{"id":11066,"date":"2010-07-13T15:55:56","date_gmt":"2010-07-13T19:55:56","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=11066"},"modified":"2010-07-13T15:55:56","modified_gmt":"2010-07-13T19:55:56","slug":"forex-daily-market-commentary-85","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/07\/13\/forex-daily-market-commentary-85\/","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 sharply vis-\u00e0-vis the U.S. dollar today as the single currency tested offers around the US$ 1.2735 level and was supported around the $1.2520 level. The common currency reached its highest level since 12 May as dealers positioned themselves ahead of the U.S. corporate earnings season that many dealers believe will evidence strong results for the second quarter.\u00a0 Alcoa, the U.S. aluminum production giant, reported better-than-expected earnings results.\u00a0 Dealers also moved into the euro after Greece sold \u20ac1.625 billion in 26-week Treasury bills at a yield of 4.65% – below the 5% rate the European Union lent funds at in its bailout package to Greece.\u00a0 The euro easily absorbed news that Portugal\u2019s credit rating was reduced two notches to A1 by Moody\u2019s on account of that country\u2019s expanding debt position and weaker economic growth.\u00a0 Eurozone finance ministers convened yesterday and Dutch finance minister de Jager reported eurozone banks \u201cwill get a certain period to refinance themselves in the market, but the countries will immediately announce that there is a certain backstop.\u201d\u00a0 European regulators are conducting stress tests on 91 different banks to evaluate their ability to withstand losses on sovereign bond holdings.\u00a0 Data released in the eurozone today saw the EMU-16 July ZEW economic sentiment survey come in weaker-than-expected at 10.7, down from the prior reading of 18.8, while Germany\u2019s ZEW economic sentiment survey fell to 21.2 and the current situation sub-index improved to 14.6.\u00a0 Other German data saw the June wholesale price index decline 0.2% m\/m and climb 5.1% y\/y.\u00a0 Other data released today saw French June consumer price inflation up 0.0% m\/m and 1.5% y\/y while the harmonized components were up 0.0% m\/m and 1.7% y\/y.\u00a0 In U.S. news, traders are waiting to see if the U.S. Senate achieves a final passage of the financial overhaul legislation on 15 July.\u00a0 The Federal Reserves sold US$ 2.12 billion of term deposits in its third test auction today, a new tool the Fed may use to absord excess liquidity from the banking system.\u00a0 Data released in the U.S. today saw June NFIB small business optimism recede while the May trade balance deficit worsened to \u2013US$ 42.3 billion.\u00a0 Many data including retail sales will be released tomorrow along with minutes from the most recent Federal Open Market Committee meeting.\u00a0 Euro offers are cited around the US$ 1.2830 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 \u00a588.00 figure and was capped around the \u00a588.85 level.\u00a0 Bank of Japan\u2019s Policy Board is expected to keep its overnight call rate target unchanged at 0.10% when its interest rate announcement is made tonight.\u00a0 BoJ Governor Shirakawa last week noted Japan\u2019s economy is \u201clikely to stay on a recovery trend\u201d with improving domestic demand.\u00a0 The central bank will likely retain some policy tools ready to deploy in case the situation in Europe deteriorates further or deflation worsens in Japan.\u00a0 BoJ is likely to be pressured by the government following this weekend\u2019s election loss, the yen\u2019s ongoing strength, and unstable equity markets.\u00a0 Last month, BoJ unveiled details about its new \u00a53 trillion lending program to stimulate lending to companies.\u00a0 Data released in Japan overnight saw May industrial production up 0.1% m\/m and 20.4% y\/y with May capacity utilization up 0.8% m\/m.\u00a0 Also, June consumer confidence improved to 43.6 from the prior print of 42.7.\u00a0 The Nikkei 225 stock index lost 0.11% to close at \u00a59,537.23. 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 \u00a5112.35 level and was supported around the \u00a5110.65 level.\u00a0 The British pound moved higher vis-\u00e0-vis the yen as sterling tested offers around the \u00a5134.05 level while the Swiss franc moved higher vis-\u00e0-vis the yen and tested offers around the \u00a584.00 figure. In Chinese news, the U.S. dollar appreciated vis-\u00e0-vis the Chinese yuan as the greenback closed at CNY 6.7725 in the over-the-counter market, up from CNY 6.7711.\u00a0 Data to be released in China tomorrow night include Q2 GDP growth, June producer prices, June consumer prices, June retail sales, and June industrial production.\u00a0 The economy is expected to have expanded an annualized 10.5% in the second quarter.<\/p>\n

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

The British pound appreciated sharply vis-\u00e0-vis the U.S. dollar today as cable tested offers around the US$ 1.5190 level and was supported around the US$ 1.4965 level.\u00a0 Data released in the U.K. today saw June consumer price inflation up 0.1% n\/n and 3.2% y\/y while the core index came in much stronger-than-expected at 3.1%, up from the prior result of 2.9%.\u00a0 DCLG May house prices were up 11.0% y\/y and June Nationwide consumer confidence will be released tonight followed by jobless data tomorrow.\u00a0 Sterling climbed higher after the release of the CPI data on the premise that additional Bank of England Monetary Policy Committee members will vote for higher interest rates.\u00a0 BoE\u2019s Main Bank Rate target currently stands at 0.50%.\u00a0 MPC member Sentance reported the MPC\u2019s rate decision should support the private sector and said rate-setting is becoming more difficult.\u00a0 MPC member Bailey said U.K. banks that are experiencing difficulties should restructure their debts.\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 \u00a30.8390 level and was supported around the \u00a30.8315 level.<\/p>\n

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

The Swiss franc appreciated vis-\u00e0-vis the U.S. dollar today as the greenback tested bids around the CHF 1.0515 level and was capped around the CHF 1.0645 level.\u00a0 Data released in Switzerland today saw June producer and import prices decline 0.4% m\/m and climb 0.9% y\/y.\u00a0 Swiss National Bank President Hildebrand last week said he is \u201cclosely monitoring\u201d the franc, adding its fluctuation has \u201cclearly increased.\u201d\u00a0 Most dealers believe SNB has been forced to intervene less on account of all of the euro-denominated assets on its balance sheet but some note the SNB will likely continue to intervene at opportune levels.\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 1.3400 figure while the British pound moved higher vis-\u00e0-vis the Swiss franc and tested offers around the CHF 1.6055 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":"

Dealers also moved into the euro after Greece sold \u20ac1.625 billion in 26-week Treasury bills at a yield of 4.65% – below the 5% rate the European Union lent funds at in its bailout package to Greece…<\/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-11066","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/11066","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=11066"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/11066\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=11066"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=11066"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=11066"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}