{"id":5783,"date":"2010-01-11T17:02:38","date_gmt":"2010-01-11T22:02:38","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=5783"},"modified":"2010-01-11T17:02:38","modified_gmt":"2010-01-11T22:02:38","slug":"fundamental-outlook-at-1500-gmt-edt-0500-4","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/01\/11\/fundamental-outlook-at-1500-gmt-edt-0500-4\/","title":{"rendered":"Fundamental Outlook at 1500 GMT (EDT + 0500)"},"content":{"rendered":"

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

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

The euro appreciated sharply vis-\u00e0-vis \t\tthe U.S. dollar today<\/strong> as the single currency tested offers around \t\tthe US$ 1.4555 level and was supported around the $1.4405 level. \u00a0The \t\tcommon currency was propelled higher on stronger-than-expected Chinese \t\texports and imports data that helped support the view the global economy \t\tis continuing to recover.\u00a0 The U.S. dollar fell on these news under the \t\tpremise that the global economy will become less dependent on the U.S. \t\teconomy, including the U.S. dollar\u2019s net import balance.\u00a0 Additionally, \t\tthe common currency moved higher on dovish remarks from St. Louis Fed \t\tPresident Bullard who noted U.S. interest rates \u201cmay remain low for \t\tquite some time.\u201d\u00a0 Atlanta Fed President Lockhart speaks later in the \t\tNorth American session.\u00a0 Friday\u2019s weaker-than-expected and disappointing \t\tU.S. December non-farm payrolls data dented the view that the Fed may \t\traise interest rates by the middle of the year.\u00a0 European Central Bank \t\tPresident Trichet called on global governments to reduce excessive \t\tbudget deficits to satisfy investors.\u00a0 Trichet noted he sees a \t\t\u201cprogressive normalization of the economy\u201d but called on market \t\tparticipants to \u201cstrengthen risk management significantly.\u201d\u00a0 ECB member \t\tNowotny said new risk-taking by some market participants is a concern \t\tfor central bankers and regulators and that risk-taking needs to be \t\tlimited by increases in capital requirements.\u00a0 Nowotny also confirmed \t\tthere will be \u201csluggish\u201d economic growth in the eurozone this year.\u00a0 \t\tData released in the eurozone today saw French November industrial \t\toutput climb +1.1% and October\u2019s print was upwardly revised.\u00a0 In U.S. \t\tnews<\/strong>, Bullard also noted the U.S. should maintain its purchases of \t\tmortgage-backed securities to provide liquidity to the markets, and \t\tstressed quantitative easing programs administered by the Fed have \t\tsupported the market.\u00a0 Data to be released in the U.S. tomorrow include \t\tNovember trade balance figures with estimates running around \u2013US$ 34.5 \t\tbillion.\u00a0 Euro bids are cited around the US$ 1.3885 level.<\/p>\n

