{"id":3304,"date":"2009-08-11T15:51:09","date_gmt":"2009-08-11T20:51:09","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=3304"},"modified":"2009-08-11T15:51:09","modified_gmt":"2009-08-11T20:51:09","slug":"fundamental-outlook-at-1400-gmt-edt-0400-67","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2009\/08\/11\/fundamental-outlook-at-1400-gmt-edt-0400-67\/","title":{"rendered":"Fundamental Outlook at 1400 GMT (EDT + 0400)"},"content":{"rendered":"

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

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

The euro gained marginal ground vis-\u00e0-vis the U.S. dollar today as the single currency tested offers around the US$ 1.4185 level and was supported around the $1.4110 level.\u00a0 Most traders believe the Federal Open Market Committee will keep interest rates unchanged when its policy decision is announced tomorrow.\u00a0 Many economists believe the FOMC will keep interest rates unchanged through at least 2010 on account of the global credit crisis.\u00a0 Traders are curious to see if the Fed changes any significant verbiage in its statement and gives any further clues about unwinding its massive monetary stimuli.\u00a0 The Fed\u2019s balance sheet is currently right around the US$ 2 trillion level and has been declining over the past few weeks, an indication it is gradually reducing some of its quantitative easing programs.\u00a0 One program that traders are paying close attention to is the Fed\u2019s purchase of U.S. Treasury securities.\u00a0 It is expected the Fed will allow its current US$ 300 billion purchase program to expire when that amount is reached, likely in September.\u00a0 There is speculation the Fed will be actively discussing pending problems in the U.S. commercial real estate market.\u00a0 There is an expectation the sector could worsen significantly early next year.\u00a0 Fed Chairman Bernanke recently noted the Fed is \u201cpaying very close attention\u201d to the sector and highlighted \u201cincreased vacancy, declining rents, and falling prices.\u201d\u00a0 Data released in the U.S. today saw Q2 non-farm productivity improve 6.4% from a downwardly revised Q1 reading of 0.3%.\u00a0 While these data mean U.S. workers are becoming more productive, they also signify higher productivity is coincident with considerably higher unemployment.\u00a0 Q2 labour costs were off 5.8%, down from a revised -2.7% in Q1, and June wholesale inventories were off 1.7%, down from a revised -1.2% in May.\u00a0 In eurozone news, the German July wholesale price index was off 0.5% m\/m and 10.6% y\/y while the July consumer price index was unchanged m\/m and off 0.5% y\/y.\u00a0 Euro bids are cited around the US$ 1.3900 figure.
\n
\n\u00a5\/ CNY<\/strong><\/p>\n

The yen appreciated vis-\u00e0-vis the U.S. dollar today as the greenback tested bids around the \u00a595.75 level and was capped around the \u00a597.15 level.\u00a0 The yen extended recent gains across the board with U.S. equities under pressure and risk appetite lower globally, favouring the yen.\u00a0 As expected, Bank of Japan\u2019s Policy Board voted unanimously to keep the overnight call rate target unchanged at 0.10% and kept its economic assessment unchanged.\u00a0 BoJ Governor Shirakawa pessimistically noted \u201cEven if we have a recovery, I don\u2019t think its strength will be impressive. I can\u2019t be confident about the strength of final demand after inventory adjustments and policy measures run their course.\u201d\u00a0 The central bank reiterated it remains concerned about \u201cdownside risks to economic activity and prices\u201d and merely noted the economy has \u201cstopped worsening.\u201d\u00a0 Data to be released next week may show Japan\u2019s economy expanded around 4.0% in the three months that ended 30 June.\u00a0 Deflationary pressures have returned to the economy.\u00a0 Consumer prices excluding fresh food fall a record 1.7% in June and this may pressure policymakers into keeping rates low through 2011.\u00a0 Data released in Japan overnight saw the government\u2019s consumer sentiment index improve to 39.4 from 37.6 in June, its highest level since November 2007 and the seventh consecutive monthly improvement.\u00a0 The Nikkei 225 stock index climbed 0.58% to close at \u00a510,585.46.\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 \u00a5135.25 level and was capped around the \u00a5137.40 level.\u00a0 The British pound moved lower vis-\u00e0-vis the yen as sterling tested bids around the \u00a5157.80 level while the Swiss franc moved lower vis-\u00e0-vis the yen and tested bids around the \u00a588.40 level. In Chinese news, the U.S. dollar gained ground vis-\u00e0-vis the Chinese yuan as the greenback closed at CNY 6.8355 in the over-the-counter market, up from CNY 6.8313.\u00a0 Data released in China overnight saw July exports decline a staggering 23% y\/y while July factory output was up a weaker-than-expected 10.8%.\u00a0 Also, July CPI was off 1.8% y\/y and July PPI was off 8.2% y\/y with July retail sales up 15.2% y\/y.<\/p>\n

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

The British pound lost minor ground vis-\u00e0-vis the U.S. dollar today as cable tested bids around the US$ 1.6430 level and was capped around the $1.6520 level.\u00a0 Traders await the release of Bank of England\u2019s quarterly inflation report tomorrow.\u00a0 Data released in the U.K. today saw the June DCLG house price index off 10.7% while the June goods trade deficit increased to \u20a46.5 billion from \u20a46.2 billion.\u00a0 Other news out of the U.K. today suggests the BoE earned more than a 10% return on its \u20a4918 million portfolio of corporate bonds.\u00a0 Cable bids are cited around the US$ 1.6215 level.\u00a0 The euro moved higher vis-\u00e0-vis the British pound as the single currency tested offers around the \u20a40.8615 level and was supported around the \u20a40.8560 level.<\/p>\n

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":"

By GCI Financial – Most traders believe the Federal Open Market Committee will keep interest rates unchanged when its policy decision is announced tomorrow…<\/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-3304","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/3304","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=3304"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/3304\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=3304"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=3304"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=3304"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}