{"id":5958,"date":"2010-01-18T14:55:25","date_gmt":"2010-01-18T19:55:25","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=5958"},"modified":"2010-01-18T14:55:25","modified_gmt":"2010-01-18T19:55:25","slug":"forex-daily-market-commentary-2","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/01\/18\/forex-daily-market-commentary-2\/","title":{"rendered":"Forex Daily Market Commentary"},"content":{"rendered":"

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

Fundamental Outlook at 1500 \t\tGMT (EDT + 0500)<\/span><\/strong><\/p>\n

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

The euro depreciated vis-\u00e0-vis the U.S. \t\tdollar today<\/strong> as the single currency tested bids around the US$ \t\t1.4335 level and was capped around the $1.4395 level. \u00a0French President \t\tSarkozy was quoted on 7 January as saying the global foreign exchange \t\tsystemn is in a state of \u201cdisorder\u201d and eurozone finance ministers today \t\tsaid Sarkozy \u201chas a point.\u201d\u00a0 G7 finance ministers will convene in \t\tnorthern Canada in early February and are expected to press China to \t\tliberalize its exchange rate regime further.\u00a0 The euro remains top-heavy \t\ton account of ongoing Greek fiscal problems.\u00a0 Dutch finance minister Bos \t\ttoday said the Greek government will need to address its budget problems \t\twithout intervention from other European Union members.\u00a0 Greece\u2019s draft \t\tbudget for 2010 has its budget deficit falling below 3% of GDP by 2012 \t\tafter having reached an estimated 12.7% last year.\u00a0 There are lingering \t\tconcerns that Greece\u2019s credit ratings could be slashed further and \t\tpossibly make the country\u2019s debt ineligible for collateral repurchase \t\toperations.\u00a0 The ECB is expected to restore its previous threshold of A- \t\tfor collateral it will accept for funding operations later this year and \t\tGreece could in theory lose access to funding from the central bank.\u00a0 \t\tGermany\u2019s IW Institute said Germany\u2019s 2011 federal budget can sustain \t\tplanned tax cuts if the government implements an aggressive \t\tconsolidation plan this year.\u00a0 The European Central Bank today reported \t\tit will stop providing Swiss franc liquidity at the end of this month, \t\tthe latest unwinding of its quantitative easing measures.\u00a0 Around \u20ac442 \t\tbillion in funds from the ECB\u2019s first emergency twelve-month operations \t\twill expire in June without the banks having an opportunity to \u201croll \t\tover\u201d the funds automatically.\u00a0 In U.S. news<\/strong>, liquidity was dry \t\tduring North American dealing on account of the U.S. market holiday and \t\twill return to normal overnight.\u00a0 Traders will pay very close attention \t\tto earnings data from Citigroup, Morgan Stanley, Bank of America, \t\tGoldman Sachs, and Wells Fargo this week.\u00a0 Euro bids are cited around \t\tthe 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 \u00a590.60 level and was capped around the \u00a591.05 level. \u00a0Traders are \t\tpaying very close attention to a funds scandal involving Prime Minister \t\tHatoyama and the Democratic Party of Japan.\u00a0 This scandal has been \t\tbrewing for several months but some traders believe the problems are \t\tworsening and could prevent the government from enacting needed reforms \t\tand budget agreements.\u00a0 Data released in Japan overnight saw November \t\tindustrial production downwardly revised to +2.2% from +2.6% m\/m.\u00a0 Bank \t\tof Japan lifted its economic assessment in four of Japan\u2019s nine regions, \t\tnoting the economy \u201cpicked up in all regions\u2026many regions continued to \t\tpoint to the low level of economic activity.\u201d \u00a0BoJ Governor Shirakawa \t\treported \u201cThe Bank of Japan recognized its is a crucial challenge for \t\tJapan\u2019s economy to overcome deflation and return to a sustainable growth \t\tpath with price stability. The central bank is aiming to maintain an \t\textremely accommodative financial environment.\u201d\u00a0 \u00a0There is increasing \t\tspeculation the central bank will extend its near-zero per cent interest \t\trate policy and possibly ramp up fund injections into the economy.\u00a0 \t\tGroup of Seven finance ministers are expected to discuss exchange rates \t\tin Canada when they convene on 5-6 February.\u00a0 The Nikkei 225 stock index \t\tlost 1.16% to close at \u00a510,855.08.\u00a0 U.S. dollar offers are cited around \t\tthe \u00a594.75 level.\u00a0 The euro moved lower <\/strong>vis-\u00e0-vis the yen as the \t\tsingle currency tested bids around the \u00a5130.05 level and was capped \t\taround the \u00a5130.95 level.\u00a0 The British pound moved higher <\/strong> vis-\u00e0-vis the yen as sterling tested offers around the \u00a5148.90 level \t\twhile the Swiss franc moved higher <\/strong>vis-\u00e0-vis the yen and tested \t\toffers around the \u00a588.75 level. In Chinese news<\/strong>, the U.S. dollar \t\tdepreciated vis-\u00e0-vis the Chinese yuan as the greenback closed at CNY \t\t6.8268 in the over-the-counter market, down from CNY 6.8269. \u00a0China \t\tInternational Capital Corporation reported China attracted US$ 48.7 \t\tbillion of \u201chot money\u201d in December, the largest amount in eight months.\u00a0 \t\tSome economists are predicting China\u2019s inflation rate could accelerate \t\tto as high as 8% in 2010, requiring probable monetary tightenings by \t\tPeople\u2019s Bank of China.\u00a0 PBoC last week decided to lift reserve \t\trequirements at commercial banks by 50bps from 15.50% to 16.00%, \t\teffective today. It is expected that China\u2019s consumer price inflation \t\tmay have expanded by as much as 1.4% last month. China is expected to \t\trelease December inflation, investment, industrial output, retail sales, \t\tand Q4 gross domestic product data on Wednesday.<\/p>\n

