{"id":10073,"date":"2010-06-08T16:52:29","date_gmt":"2010-06-08T20:52:29","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=10073"},"modified":"2010-06-08T16:52:29","modified_gmt":"2010-06-08T20:52:29","slug":"forex-daily-market-commentary-76","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/06\/08\/forex-daily-market-commentary-76\/","title":{"rendered":"Forex Daily Market Commentary"},"content":{"rendered":"

By GCI Forex Research<\/strong><\/p>\n

Fundamental Outlook at 1400 GMT (EDT + 0400)<\/strong><\/p>\n

\u20ac<\/strong><\/p>\n

The euro appreciated vis-\u00e0-vis the U.S. dollar today as the single currency tested offers around the US$ 1.2010 level and was supported around the $1.1900 figure.\u00a0 The common currency failed to gain any sustainable traction today as dealers cited few compelling reasons to be long euro with the European sovereign debt crisis overhanging the pair.\u00a0 Fitch\u2019s warning today about U.K. debt reminded investors that large economies on the periphery of the eurozone face their own problems and traders will look for any similariaties between each troubled country and Greece, which experienced its own implosion.\u00a0 Three-month Euro Libor reached 0.65% today, its highest since early January and an indication of the stresses in European money markets.\u00a0 Another measure of market stress \u2013 the Euro Libor\/ Overnight index swap spread\u00a0 – increased and is near the 2010 high.\u00a0 Three-month U.S. Dollar Libor remains elevated at 0.53688%.\u00a0 At the same time, the European Central Bank lent financial institutions more than \u20ac122 billion in seven day-funds at its main refinancing rate, up from last week\u2019s total of \u20ac117.7 billion.\u00a0 These data suggest more banks are facing liquidity problems.\u00a0 The ECB will announce its policy decision on Thursday and these funding stresses may cause the ECB to issue a new six-month refinancing operation so that banks can borrow funds for longer terms.\u00a0 Furthermore, the ECB could expand its covered bond buying program to inject more liquidity into the market.\u00a0 Approximately \u20ac500 billion in one-year funds expires on 1 July and the ECB will have to address this maturity in the context of existing financial constraints.\u00a0 It was also reported that eurozone banks deposited a record \u20ac361.692 billion with the ECB overnight instead of lending them to other banks.\u00a0 Germany\u2019s Finance Agency reported it will expand its operation and sell debt on behalf of the newly-created European Financial Stabilization Fund.\u00a0 Data released in Germany today saw the April trade balance slow to \u20ac13.4 billion while the current account balance slowed to \u20ac11.8 billion.\u00a0 Also, April industrial production expanded 0.9% m\/m and 13.3% y\/y.\u00a0 French data saw May Bank of France business sentiment tick lower to 101.\u00a0 In U.S. news, data released in the U.S. today saw May NFIB small business optimism improve to 92.2.\u00a0 Data to be released tomorrow include MBA mortgage applications and April wholesale inventories along with the Fed\u2019s Beige Book.\u00a0 Fed Chairman Bernanke reiterated the U.S. unemployment rate is likely to stay \u201chigh for a while\u201d and said the economic recovery remains \u201cmoderate paced.\u201d\u00a0 Euro offers are cited around the US$ 1.2330 level.<\/p>\n

\u00a5\/ CNY<\/strong><\/p>\n

The yen appreciated vis-\u00e0-vis the U.S. dollar today as the greenback tested bids around the \u00a590.85 level and was capped around the \u00a591.90 level.\u00a0\u00a0 Traders were reluctant to take on too much risk and the yen remained bid as a result.\u00a0 Many data were released in Japan overnight. First, the April current account total fell to \u00a51.242 trillion, down from the prior reading of \u00a52.534 trillion, while the trade balance fell to \u00a5859.1 billion from the prior reading of \u00a51.074 trillion.\u00a0 Second, May bank lending was off 2.0% y\/y.\u00a0 Third, the April leading index fell to 101.7 and the coincident index improved to 101.6.\u00a0 Fourth, the May economy watchers\u2019 survey fell to 47.7 at the current level and 48.7 at the outlook level.\u00a0 Data to be released during the Australasian session include April machine orders followed by Q1 gross domestic product on Thursday.\u00a0 New Economy minister Arai reported the \u201cbiggest theme of Japan\u2019s economy policy is how to overcome deflation.\u00a0 For that purpose, cooperation with the BoJ is very important.\u201d\u00a0 The central bank today warned its Japanese government bond holdings may reach its self-imposed limit \u201cwithin a few years.\u201d\u00a0 BoJ Governor Shirakawa noted the BoJ\u2019s ability to increase purchases is \u201cpretty limited.\u201d\u00a0 New finance minister Noda verbally intervened today, saying he will \u201ccarefully monitor markets with the understanding that excessive and disorderly movements can have a negative impact on the stability of the economy.\u201d New Prime Minister Kan yesterday said a weak yen is \u201cgenerally said to be\u201d positive for the Japanese economy.\u00a0 Former MoF official \u201cMr Yen\u201d Sakakibara warned the euro may decline below \u00a5100 \u201cwithin the next couple of months.\u201d\u00a0 The Nikkei 225 stock index gained 0.18% to close at \u00a59,537.94.\u00a0 The euro moved higher vis-\u00e0-vis the yen as the single currency tested offers around the \u00a5110.05 level and was supported around the \u00a5108.70 level.\u00a0 The British pound moved higher vis-\u00e0-vis the yen as sterling tested offers around the \u00a5133.35 level while the Swiss franc moved higher vis-\u00e0-vis the yen and tested offers around the \u00a579.30 level. In Chinese news, the U.S. dollar depreciated vis-\u00e0-vis the Chinese yuan as the greenback closed at CNY 6.8296 in the over-the-counter market, down from CNY 6.8324.\u00a0 Data released in China overnight saw the Q3 manpower survey increase to 27% from 17%.\u00a0 Data to be released this week include May money supply numbers, May new yuan loans, May trade, May retail sales, May industrial production, May PPI, and May CPI.\u00a0 People\u2019s Bank of China warned Chinese economic growth will continue to be impacted by global problems and said final domestic private demand is still not \u201csolid.\u201d PBoC noted an \u201cappropriately loose\u201d monetary policy and a proactive fiscal policy will continue. The State Administration of Foreign Exchange warned China is considering controls on yuan forward transactions to slow investors from speculating when the central bank will end its peg to the U.S. dollar.<\/p>\n

