{"id":8240,"date":"2010-04-05T13:51:08","date_gmt":"2010-04-05T17:51:08","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=8240"},"modified":"2010-04-05T13:51:08","modified_gmt":"2010-04-05T17:51:08","slug":"forex-daily-market-commentary-38","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/04\/05\/forex-daily-market-commentary-38\/","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 \t\tvis-\u00e0-vis the U.S. dollar today<\/span><\/strong> as the single \t\tcurrency tested bids around the US$ 1.3485 level and was capped around \t\tthe $1.3590 level.\u00a0 The common currency came off despite light liquidity \t\ton account of the Easter Monday holiday and Bank holiday in some trading \t\tjurisdictions.\u00a0 Traders will pay close attention to a few key events \t\tthis week.\u00a0 First, former Federal Reserve Chairman and former U.S. \t\tTreasury Secretary Rubin will testify in Congress this week about the \t\teconomic crisis.\u00a0 Greenspan was on the tape yesterday saying the U.S. \t\teconomic recovery has a \u201cway to go\u201d and said the build-up in inventories \t\twill expand.\u00a0 Second, traders will pay close attention to the Fed\u2019s \t\tmeeting today in which policymakers will be discussing requests from Fed \t\tdistrict banks to increase the discount rate.\u00a0 The Fed has raised the \t\tdiscount rate a couple of times over the past months and while another \t\tincrease would not likely have a significant impact on liquidity, it \t\twould again signal the Fed is determined to normalize monetary policy \t\twithout having to raise the headline federal funds target rate.\u00a0 Third, \t\tFed officials including Chairman Bernanke, Kocherlakota, Dudley, and \t\tHoenig will speak this week and will offer some of their latest views \t\tconcerning policy.\u00a0 Fourth, major central banks will be releasing their \t\tinterest rate decisions this week including Bank of Japan, the European \t\tCentral Bank, Bank of England, and the Reserve Bank of Australia.\u00a0 The \t\tcentral banks\u2019 decisions are an interesting study of the varied points \t\tthe central banks are at in their interest rate cycles with RBA clearly \t\tthe most hawkish and BoJ the most dovish.\u00a0 Fifth, traders will closely \t\tmonitor economic data to see if the decent gains reported on Friday \t\tregarding U.S. March non-farm payrolls are sustainable and evidence \t\ttraction in the beleaguered labour market.\u00a0 Data released in the U.S. \t\ttoday saw the March ISM non-manufacturing index print at 55.4, up from \t\tthe prior reading of 53.0, while February pending home sales were up \t\t8.2% m\/m and 17.3% y\/y.\u00a0 Minutes from the Federal Open Market Committee \t\twill be released tomorrow.\u00a0 In eurozone news<\/strong>, the European \t\tCentral Bank is expected to keep monetary policy largely unchanged on \t\tThursday.\u00a0 ECB officials may note the recent increase in inflationary \t\tpressures in the eurozone but will be unable to tighten policy at this \t\ttime on account Greece\u2019s ongoing fiscal problems and similar issues in \t\tPortgual, Spain, Italy, and elsewhere.\u00a0 Euro bids are cited around the \t\tUS$ 1.3335 level.<\/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 \u00a594.70 level and was supported \t\taround the \u00a593.65 level. \u00a0The yen traded at its highest level since 24 \t\tAugust 2009 before coming off today and the pair has gained more than \u00a56 \t\tin about a month.\u00a0 Bank of Japan\u2019s Policy Board convenes this week and \t\tit is expected to release its policy decision early Wednesday.\u00a0 The \t\tcentral bank may elect to expand its expansionary policies to further \t\tcombat deflationary pressures that remain severe.\u00a0 Alternatively, BoJ\u2019s \t\t30 April Policy Board meeting will include its semi-annual economic \t\tprojections and could be the meeting when Policy Board members adjust \t\tpolicy further following last month\u2019s additional easing steps.\u00a0 Data to \t\tbe released in Japan overnight include the February leading and \t\tcoincident indices followed by March official reserve assets on \t\tWednesday.\u00a0 As expected, last week\u2019s Bank of Japan\u2019s Q1 Tankan survey of \t\tcorporate sentiment improved q\/q with the large manufacturers\u2019 index up \t\tto -14 from -24 in Q4 and the non-manufacturer\u2019s index higher at -14 \t\tfrom -22. \u00a0Also, the large manufacturers\u2019 outlook improved to -8 from \t\t-21 in Q4 and Q1 all-industry capital expenditures improved to -0.4% \t\tfrom -10.8%.\u00a0 \u00a0The Nikkei 225 stock index climbed 0.47% to close at \t\t\u00a511,339.30.\u00a0 U.S. dollar offers are cited around the \u00a596.85 level.\u00a0 The euro moved lower <\/strong>vis-\u00e0-vis the yen as the single currency tested \t\tbids around the \u00a5127.10 level and was capped around the \u00a5127.90 level.\u00a0 \t\tThe British pound moved higher <\/strong>vis-\u00e0-vis the yen as sterling \t\ttested offers around the \u00a5144.85 level while the Swiss franc moved \t\tlower <\/strong>vis-\u00e0-vis the yen and tested bids around the \u00a588.70 level. In Chinese news<\/strong>, the U.S. dollar was unchanged vis-\u00e0-vis the Chinese \t\tyuan as the greenback closed at CNY 6.8257 in the over-the-counter \t\tmarket. The big news involving China is that the Obama administration is \t\tdelaying the release of a report due 15 April that could have \t\tpotentially labeled China a currency manipulator.\u00a0 The move to delay the \t\trelease of the report could signal negotiations are ongoing between the \t\ttwo countries or could signal China may let the yuan appreciate further \t\tin the coming days.\u00a0 Chinese leadership will visit Washington, D.C. on \t\t12-13 April.\u00a0 Data to be released in China this week include the Q1 \t\tEntrepreneur Climate Index on Wednesday.<\/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$ 1.3535 level and was supported around \t\tthe $1.3460 level. \u00a0Liquidity was light on account of the Bank holiday \t\tin the U.K. and will return to normal overnight and tomorrow.\u00a0 Traders \t\tdo not expect any major announcements out of Bank of England when its \t\tMonetary Policy Committee\u2019s interest rate decision is announced on \t\tThursday.\u00a0 The central bank is unlikely to modify policy significantly \t\tbefore the U.K. General Election in keeping with tradition.\u00a0 Many \t\tpolitical pundits continue to speculate an election may be held on 6 \t\tMay. The ongoing consensus is that the David Cameron and his Tory party \t\twill likely unseat Prime Minister Brown and his Labour party but \t\tParliament may be hung if the Tories cannot form a majority government.\u00a0 \t\tMany data will be released tomorrow including Q4 BoE housing equity \t\twithdrawal, March PMI construction, and March Nationwide consumer \t\tconfidence.\u00a0 March Halifax house prices will also be released early this \t\tweek.\u00a0 Cable bids are cited around the US$ 1.4455 level.\u00a0 The euro \t\tmoved lower<\/strong> vis-\u00e0-vis the British pound as the single currency \t\ttested bids around the \u00a30.8820 level and was capped around the \u00a30.8860 \t\tlevel.<\/span><\/p>\n

