{"id":8034,"date":"2010-03-26T13:49:42","date_gmt":"2010-03-26T17:49:42","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=8034"},"modified":"2010-03-26T13:49:42","modified_gmt":"2010-03-26T17:49:42","slug":"forex-daily-market-commentary-34","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/03\/26\/forex-daily-market-commentary-34\/","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 appreciated vis-\u00e0-vis the U.S. \t\tdollar today<\/strong> as the single currency tested offers around the US$ \t\t1.3405 level and was supported around the $1.3265 level. \u00a0The common \t\tcurrency has been quite volatile for weeks on account of uncertainty \t\tregarding financial assistance for Greece.\u00a0 Ecofin ministers convened \t\tlast night and today and an aid package for Greece was formally agreed \t\tto involving both financial assistance from the European Union via \t\tbilateral loans and the International Monetary Fund.\u00a0 Late last night, \t\tEuropean Central Bank President Trichet said IMF involvement would be \t\t\u201cvery, very bad\u201d whereas today he indicated he was \u201chappy\u201d with the \t\tresults.\u00a0 Greek Prime Minister Papandreou reported Greece will sell more \t\tdebt at an \u201copportune time.\u201d\u00a0 The Greek aid package was structured so \t\tthat Greece can tap the credit facilities if required but it is possible \t\tthat Greece may never need to utilize these facilities.\u00a0 Achieving a \t\tEuropean\u00a0 consensus on this issue was difficult but was facilitated by \t\tagreement between Germany and France.\u00a0 Attention will now shift to \t\tfiscal woes in Portugal, Spain, and Italy.\u00a0 Data released in France \t\ttoday saw March consumer confidence worsen to -34 from the prior reading \t\tof -33.\u00a0 In U.S. news<\/strong>, data released today saw revised Q4 gross \t\tdomestic product print at +5.6% from the prior reading of +5.9% while \t\tthe GDP price index ticked higher to +0.5% from +0.4%.\u00a0 Also, the Q4 \t\tcore personal consumption expenditures index increased 1.8% q\/q from the \t\tprior reading of +1.6% q\/q.\u00a0 Final March University of Michigan consumer \t\tsentiment printed at 73.6, up from the prior reading of 72.5.\u00a0 Personal \t\tincome and spending data and PCE numbers will be released on Monday.\u00a0 \t\tTraders are paying very close attention to rising U.S. Treasury yields.\u00a0 \t\tThe 10-year Note is now yielding right around the 3.90% level and some \t\teconomists believe the rate will move significantly higher to the 4.30% \t\tlevel.\u00a0 The Federal Reserve will continue to normalize monetary policy \t\tin the coming quarters.\u00a0 Fed Chairman Bernanke yesterday reported \t\t\u201crestoring the size and composition\u201d of the Fed\u2019s record US$ 2.32 \t\ttrillion balance sheet to a \u201cmore normal configuration\u201d is a long-term \t\tpolicy goal.\u00a0 Similarly, St. Louis Fed President Bullard added \u201cWe want \t\tto someday get back to a pre-crisis balance sheet \u2013 both the size of it \t\tand the fact that it would be an all-Treasuries balance sheet.\u201d Euro \t\tbids are cited around the US$ 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 \u00a592.80 level and was supported around the \u00a592.30 level. \u00a0Data \t\treleased in Japan overnight reinforced the view that deflation remains a \t\tserious problem in Japan.\u00a0 First, Tokyo-area headline consumer price \t\tinflation was off 1.8% y\/y with the ex-food and energy component off \t\t1.2% y\/y.\u00a0 Second, nationwide consumer price inflation at the headline \t\tlevel was off 1.1% y\/y and off 1.1% y\/y at the ex-food and energy core \t\tlevel.\u00a0 These data suggest deflation will remain a problem in Japan \t\tthrough 2011.\u00a0 Bank of Japan\u2019s Policy Board is likely to keep a very \t\taccommodative monetary policy for several more business quarters.\u00a0 New \t\tPolicy Board member Miyao reported \u201cLowering interest rates even a \t\tlittle bit, or keeping interest rates at very low levels amid a \t\trecovery, may be able to provide more stimulus and help sustain economic \t\tgrowth\u2026it is important for the central bank to maintain its \t\taccommodative policy stance and provide monetary support for companies \t\tand households\u2026the economy has been picking up recently, but incomes and \t\temployment remain in a severe state, and there are various risks and \t\tuncertainties to the outlook.\u201d\u00a0 The three-month euroyen futures rate is \t\ttrading around 0.439% with the December 2010 rate currently trading at \t\t0.380%, evidencing a lower market bias on interest rates through the end \t\tof the year.\u00a0 The Nikkei 225 stock index climbed 1.55% to close at \t\t\u00a510,996.37.\u00a0 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 \u00a5124.15 level and was supported around the \t\t\u00a5122.95 level.\u00a0 The British pound moved higher <\/strong>vis-\u00e0-vis the yen \t\tas sterling tested offers around the \u00a5137.95 level while the Swiss \t\tfranc moved higher <\/strong>vis-\u00e0-vis the yen and tested offers around the \t\t\u00a586.80 level. In Chinese news<\/strong>, the U.S. dollar depreciated \t\tvis-\u00e0-vis the Chinese yuan as the greenback closed at CNY 6.8270 in the \t\tover-the-counter market, down from CNY 6.8271. China announced it will \t\tlaunch stock index futures trading from 16 April on the CSI 300 Index.\u00a0 \t\tTraders are focusing on a report from the U.S. due on 15 April that may \t\tpossibly label China as a currency manipulator.\u00a0 Some observers suggest \t\ta major trade war might develop if China is labeled a currency \t\tmanipulator by the Obama administration.\u00a0 People\u2019s Bank of China advisor \t\tFan Gang said the central bank may adopt a managed float of the yuan \t\tcurrency.<\/p>\n

