{"id":3724,"date":"2009-09-08T17:08:42","date_gmt":"2009-09-08T22:08:42","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=3724"},"modified":"2009-09-08T17:08:42","modified_gmt":"2009-09-08T22:08:42","slug":"fundamental-outlook-at-1400-gmt-edt-0400-78","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2009\/09\/08\/fundamental-outlook-at-1400-gmt-edt-0400-78\/","title":{"rendered":"Fundamental Outlook at 1400 GMT (EDT + 0400)"},"content":{"rendered":"

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

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

The euro moved sharply higher vis-\u00e0-vis the U.S. dollar today as the single currency tested offers around the US$ 1.4535 level and was supported around the $1.4330 level.\u00a0 Today\u2019s intraday high represented the pair\u2019s strongest print since 18 December 2009.\u00a0 Traders are talking about a few key factors. First, trading desks resumed normal operations today after the summer and long U.S. holiday weekend.\u00a0 Second, one ongoing theme involves the record amount of U.S. Treasury supply projected for this year and its impact on the U.S. dollar.\u00a0 The Obama administration today sought an increase in the debt ceiling so that more supply can be issued and a major concern among traders is that the value of the U.S. dollar will be eroded.\u00a0 The United Nations was on the tape over the weekend suggesting Special Drawing Rights should replace become another major global reserve currency alongside the U.S. dollar.\u00a0 China, which holds an appreciable amount of U.S. dollars, has been very vocal saying the U.S. must protect the value of the U.S. dollar.\u00a0 Third, it is unlikely the Federal Reserve is going to raise interest rates anytime soon.\u00a0 While some of the Fed\u2019s quantitative easing programs will expire on their own, the Fed is likely to maintain an ultra-accommodative monetary policy for at least the next couple of business quarters.\u00a0 In eurozone news, European Central Bank member Weber reported the central bank is closely examining developments in money and credit aggregates.\u00a0 Weber added \u201cWhen upward risks to medium-term price stability become apparent, then the time has come to raise the level of monetary policy restriction.\u00a0 The negative late effects of the preceding (economic) downturn, in particular rising unemployment, have at this point not fully cropped up.\u201d\u00a0 Weber sees a \u201cgradual\u201d withdrawal from the ECB\u2019s quantitative easing.\u00a0 German finance minister Steinbrueck today said German gross domestic product growth is likely to contract by between 5% and 6% in 2009.\u00a0 Data released in Germany today saw July industrial production fell 0.9% m\/m and 17% y\/y while the July trade surplus rose to \u20ac13.9 billion from \u20ac12.1 billion.\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 \u00a592.00 figure and was capped around the \u00a593.10 level.\u00a0 The main catalyst was a considerably weaker U.S. dollar that fell relative to most other major currencies.\u00a0 The Japanese government kept its economic assessment unchanged today, noting the economy is \u201cpicking up\u201d while reducing its view of the labour market on account of record unemployment.\u00a0 Economists cite declining income and spending as ongoing risk factors.\u00a0 Data released in Japan overnight saw August economic sentiment decline to 41.7 from 42.4 in July, the first decline in eight months and the 29th consecutive month the index has been below the neutral 50.0 level.\u00a0 Other data saw August corporate bankruptcies up 2.4% y\/y while bank lending growth decelerated to +1.8% y\/y.\u00a0 Additionally, the August M3 money supply index was up 2% and the unadjusted current account surplus was off 19.4% y\/y at \u00a51.266 trillion.\u00a0 Some Japan-watchers believe the new Democratic Party of Japan government may worsen Japan\u2019s finances despite the DPJ\u2019s statements that they\u2019ll do not plan to dramatically increase supply of Japanese government bonds.\u00a0 The Nikkei 225 stock climbed 0.70% to close at \u00a510,393.23.\u00a0 U.S. dollar offers are cited around the \u00a594.75 level.\u00a0 The euro moved higher vis-\u00e0-vis the yen as the single currency tested offers around the \u00a5133.85 level and was supported around the \u00a5132.80 level.\u00a0 The British pound moved lower vis-\u00e0-vis the yen as sterling tested bids around the \u00a5151.30 level while the Swiss franc moved higher vis-\u00e0-vis the yen and tested offers around the \u00a588.30 level. In Chinese news, the U.S. dollar lost ground vis-\u00e0-vis the Chinese yuan as the greenback closed at CNY 6.8231 in the over-the-counter market, down from CNY 6.8245.\u00a0 People\u2019s Bank of China adviser Fan Gang yesterday reported \u201cmacroeconomic policies must be preemptive. Some PBOC-watchers believe China is unlikely to lift interest rates or reserve requirements within the next six months.<\/p>\n

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

The British pound appreciated vis-\u00e0-vis the U.S. dollar today as cable tested offers around the US$ 1.6495 level and was supported around the $1.6485 level.\u00a0 Chancellor of the Exchequer Darling reported now is not the correct time to reduce U.K. fiscal spending.\u00a0 Data released in the U.K. overnight saw like-for-like retail sales off 0.1% y\/y in August, in contrast to overall retail sales growth of 2.2%.\u00a0 NIESR reported the U.K. economy returned to growth in the three months ending in August with GDP up 0.2% from a 0.3% decline in the three months to July.\u00a0 Other data saw July manufacturing output up 0.9% m\/m and off 10.1% y\/y.\u00a0 Cable bids are cited around the US$ 1.6030 level.\u00a0 The euro moved higher vis-\u00e0-vis the British pound as the single currency tested offers around the \u20a40.8790 level and was supported around the \u20a40.8730 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 – The euro moved sharply higher vis-\u00e0-vis the U.S. dollar today as the single currency tested offers around the US$ 1.4535 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-3724","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/3724","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=3724"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/3724\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=3724"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=3724"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=3724"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}