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

The Swiss franc \t\tdepreciated vis-\u00e0-vis the U.S. dollar today<\/span><\/strong> as \t\tthe greenback tested offers around the CHF 1.0645 level and was \t\tsupported around the CHF 1.0585 level. \u00a0Swiss National Bank is said to \t\thave intervened in the market last week by selling Swiss francs in what \t\tis estimated to have been a massive operation.\u00a0 Swiss monetary, \t\tfinancial, and government officials have been warning that they will not \t\ttolerate a further increase in the franc in recent weeks but many \t\ttraders speculated the central bank would not intervene to weaken the \t\tfranc on account of growth in the Swiss economy.\u00a0 While forecasts for \t\teconomic growth and inflation have both been upwardly revised in recent \t\tweeks, SNB\u2019s latest probable intervention underscores their commitment \t\tto preserving an export-driven recovery.\u00a0 March CPI data will be \t\treleased tomorrow followed by February retail sales on Wednesday and the \t\tMarch unemployment rate on Thursday. The euro moved lower<\/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 higher<\/strong> vis-\u00e0-vis \t\tthe Swiss franc and tested offers around the CHF 1.6240 level.<\/span><\/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":"

Traders will pay close attention to a few key events this week. First, former Federal Reserve Chairman and former U.S. Treasury Secretary Rubin will testify in Congress this week about the economic crisis…<\/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-8240","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/8240","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=8240"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/8240\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=8240"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=8240"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=8240"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}