to be released on Wednesday and the Wholesale Inventories report on Friday.

EUR – EUR/USD Reverses Bullish Trend

European markets were closed last Friday and Monday, resulting in low volatility. With markets reopening today, the single currency is forecasted to drop as investors digest the positive American news of the last few days. While EUR/USD managed to stay above 1.3500 throughout the day yesterday, it has since corrected itself and is currently at the 1.3420 level.

European currencies are still under pressure over sovereign debt worries, as well as fears of ratings downgrades. Greece is planning to raise capital this month in the U.S. via bond issue, which could bring confidence back to the Euro. That being said, failure on Greece’s part could put further pressure on the currency. This week traders will want to pay attention to the ECB and BOE statements due on Thursday. While a hike in interest rates is not expected, investors will likely look for clues about any future changes. With both the Euro and Pound still down against the Dollar, any positive European news will likely lead to a boost for the currencies.

JPY – Yen Makes Gains Against its Major Counterparts

The Yen was able to make moderate to high gains versus its major counterparts yesterday, including the Euro and Dollar. Analysts largely attributed the Yen’s gains to an increase in Japanese exports. While JPY reached a seven month low against the Greenback last week, the pair has since started to slowly retreat, and is currently trading around the 94.00 level. The Yen has seen a significantly higher gain against the Euro over the last 24 hours. EUR/JPY is currently trading at 126.22, down well over 100 pips since yesterday morning.

This week, traders will want to pay attention to the BOJ policy meeting, set to begin on Tuesday. While no dramatic changes are forecasted to take place, the meeting could provide valuable clues regarding the direction of the Japanese economy.

Crude Oil – Crude Oil Prices Surge

Oil is currently trading around the 86.50 level, slightly down from overnight trading. Unexpectedly positive U.S. Pending Home Sales data helped boost Crude prices yesterday, a continuation of the surge caused by Friday’s unemployment report. Crude Oil has recently reached an 18-month high. Providing prices can stay above $85 a barrel today, analysts are forecasting an even greater increase in prices. That being said, recent Dollar gains indicate that a downward correction for oil may be imminent. Traders will want to carefully watch the direction oil takes versus the Dollar in trading today.

Technical News

EUR/USD

The price of this pair appears to be floating in the over-sold territory on the daily chart’s RSI indicating an upward correction may be imminent. The upward direction on the hourly chart Slow Stochastic also supports this notion. When the upwards breach occurs, going long with tight stops appears to be preferable strategy.

GBP/USD

The pair has been range-trading for a while now, with no specific direction. The Daily chart’s RSI providing us with mixed signals. The 4 hour charts do not provide a clear direction as well. Waiting for a clearer sign on the hourly chart might be a good strategy today.

USD/JPY

The 4-hour chart is showing mixed signals with its RSI fluctuating at the neutral territory. However, the daily chart’s RSI is already floating in the overbought territory indicating that a bearish correction might take place in the nearest future. Going short with tight stops may turn out to be the right choice today.

USD/CHF

The USD/CHF cross has experienced a bullish trend yesterday. However, it seems that this trend may be coming to an end. The RSI of the 4-hour chart shows the pair floating in the overbought territory, indicating that a downward correction will happen anytime soon. Going short with tight stops might be a wise choice.

The Wild Card

Crude oil

Crude oil prices rose significantly in the last week and peaked at $86.35 per barrel. However, the daily chart’s RSI is floating in an overbought territory suggesting that a recent upwards trend is loosing steam and a bearish correction is impending. This might be a good opportunity for forex traders to enter the trend at a very early stage.

Forex Market Analysis provided by Forex Yard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

EURUSD broke below the rising trend line from 1.3267 to 1.3384, suggesting that a cycle top is being formed at 1.3590 level on 4-hour chart. Deeper decline to test 1.3384 support could be seen later today, a breakdown below this level will confirm the cycle top and indicate that the bounce from 1.3267 has completed, then another fall towards 1.3100 is expected. Resistance is now at 1.3590, only rise above this level could bring price to 1.3700 area.

