{"id":7833,"date":"2010-03-22T16:48:37","date_gmt":"2010-03-22T20:48:37","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=7833"},"modified":"2010-03-22T16:48:37","modified_gmt":"2010-03-22T20:48:37","slug":"forex-daily-market-commentary-31","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/03\/22\/forex-daily-market-commentary-31\/","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

<\/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\t1.3495 level and was capped around the $1.3545 level. \u00a0The common \t\tcurrency came off on fresh fireworks regarding Greece\u2019s acute fiscal \t\tsituation.\u00a0 German Chancellor Merkel said policymakers must not create \t\t\u201cillusions\u201d this week regarding a possible agreement regarding financial \t\tassistance for Greece.\u00a0 Greek Prime Minister Papandreou and European \t\tCommission President Barroso said this week\u2019s summit of European Union \t\tleaders on 25-26 March should provide details about what type of \t\tassistance may be available to Greece.\u00a0 Many dealers believe the \t\tInternational Monetary Fund will end up providing financial assistance \t\tto Greece if required while others believe Greece will have to obtain \t\tadditional assistance from elsewhere.\u00a0 Ecofin head Juncker said Greece \t\t\u201cwill not be abandoned if aid is needed.\u201d\u00a0 Germany\u2019s Bundesbank reported \t\tfinancial deficits is not part of the IMF\u2019s mandate with one Bundesbank \t\tofficial suggesting Greece should just consider itself insolvent.\u00a0 \t\tEuropean Central Bank member Weber warned Germany will need to rely on \t\tdomestic demand more for economic growth, warning recent export \t\tperformance is not sustainable.\u00a0 Data to be released in the eurozone \t\ttomorrow include EMU-16 March industrial confidence followed by PMI data \t\tlater this week.\u00a0 In U.S. news<\/strong>, data released in the U.S. today \t\tsaw the February Chicago Fed National Activity Index decline to -0.64 \t\tfrom the downwardly revised prior reading of -0.04.\u00a0 Traders and \t\teconomists alike are still discussing the Obama administration\u2019s success \t\tin passing some initial health care reform overnight through the U.S. \t\tCongress.\u00a0 Two major questions concern how this will impact the U.S. \t\tpolitically \u2013 particularly in November\u2019s mid-term elections \u2013 and what \t\timpact a health care deal will have on U.S. debt levels, credit ratings, \t\tand market sentiment.\u00a0 There is renewed talk the U.S. may lose its \u2018AAA\u2019 \t\tcredit rating on account of concerns the sustainability of the U.S.\u2019s \t\tmassive debt.\u00a0 The U.S. Treasury has sold some US$ 2.59 trillion in debt \t\tsince the beginning of 2009 and the U.S. budget deficit now exceeds 10% \t\tof U.S. gross domestic product.\u00a0 In recent weeks, some U.S. corporate \t\tdebt has become more highly-valued than U.S. Treasuries.\u00a0 About 7% of \t\tU.S. tax revenue this year will be spent on servicing the U.S.\u2019s massive \t\tdebt load.\u00a0 St. Louis Fed President Bullard today said the U.S. is \t\t\u201cabout to turn the corner\u201d in the U.S. labour market with some \u201cgood \t\tmonths of jobs data coming up very, very soon.\u201d\u00a0 Bullard speculated \t\tMarch will provide a good tally of non-farm payrolls data and said he \t\texpects a \u201creasonable\u201d economic recovery.\u00a0 Fed Chairman Bernanke on \t\tFriday said the U.S. needs a mechanism where financial firms can be \t\tunwound without having to resort to taxpayer money. Euro bids are cited \t\taround the US$ 1.3335 level.<\/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 \u00a590.40 level and was capped around the \u00a590.75 level. \u00a0Japanese \t\tfinancial markets were closed overnight and will reopen tonight.\u00a0 \t\tDealers cited lingering repatriation flows back into Japan ahead of the \t\tfiscal year end next week.\u00a0 It was reported overnight that Bank of \t\tJapan\u2019s Japanese government bond holdings now total \u00a551.6 trillion, a \t\tfresh two-year high.\u00a0 National Strategy Minister Sengoku last week \t\treported Japan has \u201cextremely little\u201d room for additional fiscal \t\tstimulus.\u00a0 In contrast, Financial Services Minister Kamei last week \t\treported the government should compile a stimulus package.\u00a0 Bank of \t\tJapan last week expanded monetary policy further, doubling a three-month \t\tlending facility to \u00a520 trillion. \u00a0Data to be released in Japan \t\tovernight include February merchandise trade and February convenience \t\tand supermarket store sales.\u00a0 The Nikkei 225 stock index climbed 0.75% \t\ton Friday to close at \u00a510,824.72. U.S. dollar offers are cited around \t\tthe \u00a594.75 level.\u00a0 The euro moved lower <\/strong>vis-\u00e0-vis the yen as the \t\tsingle currency tested bids around the \u00a5122.15 level and was capped \t\taround the \u00a5122.60 level.\u00a0 The British pound moved lower <\/strong> vis-\u00e0-vis the yen as sterling tested bids around the \u00a5135.85 level while \t\tthe Swiss franc moved lower <\/strong>vis-\u00e0-vis the yen and tested bids \t\taround the \u00a585.05 level. In Chinese news<\/strong>, the U.S. dollar \t\tappreciated vis-\u00e0-vis the Chinese yuan as the greenback closed at CNY \t\t6.8267 in the over-the-counter market, up from CNY 6.8266. \u00a0Traders are \t\tstarting to focus on a U.S. government report due 15 April that could \t\tpotentially identify China as a \u201ccurrency manipulator.\u201d\u00a0 Chinese-U.S. \t\trelations remain quite embittered at the moment with China suggesting \t\tmost of the U.S.\u2019s economic and financial problems are of its own \t\tmaking.\u00a0 U.S. Ambassador to China Huntsman verbally intervened last \t\tweek, saying the U.S. \u201chopes to see more flexibility on the exchange \t\trate. I would be misleading you if I left you with the impression that \t\tthis wasn\u2019t a very, very important issue in the United States, and will \t\tcontinue to be. We\u2019ll see how the next few weeks play out.\u201d\u00a0 The central \t\tbank is expected to tighten monetary policy further imminently. February \t\tindustrial profits data will be released this week.<\/p>\n

