{"id":7022,"date":"2010-02-22T16:20:56","date_gmt":"2010-02-22T21:20:56","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=7022"},"modified":"2010-02-22T16:20:56","modified_gmt":"2010-02-22T21:20:56","slug":"forex-daily-market-commentary-18","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/02\/22\/forex-daily-market-commentary-18\/","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\t1.3575 level and was capped around the $1.3655 level. \u00a0A flat day for \t\tU.S. equities capped the common currency as did rumous of an \u201cemergency \t\tbailout\u201d of up to \u20ac25 billion for Greece\u2019s economy.\u00a0 European Central \t\tBank member Bini Smaghi said European Union states need to support \t\tGreece financially, adding he opposes an International Monetary Fund \t\tbailout for Greece.\u00a0 Many traders believe the ECB will be forced to keep \t\tits interest rates low for some time on account of the fiscal crises \u2013 \t\tincluding Greece\u2019s \u2013 in the eurozone.\u00a0 Short-term euro forward borrowing \t\trates have collapsed this month, an indication of expectations for lower \t\trates.\u00a0 ECB member Provopoulos said the Greek government will meet its \t\t\u201cvery ambitious\u201d deficit reduction goals and finance minister \t\tPapaconstantinou is on the tape saying the country is \u201cahead of \t\tschedule\u201d on reducing its budget deficit and will not require a \t\t\u201cbailout.\u201d\u00a0 In U.S. news<\/strong>, data released today saw the January \t\tChicago Fed natinal activity index improve to +0.02, up from the revised \t\tprint of -0.58, while the February Dallas Fed manufacturing index came \t\tin much weaker-than-expected at -0.1%, down from the +8.3% previous \t\treading.\u00a0 Data to be released tomorrow include the December S&P\/ \t\tCaseShiller home price index, February Richmond Fed manufacturing index, \t\tand February consumer confidence.\u00a0 San Francisco Fed President Yellen \t\tsaid the \u201ceconomy still needs the support of extraordinarily low \t\trates.\u201d\u00a0 Yellen also warned the economy is likely to operate \u201cwell below \t\tits potential throughout this year and next.\u201d\u00a0 She also indicated \t\tinterest on bank reserves will pay a \u201clead role\u201d when policy is \t\teventually tightening, signaling the Fed is likely to make adjustments \t\tto its monetary targets and perhaps become less dependent on the federal \t\tfunds rate.\u00a0 Euro bids are cited around the US$ 1.3335 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 \u00a591.00 figure and was capped around the \u00a591.90 level. \u00a0Finance \t\tminister Kan called on Bank of Japan to \u201cmake more efforts\u201d to combat \t\tdeflation, just days after suggesting the central bank target an \t\tinflation target.\u00a0 BoJ Governor Shirakawa today said Japan is \u201cproviding \t\tample liquidity\u201d and again called on the government to rein its massive \t\tpublic debt burden. \u00a0Prime Minister Hatoyama yesterday indicated he \t\t\u201csincerely\u201d hopes the BoJ will implement \u201cmonetary policy \t\tappropriately.\u201d The spat between the central bank and government is \t\tworsening just days after data revealed deflationary pressures are \t\tdeepening in Japan.\u00a0 Vice finance minister Minezaki suggested the \t\tgovernment should suspend a temporary measure that reduces taxes on \t\tincome from dividends and capital gains.\u00a0 The central bank last week \t\tvoted to keep monetary policy unchanged and some dealers expressed \t\tsurprise the central bank did not expand its monthly Japanese government \t\tbond buying operations.\u00a0 Some traders have already starting repatriation \t\tinflows of yen back to Japan ahead of the fiscal year end at the end of \t\tMarch.\u00a0 The Nikkei 225 stock index climbed 2.74% to close at \t\t\u00a510,400.47.\u00a0 U.S. dollar offers are cited around the \u00a594.75 level.\u00a0 The euro moved lower <\/strong>vis-\u00e0-vis the yen as the single currency tested \t\tbids around the \u00a5123.60 level and was capped around the \u00a5125.20 level.\u00a0 \t\tThe British pound moved lower <\/strong>vis-\u00e0-vis the yen as sterling \t\ttested bids around the \u00a5140.75 level while the Swiss franc moved \t\tlower <\/strong>vis-\u00e0-vis the yen and tested bids around the \u00a584.40 level. In Chinese news<\/strong>, the U.S. dollar depreciated vis-\u00e0-vis the Chinese \t\tyuan as the greenback closed at CNY 6.8265 in the over-the-counter \t\tmarket, down from CNY 6.8333.\u00a0 Chinese financial markets were closed \t\tlast week for the Chinese New Year holiday.\u00a0 Chinese leaders today said \t\tthe country will maintain an \u201cappropriately loose\u201d monetary policy in \t\t2010 and seek to balance the objectives of fostering growth and managing \t\tinflation expectations.\u00a0 Some media reports are suggesting China is \t\tbecoming increasingly concerned with the \u201ccarry trade\u201d in which hot \t\tmoney inflows are finding their way into the Chinese financial system \t\tafter borrowings are being made in cheaper currencies like the U.S. \t\tdollar.<\/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$ 1.5520 level and was supported around \t\tthe $1.5430 level. \u00a0Bank of England Monetary Policy Committee member \t\tFisher last week said the economic outlook is \u201chugely uncertain.\u201d\u00a0 \t\tFisher added \u201cDouble dip (recession) is something that would likely \t\thappen if there was some exogenous, extraneous shock that came along and \t\thit the economy.\u00a0 It\u2019s not something that you can forecast.\u201d\u00a0 It was \t\tannounced last week that Kate Barker will leave the MPC and Spencer Dale \t\twas reappointed to the MPC.\u00a0 Cable bids are cited around the US$ 1.5340 \t\tlevel.\u00a0 The euro moved lower<\/strong> vis-\u00e0-vis the British pound as the \t\tsingle currency tested bids around the \u20a40.8760 level and was capped \t\taround the \u20a40.8815 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 1.0740 level. Swiss \t\tNational Bank member Jordan said the franc\u2019s strength is \u201cno obstacle\u201d \t\tto recovery and added financial regulation needs to increase.\u00a0 Data \t\treleased in Switzerland last week saw the January trade surplus climb to \t\tCHF 2.42 billion from CHF 1.36 billion in December while the ZEW \t\tFebruary expectations survey fell to 52.5 from 56.2 in January.\u00a0 Dealers \t\tlast week speculated the Swiss National Bank sold francs for euro in an \t\tintervention to help Swiss foreign trade.\u00a0 Many dealers believe the \t\tSwiss National Bank will not be able to prevent the Swiss U.S. dollar \t\toffers are cited around the CHF 1.0930 level.\u00a0 The euro moved lower<\/strong> vis-\u00e0-vis the Swiss franc as the single currency tested bids around the \t\tCHF 1.4630 level while the British pound appreciated<\/strong> vis-\u00e0-vis \t\tthe Swiss franc and tested offers around the CHF 1.6715 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":"

Short-term euro forward borrowing rates have collapsed this month, an indication of expectations for lower rates. ECB member Provopoulos…<\/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-7022","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/7022","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=7022"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/7022\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=7022"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=7022"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=7022"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}