{"id":6873,"date":"2010-02-16T16:46:24","date_gmt":"2010-02-16T21:46:24","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=6873"},"modified":"2010-02-16T16:46:24","modified_gmt":"2010-02-16T21:46:24","slug":"forex-daily-market-commentary-14","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/02\/16\/forex-daily-market-commentary-14\/","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\t1.3755 level and was supported around the $1.3585 level.\u00a0 The common \t\tcurrency snapped higher despite lingering concerns about eurozone \t\tsovereign credit risk.\u00a0 Traders expressed some satisfaction today, \t\thowever, with the hard line approach that eurozone officials are showing \t\tGreece.\u00a0 The European Union today announced it is providing Greece with \t\t30 days to confirm it is serious about improving its fiscal problems.\u00a0 \t\tEurogroup Chairman Juncker said a financial lifeline for Greece \u201cdepends \t\ton how far Greece agrees to additional measures in case those are \t\twarranted.\u201d\u00a0 Greece will likely be forced to curtail fiscal spending and \t\traise taxes to qualify for credit assistance from eurozone members.\u00a0 \t\tU.K. Chancellor of the Exchequer Darling called on Greece to \u201cresolve \t\tits own budget problems.\u201d\u00a0 Eurozone finance ministers today nominated \t\tPortgual\u2019s Constancio \u2013 a known monetary dove – to become the next Vice \t\tPresident of the ECB and some believe this heightens the likelihood that \t\tGermany\u2019s Weber \u2013 a monetary hawk – will become the new ECB President in \t\t2011.\u00a0 Data released in the eurozone today saw the German February ZEW \t\teconomic sentiment survey decline to 45.1 from 47.2 in January while the \t\tEMU-16 economic sentiment index receded to 40.2 from 46.4 in January.\u00a0 \t\tIn U.S. news<\/strong>, it was reported that foreign demand for U.S. \t\tTreasury securities fell by its largest amount on record in December \t\tafter China reduced its holdings by US$ 34.2 billion.\u00a0 Net long-term TIC \t\tflows fell to US$ 63.3 billion from US$ 126.4 billion in December.\u00a0 \t\tJapan is now officially the largest holder of U.S. Treasuries with US$ \t\t768.8 billion in its war chest, more than China\u2019s official tally of US$ \t\t755.4 billion.\u00a0 For 2009 as a whole, foreign holdings of U.S. Treasuries \t\tfell by US$ 500 million whereas foreign holdings of U.S. Treasuries \t\texpanded by US$ 456 billion in 2008.\u00a0 Other data released today saw the \t\tFebruary Empire manufacturing survey print at 24.91, up from the January \t\treading of 15.92, while the February NAHB housing market index printed \t\tat +17, up from +15 in January.\u00a0 Minneapolis Fed President Kocherlakota \t\treported the \u201cnascent\u201d U.S. economic recovery will \u201cslowly continue\u201d \t\twhile Kansas City Fed President Hoenig reported the U.S. must take \t\t\u201cdifficult\u201d steps to reduce spending and increase revenue so that the \t\tFed is not forced to finance the \u201cunsustainable\u201d federal deficit.\u00a0 Euro \t\tbids are cited around the US$ 1.3530 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 \u00a590.30 level and was supported around the \u00a589.70 level. \u00a0Bank \t\tof Japan Governor Shirakawa reported the central bank is ready to act \t\t\u201cdecisively\u201d and is \u201calways ready to provide abundant funds\u201d adding it \t\twill maintain low interest rates \u201cpersistently.\u201d\u00a0 Finance minister Kan \t\tsuggested the BoJ should adopt some sort of inflation-targeting measure, \t\treporting a CPI around 1% should be a \u201cpolicy target.\u201d\u00a0 Shirakawa also \t\treported the central bank has expanded its balance sheet more than the \t\tFederal Reserve and European Central Bank have.\u00a0 BoJ\u2019s balance sheet was \t\tequivalent to about 26% of Japanese gross domestic product in December, \t\tcompared with 21% at the ECB at 16% in the U.S.\u00a0 He also noted Japan\u2019s \t\tprevious quantitative easing measures have had a \u201cvery limited\u201d impact \t\ton reducing deflation but added BoJ policy alone cannot end deflation.