{"id":6447,"date":"2010-02-01T16:45:56","date_gmt":"2010-02-01T21:45:56","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=6447"},"modified":"2010-02-01T16:45:56","modified_gmt":"2010-02-01T21:45:56","slug":"forex-daily-market-commentary-7","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/02\/01\/forex-daily-market-commentary-7\/","title":{"rendered":"Forex Daily Market Commentary"},"content":{"rendered":"

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

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

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

The euro appreciated vis-\u00e0-vis the U.S. \t\tdollar today<\/strong> as the single currency tested offers around the US$ \t\t1.3935 level and was supported around the $1.3850 level. \u00a0The common \t\tcurrency followed U.S. equities markets higher as increased risk demand \t\tjumped on speculation the global economic recovery will continue.\u00a0 \t\tDealers also lifted the common currency as it was reported that EMU-16 \t\tPMI improved to 52.4 in January from 51.6 in December, following \t\tGermany\u2019s lead with its PMI improvement to 53.7.\u00a0 A draft copy of the \t\tupcoming Group of Seven communiqu\u00e9 reports \u201cMarket volatility, in \t\tparticular in the foreign exchange market, could destabilize the nascent \t\tglobal recovery by placing growth on an unbalanced path and trigger \t\tunwelcome protectionist reactions.\u201d\u00a0 G7 finance ministers will convene \t\tin northern Canada in early February and two hot topics are expected to \t\tbe exit strategies from the provision of global stimulus and China\u2019s \t\tcurrency.\u00a0 ECB President Trichet this weekend said policymakers \u201cwill do \t\twhatever is necessary to give all our citizens\u2026price stability.\u201d\u00a0 \t\tTrichet also noted U.S. policymakers have reassured him that they favour \t\ta strong U.S. dollar.\u00a0 In U.S. news<\/strong>, President Obama released \t\tdetails of his latest US$ 3.8 trillion budget today and it calls for a \t\tbroad US$ 1.9 trillion tax increase by returning to pre-2001 ordinary \t\tincome tax rates for higher earners.\u00a0 A US$ 1.5 trillion deficit is \t\texpected to materialize by the end of the next fiscal year and the \t\tbudget also includes a US$ 100 billion job stimulus package that has not \t\tyet been passed by Congress.\u00a0 The Federal Reserve today reported that \t\tfewer banks tightened lending standards in Q4 2009 as the economy \t\tcontinued to recover.\u00a0 Data released in the U.S. today saw December \t\tpersonal income print at +0.4%, down from the revised +0.5% November \t\treading, while personal spending fell to +0.2% from a revised +0.7%.\u00a0 \t\tAlso, the December PCE deflator came in at +2.1% y\/y while the core PCE \t\treading was up 0.1% m\/m.\u00a0 Additionally, the January headline ISM \t\tmanufacturing index improved to 58.4 from the prior reading of 55.9, the \t\tsixth consecutive monthly increase, while the ISM prices paid sub-index \t\trallied to 70.0 from the previous reading of 61.5.\u00a0 Moreover, December \t\tconstruction spending was off 1.2% m\/m.\u00a0 Traders await the release of \t\tDecember pending home sales data tomorrow.\u00a0 Euro bids are cited around \t\tthe US$ 1.3740 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 \u00a590.95 level and was supported around the \u00a589.85 level. \u00a0Bank \t\tof Japan Chief Economist Momma reported \u201cthe risk that the Japanese \t\teconomy will fall off from a cliff is small, but there is still a long \t\tway to go.\u00a0 Even if the global economy continues to recover, the spread \t\tof that to capital spending and the labour market will be limited.\u201d\u00a0 \t\tMomma also indicated capital spending will not indicate signs of a \t\trebound until the fiscal year beginning in April 2011 and said the \t\tlabour market will also remain weak.\u00a0 Core consumer prices data that \t\twere recently released confirmed a 1.2% decline in December, the latest \t\tevidence of entrenched deflationary pressures. Momma predicted the pace \t\tof the decline in CPI will be around 1% for some time.\u00a0 Many \t\tBoJ-watchers believe the central bank will introduce new emergency \t\tliquidity provision programs in Q1 or early Q2, possibly including an \t\tincrease in its purchase of Japanese government bonds.\u00a0 The markets \t\tcontinue to speculate that the downward trajectory of Japanese interest \t\trates will continue with March 2010 Euroyen futures contracts indicating \t\ta rate of 0.420%, compared with 0.360% for September 2010. \u00a0The Nikkei \t\t225 stock index climbed 0.07% to close at \u00a510,205.02.\u00a0 U.S. dollar \t\toffers are cited around the \u00a594.75 level.\u00a0 The euro moved higher <\/strong> vis-\u00e0-vis the yen as the single currency tested offers around the \t\t\u00a5126.50 level and was supported around the \u00a5124.65 level.\u00a0 The \t\tBritish pound moved higher <\/strong>vis-\u00e0-vis the yen as sterling tested \t\toffers around the \u00a5144.80 level while the Swiss franc moved higher <\/strong>vis-\u00e0-vis the yen and tested offers around the \u00a585.90 level. In \t\tChinese news<\/strong>, the U.S. dollar appreciated vis-\u00e0-vis the Chinese yuan \t\tas the greenback closed at CNY 6.8275 in the over-the-counter market, up \t\tfrom CNY 6.8269. \u00a0People\u2019s Bank of China adviser Fan Gang reported \t\tChina\u2019s \u201creal worry\u201d remains asset bubbles that could emerge as China\u2019s \t\teconomy emerges from a crisis period into a \u201cboom time.\u201d\u00a0 Fan also noted \t\tmoves by PBoC to reduce liquidity last month were \u201ctimely and \t\tnecessary.\u201d\u00a0 There is speculation that PBoC may hike rates when consumer \t\tprice inflation rises above 2.5%.\u00a0 Data released in China today saw \t\tJanuary PMI recede to 55.8 from 56.6 in December.<\/p>\n