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

The British pound appreciated vis-\u00e0-vis \t\tthe U.S. dollar today<\/strong> as cable tested offers around the US$ 1.4890 \t\tlevel and was supported around the $1.4805 level. \u00a0Data released in the \t\tU.K. today saw Q4 total business investment off 4.3% q\/q and 23.5% y\/y.\u00a0 \t\tChancellor of the Exchequer Darling this week reported his latest \t\teconomic growth forecast is \u201cin line with the Bank of England \t\tforecast.\u201d\u00a0 Darling said he plans to \u201creduce borrowing further\u201d and \t\treduced his budget deficit forecast for the next five fiscal years by \t\t\u00a344 billion.\u00a0 On the whole, Darling\u2019s fiscal report was more proactive \t\tthan expected about addressing the U.K.\u2019s fiscal problems.\u00a0 The U.K.\u2019s \t\t2009-2010 budget deficit is expected to total around \u00a3167 billion and be \t\tslightly less in the 2010-2011 fiscal year.\u00a0 Cable bids are cited around \t\tthe US$ 1.4455 level.\u00a0 The euro moved higher<\/strong> vis-\u00e0-vis the \t\tBritish pound as the single currency tested offers around the \u00a30.9025 \t\tlevel and was supported around the \u00a30.8955 level.<\/p>\n

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

The Swiss franc appreciated vis-\u00e0-vis \t\tthe U.S. dollar today<\/strong> as the greenback tested bids around the CHF \t\t1.0675 level and was capped around the CHF 1.0745 level. \u00a0The Swiss KOF \t\tResearch Institute upgraded its 2010 and 2011 economic growth forecasts \t\tfor the Swiss economy today to 1.7% and 2.2%, respectively. Consumer \t\tprice inflation is expected to be around 0.9% and 1.0%, respectively \u2013 \t\talso an upgrade from previous forecasts.\u00a0 Swiss President Leuthard \t\tyesterday said the franc is \u201cat a quite crucial level\u201d and said it is up \t\tto the Swiss National Bank to decide whether to intervene.\u00a0 Swiss \t\tNational Bank Vice Chairman Jordan reiterated this week that the central \t\tbank will work to prevent excessive franc appreciation.\u00a0 Swiss National \t\tBank President Hildebrand this week 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 on \t\tMonday published its quarterly economic report this week and noted it \t\twill continue to \u201cact decisively\u201d to prevent an \u201cexcessive\u201d appreciation \t\tof the franc.\u00a0 U.S. dollar offers are cited around the CHF 1.1180 level. \t\tThe euro moved higher<\/strong> vis-\u00e0-vis the Swiss franc as the single \t\tcurrency tested offers around the CHF 1.4310 level while the British \t\tpound moved lower<\/strong> vis-\u00e0-vis the Swiss franc and tested bids around \t\tthe CHF 1.5825 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":"

Ecofin ministers convened last night and today and an aid package for Greece was formally agreed to involving both financial assistance from the European Union via bilateral loans and the International Monetary Fund…<\/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-8034","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/8034","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=8034"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/8034\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=8034"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=8034"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=8034"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}