{"id":6030,"date":"2010-01-19T17:14:53","date_gmt":"2010-01-19T22:14:53","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=6030"},"modified":"2010-01-19T17:14:53","modified_gmt":"2010-01-19T22:14:53","slug":"forex-daily-market-commentary-3","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/01\/19\/forex-daily-market-commentary-3\/","title":{"rendered":"Forex Daily Market Commentary"},"content":{"rendered":"

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

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

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

The euro depreciated sharply vis-\u00e0-vis \t\tthe U.S. dollar today<\/strong> as the single currency tested bids around the \t\tUS$ 1.4260 level and was capped around the $1.4415 level. \u00a0U.S. markets \t\treopened after yesterday\u2019s market holiday and liquidity returned to \t\tnormal levels.\u00a0 Data released in the eurozone today saw the German \t\tJanuary ZEW economic sentiment index slip to 47.2 from 50.4 in December, \t\tlower than forecast and the fourth consecutive decline in expectations.\u00a0 \t\t\u00a0The common currency moved lower on these data as recent German economic \t\tdata had been stronger-than-expected.\u00a0 German finance minister Schaeuble \t\tsaid the government will draft legislation to reform supervision, \t\tremuneration, and restructuring for the financial sector to help \t\tstabilize the financial markets.\u00a0 Dealers are still closely monitoring \t\tthe fiscal crisis in Greece.\u00a0 Greek finance minister Papaconstantinou \t\tsaid eurozone finance ministers have welcomed Greece\u2019s plans to sharply \t\treduce its budget deficit.\u00a0 Moody\u2019s reported Greece\u2019s fiscal program \t\taddresses short-term challenges and is consistent with its current A2 \t\trating but the outlook remains negative.\u00a0 Other data released in the \t\teurozone today saw the EMU-16 January ZEW economic sentiment indicator \t\tfall to 46.4 from 48.0 in December while EMU-16 November construction \t\toutput fell 1.1% m\/m and 8% y\/y.\u00a0 European Central Bank member Bini \t\tSmaghi reported \u201cBank lending…is subject to some \t\trisk.\u00a0 While subdued bank lending has so far reflected the weak state of \t\tthe real economy, credit supply restrictions may become more binding \t\twhen loan demand by enterprises picks up as the economy recovers.\u201d\u00a0 In U.S. news<\/strong>, November long-term Treasury International Capital \t\tflows print at US$ 126.8 billion, up from a revised October print of US$ \t\t19.3 billion.\u00a0 Also, November total net flows printed at US$ 26.6 \t\tbillion, up from a downwardly revised \u2013US$ 25.4 billion in October.\u00a0 \t\tOther data to be released in the U.S. today include the January NAHB \t\thousing market index.\u00a0 Traders are paying close attention to the U.S. \t\tearnings season with Citigroup having met analysts\u2019 expectations with a \t\tsizable loss related to its TARP repayment.\u00a0 Euro bids are cited \t\taround the US$ 1.3885 level.<\/p>\n

