{"id":10900,"date":"2010-07-07T18:11:54","date_gmt":"2010-07-07T22:11:54","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=10900"},"modified":"2010-07-07T18:11:54","modified_gmt":"2010-07-07T22:11:54","slug":"forex-daily-market-commentary-84","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/07\/07\/forex-daily-market-commentary-84\/","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 depreciated vis-\u00e0-vis the U.S. dollar today as the single currency tested bids around the US$ 1.2555 level and was capped around the $1.2640 level.\u00a0 Concerns continue to mount that the global economy is headed toward a double dip recession and higher-yielding currencies like the common currency are at risk.\u00a0 Traders also pared long euro exposure after it was reported that German May factory orders slid 0.5% following April\u2019s revised print of +3.2%.\u00a0 Economists had expected a May result of around +0.3% and factory orders were up 24.8% y\/y.\u00a0\u00a0\u00a0 Most traders believe the European Central Bank will keep monetary policy unchanged on Thursday. Remarks from President Trichet will likely focus on liquidity provisions by the ECB and stress tests on eurozone banks.\u00a0 There is increasing chatter the ECB may be forced to adopt a quantitative credit expansion to deal with problems in the eurozone.\u00a0 Data released in the eurozone today saw EMU-16 Q1 final gross domestic product up 0.2% q\/q and 0.6% y\/y, unchanged from previous estimates or forecasts.\u00a0 Also, the French May trade balance worsened to -\u20ac5.5 billion from a revised -\u20ac4.3 billion.\u00a0 In U.S. news, Dallas Fed President Fisher said the Fed has \u201cdone enough\u201d to stimulate economic growth.\u00a0 He added \u201cInterest rates are zero.\u00a0 It\u2019s not the cost of money that the issue\u2026Companies are hoarding cash, they\u2019re holding back, they\u2019re not hiring people, they\u2019re not building plant and equipment at the pace we\u2019d like to see.\u00a0 This has nothing to do with monetary policy.\u00a0 We have been as accommodative as possible.\u201d\u00a0 Fisher also noted \u201cDeflation, as is inflation, are tail risks.\u201d Kansas City Fed President Hoenig reported a 1% federal funds target rate \u201cwouldn\u2019t hurt the economy\u201d and said 3% economic growth is \u201cwithin the realm of possibility.\u201d Data released in the U.S. today saw MBA mortgage applications move lower to +6.7%.\u00a0 Euro offers are cited around the US$ 1.2720 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 \u00a587.00 figure and was capped around the \u00a587.65 level.\u00a0 Traders continue to buy yen on concerns the global economic recovery will be difficult to sustain and weak equity markets also fueled yen gains.\u00a0 An intensification in risk aversion will likely benefit the yen further.\u00a0 Data released in Japan overnight saw June official reserve assets increase to US$ 1.050 trillion.\u00a0 Data to be released in Japan tonight include June bank lending, May factory orders, May current account data, and the May trade balance.\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 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 lower vis-\u00e0-vis the yen as the single currency tested bids around the \u00a5109.30 level and was capped around the \u00a5110.70 level.\u00a0 The British pound moved higher vis-\u00e0-vis the yen as sterling tested offers around the \u00a5132.85 level while the Swiss franc moved higher vis-\u00e0-vis the yen and tested offers around the \u00a582.95 level. In Chinese news, the U.S. dollar depreciated vis-\u00e0-vis the Chinese yuan as the greenback closed at CNY 6.7771 in the over-the-counter market, down from CNY 6.7805.\u00a0 People\u2019s Bank of China official Zhang reported PBoC \u201cmust deal with\u201d excess liquidity\u201d even as evidence emerges of slowing domestic growth.\u00a0 Chinese officials seem intent on countering inflation and containing liquidity. Agricultural Bank of China appears poised to raise US$ 19.2 billion in its initial public offering.\u00a0 The State Administration of Foreign Exchange reported China\u2019s holdings of U.S. Treasuries \u201cshouldn\u2019t be politicized.\u201d\u00a0 SAFE added the \u201cnuclear\u201d option of liquidating its U.S. Treasury holdings is \u201ccompletely unnecessary.\u201d\u00a0 PBoC official Yi indicated China does not want to fight trade wars.<\/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$ 1.5215 level and was supported around the US$ 1.5080 level.\u00a0 Data to be released in the U.K. tomorrow include June Halifax house prices, May industrial production, May manufacturing production, and the June NIESR GDP estimate.\u00a0 Bank of England is expected to keep its headline Bank rate target unchanged tomorrow at 0.50% and to keep its asset purchase program unchanged at \u00a3200 billion.\u00a0 Traders will pay very close attention to tomorrow\u2019s MPC vote to see if there are additional calls for higher rates.\u00a0\u00a0\u00a0 Cable bids are cited around the US$ 1.4620 level.\u00a0 The euro depreciated vis-\u00e0-vis the British pound as the single currency tested bids around the \u00a30.8300 level and was capped around the \u00a30.8335 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 1.0525 level and was capped around the CHF 1.0635 level. Data to be released in Switzerland tomorrow include the June unemployment rate.\u00a0 Data released in Switzerland this week saw June consumer price inflation off 0.4% m\/m and up 0.5% y\/y, a moderation of price pressures.\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 this week 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 depreciated vis-\u00e0-vis the Swiss franc as the single currency tested bids around the CHF 1.3265 level while the British pound moved lower vis-\u00e0-vis the Swiss franc and tested bids around the CHF 1.5965 level.<\/p>\n

Forex Daily Market Commentary<\/strong><\/em> provided by<\/em><\/strong> GCI Financial Ltd<\/strong><\/a>.<\/strong><\/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":"

Concerns continue to mount that the global economy is headed toward a double dip recession and higher-yielding currencies like the common currency are at risk. Traders also pared…<\/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-10900","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/10900","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=10900"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/10900\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=10900"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=10900"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=10900"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}