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

The British pound appreciated vis-\u00e0-vis \t\tthe U.S. dollar today<\/strong> as cable tested offers around the US$ 1.6375 \t\tlevel and was supported around the $1.6250 level.\u00a0 Sterling gained \t\tground after Rightmove reported January house prices climbed +0.4% this \t\tmonth. At the same time, there was an increase in the number of people \t\tlooking for new property and this added to cable\u2019s gains.\u00a0 Bank of \t\tEngland Monetary Policy Committee member Miles today saw U.K. banks \t\tshould hold triple the amount of equity.\u00a0 Data released in the U.K. last \t\tweek saw the November leading indicator index decline 0.9%.\u00a0 Bank of \t\tEngland Monetary Policy Committee member Posen last week called for \t\tadditional business lending while MPC member Barker said she does not \t\texpect the economy to gather steam in the first six months of the year. \t\t\u00a0Barker also indicated she sees first half growth prospects as \u201cpatchy.\u201d \t\t\u00a0MPC member Sentance moved the markets last week when he said \u201cAt some \t\tpoint you have to say we have increased the amount of stimulus enough.\u00a0 \t\tIt doesn’t mean you are going to withdraw it but you don’t have to keep \t\tadding to it.\u00a0 The Bank is approaching the point where we need to hold \t\tback and wait and see how that’s flowing into the recovery.\u201d\u00a0 Cable bids \t\tare cited around the US$ 1.5730 level. The euro lost ground<\/strong> vis-\u00e0-vis the British pound as the single currency tested bids around \t\tthe \u20a40.8780 level and was capped around the \u20a40.8830 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\t1.0235 level and was capped around the CHF 1.0290 level. \u00a0Swiss National \t\tBank President Hildebrand reported he will \u201cresolutely prevent\u201d an \t\t\u201cexcessive\u201d strengthening of the franc.\u00a0 He also said SNB must \t\t\u201ccarefully and gradually\u201d normalize its monetary policy.\u00a0 Data released \t\tin Switzerland last week saw December producer price inflation up 0.1% \t\tm\/m and decline 2.5% y\/y.\u00a0 The OECD today called on Switzerland to keep \t\tinterest rates unchanged until the economic recovery takes hold.\u00a0 U.S. \t\tdollar offers are cited around the CHF 1.0420 level.\u00a0 The euro moved \t\tlower<\/strong> vis-\u00e0-vis the Swiss franc as the single currency tested bids \t\taround the CHF 1.4735 level while the British pound gained ground<\/strong> vis-\u00e0-vis the Swiss franc and tested offers around the CHF 1.6790 level.<\/p>\n

Forex 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":"

Sterling gained ground after Rightmove reported January house prices climbed +0.4% this month. At the same time, there was an increase…<\/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-5958","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/5958","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=5958"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/5958\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=5958"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=5958"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=5958"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}