{"id":12512,"date":"2010-08-30T15:17:25","date_gmt":"2010-08-30T19:17:25","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=12512"},"modified":"2010-08-30T15:17:25","modified_gmt":"2010-08-30T19:17:25","slug":"forex-daily-market-commentary-102","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/08\/30\/forex-daily-market-commentary-102\/","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$ 1.2670 level and was capped around the $1.2765 level.\u00a0 Today\u2019s intraday high was right around the 23.6% retracement of the $1.3335 \u2013 1.2580 range.\u00a0 Liquidity was reduced on account of the Bank holiday in the U.K. and market holidays elsewhere.\u00a0 The media reported the European Central Bank will likely extend its emergency aid program for the banking system into 2011.\u00a0 There is increasing speculation the U.S. economy is heading toward a double dip recession that could dim Europe\u2019s economic recovery.\u00a0 Data released in the eurozone today saw the EMU-16 August business climate indicator tick lower to 0.61 from the revised print of 0.63 while August consumer confidence improved to -11 from from the prior reading of -12.\u00a0 August industrial confidence was unchanged at -4 and August services confidence ticked higher to +7.\u00a0 Data to be released in the eurozone tomorrow include the EMU-16 flash August estimate and the EMU-16 July unemployment rate.\u00a0 In U.S. news, data released today saw July personal income up 0.2% while July personal spending came in at +0.4%, more-than-expected and up from the prior reading of 0.0%.\u00a0 Also, the July PCE deflator was up 1.5% y\/y and July core PCE was up 0.1% m\/m and 1.4% y\/y.\u00a0 Finally, the Dallas Fed\u2019s August manufacturing activity index improved to -13.5.\u00a0 Data to be released in the U.S. tomorrow include the August Chicago PMI survey, August consumer confidence, and June CaseShiller home prices data.\u00a0 Minutes from the Federal Open Market Committee\u2019s 10 August meeting will also be released tomorrow and closely scrutinized given the Fed\u2019s decision to reinvest maturing mortgage-backed securities proceeds into the U.S. Treasury market.\u00a0 Dealers are still talking about Fed Chairman Bernanke\u2019s comments on Friday regarding how the Fed could ease policy further if required including shifting the composition of its bond reinvestment strategy.\u00a0 Euro offers are cited around the US$ 1.3240 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 \u00a584.55 level and was capped around the \u00a585.90 level. The pair briefly traded above the \u00a585.80 level, representing the 23.6% retracement of the \u00a592.85 \u2013 83.60 range.\u00a0 As expected by many Bank of Japan-watchers, the central bank held an emergency Policy Board meeting and expanded its bank lending program \u2013 the first time it has added new monetary stimulus since March.\u00a0 BoJ is increasing the amount of funds in the facility by \u00a510 trillion to a total of \u00a530 trillion.\u00a0 BoJ Governor Shirakawa indicated the central bank is poised to take more action if required and cited \u201cdownside risks\u201d to Japan\u2019s ongoing economic recovery.\u00a0 Shirakawa left the Fed\u2019s Jackson Hole symposium early to attend the meeting in Tokyo amid increasing pressure from the government to enact more monetary easing.\u00a0 More traders, however, are speculating the change in policy will not have a major impact on the economy or on the yen.\u00a0 Vice finance minister Ikeda welcomed the central bank\u2019s \u201cswift response.\u201d\u00a0 There is no indication that Japanese monetary authorities are any closer to conducting unilateral yen-selling intervention than they were last week.\u00a0 Consumer prices have been on the decline for seventeen months, household spending remains weak, and gross domestic product growth is decelerating.\u00a0 Former BoJ Policy Board member Nakahara said the central bank\u2019s easing today is \u201ctoo little and too late\u201d and argued they are \u201cmeaningless and can\u2019t stop the yen\u2019s advance.\u201d\u00a0 Nakahara added \u201cLowering the policy rate to zero is a must to stem the yen\u2019s gains.\u00a0 The BoJ should also boost outright purchases of bonds by another \u00a5500 billion.\u00a0 Increased bond purchases would enable the government to generate funds for more public works spending.\u00a0 As a whole, Japan can\u2019t live without spending by companies and the government.\u201d\u00a0 Prime Minister Kan reported he will consider a supplementary budget if necessary.\u00a0 Data to be released in Japan overnight include July industrial production and July retail trade.\u00a0 The Nikkei 225 stock index climbed 1.76% to close at \u00a59,149.26.\u00a0 U.S. dollar bids are cited around the \u00a584.60 level.\u00a0\u00a0 The euro moved lower vis-\u00e0-vis the yen as the single currency tested bids around the \u00a5107.25 level and was capped around the \u00a5109.55 level.\u00a0 The British pound moved lower vis-\u00e0-vis the yen as sterling tested bids around the \u00a5130.95 level while the Swiss franc moved lower vis-\u00e0-vis the yen and tested bids around the \u00a582.15 level. In Chinese news, the U.S. dollar appreciated vis-\u00e0-vis the Chinese yuan as the greenback closed at CNY 6.8033 in the over-the-counter market, up from CNY 6.7980.\u00a0 Data to be released in China Wednesday include August PMI manufacturing numbers followed by August PMI services data on Friday.\u00a0 The yen fell significantly after a rumour circulated that People\u2019s Bank of Governor Zhou may have defected on account of a possible US$ 430 billion loss on U.S. Treasury bond holdings.\u00a0 The rumours likely represent a power struggle within the Communist Party.\u00a0 PBoC adviser Xia Bin called for a floating interest rate mechanism for bank deposits and noted economic growth is expected to slow this year.<\/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$ 1.5455 level and was capped around the US$ 1.5575 level.\u00a0 Data released in the U.K. last night saw the August Hometrack housing survey off 0.3% m\/m and up 1.5% y\/y.\u00a0 Data to be released in the U.K. tonight include the GfK August consumer confidence survey and it is expected to print around -24.\u00a0 Net consumer credit and mortgage lending data will be released tomorrow.\u00a0 Bank of England Chief Economist Bean spoke at Jackson Hole and said \u201cThe deleveraging process is incomplete, the recovery remains fragile, and a considerable margin of spare capacity is yet to be worked off, while further policy action may yet be necessary to keep the recovery on track.\u201d\u00a0 Cable bids are cited around the US$ 1.5385 level.\u00a0 The euro depreciated vis-\u00e0-vis the British pound as the single currency tested bids around the \u00a30.8160 level and was capped around the \u00a30.8215 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 1.0235 level and was capped around the CHF 1.0310 level.\u00a0 Swiss National Bank member Jordan said the central bank is closely monitoring the Swiss franc \u201cvery closely\u201d and said Switzerland\u2019s monetary policy situation remains \u201cvery complex.\u201d\u00a0 Jordan also cited a \u201csmall\u201d short-term risk of deflation.\u00a0\u00a0 Some traders believe SNB may be forced to resume its franc-selling intervention to stop the euro\u2019s sharp decline on the cross.\u00a0 The July UBS consumption indicator will be released tomorrow followed by August PMI on Wednesday, Q2 GDP and July retail sales on Thursday, and August consumer price inflation on Friday.\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 1.2980 level while the British pound moved lower vis-\u00e0-vis the Swiss franc and tested bids around the CHF 1.5840 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":"

The euro depreciated vis-\u00e0-vis the U.S. dollar today as the single currency tested bids around the US$ 1.2670 level and was capped around the $1.2765 level. Today\u2019s intraday high was right around the 23.6% retracement…<\/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-12512","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/12512","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=12512"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/12512\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=12512"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=12512"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=12512"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}