{"id":7266,"date":"2010-03-02T21:30:02","date_gmt":"2010-03-03T02:30:02","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=7266"},"modified":"2010-03-02T21:30:02","modified_gmt":"2010-03-03T02:30:02","slug":"forex-daily-market-commentary-23","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/03\/02\/forex-daily-market-commentary-23\/","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\t1.3620 level and was supported around the $1.3440 level.\u00a0 Traders \t\tcontinue to express optimism that meetings between Greek officials and \t\tGerman officials this week will be productive and result in some sort of \t\tfinancial asssitance package for Greece.\u00a0 Ahead of this week\u2019s meeting, \t\tGreece announced today that it is pursuing another \u20ac6.5 billion in \t\tdeficit cuts.\u00a0 Greece is expected to float up to \u20ac5 billion in new \t\t10-year bonds over the next week or two to help finance its massive \t\tbudget deficit that topped out above 12% of gross domestic product in \t\t2009.\u00a0 One possible financial rescue scenario has some eurozone member \t\tcountries purchasing Greek bonds to support the beleaguered country.\u00a0 In \t\taddition to Greece, other eurozone countries continue to face difficult \t\tfiscal challenges including Spain, Portugal, and Ireland.\u00a0 Data released \t\tin the eurozone today saw EMU-16 February producer prices climb 0.7% m\/m \t\tand fall 1.0% y\/y while February consumer prices were off 0.9% y\/y.\u00a0 \t\tInterest rates were back in focus today as Bank of Canada kept its main \t\tovernight rate unchanged at 0.25% and Reserve Bank of Australia lifted \t\tits main rate by 0.25%.\u00a0 The European Central Bank is expected to keep \t\tits main refinancing rate unchanged at 1.00% for the foreseeable \t\tfuture.\u00a0 The ECB will discuss on Thursday the idea of lending covered \t\tbonds to banks for a fee.\u00a0 In U.S. news<\/strong>, Kansas City Fed \t\tPresident Hoenig made news today when he vociferously defended the need \t\tto maintain the Fed\u2019s policymaking and supervisory independence.\u00a0 Hoenig \t\talso said the Fed should begin to raise interest rates even with high \t\tunemployment.\u00a0 Minneapolis Fed President Kocherlakota said there is a \t\trisk that smaller U.S. banks could precipitate the next financial \t\tcrisis, adding their exposure to commercial real estate \u201cmay be exerting \t\ta significant drag on the overall economic recovery.\u201d\u00a0 Euro bids are \t\tcited around the US$ 1.3335 level.<\/p>\n

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<\/strong><\/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 \u00a588.90 level and was capped around the \u00a589.35 level. The verbal \t\tskirmish between Bank of Japan and the government continued with the \t\tlatter saying it will not seek a change in law to permit the former to \t\tpurchase new Japanese government bonds.\u00a0 Yesterday, financial services \t\tminister Kamei called on the BoJ to directly purchase JGBs to financial \t\tstimulus spending.\u00a0 Finance minister Kan today tempered Kamei\u2019s remarks \t\tsaying \u201cWe have to rebuild the economy, which requires spending, but we \t\tdon\u2019t have the financial reserves and if we issue bonds, that will push \t\tyields up. We have to tread a very narrow path.\u201d\u00a0 BoJ Governor Shirakawa \t\thas recently increased his anti-deflation rhetoric but has also \t\tsuggested deflation is not purely a monetary phenomenon, adding a lack \t\tof final private demand is contributing to lower prices. \u00a0The central \t\tbank purchases \u00a51.8 trillion if Japanese government securities every \t\tmonth and Kan continues to call on the central bank to take \u201cappropriate \t\taction.\u201d\u00a0 Additionally, Kan yesterday indicated he hopes deflation will \t\tend by the end of the year whereas current BoJ forecasts have deflation \t\tcontinuing through at least the second half of 2011.\u00a0 Data released in \t\tJapan today saw the January unemployment rate decline to 4.9%.\u00a0 The \t\tNikkei 225 stock index climbed 0.49% to close at \u00a510,221.84.\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 \u00a5119.75 level and was capped around the \u00a5121.30 level.\u00a0 The \t\tBritish pound moved lower <\/strong>vis-\u00e0-vis the yen as sterling tested bids \t\taround the \u00a5132.50 level while the Swiss franc moved lower <\/strong> vis-\u00e0-vis the yen and tested bids around the \u00a581.85 level. In Chinese \t\tnews<\/strong>, the U.S. dollar appreciated vis-\u00e0-vis the Chinese yuan as the \t\tgreenback closed at CNY 6.8266 in the over-the-counter market, up from \t\tCNY 6.8263.\u00a0 China is expected to continue raising its reserve ration as \t\tshorter-term bills expire.\u00a0 One recent study published in the U.S. \t\tsuggests China will face a significant debt crisis in 2012 on account of \t\tregional and local borrowing activities.\u00a0 Data released in China \t\tyesterday saw February manufacturing PMI decline go 52.0 from 55.8, \t\tconsiderably weaker-than-expected.\u00a0 Revised U.S. TICS data released on \t\tFriday confirmed China is the largest holder of U.S. Treasuries. Foreign \t\tholdings of U.S. debt now total US$ 2.7 trillion in aggregate.<\/p>\n

\u20a4<\/strong><\/p>\n

The British pound weakened vis-\u00e0-vis \t\tthe U.S. dollar today<\/strong> as cable tested bids around the US$ 1.4855 \t\tlevel and was capped around the $1.4995 level. \u00a0Cable again moved lower \t\tas traders reacted to strong-than-expected U.K. GDP data that were \t\treleased on Friday.\u00a0 One theory suggests Prime Minister Brown may take \t\tadvantage of the stronger-than-expected GDP data by calling a general \t\telection earlier than previously expected.\u00a0 Sterling is lower on the \t\tpremise that the U.K. could have its first minority government in \t\tdecades. The opposition Tory party is largely expected to assume more \t\tafter more than one decade of Labour rule.\u00a0 Data released in the U.K. \t\ttoday saw February PMI construction decrease slightly to 48.5 from 48.6 \t\tin January.\u00a0 Cable bids are cited around the US$ 1.4455 level.\u00a0 The \t\teuro moved higher<\/strong> vis-\u00e0-vis the British pound as the single currency \t\ttested offers around the \u20a40.9090 level and was supported around the \t\t\u20a40.9015 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":"

In Chinese news, the U.S. dollar appreciated vis-\u00e0-vis the Chinese yuan as the greenback closed at CNY 6.8266 in the over-the-counter market, up from CNY 6.8263…<\/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-7266","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/7266","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=7266"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/7266\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=7266"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=7266"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=7266"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}