{"id":6766,"date":"2010-02-11T16:06:03","date_gmt":"2010-02-11T21:06:03","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=6766"},"modified":"2010-02-11T16:06:03","modified_gmt":"2010-02-11T21:06:03","slug":"forex-daily-market-commentary-12","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/02\/11\/forex-daily-market-commentary-12\/","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 depreciated vis-\u00e0-vis the U.S. \t\tdollar today<\/strong> as the single currency tested bids around the US$ \t\t1.3595 level and was capped around the $1.3800 figure.\u00a0 The common \t\tcurrency continues to trade on rumours and news headlines regarding a \t\tEuropean bailout plan for Greece\u2019s fiscal deficit.\u00a0 German Chancellor \t\tMerkel reported \u201cGreece is part of the European Union and will not be \t\tleft on its own\u201d while U.K. Chancellor of the Exchequer Darling said a \t\tGreek resolution is in \u201call our interests.\u201d\u00a0 The lack of an explicit \t\tbailout package for Greece at this time indicates some likely political \t\tpressure against a deal.\u00a0 EU leaders promised to \u201ctake determined and \t\tcoordinated action, if needed, to safeguard financial stability in the \t\teuro area as a whole.\u201d\u00a0 European Central Bank President Trichet said \t\t\u201cone can count on our permanent alertness.\u201d\u00a0 The EU seems to be \t\tresisting the possibility of Greece getting a bailout from the \t\tInternational Monetary Fund.\u00a0 Aside from Greece\u2019s problems, there is a \t\tconcern that there could be contagion with the credit crisis spreading \t\tto other countries that have their own credit problems, including Spain, \t\tIreland, and Portugal.\u00a0 The euro will likely continue to suffer from \t\tdownward pressure as long as there is no overt financial package to help \t\tGreece refinance its mountain of debt.\u00a0 The European Union may be \t\tstalling on such an announcement as it assesses the likelihood of other \t\teurozone countries requiring fiscal assistance.\u00a0 The report of \t\t\u201csolidarity\u201d has so far not been enough to counter euro bears who want \t\tto see an actual deal announced.\u00a0 ECB official member Nowotny warned \t\t\u201ccontagion would be worse than the negatives of helping\u201d while EU\u2019s \t\tJuncker reported the Masstricht Treaty\u2019s \u201cno bailout clause\u201d will be \t\trespected and said the EU\u2019s assistance will \u201cavoid moral hazard.\u201d\u00a0 \t\tInterestingly, Greek Prime Minister Papandreou said his country is \u201cnot \t\tseeking\u201d outside assistance to resolve its fiscal crisis.\u00a0 ECB member \t\tWeber warned the German economy could shrink in Q1 and added current \t\tinterest rates \u201care appropriate.\u201d\u00a0 Weber also added the ECB will phase \t\tout some liquidity programs and said the next likely step is a return to \t\tauctions for long-term refis, as opposed to full allotments.\u00a0 In U.S. \t\tnews<\/strong>, data released saw weekly initial jobless claims narrow to \t\t+440,000 while continuing jobless claims fell to 4.538 million.\u00a0 \t\tTomorrow\u2019s data will include January retail sales, December business \t\tinventories, and February University of Michigan consumer sentiment.\u00a0 \t\tThe Federal Reserve is said to be in discussions with money market \t\tmutual funds on agreements to drain as much as US$ 1 trillion from the \t\tfinancial system.\u00a0 The industry is about US$ 3.2 billion in size \t\tcompared with around US$ 100 billion of capacity held by the eighteen \t\tprimary dealers that trade directly with the Fed.\u00a0 Fed Chairman \t\tBernanke\u2019s prepared testimony yesterday made it clear that the Fed will \t\tbe unwinding some programs but averted an explicit timetable.\u00a0 On the \t\tpolitical front, Senate Democrats unveiled a new US$ 85 billion jobs \t\tstimulus plan.\u00a0 Euro bids are cited around the US$ 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 \u00a589.55 level and was capped around the \u00a590.15 level. \u00a0Traders are \t\tawaiting Q4 2009 gross domestic product data that will be released on \t\tMonday and they are expected to show annualized growth of 3.6% for the \t\tOctober through December period, up from the 1.3% expansion in the third \t\tquarter.\u00a0 Even if output is reported to have expanded, Bank of Japan \t\tGovernor Shirakawa reported this month that \u201cthere is still a long way \t\tto go.\u201d\u00a0 Other data released in Japan this week saw December machinery \t\torders up 20% m\/m, defying expectations of an 8% increase.\u00a0 It was also \t\treported that January producer prices declined for a thirteenth \t\tconsecutive month, off 2.1% – the longest streak in six years.