{"id":8420,"date":"2010-04-08T17:30:22","date_gmt":"2010-04-08T21:30:22","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=8420"},"modified":"2010-04-08T17:30:22","modified_gmt":"2010-04-08T21:30:22","slug":"forex-daily-market-commentary-41","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/04\/08\/forex-daily-market-commentary-41\/","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\t1.3365 level and was supported around the $1.3280 level. \u00a0As expected, \t\tthe European Central Bank did not announce a change to its monetary \t\tpolicy today and European Central Bank President Trichet reiterated \t\tviews he has made in recent policy statements.\u00a0 The big news in the \t\teurozone remains the worsening situation in Greece.\u00a0 There are reports \t\tthat western banks have pulled their repo lines with Greek banks, \t\treducing the ability of Greek banks to secure funding in the \t\tinternational capital markets.\u00a0 Trichet today said the Greek situation \t\tis not even an \u201cissue\u201d but added responsbilities must be undertaken to \t\tcontend with the problem.\u00a0 The capital markets might disagree with \t\tTrichet\u2019s assessment of Greece\u2019s worsening problems, however, as Greek \t\tassets depreciated significantly today.\u00a0 Spreads on five-year Greek \t\tcredit default swap spreads blew out by 55bps during the European \t\tsession and Greek cash bonds also moved lower with yields on 10-year \t\tGreek bonds reaching 7.5% today \u2013 their highest level since the advent \t\tof the euro.\u00a0 European Union finance ministers will convene in Madrid on \t\t16-18 April and G20 officials convene 22 April ahead of the annual IMF \t\tand World Bank meetings on 24-25 April.\u00a0 The most pressing test for \t\tGreece will come on 19 May when some \u20ac8.1 billion in debt comes due.\u00a0 It \t\tis estimated that at least two syndications would be required to \t\trefinance the maturing debt and there is growing concern that investors \t\tmay have insufficient appetite for more Greek paper, even at higher \t\tyields.\u00a0 Credit default swap spreads on other heavily-indebted countries \t\tincluding Spain and Portugal also widened.\u00a0 The ECB also announced a \t\tmore liberal collateral eligibility policy that is partially designed to \t\tassure that Greek debt can be utilized in repo transactions into 2011.\u00a0 \t\tData released in the eurozone today saw February retail sales off 0.6% \t\tm\/m and off 1.1% y\/y.\u00a0 In U.S. news<\/strong>, Minneapolis Fed President \t\tKocherlakota reported the Fed needs to retain supervisory powers and \t\tsaid \u201cbanks with large amounts of commercial real estate risk-exposure \t\tface a correspondingly elevated risk of failure.\u00a0 This threat could well \t\tlead to continued declines in bank lending, which could curtail the \t\trecovery.\u201d Federal Reserve Governor Tarullo said the need to low rates \t\twill not \u201cdiminish soon,\u201d reiterating dovish comments made by Fed \t\tChairman Bernanke yesterday.\u00a0 Data released in the U.S. today saw weekly \t\tinitial jobless claims climb to 460,000 from a revised 442,000 while \t\tcontinuing jobless claims fell to 4.550 million from 4.681 million. \t\tAlso, March ISCS chain store sales were up a significant 9.0% y\/y.\u00a0 \t\tFebruary wholesale inventories data will be released tomorrow.\u00a0 Euro \t\tbids 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>92.85 level and was capped around the \t\t\u00a593.40 level. \u00a0Bank of Japan maintained its assessment of the economy \t\tovernight, reporting \u201cJapan\u2019s economy has been picking up mainly due to \t\timprovement in overseas economic conditions and to various policy \t\tmeasures.\u201d\u00a0 BoJ reiterated the economy still lacks \u201cmomentum to support \t\ta self-sustained recovery in domestic private demand.\u201d\u00a0 Nikkei<\/span> reported BoJ Governor Shirakawa and Prime Minister Hatoyama will meet \t\tregularly to discuss the economy.\u00a0 The central bank also reported \t\tcorporate sentiment is improving, capital spending is leveling out, and \t\tthe deceleration in consumer prices will moderate.\u00a0 Data released in \t\tJapan overnight saw the February current account total print at \u00a5 1.47 \t\ttrillion while February machine orders were off 5.4% m\/m and 7.1% y\/y.\u00a0 \t\tAlso, March bankruptcies were off 14.5% y\/y and March machine tool \t\torders were up 262.1% y\/y.