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

The yen appreciated \t\tvis-\u00e0-vis the U.S. dollar today<\/strong> as the greenback tested bids around \t\tthe \u00a591.80 level and was capped around the \u00a592.65 level. \u00a0Bank of Japan \t\tofficial Shinobu Nakagawa reported it is \u201cpossible\u201d that official \t\tJapanese interest rates will remain near zero per cent until 2011 on \t\taccount of the poor economic outlook.\u00a0 Nakagawa also reported the \t\tappreciating yen helps to support demand for Japanese government bonds.\u00a0 \t\tThere is increasing speculation BoJ could increase its bond purchase \t\tactivity to avert a relapse into another recession.\u00a0 Currently, the \t\tcentral bank purchases around \u00a51.8 trillion in Japanese government bonds \t\tevery month and it may decide to up its purchases to counter intense \t\tdeflationary pressures.\u00a0 A new announcement could be made as early as H1 \t\t2010.\u00a0 An anonymous Ministry of Finance official reported finance \t\tminister Kan and U.S. Treasury Secretary Geithner agree on exchange rate \t\tpolicy.\u00a0 \u00a0New finance minister Kan last week said it is his \t\tresponsibility to respond to moves in the currency market but added the \t\tmarkets should determine rates.\u00a0 Last Thursday, Kan indicated the yen \t\tshould be weaker whereas his predecessor, Fujii, green-lighted a \t\tstronger yen when he first took office last year.\u00a0 Chief Cabinet \t\tSecretary Hirano said the government should not make any comments that \t\tcould impact the markets. \u00a0Prime Minister Hatoyama last week said rapid \t\texchange rate moves are \u201cnot good\u201d and \u201cunwelcome.\u201d Most traders believe \t\tthe Japanese government will probably try to orchestrate a weaker yen to \t\thelp counter deflationary pressures and stimulate foreign trade.\u00a0 The \t\tNikkei 225 stock index climbed 1.09% to close at \u00a510,798.32.\u00a0 \u00a0U.S. \t\tdollar offers are cited around the \u00a594.75 level.\u00a0 The euro moved \t\thigher <\/strong>vis-\u00e0-vis the yen as the single currency tested offers around \t\tthe \u00a5134.35 level and was supported around the \u00a5133.40 level.\u00a0 The \t\tBritish pound moved higher <\/strong>vis-\u00e0-vis the yen as sterling tested \t\toffers around the \u00a5149.60 level while the Swiss franc moved higher <\/strong>vis-\u00e0-vis the yen and tested offers around the \u00a591.05 level. In \t\tChinese news<\/strong>, the U.S. dollar depreciated vis-\u00e0-vis the Chinese yuan \t\tas the greenback closed at CNY 6.8263 in the over-the-counter market, \t\tdown from CNY 6.8276. \u00a0\u00a0Last week, People\u2019s Bank of China guided \t\tinterest rate expectations higher by selling three-month bills at higher \t\trates for the first time in nineteen weeks.\u00a0 This evidences the central \t\tbank\u2019s attempt to tighten liquidity.\u00a0 \u00a0PBoC-watchers believe the central \t\tbank may lift interest rates for the first time in three years by \t\tSeptember.\u00a0 There is increasing speculation that China\u2019s economy could \t\tslow dramatically this year. \u00a0Last week, People\u2019s Bank of China \t\tyesterday reported it will support \u201crelatively fast\u201d economic growth and \t\tmanage inflation expectations.\u00a0 Additionally, PBoC noted it will target \t\t\u201cmoderate\u201d loan growth in 2010.\u00a0 Data released in China overnight saw \t\tDecember exports climb 17.7% y\/y, the latest evidence that China remains \t\tthe key driver of global economic growth.\u00a0 These data also mean that \t\tChina has overtaken Germany as the world\u2019s largest exporter.<\/p>\n

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

The British pound appreciated sharply \t\tvis-\u00e0-vis the U.S. dollar today<\/strong> as cable tested offers around the \t\tUS$ 1.6190 level and was supported around the $1.6045 level. \u00a0Former \t\tBank of England Monetary Policy Committee member Buiter reported the \t\tcentral bank may start to raise interest rates by the middle of the \t\tyear, possibly taking the Bank Rate to 0.75% to 1.00%.\u00a0 Buiter suggested \t\tthe BoE\u2019s rate hike could come before the European Central Bank \t\tcontemplates one.\u00a0 The big news in the U.K. remains the general election \t\tthat is scheduled to be called before June.\u00a0 Prime Minister Brown is \t\tattempting to rally the Labour Party following widespread discontent \t\tfrom within his own ranks.\u00a0 Tory opposition leader Cameron is pledging \t\tearlier and deeper deficit reductions.\u00a0 CBI today reported the U.K. \t\tservices sector evidenced its second consecutive increase in activity in \t\tthe fourth quarter but projects business activity should slow in the \t\tcoming months.\u00a0 Cable bids are cited around the US$ 1.5730 level. The \t\teuro gained ground<\/strong> vis-\u00e0-vis the British pound as the single \t\tcurrency tested offers around the \u20a40.9025 level and was supported around \t\tthe \u20a40.8970 level.<\/p>\n

CHF<\/strong><\/p>\n

The Swiss franc appreciated vis-\u00e0-vis \t\tthe U.S. dollar today<\/strong> as the greenback tested bids around the CHF \t\t1.0130 level and was capped around the CHF 1.0240 level. \u00a0Data released \t\tin Switzerland today saw November real retail sales up 0.6%.\u00a0 Swiss \t\tNational Bank is expected to keep interest rates unchanged for at least \t\tthe next couple of months.\u00a0 U.S. dollar offers are cited around the CHF \t\t1.0615 level.\u00a0 The euro came off <\/strong>vis-\u00e0-vis the Swiss franc as the \t\tsingle currency tested bids around the CHF 1.4720 level while the \t\tBritish pound moved lower<\/strong> vis-\u00e0-vis the Swiss franc and tested bids \t\taround the CHF 1.6315 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 appreciated sharply vis-\u00e0-vis the U.S. dollar today as the single currency tested offers around the US$ 1.4555 level and was supported…<\/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-5783","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/5783","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=5783"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/5783\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=5783"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=5783"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=5783"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}