{"id":7743,"date":"2010-03-19T19:39:34","date_gmt":"2010-03-19T23:39:34","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=7743"},"modified":"2010-03-19T19:39:34","modified_gmt":"2010-03-19T23:39:34","slug":"forex-daily-market-commentary-30","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/03\/19\/forex-daily-market-commentary-30\/","title":{"rendered":"Forex Daily Market Commentary"},"content":{"rendered":"

By GCI Fx Research <\/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\t1.3500 figure and was capped around the $1.3625 level. \u00a0Bank of Spain \t\tyesterday reported that bad loans at Spanish banks have reached their \t\thighest level since 1996, reaching 5.6% of total credit.\u00a0 There are new \t\tdetails in the ongoing saga concerning Greece\u2019s fiscal woes. Germany all \t\tof a sudden is said to favour a new policy framework that would have the \t\tInternational Monetary Fund providing fiscal relief to Greece, a shift \t\tin policy.\u00a0 France, on the other hand, is said to resist involvement of \t\tthe International Monetary Fund and if these reports are true, they \t\twould pit Germany\u2019s Merkel against France\u2019s Sarkozy.\u00a0 One school of \t\tthought suggests Sarkozy may be resisting IMF involvement because his \t\twould-be political competiton, Strauss-Kahn, heads the IMF.\u00a0 Data \t\treleased in Germany today saw February producer price inflation flat m\/m \t\tand off 2.9% y\/y.\u00a0 Data to be released in Germany next week include Ifo \t\tbusiness sentiment and PMI data.\u00a0 EMU-16 March consumer confidence data \t\twill be released on Monday.\u00a0 In U.S. news<\/strong>, data to be released in \t\tthe U.S. on Monday include the February Chicago Fed\u2019s national activity \t\tindex followed by home sales data on Tuesday.\u00a0 The Federal Reserve today \t\twithdrew exemptions for banks it had granted in August 2007 as part of a \t\tmove to boost the provision of liquidity.\u00a0 This exemption removal is the \t\tFed\u2019s latest maneuver to withdraw policy accommodation.\u00a0 The Fed did not \t\tlift its discount rate again yesterday, contrary to widespread \t\tspeculation that policymakers would imminently continue to shift policy \t\twithout raising the federal funds target rate.\u00a0 Euro bids are cited \t\taround the US$ 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 \u00a590.30 level and was capped around the \u00a590.70 level. National \t\tStrategy Minister Sengoku reported Japan has \u201cextremely little\u201d room for \t\tadditional fiscal stimulus.\u00a0 In contrast, Financial Services Minister \t\tKamei this week reported the government should compile a stimulus \t\tpackage.\u00a0 Prime Minister Hatoyama has indicated he has not considered an \t\tadditional fiscal stimulus package at this time.\u00a0 Japan\u2019s debt-to-GDP \t\tratio is nearing 200%, among the highest of all industrialized nations.\u00a0 \t\tData released in Japan overnight saw the January all-industry activity \t\tindex climb to 3.8% m\/m from -0.3%.\u00a0 Sengoku also noted an easier \t\tmonetary policy may have only a \u201climited impact\u201d on overcoming \t\tdeflation.\u00a0 Bank of Japan this week expanded monetary policy further, \t\tdoubling a three-month lending facility to \u00a520 trillion. BoJ Policy \t\tBoard member Momma said overnight that fiscal policy must \u201cearn the \t\ttrust\u201d of the markets.\u00a0 Other data released overnight saw the retail \t\tinvestor sentiment index up +6 points.\u00a0 Bank of Japan this week kept its \t\teconomic assessment unchanged for a fourth consecutive month, reporting \t\tthe economy is \u201cpicking up.\u201d The central bank also upped its assessment \t\tof business investment, adding it is \u201cleveling out on the whole.\u201d\u00a0 The \t\tNikkei 225 stock index climbed 0.75% to close at \u00a510,824.72. U.S. dollar \t\toffers are cited around the \u00a594.75 level.\u00a0 The euro moved lower <\/strong> vis-\u00e0-vis the yen as the single currency tested bids around the \u00a5122.25 \t\tlevel and was capped around the \u00a5123.35 level.\u00a0 The British pound \t\tmoved lower <\/strong>vis-\u00e0-vis the yen as sterling tested bids around the \t\t\u00a5135.60 level while the Swiss franc moved lower <\/strong>vis-\u00e0-vis the yen \t\tand tested bids around the \u00a585.10 level. In Chinese news<\/strong>, the \t\tU.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 6.8264. \t\t\u00a0China reported its purchases of U.S. Treasuries have helped stabilize \t\tthe U.S. financial markets and urged the U.S. to avoid politicizing \t\tChina\u2019s yuan policy.\u00a0 U.S. Ambassador to China Huntsman verbally \t\tintervened this week, saying the U.S. \u201chopes to see more flexibility on \t\tthe exchange rate. I would be misleading you if I left you with the \t\timpression that this wasn\u2019t a very, very important issue in the United \t\tStates, and will continue to be. We\u2019ll see how the next few weeks play \t\tout.\u201d\u00a0 The central bank is expected to tighten monetary policy further \t\timminently.<\/p>\n