\u00a0 Additionally, the March economy watchers\u2019 \t\tsurvey improved at the both the current and outlook levels.\u00a0 The Nikkei \t\t225 stock index lost 1.10% to close at \u00a511,168.20.\u00a0 U.S. dollar offers \t\tare cited around the \u00a596.85 level.\u00a0 The euro moved lower <\/strong> vis-\u00e0-vis the yen as the single currency tested bids around the \u00a5123.40 \t\tlevel and was capped around the \u00a5124.60 level.\u00a0 The British pound \t\tmoved lower <\/strong>vis-\u00e0-vis the yen as sterling tested bids around the \t\t\u00a5140.95 level while the Swiss franc moved lower <\/strong>vis-\u00e0-vis the yen \t\tand tested bids around the \u00a586.15 level. In Chinese news<\/strong>, the \t\tU.S. dollar depreciated vis-\u00e0-vis the Chinese yuan as the greenback \t\tclosed at CNY 6.8243 in the over-the-counter market, down from CNY \t\t6.8255. \u00a0The move higher in the yuan was expected by most dealers as \t\tsimmering tensions between the U.S. and China have thawed a little bit \t\tin the run-up to next week\u2019s meeting in Washington, D.C. between \t\tleadership from the two countries.\u00a0 Treasury Secretary Geithner met with \t\tChinese leadership in Beijing today to stress the importance of \t\tbilateral relations.\u00a0 People\u2019s Bank of China sold about CNY 15 billion \t\tin three-year bills today, its first sale since June 2008 and the \t\tcentral bank\u2019s latest attempt to drain liquidity and manage money supply \t\tgrowth.\u00a0 There is a growing sense that China is close to announcing an \t\timportant shift in its currency policy, possibly including a further \t\tliberalization of the yuan\u2019s exchange rate.<\/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$ 1.5275 \t\tlevel and was supported around the $1.5140 level. \u00a0Many data were \t\treleased in the U.K. today. First, March Halifax house prices were up \t\t1.1% m\/m and 5.2% y\/y for the most recent three-month period.\u00a0 Second, \t\tFebruary industrial production was up 1.0% m\/m and off 0.1% y\/y.\u00a0 Third, \t\tFebruary manufacturing production was up 1.3% m\/m and 1.4% y\/y.\u00a0 Fourth, \t\tthe March NIESR GDP estimate came in at +0.4%, unchanged from the \t\trevised prior reading.\u00a0 As expected, Bank of England\u2019s Monetary Policy \t\tCommittee kept its main Bank rate unchanged at 0.50% and kept its asset \t\tpurchase program unchanged at \u00a3200 billion.\u00a0 Bank for International \t\tSettlements today issued a stern warning about the size of U.K. \t\tsovereign debt.\u00a0 Cable bids are cited around the US$ 1.4455 level.\u00a0 The euro moved lower<\/strong> vis-\u00e0-vis the British pound as the single \t\tcurrency tested bids around the \u00a30.8735 level and was capped around the \t\t\u00a30.8780 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\t1.0715 level and was capped around the CHF 1.0785 level. \u00a0Data released \t\tin Switzerland today saw the March unemployment rate decline to 4.2% \t\tfrom 4.4% in February.\u00a0 Swiss National Bank\u2019s 2009 Annual Report was \t\treleased today in which the central bank indicated it expects GDP growth \t\taround 1% this year, down from the prior forecast of 1.5%.\u00a0 Swiss \t\tNational Bank is thought to have intervened again yesterday by selling \t\tthe franc but this will remain unconfirmed and is far from certain \t\tbecause while the pair appreciated quickly, it did not appreciate by \t\tmore than 35 pips.\u00a0 U.S. dollar offers are cited around the CHF 1.0920 \t\tlevel.\u00a0 The euro moved lower<\/strong> vis-\u00e0-vis the Swiss franc as the \t\tsingle currency tested bids around the CHF 1.4320 level while the \t\tBritish pound moved higher<\/strong> vis-\u00e0-vis the Swiss franc and tested \t\toffers around the CHF 1.6395 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":"

The big news in the eurozone remains the worsening situation in Greece. There are reports that western banks have pulled their repo lines with Greek banks, reducing the ability of Greek banks…<\/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-8420","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/8420","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=8420"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/8420\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=8420"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=8420"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=8420"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}