{"id":7593,"date":"2010-03-15T15:25:53","date_gmt":"2010-03-15T20:25:53","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=7593"},"modified":"2010-03-15T15:25:53","modified_gmt":"2010-03-15T20:25:53","slug":"forex-daily-market-commentary-26","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/03\/15\/forex-daily-market-commentary-26\/","title":{"rendered":"Forex Daily Market Commentary"},"content":{"rendered":"

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

\u20ac<\/strong><\/p>\n

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

The euro depreciated vis-\u00e0-vis the U.S. \t\tdollar today<\/strong> as the single currency tested bisa around the US$ \t\t1.3685 level and was capped around the $1.3775 level. \u00a0The Federal Open \t\tMarket Committee is not expected to make any significant changes to \t\tmonetary policy tomorrow when its interest rate decision is announced.\u00a0 \t\tThe Obama administration is said to favour San Francisco Fed President \t\tYellen to replace retiring Vice Chairman Kohn.\u00a0 It is believed Obama may \t\tstack the Fed Board with so-called monetary doves to retain a downward \t\tbias on interest rates.\u00a0 Data released in the U.S. today saw February \t\tcapacity utilization rise to 72.7% from 72.5% while February industrial \t\tproduction fell to +0.1% from the prior reading of +0.9%.\u00a0 Also, January \t\ttotal net Treasury International Capital flows printed at \u2013US$ 33.4 \t\tbillion, down from a revised +US 53.6 billion for December.\u00a0 Net \t\tlong-term TIC flows tumbled to US$ 19.1 billion from the prior reading \t\tof US$ 63.3 billion.\u00a0 These data mean the U.S. did not cover its trade \t\tdeficit in January through foreign investment inflows.\u00a0 Other data \t\treleased today saw the March Empire State manufacturing index decline to \t\t+22.86 from the previous reading of +24.91.\u00a0 Dealers await the March \t\tNAHB housing market index later in the day and details about new \t\tfinancial services regulation legislation making its way through \t\tCongress.\u00a0 In eurozone news<\/strong>, EMU-16 Q4 unemployment was off 0.2% \t\tq\/q and 2.0% y\/y.\u00a0 Eurozone CPI data will be released tomorrow along \t\twith German ZEW data.\u00a0 Traders remain fixated on Greece, especially as \t\tFrench finance minister Lagarde and other eurozone officials have \t\tintimated Greece may be able to resolve its massive fiscal deficit \t\twithout external financial assistance.\u00a0 European Union officials are \t\tsaid to have a \u201ccontingency\u201d plan in place that they can implement \u201cwith \t\tthe push of a button.\u201d\u00a0 Euro bids are cited around the US$ 1.3335 \t\tlevel.<\/p>\n

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

The yen depreciated vis-\u00e0-vis the U.S. \t\tdollar today<\/strong> as the greenback tested offers around the \u00a590.85 level \t\tand was supported around the \u00a590.55 level. \u00a0Traders await Bank of Japan \t\tPolicy Board\u2019s interest rate decision tomorrow night with strong \t\texpectations of additional monetary easing.\u00a0 The central bank may expand \t\ta \u00a510 trillion fund that provides funding to banks when policymakers \t\tconvene on 16-17 March and this is important because an unlimited \t\tuncollateralized loan facility expires on 31 March.\u00a0 The central bank \t\tremains under significant pressure to do more to combat the deflation \t\tproblem further.\u00a0 BoJ Governor Shirakawa and other Policy Board members \t\thave recently indicated deflationary pressures are persisting because \t\tthere is insufficient final private demand. \u00a0Shirakawa overnight said he \t\tis \u201cnot against inflation targeting\u201d and said the central bank should \t\tnot make policy based on short term price movements.\u00a0 He also said that \t\tadditional Japanese government bond purchases would mean the central \t\tbank will sell them eventually. Concerning the yen, Shirakawa said the \t\tcentral bank\u2019s accommodative policy is impacting the yen and \u201cproper \t\taction needs to be taken.\u201d\u00a0 It appears the Hatoyama government is \t\tbecoming increasingly concerned with the yen\u2019s strength and there is \t\tgrowing speculation the government may begin to officially intervene in \t\tthe market, especially as the government increased the size of the \t\tfunding it has available for intervention in its draft budget.\u00a0 Data \t\treleased in Japan overnight saw February consumer confidence improve to \t\t40.0 while February Tokyo-area condominium sales climb 10.7% y\/y.\u00a0 \t\tMachine tool orders and tertiary index data will be released tomorrow.\u00a0 \t\tThe Nikkei 225 stock index climbed 0.01% to close at \u00a510,751.98.\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 \u00a5124.25 level and was capped around the \u00a5125.15 level.\u00a0 The \t\tBritish pound moved lower <\/strong>vis-\u00e0-vis the yen as sterling tested bids \t\taround the \u00a5136.10 level while the Swiss franc moved higher <\/strong> vis-\u00e0-vis the yen and tested offers around the \u00a585.85 level. In \t\tChinese news<\/strong>, the U.S. dollar depreciated vis-\u00e0-vis the Chinese yuan \t\tas the greenback closed at CNY 6.8262 in the over-the-counter market, up \t\tfrom CNY 6.8256. \u00a0Data released in China overnight saw February actual \t\tforeign direct investment decrease to +1.08% from the prior reading of \t\t+7.80%.\u00a0 Premier Wen Jinbao reported the yuan is \u201cnot undervalued.\u201d\u00a0 \t\tChinese and U.S. tensions are definitely increasing and it remains to be \t\tseen how quickly China may liberalize its yuan exchange rate policy.<\/p>\n

