{"id":2813,"date":"2009-07-06T13:37:05","date_gmt":"2009-07-06T18:37:05","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=2813"},"modified":"2009-07-06T13:37:05","modified_gmt":"2009-07-06T18:37:05","slug":"fundamental-outlook-at-1400-gmt-edt-0400-55","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2009\/07\/06\/fundamental-outlook-at-1400-gmt-edt-0400-55\/","title":{"rendered":"Fundamental Outlook at 1400 GMT (EDT + 0400)"},"content":{"rendered":"

By GCI Fx Research<\/span><\/p>\n

\u20ac<\/strong><\/p>\n

The euro moved lower vis-\u00e0-vis the U.S. dollar today as the single currency tested bids around the US$ 1.3875 level and was capped around the $1.4000 figure.\u00a0 Group of Eight officials are convening in Italy from Wednesday to discuss the global economy and representatives from major emerging market economies including Russia, China, India, and others will be present.\u00a0 There has been a significant amount of recent talk about the U.S. dollar being replaced as the main international reserve currency.\u00a0 Russian President Medvedev said the current U.S. dollar-based system is \u201cflawed\u201d but added \u201cthere is no alternative to the U.S. dollar or the European currency.\u201d\u00a0 Indian Economic Advisory Council chairman Tendulkar said he is urging his country to diversify its foreign exchange reserves and reduce its holdings of U.S. dollars.\u00a0 European Central Bank President Trichet added \u201cit\u2019s extremely important that the U.S. authorities\u2026say that a strong dollar is in the interest of the U.S.\u201d\u00a0 Trichet also warned consumer confidence is lagging and said weakness in the labour sector may not be fully priced in.\u00a0 Data released in the eurozone today saw the July Sentix investor confidence index decline to -31.3 from -27.\u00a0 Trichet spoke about the eurozone banking system today, saying commercial banks should \u201crestructure as much as possible their situation when needed\u201d and said banks need to pass liquidity on to borrowers and not horde cash.\u00a0 ECB member Noyer verbally intervened in the FX market saying \u201cwe must ensure a bigger stability between currencies in the coming months\u201d and said \u201cwe must avoid\u2026the piling up of currency reserves.\u201d ECB member Paramo reported current interest rate levels are appropriate and foresees EMU-16 economic growth by H1 2010.\u00a0 In U.S. news, the June ISM non-manufacturing composite index printed at a better-than-expected 47.0, up from 44.0 in May.\u00a0 Euro bids are cited around the US$ 1.3435 level.<\/p>\n

\u00a5\/ CNY<\/strong><\/p>\n

The yen appreciated sharply vis-\u00e0-vis the U.S. dollar today as the greenback tested bids around the \u00a594.65 level and was capped around the \u00a596.10 level.\u00a0 Bank of Japan raised its economic assessment for all regions of the country for the first time since January 2006, primarily on account of an improvement in exports and production.\u00a0 BoJ noted \u201cthe pace of economic deterioration was slower in all regions compared with the previous assessments\u201d but added \u201cmost regions, however, emphasized that their economies continued to be in a severe situation.\u201d On a negative note, the central bank reported capital spending is \u201csharply falling\u201d and reported consumer spending \u201cremains weak.\u201d\u00a0 BoJ Governor Shirakawa noted \u201cJapan\u2019s economic conditions, after deteriorating significantly, have begun to stop worsening.\u201d\u00a0 Data released in Japan today saw the May diffusion-based leading index improve to 60.0 in May from 50.0 in April while the composite-based leading index printed at 77.0 in May from 76.2 in April.\u00a0 The Nikkei 225 stock index lost 1.38% to close at \u00a59,680.87.\u00a0 U.S. dollar offers are cited around the \u00a5104.15 level.\u00a0 The euro moved lower vis-\u00e0-vis the yen as the single currency tested bids around the \u00a5131.70 level and was capped around the \u00a5134.20 level.\u00a0 The British pound moved lower vis-\u00e0-vis the yen as sterling tested bids around the \u00a5153.00 figure while the Swiss franc moved lower vis-\u00e0-vis the yen and tested bids around the \u00a586.75 level. In Chinese news, the U.S. dollar moved higher vis-\u00e0-vis the Chinese yuan as the greenback closed at CNY 6.8334 in the over-the-counter market, up from CNY 6.8315.\u00a0 Chinese commerce minister Chen said China will likely continue to be negatively impacted by a slowdown in global trade, but said global trade volumes will \u201crecover a little bit\u201d before the end of the year.\u00a0 China launched a trial yuan settlement scheme today.<\/p>\n

\u20a4<\/strong><\/p>\n

The British extended recent losses vis-\u00e0-vis the U.S. dollar today as cable tested bids around the US$ 1.6095 level and was capped around the $1.6325 level.\u00a0 Sterling came off today on market speculation that Bank of England will announce an extension of its quantitative easing program on Thursday when the Monetary Policy Committee\u2019s interest rate decision is announced.\u00a0 Some traders believe the MPC may decided to purchase an additional \u20a425 billion in government and other bonds as part of its credit easing program, adding to the \u20a4125 billion of the existing facility.\u00a0 Others believe the MPC could expand the program but will wait until August.\u00a0 The U.K. government is currently managing the public\u2019s expectations regarding public-sector pay awards.\u00a0 Prime Minister Brown reiterated policymakers \u201ccannot be complacent about the global economy.\u201d\u00a0 Cable bids are cited around the US$ 1.5845 level.\u00a0 The euro moved higher vis-\u00e0-vis the British pound as the single currency tested offers around the \u20a40.8645 level and was supported around the \u20a40.8550 level.<\/p>\n

Daily Market Commentary<\/strong><\/em> provided by\u00a0GCI 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":"

By GCI Fx Research \u20ac The euro moved lower vis-\u00e0-vis the U.S. dollar today as the single currency tested bids around the US$ 1.3875 level and was capped around the $1.4000 figure.\u00a0 Group of Eight officials are convening in Italy from Wednesday to discuss the global economy and representatives from major emerging market economies including … <\/p>\n

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