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

The British pound depreciated vis-\u00e0-vis \t\tthe U.S. dollar today<\/strong> as cable tested bids around the US$ 1.4930 \t\tlevel and was capped around the $1.5025 level. \u00a0Bank of England Monetary \t\tPolicy Committee member Sentance last week reported he\u2019s \u201cbeen \t\trelatively encouraged by the turnaround we’ve seen in the last year, \t\tboth in the UK and in the global economy.\u00a0 You have to recognize there \t\tis some risk of a double dip, but that’s not the central forecast. You’d \t\thave to see some factors bring that about: we’ve seen big shocks in the \t\tinternational economy over the last couple of years, so you couldn’t \t\trule out some new shocks emerging on the financial front which could set \t\tback the economy. But that’s not my central expectation.\u201d\u00a0 It was \t\treported last week that Bank of England reported net business lending \t\tfell 9.3% m\/m, the sharpest decline since record-keeping began in 1999.\u00a0 \t\t\u00a0\u00a0Cable bids are cited around the US$ 1.4455 level.\u00a0 The euro moved \t\tlower<\/strong> vis-\u00e0-vis the British pound as the single currency tested bids \t\taround the US$ 0.9000 figure and was capped around the \u00a30.9045 level.<\/p>\n

CHF<\/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 1.0575 level. \u00a0Swiss \t\tNational Bank published its quarterly economic report today and noted it \t\twill continue to \u201cact decisively\u201d to prevent an \u201cexcessive\u201d appreciation \t\tof the franc.\u00a0 In recent days, many dealers speculated the SNB would be \t\tless likely to sell francs for euro given the recent improvement in the \t\tU.S. economy and the cross has fallen to fresh multi-month lows as a \t\tresult. SNB today indicated it expects the Swiss recovery to be \t\t\u201cmoderate and fragile.\u201d \u00a0Data released in Switzerland last week saw Q4 \t\tindustrial production rise 6.4% q\/q and decline 1.1% y\/y while the \t\tFebruary trade surplus declined to CHF 1.29 billion from CHF 2.42 \t\tbillion.\u00a0 The euro came off<\/strong> vis-\u00e0-vis the Swiss franc as the \t\tsingle currency tested bids around the CHF 1.4325 level while the \t\tBritish pound moved higher<\/strong> vis-\u00e0-vis the Swiss franc and tested \t\toffers around the CHF 1.5950 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":"

By GCI Forex Research Fundamental Outlook at 1500 GMT (EDT + 0500) \u20ac The euro depreciated vis-\u00e0-vis the U.S. dollar today as the single currency tested bids around the US$ 1.3495 level and was capped around the $1.3545 level. \u00a0The common currency came off on fresh fireworks regarding Greece\u2019s acute fiscal situation.\u00a0 German Chancellor Merkel … <\/p>\n

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