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

The British pound depreciated sharply \t\tvis-\u00e0-vis the U.S. dollar today<\/strong> as cable tested bids around the US$ \t\t1.5020 level and was capped around the $1.5205 level. Sterling moved \t\tlower on remarks from Bank of England Monetary Policy Committee member \t\tBarker who reported the U.K. economy could recede again, adding the \t\teconomic recovery will continue to be \u201cbumpy and fragile.\u201d\u00a0 Cable \t\tcontinues to suffer from political uncertainty ahead of the upcoming \t\tmandatory General Election.\u00a0 Prime Minister Brown is expected to lose to \t\tTory leader Cameron but Cameron may not be able to form a majority \t\tgovernment if he wins, and this could lead to a weaker pound.\u00a0 U.K. DCLG \t\thouse prices data will be released tomorrow.\u00a0 On Friday, Bank of England \t\tChief Economist and Monetary Policy Committee member Dale reported that \t\tfrom the time quantitative easing was implemented last year, \u201cthe \t\teconomy has stabilized, household and business confidence have \t\trecovered, and financial market conditions have improved.\u201d\u00a0 Dale noted \t\tthe BoE is poised to make additional purchases of assets if required but \t\tnoted the central bank could also withdraw monetary stimulus at any \t\ttime.\u00a0 \u00a0Cable bids are cited around the US$ 1.4455 level.\u00a0 The euro \t\tmoved higher<\/strong> vis-\u00e0-vis the British pound as the single currency \t\ttested offers around the US$ 0.9130 level and was supported around the \t\t$0.9045 level.<\/p>\n

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

The Swiss franc \t\tdepreciated vis-\u00e0-vis the U.S. dollar today<\/strong> as the greenback tested \t\toffers around the CHF 1.0615 level and was supported around the CHF \t\t1.0575 level.\u00a0 Data released in Switzerland today saw February producer \t\tand import prices decline 0.3% m\/m and fall 1.0% y\/y.\u00a0 SECO March 2010 \t\teconomic forecasts will be released tomorrow.\u00a0 As expected, Swiss \t\tNational Bank last week kept its three-month Swiss franc Libor target \t\trate unchanged at 0.2% today.\u00a0 SNB reported \u2018The Swiss National Bank is \t\tmaintaining its expansionary monetary policy. It will act decisively to \t\tprevent an excessive appreciation of the Swiss franc against the euro.\u201d\u00a0 \t\tSNB is forecasting the Swiss economy will expand about 1.5% this year.\u00a0 \t\tSNB Chairman Hildebrand said the main risks to Swiss economic growth are \t\t\u201cexternal\u201d and reiterated foreign exchange intervention remains one of \t\tits tools. \u00a0January M2 money supply growth was an annualized 16.5%.\u00a0 \t\tU.S. dollar offers are cited around the CHF 1.1045 level.\u00a0 The euro \t\tmoved lower<\/strong> vis-\u00e0-vis the Swiss franc as the single currency tested \t\tbids around the CHF 1.4525 level while the British pound moved lower <\/strong>and tested bids around the CHF 1.5915 level.<\/p>\n

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":"

The Federal Open Market Committee is not expected to make any significant changes to monetary policy tomorrow when its interest rate decision is announced…<\/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-7593","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/7593","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=7593"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/7593\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=7593"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=7593"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=7593"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}