{"id":6670,"date":"2010-02-08T18:16:56","date_gmt":"2010-02-08T23:16:56","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=6670"},"modified":"2010-02-08T18:16:56","modified_gmt":"2010-02-08T23:16:56","slug":"forex-daily-market-commentary-10","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/02\/08\/forex-daily-market-commentary-10\/","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\t1.3710 level and was supported around the $1.3620 level. \u00a0Dealers lifted \t\tthe common currency during the North American session but the pair \t\tremains on a downward trajectory, having traded on Friday at its lowest \t\tlevel since May 2009.\u00a0 PIMCO\u2019s El-Erian today reported the global \t\tbond giant prefers German government bonds over U.S. Treasuries.\u00a0 \t\tThis statement highlights the drastic reassessment of sovereign risk the \t\tmarkets are currently undertaking.\u00a0 Eurozone debt remains highly \t\tvolatile and Greek 10-year paper is currently trading more than 400 bps \t\twider than German 10-year paper.\u00a0 The debt situations in Portugal, \t\tSpain, and Ireland are also causing the euro some weakness.\u00a0 \t\tDealers are currently focusing on the likelihood the International \t\tMonetary Fund will need to bail out Greece and perhaps some other \t\tEuropean countries if they cannot manage their debt crises themselves.\u00a0 \t\tGroup of Seven officials finance ministers and central bankers convened \t\tin Canada this weekend and indicated they would continue their fiscal \t\tstimuli to prop the slumping global economy.\u00a0 Some central banks, \t\thowever, are unwinding their stimulus programs at the same time.\u00a0 \t\tMany G7-watchers were unimpressed with the meeting as it failed to \t\tprovide any significant new details about the level of international \t\tsupport Greece and other aggrieved countries can expect if bailouts are \t\trequired.\u00a0 Spain today announced it will reduce net debt issuance \t\tby 34% in 2010 in a bid to remove public debt.\u00a0 Deutsche Bank today \t\trevised its forecast for official European Central Bank interest rates \t\thikes and now sees the main refinancing rate at 1.5% by the end of the \t\tyear, down from the previous forecast of 2.0%.\u00a0 ECB\u2019s Nowotny said \t\tevery eurozone country needs to respect the bloc\u2019s fiscal rules and said \t\tnew financial regulations must not harm economic growth.\u00a0 Data \t\treleased in the eurozone today saw the Bank of France January business \t\tsentiment index print at 104, up from 102 in December.\u00a0 Also, \t\tEMU-16 Sentix investor confidence fell to -8.2 in January from -3.7 in \t\tDecember, the first decline in seven months.\u00a0 European Union \t\tofficials will are convening this week to discuss a long-term economic \t\tstrategy.\u00a0 In U.S. news<\/strong>, traders are still evaluating \t\tFriday\u2019s mixed January non-farm payrolls report and assessing U.S. \t\teconomic data for clues as to when the U.S. labour market may improve.\u00a0 \t\tSt. Louis Fed President Bullard said the U.S. economic recovery is \u201con \t\ttrack\u201d and reported \u201cMaybe you get in the second half of 2010 or \t\tsomething like that, if things are going pretty weell, maybe then you\u2019d \t\tsell a little bit (of assets from the Fed\u2019s balance sheet) at that point \t\tand you\u2019d try to see how the market reacts.\u201d Former Fed Chairman \t\tGreenspan said he anticipates unemployment will remain in the 9% – 10% \t\trange in 2010. \u00a0Data to be released in the U.S. tomorrow include \t\tDecember wholesale inventories.\u00a0 \u00a0Euro bids are cited around the \t\tUS$ 1.3530 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 \u00a589.15 level and was capped around the \u00a589.55 level. \u00a0Traders \t\tcontinue to sell Japanese government bonds in the cash and futures \t\tmarkets as the markets continue to reduce exposure to sovereign risk.\u00a0 \t\tThe benchmark 10-year JGB is now yielding around 1.355%.\u00a0 BoJ \t\tDeputy Governor Yamaguchi warned economic growth \u201cmay stall\u201d temporarily \t\tand said \u201cgrowth may be in a pretty severe state through this summer, so \t\twe can\u2019t really expect a rapid expansion.