\u00a0 \t\tTraders 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. \u00a0Despite 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 The Nikkei \t\t225 stock index climbed 0.21% to close at \u00a510,034.25.\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\u00a5123.85 level and was supported around the \u00a5122.30 level.\u00a0 The \t\tBritish pound moved higher <\/strong>vis-\u00e0-vis the yen as sterling tested \t\toffers around the \u00a5141.40 level while the Swiss franc moved higher <\/strong>vis-\u00e0-vis the yen and tested offers around the \u00a584.40 level. In \t\tChinese news<\/strong>, the U.S. dollar remained steady vis-\u00e0-vis the Chinese \t\tyuan as the greenback closed at CNY 6.8333 in the over-the-counter \t\tmarket.\u00a0 Chinese financial markets were closed for the Chinese New Year \t\tholiday.\u00a0 Last week, People\u2019s Bank of China reconfirmed it will \t\t\u201cgradually guide monetary conditions back to normal levels from the \t\tcounter-crisis mode\u201d but then the central bank lifted reserve \t\trequirements by 0.5%, effective 25 February. The central bank is clearly \t\ttrying to contain inflationary pressures and avert asset bubbles.\u00a0 Some \t\tChina-watchers believe the central bank could allow the yuan to \t\tappreciate some 5% in the coming months.<\/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$ 1.5745 level and was supported around \t\tthe $1.5625 level. \u00a0Data released in the U.K. today saw January consumer \t\tprice inflation decline 0.2% m\/m and rise 3.5% y\/y, the highest level \t\tsince November 2008 and consistent with economists\u2019 forecasts.\u00a0 Bank of \t\tEngland Governor King last week prepared the market for a temporary \t\tspike in inflation, noting it should be back at target in two years\u2019 \t\ttime.\u00a0 Yields on ten-year U.K. gilts are actually higher than Spanish \t\tand Italian ten-year debt, suggesting dealers are unhappy about the U.K. \t\tdebt level or its prospects for inflation.\u00a0 Other data released today \t\tsaw December DCLG house prices expand 2.2%.\u00a0 Chancellor Darling today \t\tsaid he \u201cstrongly supports\u201d the central bank\u2019s determination to curb \t\tinflation.\u00a0 Cable bids are cited around the US$ 1.5340 level.\u00a0 The \t\teuro moved higher<\/strong> vis-\u00e0-vis the British pound as the single currency \t\ttested offers around the \u20a40.8745 level and was supported around the \t\t\u20a40.8675 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\t1.0675 level and was capped around the CHF 1.0790 level. \u00a0Many dealers \t\tbelieve the Swiss National Bank will not be able to prevent the Swiss \t\tfranc from appreciating too much in the wake of the euro\u2019s widespread \t\tdepreciation.\u00a0 There is speculation the central bank has intervened at \t\tleast eight times in recent weeks by selling francs for euro. SNB member \t\tJordan was quoted as saying \u201ccentral banks need to be independent and \t\thave a clear mandate to ensure price stability.\u201d\u00a0 \u00a0Data released in \t\tSwitzerland yesterday saw January producer price inflation climb 0.3% \t\tm\/m and decline 1.3% y\/y.\u00a0 Swiss financial markets will likely be closed \t\tfor most of the week for Carnival holidays.\u00a0 U.S. dollar offers are \t\tcited around the CHF 1.0810 level.\u00a0 The euro moved higher<\/strong> vis-\u00e0-vis the Swiss franc as the single currency tested offers around \t\tthe CHF 1.4685 level while the British pound depreciated<\/strong> vis-\u00e0-vis the Swiss franc and tested bids around the CHF 1.6780 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 European Union today announced it is providing Greece with 30 days to confirm it is serious about improving its fiscal problems. Eurogroup Chairman…<\/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-6873","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/6873","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=6873"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/6873\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=6873"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=6873"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=6873"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}