{"id":7888,"date":"2010-03-23T16:46:58","date_gmt":"2010-03-23T20:46:58","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=7888"},"modified":"2010-03-23T16:46:58","modified_gmt":"2010-03-23T20:46:58","slug":"forex-daily-market-commentary-32","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/03\/23\/forex-daily-market-commentary-32\/","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

The euro depreciated vis-\u00e0-vis the U.S. \t\tdollar today<\/strong> as the single currency tested bids around the US$ \t\t1.3475 level and was capped around the $1.3570 level. The common \t\tcurrency came off on renewed fears regarding Greece\u2019s fiscal crisis amid \t\tworries there may be insufficient political agreement to implement a \t\tfinancial aid package for the country.\u00a0 A German finance ministry \t\tofficial reported Germany and France agree on supporting an \t\tInternational Monetary Fund rescue package of Greece, a contrast with \t\tother reports that officials are far from an agreement about financial \t\tassistance.\u00a0 Greece needs to sell about \u20ac10 billion in new bonds in \t\tcoming weeks to refinance maturing debt.\u00a0 Germany is also said to favour \t\ta proposal that would stiffen the penalties for European Union members \t\tthat do not maintain fiscal discipline.\u00a0 Data to be released in the \t\teurozone tomorrow include March PMI and January industrial new orders.\u00a0 \t\tEMU-16 leaders will convene this week to discuss the Greeek situation \t\tand the common currency could get a boost if a comprehensive solution is \t\tannounced for Greece.\u00a0 Incoming ECB Vice President Constancio said a \t\tpackage for Greece will be a \u201cnormal\u201d loan and not a bailout.\u00a0 In \t\tU.S. news<\/strong>, Chicago Fed Evans last night indicated he would not be \t\tsurprised if the Fed\u2019s accommodative monetary policy remained in place \t\tthrough 2011, clearly putting him in the \u201cdovish\u201d camp.\u00a0 Atlanta Fed \t\tPresident Lockhart noted the U.S. has a \u201cprivileged\u201d position because \t\tthe dollar is the global reserve currency but warned the U.S. should not \t\tassume that will remain permanent.\u00a0 Many data were released in the U.S. \t\ttoday.\u00a0 February existing home sales were off 0.6% m\/m to 5.02 million \t\tannualized units, a significant improvement from the prior print of \t\t-7.2%.\u00a0 The house price index also improved to -0.6% m\/m from the \t\trevised tally of -2.0% m\/m.\u00a0 Additionally, the March Richmond Fed \t\tmanufacturing index improved to +6 from the prior reading of +2.\u00a0 \t\tDurable goods and new home sales data will be released tomorrow.\u00a0 \t\tPhiladelphia Fed President Plosser called on the Fed to adopt a less \t\tdiscretionary rate-setting framework.\u00a0 Euro bids are cited around the \t\tUS$ 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 \u00a590.45 level and was supported around the \u00a590.05 level. \t\t\u00a0Japanese financial markets reopened overnight and the yen was mixed \t\tacross the board.\u00a0 Minutes from Bank of Japan Policy Board\u2019s were \t\treleased overnight and they indicated \u201cSome members were of the view \t\tthat upside and downside risks were becoming balanced\u201d whereas others \t\tobserved \u201cconsiderable downside risks to the economy.\u201d Bank of Japan \t\tlast week expanded monetary policy further, doubling a three-month \t\tlending facility to \u00a520 trillion amid strong political pressure to ease \t\tpolicy further.\u00a0 The move is expected to have a limited impact on \t\tliquidity and was probably implemented to try and improve market \t\tsentiment. \u00a0Policymakers in February also expressed concern with \t\tescalating deflationary pressures and the perception that China may be \t\texperiencing an asset bubble.\u00a0 Data released in Japan overnight saw Q4 \t\tfinancial household assets climb 2.5% y\/y.\u00a0 Deflationary pressures are \t\texpected to remain strong through at least 2011.\u00a0 Dealers continue to \t\tcite repatriation flows back into Japan ahead of the fiscal year end \t\tnext week.\u00a0 The Nikkei 225 stock index lost 0.47% to close at \t\t\u00a510,774.15. U.S. dollar offers are cited around the \u00a594.75 level.\u00a0 The euro moved higher <\/strong>vis-\u00e0-vis the yen as the single currency \t\ttested offers around the \u00a5122.60 level and was supported around the \t\t\u00a5121.75 level.\u00a0 The British pound moved lower <\/strong>vis-\u00e0-vis the yen \t\tas sterling tested bids around the \u00a5135.20 level while the Swiss \t\tfranc moved higher <\/strong>vis-\u00e0-vis the yen and tested offers around the \t\t\u00a585.45 level. In Chinese news<\/strong>, the U.S. dollar depreciated \t\tvis-\u00e0-vis the Chinese yuan as the greenback closed at CNY 6.8264 in the \t\tover-the-counter market, down from CNY 6.8267. \u00a0People\u2019s Bank of China \t\tGovernor Zhou reported the U.S. and China may have hold bilateral talks \t\tto discuss exchange rates, adding political \u201cvery high profile noise\u201d \t\tisn\u2019t \u201chelpful.\u201d\u00a0 Zhou added \u201cFor China, we also have a tremendous task \t\tto create more jobs.\u201d\u00a0 Traders are starting to focus on a U.S. \t\tgovernment report due 15 April that could potentially identify China as \t\ta \u201ccurrency manipulator.\u201d\u00a0 February industrial profits data will be \t\treleased 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$ 1.4970 \t\tlevel and was capped around the $1.5110 level. \u00a0Bank of England \t\tannounced new plans today involving long-term repo transactions designed \t\tto increase the provision of liquidity through accepting a wider range \t\tof collateral.\u00a0 Data released in the U.K. today saw the March CBI \t\tdistributive trades survey decline to +13 from +23.\u00a0 Also, BBA mortgage \t\tapprovals came in stronger-than-expected at 35,200 while February core \t\tconsumer price index increased 2.9% y\/y, down from January\u2019s print of \t\t+3.1% y\/y.\u00a0 At the headline level, CPI was up 0.4% m\/m and 3.0% y\/y.\u00a0 \t\tCable bids are cited around the US$ 1.4455 level.\u00a0 The euro moved \t\thigher<\/strong> vis-\u00e0-vis the British pound as the single currency tested \t\toffers around the \u00a30.9015 level and was supported around the \u00a30.8965 \t\tlevel.<\/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 President Hildebrand reported the central bank will \t\t\u201cdecisively\u201d act against \u201cexcessive\u201d franc strength, noting the central \t\tbank can intervene to a \u201cvery large extent.\u201d\u00a0 Swiss National Bank \t\tyesterday 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$ 1.3475 level and was capped around the $1.3570 level. The common currency came off on renewed fears regarding Greece\u2019s fiscal crisis amid worries there may … <\/p>\n

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