{"id":16551,"date":"2010-12-09T08:45:02","date_gmt":"2010-12-09T13:45:02","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=16551"},"modified":"2010-12-09T08:45:02","modified_gmt":"2010-12-09T13:45:02","slug":"forex-daily-market-commentary-172","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/12\/09\/forex-daily-market-commentary-172\/","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 against the euro and the AUD after a very strong \t\t\tAustralian employment report boosted risk appetite. EURUSD traded \t\t\t1.3225-1.3323, USDJPY 83.66-84.28. US Treasury yields also \t\t\tstabilized, and even retreated a little, after the 10y auction \t\t\tpassed largely without incident. The dollar held its ground against \t\t\tthe NZD however, after the RBNZ sounded dovish and revised down its \t\t\tguidance for future rate hikes. Although the S&P500 finished only \t\t\t+0.37% ahead, S&P financials gained almost 2%, and gold is trading \t\t\tat $1387.40 at the time of writing. Upcoming releases for the US \t\t\tinclude initial jobless claims, and the dollar is likely to gain if \t\t\tnew claims are fewer than expected. The recent tax proposal will \t\t\tlikely remain in the spotlight and while the near-term impact on \t\t\tgrowth should be positive, which would offer support for dollar, US \t\t\tofficials will need to keep an eye on the longer-term implications \t\t\tfor the US fiscal position.
\n EUR<\/span><\/em><\/strong><\/p>\n

A EUR5bn German Schatz auction was poorly received, with a \t\t\tbid-to-cover ratio of 0.9. This is the third German bond auction in \t\t\ta row that has not been covered.
\nThe October German industrial production print was a strong reading, \t\t\tincreasing by 2.9% m\/m and 11.7% y\/y, greatly above consensus. Our \t\t\teconomists note that a strong performance for Q4 is now likely, with \t\t\tthe trend following good prints in PMI and IFO numbers.
\nWe retain our negative bias on the euro given the lack of a broader \t\t\tsolution for contagion worries\/peripheral fears.
\n JPY<\/span><\/em><\/strong><\/p>\n

BoJ policy board member Morimoto said that one-sided dollar weakness \t\t\tseems to have subsided, although he warned that sharp FX volatility \t\t\tcan have a large effect on the economy and so he is always watching \t\t\tFX moves carefully. Referring to the recent jump in JGB yields, he \t\t\tsaid this is simply a reflection of similar moves in US Treasury \t\t\tyields, and that he does not expect any substantial damage to \t\t\tJapan’s economy to flow from this. He added that increasing the size \t\t\tof the BoJ’s asset purchase facility is a strong policy option, and \t\t\tBloomberg reported him saying that he hopes BoJ easing will have \t\t\tsome effect on FX.
\n GBP<\/span><\/em><\/strong><\/p>\n

UK Chancellor George Osborne spoke at the Treasury Committee and \t\t\trevealed that the ‘interest rate on the loan package to Ireland is \t\t\tstill under negotiation’. He also noted that there was a discussion \t\t\tof haircuts to senior bank debt during the Irish rescue plan but \t\t\tpolicy makers decided against these because of considerable \t\t\tcontagion risks.
\n AUD<\/span><\/em><\/strong><\/p>\n

The employment report for November was very strong, showing that \t\t\t+54.6k (cons. 20k) new jobs were created, all of which were \t\t\tfull-time posts. The unemployment rate fell to 5.2% as expected \t\t\t(prev. 5.4%). Our Australian economists think the pace of job \t\t\tcreation has probably peaked and re-iterate their view that, with \t\t\tGDP growth a bit below trend and borrowing rates slightly above \t\t\taverage, the RBA has more time on its hands to assess inflationary \t\t\tpressures. They expect the next +25bp RBA hike in Q3.<\/p>\n

TECHNICAL OUTLOOK<\/span><\/strong>
\nUSDJPY eyes 84.41.
\nEURUSD BEARISH Move below 1.3180 would expose 1.3149 ahead of \t\t\t1.2969. Resistance at 1.3442.
\nUSDJPY BULLISH Outlook is positive; recovery eyes 84.41. Support at \t\t\t83.46.
\nGBPUSD NEUTRAL Initial resistance at 1.5840 previous low with \t\t\tsupport at 1.5669\/56.
\nUSDCHF NEUTRAL 1.0067 and 0.9726 mark the near-term directional \t\t\ttriggers.
\nAUDUSD NEUTRAL Model is neutral; initial resistance at 0.9965, \t\t\tsupport at 0.9739\/00.
\nUSDCAD BEARISH Break through the 0.9978\/31 support zone would open \t\t\tup the way towards 0.9820. Resistance at 1.0179\/90.
\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 Move below 0.8390 exposes next support lying at \t\t\t0.8335. Initial resistance defined at 0.8429.
\nEURJPY NEUTRAL Break of 109.57 would expose 108.35. Near-term \t\t\tresistance at 111.92\/112.42.<\/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 against the euro and the AUD after a very strong Australian employment report boosted risk appetite. EURUSD traded 1.3225-1.3323, USDJPY 83.66-84.28. US Treasury yields also stabilized, and even retreated a little, after the 10y auction passed largely without incident.<\/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-16551","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/16551","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=16551"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/16551\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=16551"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=16551"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=16551"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}