{"id":10861,"date":"2010-07-06T15:03:07","date_gmt":"2010-07-06T19:03:07","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=10861"},"modified":"2010-07-06T15:03:07","modified_gmt":"2010-07-06T19:03:07","slug":"forex-daily-market-commentary-83","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/07\/06\/forex-daily-market-commentary-83\/","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$ 1.2655 level and was supported around the $1.2480 level.\u00a0 The common currency reached its highest level since 21 May as dealers were less risk-averse on the heels of stronger global equity markets.\u00a0 Liquidity was normalized following the U.S. Independence Day holiday weekend.\u00a0 Yields on German and French government bonds are hovering near record lows and Austria successfully sold \u20ac1.32 billion in bonds today.\u00a0 Germany plans to auction as much as \u20ac5 billion in ten-year debt tomorrow.\u00a0 Most traders expect European Central Bank will keep monetary policy unchanged on Thursday.\u00a0 ECB President Trichet will speak after the ECB\u2019s decision is announced and he is expected to discuss liquidity provisions by the ECB and\u00a0 the stress tests that will be conducted on eurozone banks.\u00a0 An anonymous ECB official today reported the central bank is pleased with the manner in which the euro has stabilized and suggested the ECB may continue with its extraordinary monetary policy measures until 2011.\u00a0 There is also talk that German ECB officials want to end the ECB\u2019s asset purchase program this year.\u00a0 ECB official Noyer said economic growth needs to be \u201cbalanced and sustainable.\u201d\u00a0 Data to be released in the eurozone tomorrow include EMU-16 Q1 gross domestic product, German May factory orders, and the French May trade balance.\u00a0 In U.S. news, data released today saw the June ISM non-manufacturing index decline more-than-expected to 53.8, lower than the May print of 55.4.\u00a0 Data to be released tomorrow include MBA mortgage applications.\u00a0 Richmond Fed President Lacker was quoted in the Japanese media as saying consumer spending is \u201cmoderately strong\u201d while Dallas Fed President Fisher reported households are \u201ccautious.\u201d\u00a0 Economists are closely scrutinizing U.S. economic data to see if the recent moderation in economic growth worsens and the U.S. encounters a double dip recession.\u00a0 The U.S. economy is also experiencing disinflationary pressures.\u00a0 Euro offers are cited around the US$ 1.2720 level.<\/p>\n

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

The yen depreciated vis-\u00e0-vis the U.S. dollar today as the greenback tested offers around the \u00a587.95 level and was supported around the \u00a587.40 level.\u00a0 U.S. dollar sentiment eroded further and the pair stopped just short of testing key technical support around the \u00a587.20 level.\u00a0 The yen reversed course and was given across the board as dealers cited better risk-taking that followed the release of stronger-than-expected Australian May trade surplus data.\u00a0 Data released in Japan overnight saw the May leading index fall to 98.7 while the May coincident index ticked lower to 101.2.\u00a0\u00a0 Bank of Japan official Toyama yesterday said the Tokyo interbank offered rate is \u201csubstantially\u201d deviating from appropriate levels.\u00a0 Tibor fell yesterday for a fourth consecutive day to 0.380%, its lowest level since July 2006.\u00a0 The yen will likely remain strong provided growth estimates for the U.S. and Europe remain muted, absent any intervention from the Japanese government.\u00a0 The Japanese media continues to report Bank of Japan may lift its 2010 economic growth forecast to around 2.5% from the current forecast of 1.8%.\u00a0 Dealers are paying close attention to Japanese politics where Prime Minister Kan\u2019s Democratic Party of Japan party could lose its upper-house majority on 11 July.\u00a0 Kan and the DPJ are seeking to increase taxes.\u00a0 Data to be released in Japan this week include May machine orders and current account data on Wednesday.\u00a0 The Nikkei 225 stock index climbed 0.77% to close at \u00a59,338.04.\u00a0 U.S. dollar bids are cited around the \u00a586.29 level.\u00a0\u00a0 The euro moved higher vis-\u00e0-vis the yen as the single currency tested offers around the \u00a5110.85 level and was supported around the \u00a5109.15 level.\u00a0 The British pound moved higher vis-\u00e0-vis the yen as sterling tested offers around the \u00a5133.65 level while the Swiss franc moved higher vis-\u00e0-vis the yen and tested offers around the \u00a583.05 level. In Chinese news, the U.S. dollar appreciated vis-\u00e0-vis the Chinese yuan as the greenback closed at CNY 6.7805 in the over-the-counter market, up from CNY 6.7758.\u00a0 The State Administration of Foreign Exchange noted a depreciation in the U.S. dollar will not cause \u201creal\u201d losses from foreign reserve investments.\u00a0 Agricultural Bank plans to raise as much as US$ 20.1 billion by selling equity in Shanghai and Hong Kong.\u00a0 Dealers are reporting People\u2019s Bank of China has purchased significant amount of Japanese government bonds, approximately US$ 6 billion between January and April.\u00a0 The big news in China yesterday was a slide in the HSBC June services index to 55.6 from 56.4 and these data follow recent weaker data in the manufacturing sector.\u00a0 Some economists are scaling back their Chinese GDP growth forecasts for the fourth quarter to an annualized 8%.\u00a0 Notably, the Chinese economy expanded 11.9% y\/y in the first three quarters of 2010.\u00a0 Premier Wen this weekend reported the Chinese government will remain flexible on account of \u201cvery complicated\u201d economic situations in China and abroad.<\/p>\n

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

The British pound appreciated vis-\u00e0-vis the U.S. dollar today as cable tested offers around the US$ 1.5225 level and was supported around the US$ 1.5080 level.\u00a0 Bank of England is expected to keep its headline Bank rate target unchanged this week at 0.50% and keep its asset purchase program unchanged at \u00a3200 billion.\u00a0 BCC today reported the BoE is unlikely to change its Bank Rate before May 2011.\u00a0 It was announced yesterday that economic forecaster Martin Weale will join the BoE Monetary Policy Committee as an external member.\u00a0 Traders will pay very close attention to Thursday\u2019s MPC vote to see if there are additional calls for higher rates.\u00a0 Traders await the release of the BRC June shop price index.\u00a0 Cable bids are cited around the US$ 1.4620 level.\u00a0 The euro appreciated vis-\u00e0-vis the British pound as the single currency tested offers around the \u00a30.8325 level and was supported around the \u00a30.8265 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 1.0560 level and was capped around the CHF 1.0665 level.\u00a0 Data released in Switzerland today saw June consumer price inflation off 0.4% m\/m and up 0.5% y\/y, a moderation of price pressures.\u00a0 The June unemployment rate will be released on Thursday and is expected to come in around 3.7%.\u00a0 Swiss National Bank\u2019s foreign currency holdings declined last month to CHF 225.8 billion from CHF 232.1 billion in May as SNB officials stopped selling francs for euro or U.S. dollars.\u00a0 Swiss National Bank President Hildebrand yesterday said he is \u201cclosely monitoring\u201d the franc, adding its fluctuation has \u201cclearly increased.\u201d\u00a0 U.S. dollar offers are cited around the CHF 1.0980 level.\u00a0 The euro appreciated vis-\u00e0-vis the Swiss franc as the single currency tested offers around the CHF 1.3410 level while the British pound moved lower vis-\u00e0-vis the Swiss franc and tested bids around the CHF 1.6035 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":"

Bank of England is expected to keep its headline Bank rate target unchanged this week at 0.50% and keep its asset purchase program unchanged at \u00a3200 billion…<\/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-10861","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/10861","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=10861"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/10861\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=10861"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=10861"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=10861"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}