Daily Forex Signals

By CountingPips.com

The euro has started off the week slightly lower against the U.S. dollar in forex trading after finishing last week higher and ascending to right around the 1.3500 level.  The euro-dollar pair (EUR/USD) rose early overnight but quickly pared those gains and fell today to match this month’s current low point at the 1.3460 exchange rate before currently trading near the 1.3478 level. This is approximately 15 pips lower from the day’s opening rate at 00:00 GMT. Last week, the euro rose by almost 90 pips to the 1.3498 exchange rate versus the dollar to reverse a two week losing streak despite record bearish speculative positions.

Economic news out today showed that U.S. pending home sales rebounded in February by 8.2 percent after falling 7.8 percent in January. This beat the forecasts expecting a flat reading. Also released was ISM’s service sector business reading that showed non-manufacturing business activity rose by more than expected in March. The service sector business score rose to 55.4 following a score of 53.0 in February and better than the expected 54.0.

EUR/USD Chart – The Euro today declining slightly against the US dollar on the 1-hour chart. The pair broke through a rising short-term trendline to the downside today and trades in between the 23.6 and 38.2 short-term fibonacci retracement levels (on the up move from 1.3267 to 1.3590 that started on March 26th). The pair gained last week despite a decrease on Friday following positive U.S. job numbers and currently trades around the 1.3480 exchange rate near the end of the U.S. session.

New York Financial Press
Apr. 05, 2010. 12:55 PM EST

04/05/10 The U.S. dollar traded mixed against the major currencies. The ISM services index and pending home sales came in better-than-expected.

By GCI Forex Research

Fundamental Outlook at 1500 GMT (EDT + 0500)

€

The euro depreciated vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.3485 level and was capped around the $1.3590 level.  The common currency came off despite light liquidity on account of the Easter Monday holiday and Bank holiday in some trading jurisdictions.  Traders will pay close attention to a few key events this week.  First, former Federal Reserve Chairman and former U.S. Treasury Secretary Rubin will testify in Congress this week about the economic crisis.  Greenspan was on the tape yesterday saying the U.S. economic recovery has a “way to go” and said the build-up in inventories will expand.  Second, traders will pay close attention to the Fed’s meeting today in which policymakers will be discussing requests from Fed district banks to increase the discount rate.  The Fed has raised the discount rate a couple of times over the past months and while another increase would not likely have a significant impact on liquidity, it would again signal the Fed is determined to normalize monetary policy without having to raise the headline federal funds target rate.  Third, Fed officials including Chairman Bernanke, Kocherlakota, Dudley, and Hoenig will speak this week and will offer some of their latest views concerning policy.  Fourth, major central banks will be releasing their interest rate decisions this week including Bank of Japan, the European Central Bank, Bank of England, and the Reserve Bank of Australia.  The central banks’ decisions are an interesting study of the varied points the central banks are at in their interest rate cycles with RBA clearly the most hawkish and BoJ the most dovish.  Fifth, traders will closely monitor economic data to see if the decent gains reported on Friday regarding U.S. March non-farm payrolls are sustainable and evidence traction in the beleaguered labour market.  Data released in the U.S. today saw the March ISM non-manufacturing index print at 55.4, up from the prior reading of 53.0, while February pending home sales were up 8.2% m/m and 17.3% y/y.  Minutes from the Federal Open Market Committee will be released tomorrow.  In eurozone news, the European Central Bank is expected to keep monetary policy largely unchanged on Thursday.  ECB officials may note the recent increase in inflationary pressures in the eurozone but will be unable to tighten policy at this time on account Greece’s ongoing fiscal problems and similar issues in Portgual, Spain, Italy, and elsewhere.  Euro bids are cited around the US$ 1.3335 level.

