{"id":8335,"date":"2010-04-07T17:13:19","date_gmt":"2010-04-07T21:13:19","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=8335"},"modified":"2010-04-07T17:13:19","modified_gmt":"2010-04-07T21:13:19","slug":"forex-daily-market-commentary-40","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/04\/07\/forex-daily-market-commentary-40\/","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\t1.3325 level and was capped around the $1.3410 level. \u00a0There is growing \t\ttalk that Greece will default on its debt and this was exacerbated by a \t\tmarket rumour today that Germany is withdrawing its support for \t\tfinancial assistance to Greece.\u00a0 The yield on 10-year Greek bonds \t\treached 407bps over benchmark German bunds today, the highest level \t\tsince the euro\u2019s introduction in 1999.\u00a0 Continued pressure on Greek \t\tassets is also rendering it more difficult for other highly-indebted \t\teurozone countries including Portugal and Spain to address their fiscal \t\timbalances.\u00a0 The common currency also came off on a report that the \t\teurozone registered zero growth in the fourth quarter, a downgrade from \t\tthe earlier report of 0.1% growth and down from the third quarter\u2019s 0.3% \t\tgrowth rate.\u00a0 On an annualized basis, Q4 growth was off 2.2% y\/y from \t\tthe previous reading of -2.1% y\/y.\u00a0 Other EMU-16 data released today saw \t\tMarch PMI services improve to 54.1 from the prior reading of 53.7 while \t\tthe EMU-16 March PMI composite improved to 55.9 from the prior reading \t\tof 55.5.\u00a0 Also, EMU-16 February producer price inflation printed at 0.1% \t\tm\/m and -0.5% y\/y.\u00a0 February retail sales data will be released \t\ttomorrow.\u00a0 The European Central Bank is expected to keep monetary policy \t\tunchanged tomorrow and for the foreseeable future given the sluggish \t\teconomic recovery and ongoing problems with eurozone sovereign debt.\u00a0 In U.S. news<\/strong>, data released today saw MBA mortgage applications \t\tdecline 11.0% in the latest week while February consumer credit fell to \t\t\u2013US$ 11.5 billion from the prior reading of +US$ 10.6 billion.\u00a0 Data to \t\tbe released tomorrow include weekly initial jobless claims, continuing \t\tjobless claims, and March ICSC chain store sales.\u00a0 Former Federal \t\tReserve Chairman Greenspan defended his tenure at the Fed in \t\tCongressional testimony today, adding enhanced regulation of financial \t\tinstitutions may have averted some of the credit crises over the past \t\tcouple of years.\u00a0 Additionally, Greenspan reported the securitization of \t\tsub-prime mortgages also contributed to the crises as global investors \t\tscrambed for yield.\u00a0 Fed Chairman Bernanke today reported the U.S. is \t\t\u201cfar from out of the woods,\u201d citing a \u201ctroubled\u201d commercal real estate \t\tsector and \u201cvery weak\u201d hiring.\u00a0 Bernanke did not today reiterate that \t\trates will remain low for an \u201cextended period\u201d but noted \u201cstimulative\u201d \t\trates will aid growth.\u00a0 Euro bids are cited around the US$ 1.3175 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 \u00a5<\/a>93.40 level and was capped around the \t\t\u00a594.25 level.\u00a0 As expected, Bank of Japan voted to keep interest rates \t\tunchanged overnight with its main unsecured overnight call rate \t\tunchanged at 0.1%.\u00a0 BoJ Governor Shirakawa reported \u201cWe have confirmed \t\tthat the economy is currently picking up steadily and on top of that, we \t\tare seeing some signs of future progress.\u201d\u00a0 Government pressure on the \t\tcentral bank to ease policy further will likely continue and some \t\tBoJ-watchers expect the central bank will loosen policy further again \t\tbefore the end of the quarter.\u00a0 The central bank last month doubled a \t\tlending program to \u00a520 trillion.\u00a0 Some dealers believe the BoJ will \t\tincrease its growth forecasts later this month on account of the recent \t\timprovement in the export sector.\u00a0 Data to be released in Japan tonight \t\tinclude the February current account total, February trade balance, and \t\tFebruary machine orders.\u00a0 The Nikkei 225 stock index climbed 0.09% to \t\tclose at \u00a511,292.83.\u00a0 U.S. dollar offers are cited around the \u00a596.85 \t\tlevel.\u00a0 The euro moved lower <\/strong>vis-\u00e0-vis the yen as the single \t\tcurrency tested bids around the \u00a5124.60 level and was capped around the \t\t\u00a5126.15 level.\u00a0 The British pound moved lower <\/strong>vis-\u00e0-vis the yen \t\tas sterling tested bids around the \u00a5141.75 level while the Swiss \t\tfranc moved lower <\/strong>vis-\u00e0-vis the yen and tested bids around the \t\t\u00a587.00 figure. In Chinese news<\/strong>, the U.S. dollar depreciated \t\tvis-\u00e0-vis the Chinese yuan as the greenback closed at CNY 6.8255 in the \t\tover-the-counter market, down from CNY 6.8257. \u00a0People\u2019s Bank of China \t\tannounced it will sell three-year bills tomorrow for the first time \t\tsince June 2008 to drain cash from the economy.\u00a0 PBoC-watchers believe \t\tthis tightening step will precede eventual increases in benchmark rates \t\tand will probably coincide with increases in the yuan\u2019s value.\u00a0 China \t\tovernight reported the U.S. and China agree to \u201crespect each other\u2019s \t\tcore concerns and major values\u201d and added China wants positive ties with \t\tthe U.S.\u00a0 The big news involving China continues to be that the Obama \t\tadministration is delaying the release of a report due 15 April that \t\tcould have potentially labeled China a currency manipulator.\u00a0 The move \t\tto delay the release of the report could signal negotiations are ongoing \t\tbetween the two countries or could signal China may let the yuan \t\tappreciate further in the coming days.\u00a0 Chinese leadership will visit \t\tWashington, D.C. on 12-13 April.\u00a0 It was reported today that China\u2019s net \t\tforeign debt totaled US$ 428.6 billion at the end of 2009, up 14% y\/y.\u00a0 \t\tChinese and U.S. officials will convene in Washington, D.C. next week \t\tand will discuss China\u2019s exchange rate policy and other key issues.\u00a0 \t\tPeople\u2019s Bank of China adviser Li Daokui was on the tape overnight \t\tnoting China may raise interest rates if the increase in inflation \t\tcontinues and pushes inflation above 3%.<\/p>\n

