{"id":11269,"date":"2010-07-21T16:59:53","date_gmt":"2010-07-21T20:59:53","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=11269"},"modified":"2010-07-21T16:59:53","modified_gmt":"2010-07-21T20:59:53","slug":"forex-daily-market-commentary-87","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/07\/21\/forex-daily-market-commentary-87\/","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$ 1.2750 level and was capped around the $1.2910 level.\u00a0 The common currency came off after Federal Reserve Chairman Bernanke reported the economic outlook remains \u201cunusually uncertain\u201d in Senate testimony and reiterated the Fed\u2019s plan to keep interest rates at very low levels for an \u201cextended period.\u201d\u00a0 Bernanke also noted the Fed is \u201cprepared to take further policy actions as needed\u201d to support the U.S. economic recovery but stopped short of noting what those actions may include.\u00a0 Bernanke drove home the point that the U.S. economy is likely to avert a double-dip recession but made it clear the Fed continues to view economic output as \u201cfragile.\u201d\u00a0 Some traders believe the Fed might reopen some of its emergency lending and stimulus programs if the economic situation worsens and economic growth is jeopardized.\u00a0 U.S. equities were higher before Bernanke spoke but lost momentum and sank given the uncertain outlook on the economy.\u00a0 Data released in the U.S. today saw MBA mortgage applications move higher by +7.6% in the latest week.\u00a0 Last week, the Fed released updated economic projections that evidenced forecasts for low growth, high unemployment, and muted inflation.\u00a0 Bernanke also provided support for the new financial regulatory legislation that President Obama signed into law today.\u00a0 In eurozone news, there were no major data released today.\u00a0 The big day for markets is Friday when the results from stress tests on up to 91 eurozone banks will be released.\u00a0 It has already been reported in the media that some banks have failed their stress tests.\u00a0 PMI data will be released in the eurozone tomorrow.\u00a0 Euro offers are cited around the US$ 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 \u00a586.85 level and was capped around the \u00a587.50 level.\u00a0 The pair continues to inch lower to levels where some traders believe the government may intervene, specifically around an \u00a585 handle.\u00a0 An anonymous Bank of Japan source this week suggested the central bank may intervene around the \u00a585 level if the pair depreciates to that area and continues to trade there.\u00a0 Japanese monetary authorities have not officially intervened for years but they will clearly not want the pair to risk a move below the \u00a580 figure.\u00a0\u00a0 The pair briefly traded below this level in 1995 before a massive dollar-buying intervention was implemented to boost the greenback.\u00a0 Data to be released in Japan overnight include all industry activity.\u00a0 The Nikkei 225 stock index lost 0.23% to close at \u00a59,278.83.\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 \u00a5110.80 level and was capped around the \u00a5112.805 level.\u00a0 The British pound moved lower vis-\u00e0-vis the yen as sterling tested bids around the \u00a5131.70 level while the Swiss franc moved lower vis-\u00e0-vis the yen and tested bids around the \u00a582.50 level. In Chinese news, the U.S. dollar depreciated vis-\u00e0-vis the Chinese yuan as the greenback closed at CNY 6.7767 in the over-the-counter market, down from CNY 6.7783.\u00a0 Prime Minister Wen this week warned the Chinese property market may be in for difficult times.\u00a0 The Chinese government now accounts for about one-third of global economic growth and economists fear a crash in the housing sector there may result in significant problems for global output.<\/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$ 1.5155 level and was capped around the US$ 1.5335 level.\u00a0 Sterling tracked the euro lower following Bernanke\u2019s speech but the big news in the U.K. today was the release of the minutes from the July Bank of England Monetary Policy Committee meeting in which policymakers voted 7-to-1 to keep the Bank rate unchanged at 0.5%.\u00a0 The minutes read \u201cOn balance, most members thought that it was appropriate to leave the stance of monetary policy unchanged. The committee considered arguments in favour of a modest easing in the stance of monetary policy. The softening in the medium-term outlook for GDP growth over recent months would put further downwards pressure on inflation, once the impact of temporary factors had waned.\u201d MPC member Sentance voted again to raise interest rates.\u00a0 There is talk of a possible three-way split on the MPC this year if one or more policymakers voted to expand policy accommodation.\u00a0 Some believe the MPC may resort to increasing its asset purchase program. Cable bids are cited around the US$ 1.5140 level.\u00a0 The euro appreciated vis-\u00e0-vis the British pound as the single currency tested offers around the \u00a30.8505 level and was supported around the \u00a30.8425 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":"

Sterling tracked the euro lower following Bernanke\u2019s speech but the big news in the U.K. today was the release of the minutes from the July Bank of England Monetary Policy Committee…<\/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-11269","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/11269","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=11269"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/11269\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=11269"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=11269"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=11269"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}