{"id":7521,"date":"2010-03-11T13:46:15","date_gmt":"2010-03-11T18:46:15","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=7521"},"modified":"2010-03-11T13:46:15","modified_gmt":"2010-03-11T18:46:15","slug":"forex-daily-market-commentary-25","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/03\/11\/forex-daily-market-commentary-25\/","title":{"rendered":"Forex Daily Market Commentary"},"content":{"rendered":"

By GCI Fx Research<\/strong><\/p>\n

Fundamental Outlook at 1500 \t\tGMT (EDT + 0500)<\/span><\/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\t1.3620 level and was capped around the $1.3685 level. \u00a0There are ongoing \t\tthemes that are driving trading flows now.\u00a0 First, Greece\u2019s fiscal \t\tproblems continue to plague the common currency.\u00a0 Greece continues to \t\tassert that it will not require financial assistance to manage its \t\tmountain of maturing debts.\u00a0 If a bailout is required, the most likely \t\tcandidates include Germany, the European Union, and the International \t\tMonetary Fund.\u00a0 Second, there is a concern that sovereign credit risks \t\tcould intensify and spread to other highly indebted eurozone countries \t\tincluding Portugal, Italy, and Spain.\u00a0 The prospect of a widerning \t\tproblem has kept the single currency on the defensive for weeks.\u00a0 Third, \t\tthere is a general sense that the Federal Reserve will be more proactive \t\tabout unwinding emergency credit measures than the European Central \t\tBank.\u00a0 This perception has also kept the euro on the defensive. Fourth, \t\teconomic data continue to be mixed.\u00a0 Economists note that there really \t\tis not an evident trend in the U.S. labour market yet.\u00a0 Data released in \t\tthe U.S. today saw weekly initial jobless claims decline 6,000 to \t\t462,000 while continuing jobless claims came in at 4.588 million, up \t\tfrom 4.521 million.\u00a0 Some private sector forecasts suggest there could \t\tbe jobs growth this month as high as 300,000.\u00a0 The general sense is that \t\tthe unemployment rate will gradually decrease, possibly falling below 9% \t\tlater this year.\u00a0 Other data released in the U.S. today saw the January \t\ttrade balance print at \u2013US$ 37.3 billion, down from an upwardly revised \t\tUS$ -39.9 billion in December.\u00a0 Most economists expect the mammoth U.S. \t\ttrade deficit to continue widening.\u00a0 Tomorrow\u2019s U.S. data will include \t\tFebruary retail sales, mid-March University of Michigan consumer \t\tsentiment, and January business inventories.\u00a0 Many important data \t\tincluding industrial production, TICS flows, and housing numbers will be \t\treleased early next week.\u00a0 In eurozone news<\/strong>, European Central \t\tBank member Mersch said that if a European Monetary Fund is created to \t\thelp address fiscal problems in the eurozone, the entity will not \t\treceive financial asssitance from the ECB.\u00a0 Germany\u2019s Kiel Institute \t\treduced its eurozone growth forecast to +0.7% for 2010 and +1.8% for \t\t2011.\u00a0 Data released in the eurozone today saw the Q4 current account \t\tsurplus print at \u20ac4.8 billion compared with a \u20ac32.2 billion deficit one \t\tyear ago.\u00a0 Euro bids are cited around the US$ 1.3335 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 \u00a590.70 level and was supported around the \u00a590.20 level. \u00a0Many \t\ttraders are concluding an additional quantitative easing measure by Bank \t\tof Japan next week seems like a foregone conclusion.\u00a0 Central bankers \t\tare known to be concerned that deflationary pressures are likely to \t\tremain in Japan through at least fiscal year 2012 and the Japanese \t\tgovernment continues to pressure the BoJ into loosening policy further.\u00a0 \t\tDeputy finance minister Noda today said the BoJ and government \u201cshare \t\tthe view that the economy is in a mild deflationary state.\u201d\u00a0 Data \t\treleased in Japan overnight saw Q4 gross domestic product rise at an \t\tannual 3.8% rate, notably less than the preliminary 4.6% figure reported \t\tlast month.\u00a0 Also, the GDP deflation tumbled a record 3.8%, underscoring \t\tthe seriousness of deflation in the Japanese economy.\u00a0 Demand across \t\tAsia is improving, however, and this may allow Japanese companies to \t\tincrease capital expenditures. Capital spending was up 0.9% q\/q in Q4 \t\tbut approximately one-third of factory capacity is idle now in Japan.\u00a0 \t\tJapan\u2019s fiscal situation remains critical and the government\u2019s ability \t\tto increase fiscal spending through supplementary budgets to counter \t\tdeflationary pressures is limited.\u00a0 Dealers continue to cite strong \t\trepatriation flows during the Australasian sessions.\u00a0 The Nikkei 225 \t\tstock index gained 0.96% to close at \u00a510,664.95.\u00a0 U.S. dollar offers are \t\tcited around the \u00a594.75 level.\u00a0 The euro moved higher <\/strong>vis-\u00e0-vis \t\tthe yen as the single currency tested offers around the \u00a5123.85 level \t\tand was supported around the \u00a5123.00 figure.\u00a0 The British pound moved \t\thigher <\/strong>vis-\u00e0-vis the yen as sterling tested offers around the \t\t\u00a5136.45 level while the Swiss franc moved higher <\/strong>vis-\u00e0-vis the \t\tyen and tested offers around the \u00a584.80 level. In Chinese news<\/strong>, \t\tthe U.S. dollar appreciated vis-\u00e0-vis the Chinese yuan as the greenback \t\tclosed at CNY 6.8266 in the over-the-counter market, up from CNY 6.8260. \t\t\u00a0Data released in China overnight saw inflation increase a significant \t\t2.7% y\/y and this has led to speculation that People\u2019s Bank of China \t\tcould hike rates or tighten policy further as early as tomorrow.\u00a0 The M2 \t\tmoney supply measure has increase more than 25% over the previous twelve \t\tmonths and this will invariably lead to inflationary pressures.\u00a0 It was \t\talso reported that Chinese banks provided CNY 700 billion in new loans \t\tlast month.<\/p>\n