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

The British pound moved lower vis-\u00e0-vis the U.S. dollar today<\/strong> as \t\tcable tested bids around the US$ 1.5850 level and was capped around the \t\t$1.5975 level. \u00a0Many data were released in the U.K. today. First, \t\tJanuary manufacturing PMI improved to 56.7 from 54.6, a fifteen-year \t\thigh.\u00a0 Second, December mortgage approvals decreased to 59,020.\u00a0 Third, \t\tnet lending to individuals rose by \u20a41.2 billion in December.\u00a0 Fourth, \t\tHometrack January house prices were up +0.1%.\u00a0 Bank of England is \t\texpected to keep interest rate policy unchanged this week.\u00a0 There is \t\tsome speculation, however, that Bank of England may pause its \u20a4200 \t\tbillion bond purchase plan but maintain the option to extend it \t\tfurther.\u00a0 Cable bids are cited around the US$ 1.5720 level.\u00a0 The euro \t\tmoved higher<\/strong> vis-\u00e0-vis the British pound as the single currency \t\ttested offers around the \u20a40.8765 level and was supported around the \t\t\u20a40.8680 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\t1.0565 level and was capped around the CHF 1.0625 level. \u00a0\u00a0The media \t\treported Swiss National Bank is unlikely to abandon its policy to keep a \t\tlid on the Swiss franc even though the domestic economy continues to \t\timprove.\u00a0 Data released in Switzerland today saw January PMI improve to \t\t56.0 from 53.7 in December.\u00a0 Data released in Switzerland last week saw \t\tthe December UBS consumption indicator fall to 1.2 from 1.26 in \t\tNovember.\u00a0 Swiss National Bank President Hildebrand recently reported he \t\tis \u201cextremely interested\u201d in the Obama administration\u2019s bank proposals.\u00a0 \t\tThe euro moved higher<\/strong> vis-\u00e0-vis the Swiss franc as the single \t\tcurrency tested offers around the CHF 1.4735 level while the British \t\tpound moved lower<\/strong> vis-\u00e0-vis the Swiss franc and tested bids around \t\tthe CHF 1.6785 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":"

The common currency followed U.S. equities markets higher as increased risk demand jumped on speculation the global economic recovery will continue…<\/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-6447","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/6447","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=6447"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/6447\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=6447"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=6447"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=6447"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}