\u00a3<\/strong><\/p>\n

The British pound depreciated vis-\u00e0-vis the U.S. dollar today as cable tested bids around the US$ 1.4345 level and was capped around the $1.4530 level.\u00a0 Cable was knocked lower after ratings agency Fitch warned the U.K. is facing a \u201cformidable\u201d challenge with its escalating debts.\u00a0 Prime Minister Cameron warned that forthcoming fiscal realignments will hurt everyone.\u00a0 Bank of England\u2019s Monetary Policy Committee is expected to keep rates unchanged on Thursday and to keep its asset purchase target unchanged at \u00a3200 billion.\u00a0 Data released in the U.K. today saw BRC May retail sales growth of 0.8% y\/y.\u00a0 Data to be released tomorrow include April trade data.\u00a0 Cable bids are cited around the US$ 1.4220 level.\u00a0 The euro appreciated vis-\u00e0-vis the British pound as the single currency tested offers around the \u00a30.8290 level and was capped around the \u00a30.8230 level.<\/p>\n

CHF<\/strong><\/p>\n

The Swiss franc appreciated vis-\u00e0-vis the U.S. dollar today as the greenback tested bids around the CHF 1.1550 level and was capped around the CHF 1.1640 level. Data released in Switzerland today saw the May unemployment rate remain unchanged at 4.0% while May consumer price inflation was off 0.1% m\/m and up 1.1% y\/y.\u00a0 There is speculation today the Swiss National Bank bought euro for francs in an intervention after the London close.\u00a0 Swiss National Bank President Hildebrand last week said \u201cThere\u2019s a consensus that the financial system needs to become more resilient.\u00a0 It\u2019s absolutely decisive that the regulatory focus remains on capital, liquidity, and a diffusion of the too-big-to-fail problem.\u201d\u00a0 U.S. dollar bids are cited around the US$ 1.1420 level.\u00a0 The euro lost ground vis-\u00e0-vis the Swiss franc as the single currency tested bids around the CHF 1.3780 level while the British pound lost ground vis-\u00e0-vis the Swiss franc and tested bids around the CHF 1.6640 level.<\/p>\n

Forex Daily Market Commentary<\/strong><\/em> provided by<\/em><\/strong> GCI Financial Ltd<\/strong><\/a>.<\/strong><\/span><\/p>\n

GCI Financial Ltd (\u201dGCI\u201d) is a regulated securities and commodities trading firm, specializing in online Foreign Exchange (\u201dForex\u201d) brokerage. GCI executes billions of dollars per month in foreign exchange transactions alone. In addition to Forex, GCI is a primary market maker in Contracts for Difference (\u201dCFDs\u201d) on shares, indices and futures, and offers one of the fastest growing online CFD trading services. GCI has over 10,000 clients worldwide, including individual traders, institutions, and money managers. GCI provides an advanced, secure, and comprehensive online trading system. Client funds are insured and held in a separate customer account. In addition, GCI Financial Ltd maintains Net Capital in excess of minimum regulatory requirements.<\/p>\n

DISCLAIMER: GCI\u2019s 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.<\/p>\n","protected":false},"excerpt":{"rendered":"

Traders were reluctant to take on too much risk and the yen remained bid as a result. Many data were released in Japan overnight. First, the April current account total fell to \u00a51.242 trillion…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-10073","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/10073","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/comments?post=10073"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/10073\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=10073"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=10073"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=10073"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}