{"id":16448,"date":"2010-12-07T07:00:15","date_gmt":"2010-12-07T12:00:15","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=16448"},"modified":"2010-12-07T07:00:15","modified_gmt":"2010-12-07T12:00:15","slug":"forex-daily-market-commentary-170","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/12\/07\/forex-daily-market-commentary-170\/","title":{"rendered":"Forex Daily Market Commentary"},"content":{"rendered":"

By GCI Forex Research<\/strong><\/p>\n

Fundamental Outlook at \t\t\t0800 GMT (EDT + 0400)<\/strong><\/p>\n

USD<\/span><\/em><\/strong><\/p>\n

The dollar weakened moderately during the Asia session after hopes \t\t\twere raised that Ireland’s 2011 budget might be approved at today’s \t\t\tparliamentary vote. EURUSD traded 1.3277-1.3354, USDJPY 82.34-82.73. \t\t\tGold has retreated slightly from yesterday’s all time high, and is \t\t\ttrading at $1,420.98\/oz at the time of writing. Richmond Fed \t\t\tPresident Lacker said history suggests that the Fed should be \t\t\tcareful not to target the jobless rate, though he does see better \t\t\tlabour conditions despite the recent payrolls disappointment. Like \t\t\tFed Chairman Bernanke, Lacker is confident the Fed can withdraw its \t\t\tstimulus measures, though getting the correct timing is the \t\t\tdifficult part and further expansion of the balance sheet now could \t\t\tcomplicate matters. He also said US economic growth is \t\t\tself-sustaining, though sluggish. Several Fed officials have said it \t\t\tis appropriate to review the QE2 policy regularly, and investor \t\t\tinterest in the outcome of next week’s FOMC meeting is already \t\t\tstarting to build. But it is not likely the FOMC will choose to \t\t\talter the program so soon after inception and Eurozone developments \t\t\tshould remain the main driver for currencies.
\n EUR<\/span><\/em><\/strong><\/p>\n

Eurogroup Chairman Juncker said the monthly meeting of Eurozone \t\t\tfinance ministers was mostly technical, with no new decisions taken. \t\t\tHe said Spain and Portugal explained their current and planned \t\t\tausterity and reform measures, and he repeated that any private \t\t\tsector involvement in rescues post-2013 will be done on a \t\t\tcase-by-case basis. Juncker also sees no need to increase the \t\t\tcapacity of the EFSF for the time being.
\nSeveral finance ministers commented on a potential Eurobond. Some \t\t\tofficials, such as the Greek and Spanish contingent, seemed to at \t\t\tleast favour discussion exploring a Eurobond, though the Austrian \t\t\tand Dutch finance ministers clearly oppose the idea. Meanwhile, \t\t\tSpanish Economy Minister Salgado reiterated that Spain does not need \t\t\taid. The attention now shifts to the Irish budget vote. But even if \t\t\tthe budget passes, contagion worries will persist, which keeps us \t\t\tnegative on the euro.
\nThe Irish finance minister is expected to detail the budget measures \t\t\tin parliament today, starting at 1545GMT, and the voting should \t\t\tbegin around 1900GMT. Independent lawmaker Michael Lowry said he \t\t\twill support the budget and the press reported another independent \t\t\tlawmaker, Jackie Healy-Rae, will also likely support the budget.
\nThe ECB’s bond buying program continues and ?1.96 bn worth of bond \t\t\tpurchases settled in the week ended Dec. 3. Our fixed income \t\t\tstrategists note that, given the 3 day settlement period, the data \t\t\tdoes not cover bonds bought from Dec. 1, and therefore excludes \t\t\tpurchases made in and around ECB President Trichet’s press \t\t\tconference.
\nSome better news did emerge out of the Eurozone when a leading \t\t\tLondon-based clearing house announced that it would reduce the extra \t\t\tmargin required to hold Irish Government bonds to 30% from 45%.
\n AUD<\/span><\/em><\/strong><\/p>\n

The RBA kept the policy rate on hold at 4.75%, and adopted a more \t\t\tneutral policy posture, noting that the Board views “this setting of \t\t\tmonetary policy as appropriate for the economic outlook”. The policy \t\t\tstatement also noted the beneficial impact of the strong AUD in \t\t\thelping to curtail inflationary pressures. In response, our \t\t\tAustralian economists changed their call on future RBA hikes, and \t\t\tnow expect the RBA to be on hold for all of H1 2011, with two 25bp \t\t\thikes expected to follow in H2.
\n CAD<\/span><\/em><\/strong><\/p>\n

Despite the all-items inflation rate moving above the midpoint of \t\t\tthe BoC’s target range in October, we think the much weaker Q3 GDP \t\t\twill keep the BoC on hold at the upcoming meeting. The GDP print was \t\t\tmuch weaker than the October Monetary Policy Report projections but \t\t\twe do look for the BoC to gradually raise short rates to 2.00% by \t\t\tthe end of 2011 as household debt growth remains firm.<\/p>\n

TECHNICAL OUTLOOK<\/span><\/strong>
\nUSDCAD focus on 0.9978\/31.
\nEURUSD BEARISH Recovery pressured 1.3448; focus is back on downside, \t\t\texpect decline towards 1.3193 and 1.2969 next.
\nUSDJPY NEUTRAL 83.90 and 81.66 mark the near-term directional \t\t\ttriggers.
\nGBPUSD BEARISH Outlook is bearish; expect losses to target 1.5581 \t\t\tand 1.5485 next. Resistance at 1.5788.
\nUSDCHF NEUTRAL Initial support at 0.9726. Resistance at 0.9951.
\nAUDUSD NEUTRAL Recovery held below 0.9954, support comes in at \t\t\t0.9739.
\nUSDCAD BEARISH Focus is on the 0.9978\/31 support zone; a break here \t\t\twould open up the way towards 0.9820. Resistance at 1.0190.
\nEURCHF BEARISH Remains heavy below 1.3229 breakout low keeping our \t\t\tfocus on downside; expect losses to target 1.2933 and 1.2766 next.
\nEURGBP BEARISH Momentum is negative with initial support defined at \t\t\t0.8390 ahead of 0.8335. Upside capped at 0.8564.
\nEURJPY BEARISH Decline through 108.35 and 107.73 would open up the \t\t\tway towards 105.44 key low. Near-term resistance at 111.98.<\/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 dollar weakened moderately during the Asia session after hopes were raised that Ireland’s 2011 budget might be approved at today’s parliamentary vote. EURUSD traded 1.3277-1.3354, USDJPY 82.34-82.73. Gold has retreated slightly from yesterday’s all time high…<\/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-16448","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/16448","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=16448"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/16448\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=16448"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=16448"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=16448"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}