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

The British pound appreciated vis-\u00e0-vis \t\tthe U.S. dollar today<\/strong> as cable tested offers around the US$ 1.5065 \t\tlevel and was supported around the $1.4945 level. \u00a0A Bank of England \t\tquarterly inflation survey was released today in which U.K. inflation \t\texpectations climbed to their highest level since November 2008. This \t\tincrease in expectations has added to speculation that interest rates \t\tcould rise.\u00a0 Consumers now expect inflation to be 2.5% higher one year \t\tfrom now, up from the previous reading of 2.4%. The other big factor in \t\tthe U.K. now remains the general election.\u00a0 Concerns that Tory leader \t\tCameron could win the election but fail to form a majority government \t\tare weighing heavily on sterling.\u00a0 BoE member Posen said the U.K. \t\teconomy has successfully avoided deflation and added the economy would \t\thave been considerably worse absent quantitative easing policies.\u00a0 Cable \t\tbids are cited around the US$ 1.4455 level.\u00a0 The euro moved lower<\/strong> vis-\u00e0-vis the British pound as the single currency tested bids around \t\tthe US$ 0.9060 level and was capped around the $0.9120 level.<\/p>\n

CHF<\/strong><\/p>\n

The Swiss franc \t\tappreciated vis-\u00e0-vis the U.S. dollar today<\/strong> as the greenback tested \t\tbids around the CHF 1.0690 level and was capped around the CHF 1.0725 \t\tlevel.\u00a0 As expected, Swiss National Bank kept its three-month Swiss \t\tfranc Libor target rate unchanged at 0.2% today.\u00a0 SNB reported \u2018The \t\tSwiss National Bank is maintaining its expansionary monetary policy. It \t\twill act decisively to prevent an excessive appreciation of the Swiss \t\tfranc against the euro.\u201d\u00a0 SNB is forecasting the Swiss economy will \t\texpand about 1.5% this year.\u00a0 U.S. dollar offers are cited around the \t\tCHF 1.1045 level.\u00a0 The euro moved higher<\/strong> vis-\u00e0-vis the Swiss \t\tfranc as the single currency tested offers around the CHF 1.4630 level \t\twhile the British pound moved higher <\/strong>and tested offers around the \t\tCHF 1.6120 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 traders are concluding an additional quantitative easing measure by Bank of Japan next week seems like a foregone conclusion. Central bankers are known…<\/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-7521","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/7521","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=7521"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/7521\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=7521"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=7521"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=7521"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}