¥/ CNY

The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥94.70 level and was supported around the ¥93.65 level.  The yen traded at its highest level since 24 August 2009 before coming off today and the pair has gained more than ¥6 in about a month.  Bank of Japan’s Policy Board convenes this week and it is expected to release its policy decision early Wednesday.  The central bank may elect to expand its expansionary policies to further combat deflationary pressures that remain severe.  Alternatively, BoJ’s 30 April Policy Board meeting will include its semi-annual economic projections and could be the meeting when Policy Board members adjust policy further following last month’s additional easing steps.  Data to be released in Japan overnight include the February leading and coincident indices followed by March official reserve assets on Wednesday.  As expected, last week’s Bank of Japan’s Q1 Tankan survey of corporate sentiment improved q/q with the large manufacturers’ index up to -14 from -24 in Q4 and the non-manufacturer’s index higher at -14 from -22.  Also, the large manufacturers’ outlook improved to -8 from -21 in Q4 and Q1 all-industry capital expenditures improved to -0.4% from -10.8%.   The Nikkei 225 stock index climbed 0.47% to close at ¥11,339.30.  U.S. dollar offers are cited around the ¥96.85 level.  The euro moved lower vis-à-vis the yen as the single currency tested bids around the ¥127.10 level and was capped around the ¥127.90 level.  The British pound moved higher vis-à-vis the yen as sterling tested offers around the ¥144.85 level while the Swiss franc moved lower vis-à-vis the yen and tested bids around the ¥88.70 level. In Chinese news, the U.S. dollar was unchanged vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8257 in the over-the-counter market. The big news involving China is that the Obama administration is delaying the release of a report due 15 April that could have potentially labeled China a currency manipulator.  The move to delay the release of the report could signal negotiations are ongoing between the two countries or could signal China may let the yuan appreciate further in the coming days.  Chinese leadership will visit Washington, D.C. on 12-13 April.  Data to be released in China this week include the Q1 Entrepreneur Climate Index on Wednesday.

₤

The British pound appreciated vis-à-vis the U.S. dollar today as cable tested offers around the US$ 1.3535 level and was supported around the $1.3460 level.  Liquidity was light on account of the Bank holiday in the U.K. and will return to normal overnight and tomorrow.  Traders do not expect any major announcements out of Bank of England when its Monetary Policy Committee’s interest rate decision is announced on Thursday.  The central bank is unlikely to modify policy significantly before the U.K. General Election in keeping with tradition.  Many political pundits continue to speculate an election may be held on 6 May. The ongoing consensus is that the David Cameron and his Tory party will likely unseat Prime Minister Brown and his Labour party but Parliament may be hung if the Tories cannot form a majority government.  Many data will be released tomorrow including Q4 BoE housing equity withdrawal, March PMI construction, and March Nationwide consumer confidence.  March Halifax house prices will also be released early this week.  Cable bids are cited around the US$ 1.4455 level.  The euro moved lower vis-à-vis the British pound as the single currency tested bids around the £0.8820 level and was capped around the £0.8860 level.

CHF

The Swiss franc depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the CHF 1.0645 level and was supported around the CHF 1.0585 level.  Swiss National Bank is said to have intervened in the market last week by selling Swiss francs in what is estimated to have been a massive operation.  Swiss monetary, financial, and government officials have been warning that they will not tolerate a further increase in the franc in recent weeks but many traders speculated the central bank would not intervene to weaken the franc on account of growth in the Swiss economy.  While forecasts for economic growth and inflation have both been upwardly revised in recent weeks, SNB’s latest probable intervention underscores their commitment to preserving an export-driven recovery.  March CPI data will be released tomorrow followed by February retail sales on Wednesday and the March unemployment rate on Thursday. The euro moved lower vis-à-vis the Swiss franc as the single currency tested bids around the CHF 1.4315 level while the British pound moved higher vis-à-vis the Swiss franc and tested offers around the CHF 1.6240 level.

Forex Daily Market Commentary provided by GCI Financial Ltd.

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DISCLAIMER: GCI’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be U.S.ed as investment advice. GCI assumes no responsibility or liability from gains or losses incurred by the information herein contained.