{"id":7666,"date":"2010-03-17T18:36:30","date_gmt":"2010-03-17T22:36:30","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=7666"},"modified":"2010-03-17T18:36:30","modified_gmt":"2010-03-17T22:36:30","slug":"forex-daily-market-commentary-28","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/03\/17\/forex-daily-market-commentary-28\/","title":{"rendered":"Forex Daily Market Commentary"},"content":{"rendered":"

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

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

The euro depreciated \t\tvis-\u00e0-vis the U.S. dollar today<\/span><\/strong> as the single \t\tcurrency tested bids around the US$ 1.3725 level and was capped around \t\tthe $1.3815 level. \u00a0As expected, the Federal Open Market Committee \t\tyesterday kept its benchmark federal funds target rate unchanged at \t\t0.25% and global equity markets received the news well under the premise \t\tthat inflation will not be a problem for some time.\u00a0 The markets are \t\tlargely speculating the Fed will not begin to raise interest rates until \t\tQ4 at the earliest with many economists expecting no change until 2011.\u00a0 \t\tKansas City Fed President Hoenig dissented again, reporting that \t\tcontinuing to express the expectation of exceptionally low levels of the \t\tfederal funds rate for an extended period was no longer warranted \t\tbecause it could lead to the buildup of financial imbalances and \t\tincrease risks to longer-run macroeconomic and financial stability.\u201d Fed \t\tChairman Bernanke is expected to testify before Congress soon and tell \t\tlegislators that the Fed is the ideal oversight regulator for large and \t\tsmall banks alike.\u00a0 Traders are also awaiting to see if the Obama health \t\tcare initiative can be passed by Congress before the Easter break and \t\thow financial regulatory regulation materializes, possibly encompassing \t\tthe so-called \u201cVolcker Rule.\u201d\u00a0 Comptroller of the Currency Dugan said he \t\thas \u201csignificant concerns\u201d with Senator Dodd\u2019s proposed financial \t\tregulation overhaul.\u00a0 Data released in the U.S. today saw MBA mortgage \t\tapplications decline 1.5% while headline February producer price \t\tinflation was off 0.6% m\/m and up 4.4% y\/y.\u00a0 The ex-food and energy core \t\tindex was up 0.1% m\/m and 1.0% y\/y.\u00a0 In eurozone news<\/strong>, EMU-16 \t\tconstruction output fell 2.2% m\/m in January, down from +0.5% growth in \t\tDecember, and was off 12.5% y\/y compared with a 3.1% y\/y decline in \t\tDecember.\u00a0 Eurozone finance ministers this week reiterated their plan to \t\t\u201ctake coordinated action\u201d but did not provide much additional \t\tinformation other than to suggest any assistance would take the form of \t\tbilateral loans rather than loan guarantees.\u00a0 Euro bids are cited around \t\tthe US$ 1.3335 level.<\/span><\/p>\n

<\/span><\/p>\n

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

The \t\tyen depreciated vis-\u00e0-vis the U.S. dollar today<\/span><\/strong> as the greenback tested offers around the \u00a590.70 level and was supported \t\taround the \u00a590.00 figure. \u00a0Bank of Japan expanded its quantitative \t\teasing program overnight, as expected. The central bank doubled its \t\tthree-month lending facility to \u00a520 trillion.\u00a0 The move is not likely to \t\thave a significant impact on the real economy and may marginally \t\tincrease liquidity.\u00a0 By and large, the central bank made the move to \t\tsatisfy ongoing calls from the Japanese government to ease policy \t\tfurther.\u00a0 The government\u2019s ability to enact more fiscal spending to \t\tstimulate final private demand is limited on account of Japan\u2019s massive \t\tindebtedness.\u00a0 BoJ Governor Shirakawa said the economy is \u201cimproving a \t\tbit more than we expected\u201d but warned \u201cThe Bank of Japan\u2019s policy alone \t\tcan\u2019t beat deflation.\u00a0 I wish there was a miracle, but all we can do is \t\tpersist with our efforts.\u201d\u00a0 There were two dissenters on the BoJ Policy \t\tBoard.\u00a0 The central bank seems to be suffering from a \u201cliquidity trap\u201d \t\twhereby there is little discernible benefit no matter how much liquidity \t\tthe central bank infuses.\u00a0 Data released in Japan overnight saw the \t\tJanuary tertiary industry index improve to +2.9% from -0.9%.\u00a0 The Nikkei \t\t225 stock index climbed 1.17% to close at \u00a510,846.98. U.S. dollar offers \t\tare cited around the \u00a594.75 level.\u00a0 The euro moved higher <\/strong> vis-\u00e0-vis the yen as the single currency tested offers around the \t\t\u00a5125.05 level and was supported around the \u00a5124.05 level.\u00a0 The \t\tBritish pound moved higher <\/strong>vis-\u00e0-vis the yen as sterling tested \t\toffers around the \u00a5139.35 level while the Swiss franc moved higher <\/strong>vis-\u00e0-vis the yen and tested offers around the \u00a586.15 level. In \t\tChinese news<\/strong>, the U.S. dollar depreciated vis-\u00e0-vis the Chinese yuan \t\tas the greenback closed at CNY 6.8259 in the over-the-counter market, \t\tdown from CNY 6.8260. \u00a0People\u2019s Bank of China yesterday reported \t\tinflation expectations are rising in a quarterly survey released today \t\tand this could render it difficult for the government to meet its 3% \t\tannual inflation target.\u00a0 Higher inflation expectations will likely \t\tpropel interest rates higher.\u00a0 The World Bank today called on China to \t\treduce its stimuli programs so that it does cause new asset bubbles.<\/span><\/p>\n

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

The British pound \t\tappreciated vis-\u00e0-vis the U.S. dollar today<\/span><\/strong> as \t\tcable tested offers around the US$ 1.5380 level and was supported around \t\tthe $1.5205 level. \u00a0Bank of England reported it is considering an \t\textension of the eligible collateral at its discount window.\u00a0 BoE MPC \t\tFisher said the move would \u201cenhance facilities.\u201d\u00a0 Minutes from the March \t\tMPC meeting were released today in which policymakers voted unanimously \t\tto keep its asset-purchase program unchanged at \u20a4200 billion. Data \t\treleased in the U.K. today saw the February claimant count decrease to \t\t4.9% from 5.0% in January while the ILO three-month unemployment rate \t\twas unchanged at 7.8%.\u00a0 Bank of England Monetary Policy Committee member \t\tBarker this week reported the U.K. economy could recede again, adding \t\tthe economic recovery will continue to be \u201cbumpy and fragile.\u201d\u00a0 Cable \t\tbids are cited around the US$ 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$ 0.8950 level and was capped around the $0.9065 level.<\/span><\/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":"

As expected, the Federal Open Market Committee yesterday kept its benchmark federal funds target rate unchanged at 0.25% and global equity markets…<\/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-7666","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/7666","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=7666"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/7666\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=7666"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=7666"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=7666"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}