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

<\/strong><\/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$ 1.5285 \t\tlevel and was supported around the $1.5135 level. \u00a0Data released in the \t\tU.K. today saw the March BRC shop price index decline to 1.2% m\/m while \t\tthe March PMI services index fell to 56.5 in March from 58.4 in \t\tFebruary.\u00a0 Bank of England is expected to keep interest rates unchanged \t\ttomorrow and to maintain its asset purchase program at \u00a3200 billion.\u00a0 \t\tCable continues to move lower as Prime Minister Brown called for a \t\tgeneral election on 6 May and Parliament was dissolved.\u00a0 The consensus \t\tis that the election could end in a hung Parliament even if challenger \t\tCameron of the Tory party unseats the unpopular Brown.\u00a0 Cable bids are \t\tcited around the US$ 1.4455 level.\u00a0 The euro moved lower<\/strong> vis-\u00e0-vis the British pound as the single currency tested bids around \t\tthe \u00a30.8750 level and was capped around the \u00a30.8820 level.<\/p>\n

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

The Swiss franc depreciated vis-\u00e0-vis \t\tthe U.S. dollar today<\/strong> as the greenback tested offers around the CHF \t\t1.0745 level and was supported around the CHF 1.0680 level. Swiss \t\tNational Bank is thought to have intervened again today by selling the \t\tfranc but this will remain unconfirmed and is far from certain because \t\twhile the pair appreciated quickly, it did not appreciate by more than \t\t35 pips.\u00a0 Still, the SNB may have sold francs for euro in smaller size \t\ttoday to remind the market that it will not tolerate a stronger franc.\u00a0 \t\tData released in Switzerland today saw February retail sales print \t\tweaker-than-expected at +3.1% y\/y.\u00a0 U.S. dollar offers are cited around \t\tthe CHF 1.0920 level.\u00a0 The euro moved higher<\/strong> vis-\u00e0-vis the Swiss \t\tfranc as the single currency tested offers around the CHF 1.4355 level \t\twhile the British pound moved higher<\/strong> vis-\u00e0-vis the Swiss franc \t\tand tested offers around the CHF 1.6380 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":"

There is growing talk that Greece will default on its debt and this was exacerbated by a market rumour today that Germany is withdrawing its support for financial assistance to Greece. The yield on 10-year Greek bonds…<\/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-8335","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/8335","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=8335"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/8335\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=8335"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=8335"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=8335"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}