{"id":6853,"date":"2010-02-15T19:39:33","date_gmt":"2010-02-16T00:39:33","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=6853"},"modified":"2010-02-15T19:39:33","modified_gmt":"2010-02-16T00:39:33","slug":"forex-daily-market-commentary-13","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/02\/15\/forex-daily-market-commentary-13\/","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\t1.3580 level and was capped around the $1.3635 level.\u00a0 Escalating \t\tsovereign credit concerns continue to weigh heavily on the common \t\tcurrency.\u00a0 Dealers sold the euro again today on reports that eurozone \t\tfinance ministers are not yet ready to provide specific details about \t\twhat form or fashion a Greek \u201cbailout\u201d might take.\u00a0 Greek finance \t\tminister Papaconstantinou today said \u201cMy guess is that \t\twhat will stop markets attacking Greece at the moment is a further, more \t\texplicit message that makes operational what has been decided last \t\tThursday.\u201d Eurogroup Chaiman Juncker today reconfirmed the European \t\tUnion is prepared to assist Greece.\u00a0 European finance ministers meet \t\tagain tomorrow and many dealers believe reported German opposition to a \t\tbailout may keep the focus on fiscal austerity measures Greece can take \t\trather than focus on an explicit package of bilateral or multilateral \t\tfinancial aid.\u00a0 Greece\u2019s budget deficit is estimated to have been above \t\t12.5% last year, far above the 3% limit imposed by the Maastricht \t\tTreaty.\u00a0 Greece is expected to release a report in mid-March about the \t\tsteps it is taking to address its fiscal problems.\u00a0 European Central \t\tBank member Orphanides today said it is \u201cunthinkable\u201d that a eurozone \t\tsovereign may default.\u00a0 In addition to Greece, dealers are closely \t\tmonitoring the fiscal situations in Portugal, Spain, and Ireland.\u00a0 A \t\tGerman Parliament source today reported the European Union can provide \t\taid to Greece as permitted in an emergency clause of some European Union \t\ttreaties.\u00a0 Aside from the eurozone credit crisis, there are growing \t\tsovereign concerns involving Dubai where some borrowers are said to be \t\tfacing difficult times.\u00a0 Five-year credit default swaps rose today to \t\t651 basis points from 627 on Friday.\u00a0 A Middle Eastern sovereign credit \t\tdefault would likely not have as large a consequence on the markets as a \t\tEuropean default.\u00a0 In U.S. news<\/strong>, data to be released \t\ttomorrow include the NAHB housing market index, December TICS flows, and \t\tthe Empire State manufacturing index. \u00a0Liquidity was light during the \t\tNorth American session on account of market holidays in the U.S. and \t\tCanada.\u00a0 Fed officials including Atlanta and Minneapolis Fed Presidents \t\tare scheculed to speak.\u00a0 Euro bids are cited around the US$ 1.3530 \t\tlevel.<\/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 \u00a590.40 level and was supported around the \u00a589.60 level. \t\t\u00a0Traders are awaiting Bank of Japan Policy Board\u2019s monetary policy \t\tdecision this week with most expecting no change in policy despite an \t\tapparent intensification of deflationary pressures.\u00a0 The central bank is \t\tlikely to keep its bank lending program and intact along with its \t\tmonthly purchases of Japanese government bonds.\u00a0 Despite a recent 4.6% \t\tannualized increase in Q4 gross domestic product, some prices declined \t\tmore than they have in more than 50 years and others dealers believe \t\tthis decrease will result in additional easing measures from the central \t\tbank this week.\u00a0 The GDP deflator tumbled 3% – the largest drop since at \t\tleast 1955 \u2013 and the domestic demand deflator was off 2.9%.\u00a0 Standard & \t\tPoors last month warned it may downgrade Japan\u2019s \u2018AA\u2019 credit rating if \t\tit does not take steps to manage its deficit.\u00a0 Prime Minister Hatoyama \t\twas on the tape today saying he cannot be optimistic about the economy.\u00a0 \t\tThe Nikkei 225 stock index lost 0.78% to close at \u00a510,013.30.\u00a0 U.S. \t\tdollar offers are cited around the \u00a594.75 level.\u00a0 The euro moved \t\tlower <\/strong>vis-\u00e0-vis the yen as the single currency tested bids around \t\tthe \u00a5122.25 level and was capped around the \u00a5122.90 level.\u00a0 The \t\tBritish pound moved lower <\/strong>vis-\u00e0-vis the yen as sterling tested bids \t\taround the \u00a5140.70 level while the Swiss franc moved lower <\/strong> vis-\u00e0-vis the yen and tested bids around the \u00a583.35 level. In Chinese \t\tnews<\/strong>, the U.S. dollar remained steady vis-\u00e0-vis the Chinese yuan as \t\tthe greenback closed at CNY 6.8333 in the over-the-counter market.\u00a0 \t\tChinese financial markets were closed for the Chinese New Year holiday.\u00a0 \t\tLast week, People\u2019s Bank of China reconfirmed it will \u201cgradually guide \t\tmonetary conditions back to normal levels from the counter-crisis mode\u201d \t\tbut then the central bank lifted reserve requirements by 0.5%, effective \t\t25 February. The central bank is clearly trying to contain inflationary \t\tpressures and avert asset bubbles.\u00a0 Some China-watchers believe the \t\tcentral bank could allow the yuan to appreciate some 5% in the coming \t\tmonths.<\/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$ 1.5610 level and was capped around the \t\t$1.5720 level. \u00a0Dealers will pay very close attention to tomorrow\u2019s U.K. \t\tinflation data.\u00a0 Consumer price inflation reached 2.9% and there is some \t\tspeculation it could top 3% for January when data are released \t\ttomorrow.\u00a0 Bank of England Governor King last week prepared the market \t\tfor a temporary spike in inflation, noting it should be back at target \t\tin two years\u2019 time.\u00a0 Yields on ten-year U.K. gilts are actually higher \t\tthan Spanish and Italian ten-year debt, suggesting dealers are unhappy \t\tabout the U.K. debt level or its prospects for inflation.\u00a0 Chancellor of \t\tthe Exchequer Darling today said the government aims to reduce its \t\tdeficit by half over the next four years.\u00a0 Cable bids are cited around \t\tthe US$ 1.5340 level.\u00a0 The euro moved lower<\/strong> vis-\u00e0-vis the British \t\tpound as the single currency tested bids around the \u20a40.8670 level and \t\twas capped around the \u20a40.8700 figure.<\/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\t1.0805 level and was supported around the CHF 1.0750 level. \u00a0Data \t\treleased in Switzerland today saw January producer price inflation climb \t\t0.3% m\/m and decline 1.3% y\/y.\u00a0 Swiss financial markets will likely be \t\tclosed for most of the week for Carnival holidays.\u00a0 Swiss National Bank \t\tis said to have intervened again by buying euro and selling Swiss franc \t\tover EBS last week for at least the second time this month.\u00a0 U.S. dollar \t\toffers are cited around the CHF 1.0810 level.\u00a0 The euro moved lower<\/strong> vis-\u00e0-vis the Swiss franc as the single currency tested bids around the \t\tCHF 1.4650 level while the British pound depreciated<\/strong> vis-\u00e0-vis \t\tthe Swiss franc and tested bids 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":"

Dealers sold the euro again today on reports that eurozone finance ministers are not yet ready to provide specific details about what form or fashion a Greek \u201cbailout\u201d might take. Greek finance minister…<\/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-6853","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/6853","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=6853"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/6853\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=6853"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=6853"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=6853"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}