{"id":7074,"date":"2010-02-23T17:59:45","date_gmt":"2010-02-23T22:59:45","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=7074"},"modified":"2010-02-23T17:59:45","modified_gmt":"2010-02-23T22:59:45","slug":"forex-daily-market-commentary-19","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/02\/23\/forex-daily-market-commentary-19\/","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\t1.3495 level and was capped around the $1.3690 level. \u00a0Traders continue \t\tto punish the common currency on account of the ongoing fiscal problems \t\tof eurozone members including Greece.\u00a0 The Greek crisis is unlikely to \t\tbe resolved for weeks, with Greece expected to provide the European \t\tUnion with an interim update in mid-March on how it is improving its \t\tfiscal situation.\u00a0 Many dealers believe bilateral or multilateral \t\tfinancial assistance will be provided involving some eurozone members \t\tbut Germany continues to report there will be no financial assistance \t\tuntil Greece helps itself.\u00a0 Data released in the eurozone today saw the \t\tFebruary Ifo headline business climate index recede to 95.2 from 95.8 in \t\tJanuary while the current assessment index weakened and the expectation \t\tsurvey ticked higher.\u00a0 In U.S. news<\/strong>, some dealers remain critical \t\tof the Fed\u2019s decision to lift the discount rate last week.\u00a0 The Federal \t\tDeposit Insurance Corporation reported \u201cproblem\u201d banks climbed to their \t\thighest level in seventeen years.\u00a0 The FDIC noted there were 702 banks \t\ton their \u201cproblem\u201d list representing US$ 402.8 billion in assets, a 27% \t\tq\/q increase.\u00a0 There will invariably be more bank failures in the U.S. \t\tin 2010.\u00a0 The U.S. Treasury today expanded its Supplemental Financing \t\tProgram, a move that will likely help the Fed to tighten policy \t\tfurther.\u00a0 Fed Chairman Bernanke will testify in Congress tomorrow and \t\tThursday.\u00a0 Data released in the U.S. today saw the December CaseShiller \t\thome price index decline 3.08%, up from a revised -5.34%, and was up \t\t0.32% m\/m from a revised 0.26%.\u00a0 Also, the February Richmond Fed \t\tmanufacturing index improve to +2 from the prior reading of -2 and \t\tFebruary consumer confidence fell sharply to 46.0 from a revised 56.5 in \t\tJanuary.\u00a0 Euro bids are cited around the US$ 1.3335 level.<\/p>\n

\u00a5\/ CNY<\/span><\/strong><\/p>\n

The yen appreciated \t\tvis-\u00e0-vis the U.S. dollar today<\/strong> as the greenback tested bids around \t\tthe \u00a589.90 level and was capped around the \u00a591.30 level. \u00a0Minutes from \t\tBank of Japan\u2019s 25-26 January Policy Board meeting were released \t\tovernight in which policymakers reported fiscal conditions are \t\t\u201cserious.\u201d\u00a0 Last week, the central bank voted to not expand monetary \t\tpolicy further, much to the anger of the Hatoyama government.\u00a0 In \t\tDecember, the central bank reported gross domestic product will expand \t\t1.3% in the year beginning 1 April.\u00a0 Finance minister Kan yesterday \t\tcalled on Bank of Japan to \u201cmake more efforts\u201d to combat deflation, just \t\tdays after suggesting the central bank target an inflation target.\u00a0 BoJ \t\tGovernor Shirakawa yesterday said Japan is \u201cproviding ample liquidity\u201d \t\tand again called on the government to rein its massive public debt \t\tburden. \u00a0Prime Minister Hatoyama on Sunday indicated he \u201csincerely\u201d \t\thopes the BoJ will implement \u201cmonetary policy appropriately.\u201d The spat \t\tbetween the central bank and government is worsening just days after \t\tdata revealed deflationary pressures are deepening in Japan.\u00a0 Vice \t\tfinance minister Minezaki suggested the government should suspend a \t\ttemporary measure that reduces taxes on income from dividends and \t\tcapital gains.\u00a0 The central bank last week voted to keep monetary policy \t\tunchanged and some dealers expressed surprise the central bank did not \t\texpand its monthly Japanese government bond buying operations.\u00a0 Some \t\ttraders have already starting repatriation inflows of yen back to Japan \t\tahead of the fiscal year end at the end of March. \u00a0Notably, interbank \t\tyen borrowing costs fell and their premium over U.S. dollar loans fell \t\tto their lowest level since yen rates moved above dollar rates on 24 \t\tAugust last year \u2013 the first time this happened in sixteen years.\u00a0 The \t\tspread between three-month yen loans and three-month dollar loans is now \t\taround 0.09 bps.\u00a0 Three-month yen Libor is now trading around 0.25313%.\u00a0 \t\tThe Nikkei 225 stock index lost 0.47% to close at \u00a510,352.10.\u00a0 \u00a0\u00a0U.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 \u00a5121.55 level and was capped around the \u00a5124.50 level.\u00a0 The \t\tBritish pound moved lower <\/strong>vis-\u00e0-vis the yen as sterling tested bids \t\taround the \u00a5138.70 level while the Swiss franc moved lower <\/strong> vis-\u00e0-vis the yen and tested bids around the \u00a583.00 figure. In \t\tChinese news<\/strong>, the U.S. dollar depreciated vis-\u00e0-vis the Chinese yuan \t\tas the greenback closed at CNY 6.8264 in the over-the-counter market, \t\tdown from CNY 6.8265.\u00a0 Chinese financial markets were closed last week \t\tfor the Chinese New Year holiday.\u00a0 Chinese leaders this week said the \t\tcountry will maintain an \u201cappropriately loose\u201d monetary policy in 2010 \t\tand 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<\/span><\/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$ 1.5390 level and was capped around the \t\t$1.5575 level. \u00a0Bank of England Governor King today testified the U.K. \t\teconomy may need additional quantitative easing measures to extend its \t\t\u201cnascent\u201d economic recovery.\u00a0 King cited several economic risks \t\tincluding the \u201cstalled\u201d economic recovery in Europe but downplayed the \t\tmarket\u2019s concerns over U.K. sovereign debt.\u00a0 Data released in the U.K. \t\ttoday saw BBA January mortgage approvals decline to 35,100 from 45,650, \t\tthe first decline since March 2009.\u00a0 Cable bids are cited around the US$ \t\t1.5340 level.\u00a0 The euro moved lower<\/strong> vis-\u00e0-vis the British pound \t\tas the single currency tested bids around the \u20a40.8750 level and was \t\tcapped around the \u20a40.8835 level.<\/p>\n

CHF<\/span><\/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\t1.0845 level and was supported around the CHF 1.0715 level. \u00a0Swiss \t\tNational Bank is rumoured to have bought euro for francs again today in \t\twhat would be the latest intervention move.\u00a0 Data released in \t\tSwitzerland today saw the January UBS consumption indicator improve to \t\t1.36 from 1.19, its highest level since September 2008.\u00a0 U.S. dollar \t\toffers are cited around the CHF 1.0930 level.\u00a0 The euro moved higher<\/strong> vis-\u00e0-vis the Swiss franc as the single currency tested offers around \t\tthe CHF 1.4680 level while the British pound appreciated<\/strong> vis-\u00e0-vis the Swiss franc and tested offers around the CHF 1.6735 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":"

Many dealers believe bilateral or multilateral financial assistance will be provided involving some eurozone members but Germany continues to report there will be no financial assistance…<\/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-7074","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/7074","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=7074"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/7074\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=7074"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=7074"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=7074"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}