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

The yen depreciated \t\tvis-\u00e0-vis the U.S. dollar today<\/strong> as the greenback tested offers \t\taround the \u00a591.05 level and was supported around the \u00a590.30 level. \t\t\u00a0Traders reacted to news that Japan Airlines will file for bankruptcy, a \t\tmove that had been anticipated for weeks.\u00a0 Data released in Japan \t\tovernight saw December consumer confidence print at 37.6.\u00a0 Former Bank \t\tof Japan Policy Board member Hirano reported a weak yen is positive for \t\tJapan\u2019s economy.\u00a0 Prime Minister Hatoyama, whose government is embroiled \t\tin a funds scandal, said the government and BoJ must cooperate in \t\tcombating deflation.\u00a0 This scandal has been brewing for several months \t\tbut some traders believe the problems are worsening and could prevent \t\tthe government from enacting needed reforms and budget agreements.\u00a0 Data \t\treleased in Japan yesterday saw November industrial production \t\tdownwardly revised to +2.2% from +2.6% m\/m.\u00a0 Yesterday, Bank of Japan \t\tlifted its economic assessment in four of Japan\u2019s nine regions, noting \t\tthe economy \u201cpicked up in all regions\u2026many regions continued to point to \t\tthe low level of economic activity.\u201d \u00a0BoJ Governor Shirakawa yesterday \t\treported \u201cThe Bank of Japan recognized it 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 0.83% to close a \u00a510,764.90.\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 \u00a5129.60 level and was capped \t\taround the \u00a5130.70 level.\u00a0 The British pound moved higher <\/strong> vis-\u00e0-vis the yen as sterling tested offers around the \u00a5149.05 level \t\twhile the Swiss franc moved lower <\/strong>vis-\u00e0-vis the yen and tested \t\tbids around the \u00a587.80 level. In Chinese news<\/strong>, the U.S. dollar \t\tappreciated vis-\u00e0-vis the Chinese yuan as the greenback closed at CNY \t\t6.8277 in the over-the-counter market, up from CNY 6.8268. \u00a0People\u2019s \t\tBank of China guided its benchmark one-year bill yield to its highest \t\tlevel in fourteen months to moderate record loan growth and slow asset \t\tbubbles.\u00a0 PBoC sold bills at a rate of 1.9264% in open-market operations \t\tand this is the central bank\u2019s latest signal that it is intent on \t\ttightening monetary policy this year.\u00a0 The State Administration for \t\tForeign Exchange reported non-U.S. dollar reserves account for about 40% \t\tof China\u2019s reserves now.\u00a0 China International Capital Corporation \t\treported China attracted US$ 48.7 billion of \u201chot money\u201d in December, \t\tthe largest amount in eight months.\u00a0 Premier Wen said China will \t\tencounter inflationary expectations this year and said China must be \t\tprepared to deal with trade frictions.\u00a0 Also, Wen said proactive fiscal \t\tpolicies will help expand domestic demand<\/p>\n

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

The British pound depreciated vis-\u00e0-vis \t\tthe U.S. dollar today<\/strong> as cable tested bids around the US$ 1.6310 \t\tlevel and was capped around the $1.6455 level.\u00a0 Prime Minister Brown \t\tsaid the European Union must develop a new economic growth strategy when \t\tpolicymakers convene on 11 February.\u00a0 Data released in the U.K. today \t\tsaw December consumer price inflation spike to 2.9% in December, well \t\tabove Bank of England\u2019s 2.0% target and expectations of a 2.5% print.\u00a0 \t\tThis was up from 1.9% in November but most economists believe the upward \t\tspike will prove temporary.\u00a0 On the flip side, a sustained rise in CPI \t\twill precipitate a policy response from Bank of England.\u00a0 Cable bids are \t\tcited around the US$ 1.5730 level. The euro lost ground<\/strong> vis-\u00e0-vis \t\tthe British pound as the single currency tested bids around the \u20a40.8730 \t\tlevel and was capped around the \u20a40.8810 level.<\/p>\n

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

The Swiss franc depreciated vis-\u00e0-vis \t\tthe U.S. dollar today<\/strong> as the greenback tested offers around the CHF \t\t1.0350 level and was supported around the CHF 1.0225 level. Swiss \t\tNational Bank President Hildebrand yesterday reported he will \t\t\u201cresolutely prevent\u201d an \u201cexcessive\u201d strengthening of the franc.\u00a0 He also \t\tsaid SNB must \u201ccarefully and gradually\u201d normalize its monetary policy.\u00a0 \t\tData released in Switzerland last week saw December producer price \t\tinflation up 0.1% m\/m and decline 2.5% y\/y.\u00a0 The OECD today called on \t\tSwitzerland to keep interest rates unchanged until the economic recovery \t\ttakes hold.\u00a0 U.S. dollar offers are cited around the CHF 1.0420 level.\u00a0 \t\tThe euro moved higher<\/strong> vis-\u00e0-vis the Swiss franc as the single \t\tcurrency tested offers around the CHF 1.4780 level while the British \t\tpound gained ground<\/strong> vis-\u00e0-vis the Swiss franc and tested offers \t\taround the CHF 1.6915 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":"

By GCI Financial – Data released in the eurozone today saw the German January ZEW economic sentiment index slip…<\/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-6030","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/6030","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=6030"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/6030\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=6030"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=6030"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=6030"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}