{"id":11867,"date":"2010-08-09T14:55:03","date_gmt":"2010-08-09T18:55:03","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=11867"},"modified":"2010-08-09T14:55:03","modified_gmt":"2010-08-09T18:55:03","slug":"forex-daily-market-commentary-92","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/08\/09\/forex-daily-market-commentary-92\/","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$ 1.3235 level and was capped around the $1.3305 level.\u00a0 The common currency has gained about 6% from four-year lows in June amid slowing U.S. economic activity.\u00a0 Many banks are pushing back their forecasts for eventual European Central Bank monetary policy tightening with some eyeing late 2011 or early 2012 as to when policy could begin to be normalized.\u00a0 German 10-year bond yields are near a record low as most traders expect the ECB to remain on hold and the Federal Reserve to possibly signal it may resume asset purchases in some capacity.\u00a0 Three-month U.S. Libor fell to 0.404%, its lowest level since 6 May, while three-month Euro Libor was unchanged around 0.834%.\u00a0 ECB member Paramo called on Spanish lenders to strengthen bank capital and ECB member Orphanides said there is \u201cno urgency\u201d to begin raising rates.\u00a0 In contrast, ECB\u2019s Quaden said the ECB \u201cneeds to be more attentive on inflation.\u201d\u00a0 Data released in the eurozone today saw August Sentix investor confidence improve sharply to 8.5 from the prior reading of -1.3.\u00a0 Also, the German June trade balance improved to \u20ac14.1 billion and the June current account expanded to \u20ac12.9 billion.\u00a0 Other data saw French July Bank of France business sentiment steady at 101.\u00a0 In U.S. news, the Federal Open Market Committee will release its interest rate decision tomorrow and policymakers are expected to keep the federal funds rate target unchanged at 0.25%.\u00a0 The big question on traders\u2019 minds is whether or not the Fed will signal a resumption of its credit expansion programs.\u00a0 Dealers are focused on the possibility the Fed will reinvest proceeds from maturing assets back into the market to keep a lid on market interest rates rather than keeping cash on its balance sheet.\u00a0 Recent U.S. economic activity has slowed or worsened and the Fed\u2019s biggest task will be to reduce the U.S. unemployment rate.\u00a0 Data to be released in the U.S. tomorrow include Q2 non-farm productivity, Q2 unit labour costs, and June wholesale inventories.\u00a0 Euro offers are cited around the US$ 1.3505 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 \u00a585.75 level and was supported around the \u00a585.30 level.\u00a0 The pair continues to trade in the \u00a585 handle, an area where many dealers believe Japanese monetary authorities will intervene to prevent the yen from surging further.\u00a0 Others, however believe Japanese authorities are pleased with improving domestic demand and an export-led recovery and will not feel forced to intervene around these levels.\u00a0 Former Bank of Japan Assistant Governor Hirano warned \u201cIf the pace of the yen\u2019s rise is too fast, Japan may try to check it by showing its readiness to intervene.\u201d
\nHe added \u201cJapan is unlikely to obtain other nations\u2019 consent for launching a solo intervention.\u201d Bank of Japan\u2019s Policy Board convened overnight to discuss monetary policy and is not expected to alter policy when its decision is announced tonight.\u00a0 Government official Hiraoka said the central bank cannot counter deflation alone, reporting \u201cJapan must fight an all-out battle to change deflationary sentiment by utilizing various measures, including fiscal and social welfare policies.\u201d\u00a0 Some government officials are still calling for the Kan government to impose an inflation target on the central bank.\u00a0 Data released in Japan overnight saw the June current account total narrow to \u00a51.047 trillion while the June trade balance nearly doubled to \u00a5769.0 billion.\u00a0 Also, July bank lending was off 1.7%.\u00a0 Data to be released overnight include the July economy watchers survey and July bankruptcies data.\u00a0 The Nikkei 225 stock index lost 0.72% to close at \u00a59,572.49.\u00a0 U.S. dollar bids are cited around the \u00a585.30 level.\u00a0\u00a0 The euro moved lower vis-\u00e0-vis the yen as the single currency tested offers around the \u00a5113.25 level and was capped around the \u00a5113.90 level.\u00a0 The British pound moved higher vis-\u00e0-vis the yen as sterling tested offers around the \u00a5136.90 level while the Swiss franc moved higher vis-\u00e0-vis the yen and tested offers 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 6.7684 in the over-the-counter market, down from CNY 6.7686.\u00a0 People\u2019s Bank of China set the yuan\u2019s reference rate at its strongest level since the currency peg was ended in July 2005.\u00a0 There is talk that a Chinese government commitment to energy reduction may reduce industrial output growth in the near term.\u00a0 Chinese exports data will be released overnight and could show exports growth decelerated to 35% last month.\u00a0 Former PBoC Deputy Governor Wu said China should not introduce additional stimulus measures.<\/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$ 1.5995 level and was supported around the US$ 1.5930 level.\u00a0 Bank of England is expected to reduce its U.K. economic growth projections and increase its inflation forecast.\u00a0 The BoE Quarterly Inflation Report will be released on Wednesday and will likely trim the Bank\u2019s May forecast of 3.4% economic growth for 2011 and 3.6% growth for 2012.\u00a0 There is talk the Bank could reduce its projections by up to a full percentage point.\u00a0 Data to be released in the U.K. overnight include the BRC July retail sales monitor and July RICS house price balance.\u00a0 Cable bids are cited around the US$ 1.5640 level.\u00a0 The euro depreciated vis-\u00e0-vis the British pound as the single currency tested bids around the \u00a30.8295 level and was capped around the \u00a30.8335 level.<\/p>\n

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

The Swiss franc depreciated vis-\u00e0-vis the U.S. dollar today as the greenback tested offers around the CHF 1.0415 level and was supported around the CHF 1.0370 level.\u00a0 Data to be released in Switzerland tomorrow include July SECO consumer confidence followed by July producer and import prices on Friday.\u00a0 Data released in Switzerland last week saw the July unemployment rate tick lower to 3.6% from the prior level of 3.7%.\u00a0 S&P last week withdrew its short-term ratings of \u201cAAA\/A-1+\u201d on Swiss National Bank on account of the lack of rated debt outstanding.\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 1.3760 level while the British pound moved higher vis-\u00e0-vis the Swiss franc and tested offers around the CHF 1.6620 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":"

Many banks are pushing back their forecasts for eventual European Central Bank monetary policy tightening with some eyeing late 2011 or early 2012 as to when policy…<\/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-11867","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/11867","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=11867"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/11867\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=11867"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=11867"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=11867"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}