{"id":6921,"date":"2010-02-17T15:32:30","date_gmt":"2010-02-17T20:32:30","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=6921"},"modified":"2010-02-17T15:32:30","modified_gmt":"2010-02-17T20:32:30","slug":"forex-daily-market-commentary-15","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/02\/17\/forex-daily-market-commentary-15\/","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\t1.3685 level and was capped around the $1.3785 level.\u00a0 The common \t\tcurrency gave back some of this week\u2019s gains amid a report that Greece \t\tmay have used questionable derivatives instruments to mask the real \t\tamount of its public debt before it qualified to join the eurozone.\u00a0 The \t\tquestionable swaps arrangements were said to have been made in 2002 or \t\tso and draw into question whether the markets really have a solid \t\tunderstanding about how much Greek debt is really outstanding.\u00a0 \u00a0Greece \t\thas until 19 February to disclose information on the swaps transactions \t\tit undertook.\u00a0 The European Central Bank is said to have instructed \t\tGreece to reduce its budget deficit by an additional \u20ac2 billion.\u00a0 Bank \t\tof Italy today said Italy\u2019s derivatives transactions \u2013 which has itself \t\tbeen accused of using swaps and derivatives in the 1990s to qualify for \t\teurozone membership \u2013 were certified by the European Union.\u00a0 Greece \t\tyesterday received a 30-day period to improve its fiscal position after \t\twhich time it must demonstrate how it is going to reduce its sizable \t\t12%+ budget deficit to as low as 3% by the middle of 2012. \u00a0The European \t\tUnion has offered qualified assistance for Greece\u2019s severe fiscal \t\tproblems but has not yet indicated if a financial assistance package \t\twill be offered, or by whom.\u00a0 There remains some stiff political \t\topposition by some in Germany and some traders are speculating a \t\ttwo-currency European Monetary Union may need to be introduced to \t\tsalvage the eurozone.\u00a0 Spanish Prime Minister Zapatero today said his \t\tcountry will do whatever is necessary to cut its deficit.\u00a0 Data released \t\tin the eurozone today saw December construction output increase 0.5% m\/m \t\tand decline 3.1% y\/y while the EMU-16 trade surplus printed at a \t\tfive-year high at \u20ac4.4 billion in December, up from \u20ac4.0 billion in \t\tNovember.\u00a0 ECB member Quaden today said a \u201cgradual\u201d exit from its \t\taccommodative monetary policy will be best.\u00a0 In U.S. news<\/strong>, data \t\treleased in the U.S. today saw the January import price index climb 1.4% \t\tm\/m from a revised +0.2% total in December and expand 11.5% y\/y.\u00a0 Also, \t\tJanuary housing starts improved 2.8% to an annualized 591,000 while \t\tJanuary building permits were off 4.9% m\/m to an annualized 621,000.\u00a0 \t\tMoreover, January industrial production beat expectations by growing \t\t0.9% while January capacity utilization came in at 72.6%.\u00a0 Dealers await \t\tthe release of the minutes from the most recent Federal Open Market \t\tCommittee meeting later in the North American session. \u00a0Dealers will pay \t\tclose attention to the FOMC\u2019s forecasts.\u00a0 Federal Reserve Chairman \t\tBernanke will testify before the House on 24 February.\u00a0 Euro bids are \t\tcited 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 \u00a591.10 level and was supported around the \u00a590.10 level. \t\t\u00a0Traders await Bank of Japan\u2019s monetary policy decision overnight with \t\tmost focusing on no change in interest rates or quantitative easing \t\tprograms.\u00a0 Bank of Japan Governor Shirakawa yesterday reported the \t\tcentral bank is ready to act \u201cdecisively\u201d and is \u201calways ready to \t\tprovide abundant funds\u201d adding it will maintain low interest rates \t\t\u201cpersistently.\u201d\u00a0 Finance minister Kan suggested the BoJ should adopt \t\tsome sort of inflation-targeting measure, reporting a CPI around 1% \t\tshould be a \u201cpolicy target.\u201d\u00a0 Shirakawa also reported the central bank \t\thas expanded its balance sheet more than the Federal Reserve and \t\tEuropean Central Bank have.\u00a0 BoJ\u2019s balance sheet was equivalent to about \t\t26% of Japanese gross domestic product in December, compared with 21% at \t\tthe ECB at 16% in the U.S.