\u00a0 Even \t\tthough this was better than December\u2019s 3.9% slide, the negative print \t\tcoincided with increases in commodity costs and these data simply \t\treaffirm the deflationary pressures evident in the economy from a lack \t\tof final private demand.\u00a0 BoJ Deputy Governor Yamaguchi this week warned \t\teconomic growth \u201cmay stall\u201d temporarily and said \u201cgrowth may be in a \t\tpretty severe state through this summer, so we can\u2019t really expect a \t\trapid expansion.\u201d\u00a0 The Nikkei 225 stock index lost 0.19% yesterday to \t\tclose at \u00a59,932.90.\u00a0 U.S. dollar offers are cited around the \u00a594.75 \t\tlevel.\u00a0 The euro moved lower <\/strong>vis-\u00e0-vis the yen as the single \t\tcurrency tested bids around the \u00a5122.05 level and was capped around the \t\t\u00a5124.15 level.\u00a0 The British pound moved higher <\/strong>vis-\u00e0-vis the yen \t\tas sterling tested offers around the \u00a5140.95 level while the Swiss \t\tfranc moved lower <\/strong>vis-\u00e0-vis the yen and tested bids around the \t\t\u00a583.25 level. In Chinese news<\/strong>, the U.S. dollar appreciated \t\tvis-\u00e0-vis the Chinese yuan as the greenback closed at CNY 6.8338 in the \t\tover-the-counter market, up from CNY 6.8320. \u00a0People\u2019s Bank of China \t\treconfirmed it will \u201cgradually guide monetary conditions back to normal \t\tlevels from the counter-crisis mode.\u201d\u00a0 Data released in China today saw \t\tthe M2 money supply up 26% y\/y and it was reported that CNY 1.39 \t\ttrillion of new loans were issued last month. Also, January producer \t\tprices expanded 4.3% y\/y and consumer prices came in \t\tlighter-than-expected, up +1.5% y\/y.\u00a0 There is some speculation that the \t\tyuan has depreciated over the past couple of days ahead of the Chinese \t\tNew Year as a signal that China is displeased with the U.S.\u2019s recent \t\tmilitary deal with Taiwan.<\/p>\n

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

The British pound moved higher vis-\u00e0-vis the U.S. dollar today<\/strong> as \t\tcable tested offers around the US$ 1.5715 level and was supported around \t\tthe $1.5560 level. \u00a0Bank of England Governor King reported the U.K. \t\teconomy is \u201cbumping along the bottom.\u201d\u00a0 Bank of England released its \t\tquarterly inflation report yesterday and noted inflation remains low in \t\tthe U.K. and added the strength of the economic recovery of the U.K. \t\teconomy remains \u201chighly uncertain.\u201d\u00a0 Notably, BoE Governor King reported \t\teconomic growth has decelerated from November 2009 but said Q4 GDP \t\tnumbers could be upwardly revised. \u00a0Specifically on the inflation front, \t\tthe central bank said inflation could move above 3% this year but added \t\tit should moderate within two years.\u00a0 King also noted it is too early to \t\tsay if the Bank will expand its quantitative easing purchase program by \t\tresuming bond and asset purchases.\u00a0 Data released in the U.K. yesterday \t\tsaw December manufacturing production climb 0.9% m\/m and decline 1.9% \t\ty\/y while December industrial production was up 0.5% m\/m and off 3.6% \t\ty\/y. Cable bids are cited around the US$ 1.5340 level.\u00a0 The euro \t\tmoved lower<\/strong> vis-\u00e0-vis the British pound as the single currency \t\ttested bids around the \u20a40.8700 figure and was capped around the \u20a40.8840 \t\tlevel.<\/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\t1.0680 level and was supported around the CHF 1.0615 level. \u00a0Data \t\treleased in Switzerland today saw January consumer price inflation \t\tdecline 0.1% m\/m and climb 1% y\/y, a faster-than-expected acceleration.\u00a0 \t\t\u00a0Swiss National Bank member Jordan this week indicated it is premature \t\tto raise interest rates from their near zero per cent level.\u00a0 Jordan \t\talso reported the SNB will continue to prevent an \u201cexcessive\u201d appreciate \t\tof the Swiss franc, adding the franc is seen as a \u201csafe haven.\u201d\u00a0 U.S. \t\tdollar offers 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 \t\taround the CHF 1.4655 level while the British pound appreciated<\/strong> vis-\u00e0-vis the Swiss franc and tested offers around the CHF 1.6845 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 continues to trade on rumours and news headlines regarding a European bailout plan for Greece\u2019s fiscal deficit. German Chancellor Merkel…<\/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-6766","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/6766","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=6766"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/6766\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=6766"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=6766"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=6766"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}