{"id":2854,"date":"2009-07-08T14:38:04","date_gmt":"2009-07-08T19:38:04","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=2854"},"modified":"2009-07-08T14:38:04","modified_gmt":"2009-07-08T19:38:04","slug":"fundamental-outlook-at-1400-gmt-edt-0400-56","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2009\/07\/08\/fundamental-outlook-at-1400-gmt-edt-0400-56\/","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$ 1.3830 level and was capped around the $1.3935 level.\u00a0 Today\u2019s intraday losses followed yesterday\u2019s selling pressure and a couple of different factors led to market activity.\u00a0 First, risk aversion remains elevated ahead of the U.S. earnings season with many investors unwilling to chase assets with higher yields.\u00a0 Second, traders believe the Group of Eight\u2019s communiqu\u00e9 that will follow their meeting in Italy will be long on climate treaty language and short on currency language.\u00a0 There was speculation that China, Russia, or India could press officials to adopt a new international reserve currency and decrease dependence on the U.S. dollar.\u00a0 While this may still remain an agenda for some countries, it does not appear it will be publicly topical at the G8 meeting.\u00a0 To this end, the European Central Bank released a report today that indicates the global economic crisis has left major international currencies \u201cbroadly unaffected\u201d and reiterated the U.S. dollar \u201chas maintained\u2026its status as the most important international currency globally.\u201d\u00a0 Third, the International Monetary Fund released a report today that indicates the global economic recovery is quite slow.\u00a0 Fourth, ECB member Paramo indicated the ECB will \u201cmaintain a liquidity policy that ensures all solvent institutions with the right collateral\u2026have unlimited access to this liquidity.\u201d\u00a0 Indications that the ECB will maintain an easy monetary policy have a negative impact on the euro as they suggest policymakers are in no hurry to unwind their monetary stimuli.\u00a0 Fourth, Q1 GDP was off 2.5% q\/q and 4.9% y\/y, an indication that EMY-16 economic growth revisions did little to dispel the view of recessionary activity in Q1.\u00a0\u00a0 Notably, year-over-year growth in eurozone bank loans to the private sector slowed to 1.8% in May from 2.3% in April, the lowest reading since at least 1992.\u00a0 Data released in Germany today saw May industrial output surge a monthly 3.7%, up sharply from April\u2019s -2.6% contraction.\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 \u00a592.15 level and was capped around the \u00a594.85 level.\u00a0 The pair continues to weaken on expectations that second quarter corporate earnings reports will be weaker-than-expected and lead some Japanese accounts to reduce their exposure to U.S. equities.\u00a0 Today\u2019s low represents the pair\u2019s lowest print since 18 February.\u00a0 The yen shook offer weaker-than-expected May core private-sector machinery orders that fell 3.0% m\/m to a record low value.\u00a0 Also, bank lending slowed last month to +1.8% from a record pace and June corporate bankruptcies were up more than 18% m\/m and 7.4% y\/y.\u00a0 Collectively, today\u2019s data does not bode well for capital and consumer spending in Japan\u2019s domestic economy, and may be at odds with the government\u2019s and Bank of Japan\u2019s recent upgrades to their economic assessment.\u00a0 The big talk involving BoJ is that officials could extend their emergency financial programs to support the economy when its Policy Board convenes on 14-15 July.\u00a0 Some dealers believe an indication that BoJ will extend its policies past the September deadline will take focus away from policies\u2019 exit strategies and lead to a weaker yen.\u00a0 One wildcard that remains is Japan\u2019s elections in mid-September, especially as Prime Minister Aso has little political support and no clear mandate.\u00a0 BoJ\u2019s consumer sentiment diffusion index printed at -81.4 for the April \u2013 June period, its first improvement in nearly two years.\u00a0 Another component of the survey revealed consumers\u2019 inflation expectations have remained firm.\u00a0\u00a0\u00a0 Other data released overnight saw the core consumer price index decline 1.1% y\/y in May, off sharply from April\u2019s -0.1% print.\u00a0 Additionally, the May current account surplus was off 34.4% y\/y to \u00a51.302 trillion.\u00a0 The Nikkei 225 stock index lost 2.35% to close at \u00a59,420.75.\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 \u00a5127.00 figure and was capped around the \u00a5132.10 level.\u00a0 The British pound moved lower vis-\u00e0-vis the yen as sterling tested bids around the \u00a5146.75 level while the Swiss franc moved lower vis-\u00e0-vis the yen and tested bids around the \u00a583.95 level. In Chinese news, the U.S. dollar was unchanged vis-\u00e0-vis the Chinese yuan as the greenback closed at CNY 6.8318 in the over-the-counter market.<\/p>\n

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

The British pound extended its recent depreciation vis-\u00e0-vis the U.S. dollar today as cable tested bids around the US$ 1.5980 level and was capped around the $1.6135 level.\u00a0 Sterling continued its move lower on growing speculation the Bank of England\u2019s Monetary Policy Committee will extend its quantitative easing scheme by lifting its asset purchasing plan beyond \u20a4150 billion.\u00a0 An announcement could come tomorrow following the MPC\u2019s meeting.\u00a0 Data released in the U.K. today saw the Halifax June house price index off 0.5% m\/m and 15.0% y\/y.\u00a0 Chancellor of the Exchequer Darling reported the government will establish a new financial stability council that will integrate the Bank of England, the Financial Services Authority, and the U.K. Treasury.\u00a0 Other data released today saw BRC June shop prices up 0.7%.\u00a0 Cable bids are cited around the US$ 1.3435 level.\u00a0 The euro moved higher vis-\u00e0-vis the British pound as the single currency tested offers around the \u20a40.8670 level and was supported around the \u20a40.8615 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 Financial – The euro moved lower vis-\u00e0-vis the U.S. dollar today as the single currency tested bids around the US$ 1.3830 level…<\/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-2854","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/2854","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=2854"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/2854\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=2854"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=2854"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=2854"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}