GCI Forex Research<\/p>\n
\u20ac<\/p>\n
The euro moved higher vis-\u00e0-vis the U.S. dollar today as the single currency tested offers around the US$ 1.2760 level and was supported around the $1.2525 level.\u00a0 The common currency snapped back after being given earlier in the week on escalating concerns about Eastern European and Western European banks\u2019 exposure to asset problems in that region.\u00a0 Austria\u2019s central bank said the most important Austrian banks are well-capitalized with sufficient liquidity and can contend with problems in Eastern Europe. Many traders believe these latest developments in Eastern Europe are another reason why the European Central Bank will ease interest rates next month.\u00a0 In U.S. news, the January headline producer price index rose 0.8% m\/m, reversing some of December\u2019s 1.9% decline, while the core PPI was up 0.4%, beating expectations of a 0.1% climb.\u00a0 Core PPI was also up 4.2% y\/y.\u00a0 These data allayed some concerns that deflationary pressures were mounting in the U.S. though it is premature to conclude downward price pressures are stabilizing.\u00a0 Other data released today saw weekly initial jobless claims remain steady at a revised 627,000 while continuing jobless claims jumped higher to 4.987 million, the highest level in 42 years.\u00a0 Additionally, it was reported that the Philadelphia Fed\u2019s manufacturing survey printed at -41.3 in February and that the U.S. January leading index gained 0.4%.\u00a0 Dealers are paying close attention to the Obama administration\u2019s plans to slow the foreclosures crisis in the U.S. with many traders concluding the plans amounts to moral hazard.\u00a0 Euro bids are cited around the US$ 1.2475 level.<\/p>\n
\u00a5\/ CNY<\/p>\n
The yen depreciated vis-\u00e0-vis the U.S. dollar today as the greenback tested offers around the \u00a594.40 level and was supported around the \u00a593.30 level.\u00a0 The Japanese government downgraded its economic assessment for the fifth consecutive month, the longest period of consecutive downgrades since 2001.\u00a0 The government reported the economy \u201cis worsening rapidly while in a severe situation\u201d and this is the most pessimistic the government has been since 1975.\u00a0 Many Japan-watchers believe the Aso government will soon draft its fourth fiscal stimulus package since August.\u00a0 Data released in Japan overnight saw the gross domestic product gap print at -4.3% in the October \u2013 December period, the worst print since the -4.5% figure in Q1 2002, and this means supply far exceeds demand.\u00a0 This also reflects problems faced by Japan\u2019s all-important export sector where the yen\u2019s relative strength has eroded Japan\u2019s trade surplus.\u00a0 The Nikkei 225 stock index climbed 0.31% to close at \u00a57,557.65.\u00a0 U.S. dollar offers are cited around the \u00a5104.15 level.\u00a0 The euro moved higher vis-\u00e0-vis the yen as the single currency tested offers around the \u00a5120.35 level and was supported around the \u00a5117.30 level.\u00a0 The British pound moved higher vis-\u00e0-vis the yen as sterling tested offers around the \u00a5136.35 level while the Swiss franc moved higher vis-\u00e0-vis the yen and tested offers around the \u00a580.55 level.\u00a0 The Chinese yuan appreciated vis-\u00e0-vis the U.S. dollar as the greenback closed at CNY 6.8348 in the over-the-counter market, down from CNY 6.8378.<\/p>\n