\u20a4<\/span><\/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\t1.4985 level and was capped around the $1.5255 level. Bank of England \t\treported net business lending fell 9.3% m\/m, the sharpest decline since \t\trecord-keeping began in 1999.\u00a0 Bank of England Monetary Policy Committee \t\tmember Sentance reported he\u2019s \u201cbeen relatively encouraged by the \t\tturnaround we’ve seen in the last year, both in the UK and in the global \t\teconomy.\u00a0 You have to recognize there is some risk of a double dip, but \t\tthat’s not the central forecast. You’d have to see some factors bring \t\tthat about: we’ve seen big shocks in the international economy over the \t\tlast couple of years, so you couldn’t rule out some new shocks emerging \t\ton the financial front which could set back the economy. But that’s not \t\tmy central expectation.\u201d\u00a0 BoE yesterday noted that mortgage lending has \t\t\u201crecovered somewhat.\u201d\u00a0 Cable bids are cited around the US$ 1.4455 \t\tlevel.\u00a0 The euro moved higher<\/strong> vis-\u00e0-vis the British pound as the \t\tsingle currency tested offers around the US$ 0.9015 level and was capped \t\taround the \u00a30.8920 level.<\/p>\n

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

The Swiss franc weakened vis-\u00e0-vis the \t\tU.S. dollar today<\/strong> as the greenback tested offers around the CHF \t\t1.0635 level and was supported around the CHF 1.0540 level. Traders \t\tcontinue to speculate the Swiss National Bank\u2019s franc policy has shifted \t\tand that policymakers will tolerate more appreciation of the franc.\u00a0 \t\tSwiss National Bank member Danthine noted it will continue to counter \t\texcessive foreign exchange gains.\u00a0 Data released in Switzerland \t\tyesterday saw Q4 industrial production rise 6.4% q\/q and decline 1.1% \t\ty\/y while the February trade surplus declined to CHF 1.29 billion from \t\tCHF 2.42 billion.\u00a0 The euro\/ Swiss franc cross came off to a fresh \t\tsixteen-month low amid declining expectations of additional Swiss \t\tNational Bank intervention.\u00a0 Also, the March ZEW expectations index \t\tclimbed to 53.8 from 52.5 in February.\u00a0 The euro came off<\/strong> vis-\u00e0-vis the Swiss franc as the single currency tested bids around the \t\tCHF 1.4315 level while the British pound moved lower<\/strong> vis-\u00e0-vis \t\tthe Swiss franc and tested bids around the CHF 1.5920 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":"

By GCI Fx Research \u20ac The euro depreciated vis-\u00e0-vis the U.S. dollar today as the single currency tested bids around the US$ 1.3500 figure and was capped around the $1.3625 level. \u00a0Bank of Spain yesterday reported that bad loans at Spanish banks have reached their highest level since 1996, reaching 5.6% of total credit.\u00a0 There … <\/p>\n

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