\u00a0 He also noted Japan\u2019s previous quantitative \t\teasing measures have had a \u201cvery limited\u201d impact on reducing deflation \t\tbut added BoJ policy alone cannot end deflation. \u00a0Vice finance minister \t\tMinezaki called on Japan to impose the so-called Tobin tax on financial \t\ttransactions, noting \u201c\u2026speculative funds flowing carelessly\u2026are \t\tdestroying the lives of ordinary people.\u201d 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%. \u00a0Data \t\treleased in Japan overnight saw the tertiary index come in \t\tlower-than-expected.\u00a0 The Nikkei 225 stock index climbed 2.72% to close \t\tat \u00a510,306.83.\u00a0 \u00a0U.S. dollar offers are cited around the \u00a594.75 level.\u00a0 \t\tThe euro moved higher <\/strong>vis-\u00e0-vis the yen as the single currency \t\ttested offers around the \u00a5124.85 level and was supported around the \t\t\u00a5123.90 level.\u00a0 The British pound moved higher <\/strong>vis-\u00e0-vis the yen \t\tas sterling tested offers around the \u00a5143.60 level while the Swiss \t\tfranc moved higher <\/strong>vis-\u00e0-vis the yen and tested offers around the \t\t\u00a585.05 level. In Chinese news<\/strong>, the U.S. dollar remained steady \t\tvis-\u00e0-vis the Chinese yuan as the greenback closed at CNY 6.8333 in the \t\tover-the-counter market.\u00a0 Chinese financial markets were closed for the \t\tChinese New Year holiday.\u00a0 Last week, People\u2019s Bank of China reconfirmed \t\tit will \u201cgradually guide monetary conditions back to normal levels from \t\tthe counter-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 lower vis-\u00e0-vis the U.S. dollar today<\/strong> as \t\tcable tested bids around the US$ 1.5715 level and was capped around the \t\t$1.5815 level. \u00a0As expected, Bank of England\u2019s Monetary Policy Committee \t\tvoted 9-to-0 to keep its Bank Rate unchanged at 0.5% this month and to \t\tpause its \u20a4200 billion bond purchase plan, according to minutes released \t\ttoday.\u00a0 Data released in the U.K. today saw January jobless claims rise \t\t23,500 with the jobless rate steady at 7.8%.\u00a0 The central bank is not \t\texpected to resume its bond purchase program unless the economy falters \t\tsignificantly.\u00a0 BoE also warned credit conditions will remain tight \u201cfor \t\tsome time\u201d and said there is \u201cno overwhelming risk\u201d CPI could fall below \t\t2,\u201d noting economic headwinds remain \u201cconsiderable.\u201d \u00a0Cable bids are \t\tcited around the US$ 1.5340 level.\u00a0 The euro moved lower<\/strong> vis-\u00e0-vis the British pound as the single currency tested bids around \t\tthe \u20a40.8685 level and was capped around the \u20a40.8740 level.<\/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\t1.0785 level and was supported around the CHF 1.0645 level. \u00a0Many \t\tdealers believe the Swiss National Bank will not be able to prevent the \t\tSwiss franc from appreciating too much in the wake of the euro\u2019s \t\twidespread depreciation.\u00a0 There is speculation the central bank has \t\tintervened at least eight times in recent weeks by selling francs for \t\teuro. SNB member Jordan was quoted as saying \u201ccentral banks need to be \t\tindependent and have a clear mandate to ensure price stability.\u201d\u00a0 \u00a0Data \t\treleased in Switzerland on Mondat saw January producer price inflation \t\tclimb 0.3% m\/m and decline 1.3% y\/y.\u00a0 Swiss financial markets will \t\tlikely be closed for most of the week for Carnival holidays.\u00a0 U.S. \t\tdollar offers are cited around the CHF 1.0810 level.\u00a0 The euro moved \t\thigher<\/strong> vis-\u00e0-vis the Swiss franc as the single currency tested \t\toffers around the CHF 1.4690 level while the British pound \t\tappreciated<\/strong> vis-\u00e0-vis the Swiss franc and tested offers around the \t\tCHF 1.6895 level.<\/p>\n

Forex Daily Market Commentary<\/strong><\/em> provided by<\/em><\/strong> GCI Financial Ltd<\/strong><\/a>.<\/strong><\/span><\/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 Central Bank is said to have instructed Greece to reduce its budget deficit by an additional \u20ac2 billion. Bank of Italy…<\/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-6921","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/6921","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=6921"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/6921\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=6921"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=6921"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=6921"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}