\u201d\u00a0 The central bank \t\tcontinues to expect tepid economic growth with deflationary pressures at \t\tthe consumer price inflation level through the fiscal year ending March \t\t2012.\u00a0 Data released in Japan overnight saw bank lending off 1.5% \t\ty\/y in January, highlighting the broad lack of capital in Japan at this \t\ttime.\u00a0 The Nikkei 225 stock index lost 1.05% to close at \u00a59,951.82.\u00a0 \t\tU.S. dollar offers are cited around the \u00a594.75 level.\u00a0 The euro \t\tmoved lower <\/strong> vis-\u00e0-vis the yen as the single currency tested bids around the \u00a5121.55 \t\tlevel and was capped around the \u00a5122.75 level.\u00a0 The British \t\tpound moved lower <\/strong>vis-\u00e0-vis the yen as sterling tested bids around \t\tthe \u00a5138.60 level while the Swiss franc moved lower <\/strong>vis-\u00e0-vis the \t\tyen and tested bids around the \u00a582.85 level. In Chinese news<\/strong>, the \t\tU.S. dollar appreciated vis-\u00e0-vis the Chinese yuan as the greenback \t\tclosed at CNY 6.8266 in the over-the-counter market, up from CNY 6.8265. \t\tThe Chinese government reiterated it aims to keep inflation around 3% \t\tthis year.\u00a0 It appears likely People\u2019s Bank of China will raise \t\tinterest rates this year to control inflation and counter growing asset \t\tbubbles.\u00a0 Group of Seven policymakers this weekend issued a \t\tdiscussion paper that calls for more currency flexibility, hardly the \t\tapproach that many traders wanted officials to take with China.<\/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$ 1.5533 level and was capped around the \t\t$1.5625 level. \u00a0Chancellor of the Exchequer Darling reported he fully \t\tsupports Bank of England\u2019s asset purchase pause that was announced on \t\tThursday, adding the U.K. gilt market responded well.\u00a0 BoE has \t\trecently announced the weaker pound has benefited the U.K. economy.\u00a0 \t\tThe central bank will publish its quarterly inflation report and new \t\teconomic forecasts on Wednesday.\u00a0 In November, the central bank \t\testimated 2010 economic growth of 2.2%, rallying to 4.1% in 2011. Most \t\tBoE-watchers believe the central bank will reduce its growth forecast \t\tthis week and will likely see inflation around 2% in two years.\u00a0 \t\tCable bids are cited around the US$ 1.5340 level.\u00a0 The euro \t\tmoved higher<\/strong> vis-\u00e0-vis the British pound as the single currency \t\ttested offers around the \u20a40.8795 level and was supported around the \t\t\u20a40.8730 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\t1.0700 figure and was capped around the CHF 1.0770 level. Data released \t\tin Switzerland today saw December real retail sales up 4.7% while the \t\tJanuary unemployment rate rose to 4.5% from 4.4%.\u00a0 Some dealers are \t\tstill talking about Friday\u2019s reported intervention by Swiss National \t\tBank in which the central bank is rumoued to have bid on the EUR\/CHF \t\tcross some 280 pips above the current market price.\u00a0 U.S. dollar \t\toffers are cited around the CHF 1.0810 level.\u00a0 The euro moved \t\tlower<\/strong> vis-\u00e0-vis the Swiss franc as the single currency tested bids around the \t\tCHF 1.4645 level while the British pound came off<\/strong> vis-\u00e0-vis the \t\tSwiss franc and tested bids around the CHF 1.6680 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":"

Traders continue to sell Japanese government bonds in the cash and futures markets as the markets continue to reduce exposure to sovereign risk…<\/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-6670","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/6670","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=6670"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/6670\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=6670"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=6670"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=6670"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}