{"id":8461,"date":"2010-04-09T15:32:22","date_gmt":"2010-04-09T19:32:22","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=8461"},"modified":"2010-04-09T15:32:22","modified_gmt":"2010-04-09T19:32:22","slug":"forex-daily-market-commentary-42","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/04\/09\/forex-daily-market-commentary-42\/","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\t1.3490 level and was supported around the $1.3340 level. \u00a0The common \t\tcurrency rocketed higher on news that the European Union may be more \t\tsupportive of a financial aid package for Greece than previously \t\tbelieved by the markets.\u00a0 Fitch downgraded Greece\u2019s credit rating to the \t\tlowest investment grade possible but European officials announced plans \t\tto support Greece if needed, pushing the yield on 10-year Greek debt \t\tdown by 29 bps from yesterday\u2019s eleven-year highs.\u00a0 The financial \t\tpackage is said to include an arrangement between the International \t\tMonetary Fund, the eurozone, and other European Union institutions \t\twhereby Greece would have to apply to both the EU and the IMF jointly to \t\tavail of as much as \u20ac20 billion in funding.\u00a0 The European Union\u2019s \t\tcredits to Greece would incorporate bilateral loans at a rate higher \t\tthan the IMF\u2019s credit facility but would be more attractive than \t\tprevailing rates in the market.\u00a0 European Central Bank President Trichet \t\tcalled on governments to reduce spending soon and added Europe\u2019s \t\teconomic recovery may be a \u201cbumpy road.\u201d\u00a0 Data released in Germany today \t\tsaw the February trade balance print at \u20ac12.6 billion while the February \t\tcurrent account printed at \u20ac9.1 billion.\u00a0 In U.S. news<\/strong>, February \t\twholesale inventories printed at +0.6%, up from the upwardly revised \t\tprior reading of +0.1%.\u00a0 Federal Reserve Chairman Bernanke last night \t\treported \u201cpolicymakers must respond forcefully, creatively, and \t\tdecisively to severe financial crises.\u201d\u00a0 Euro bids are cited around the \t\tUS$ 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>93.10 level and was capped around the \t\t\u00a593.80 level. \u00a0Bank of Japan Governor Shirakawa met Prime Minister \t\tHatoyama today in the first of a series of quarterly meetings where the \t\tcentral bank will likely be pressured by the government to enact new \t\teasing measures.\u00a0 Shirakawa reported the central bank\u2019s monthly purchase \t\tof \u00a51.8 trillion in Japanese government bonds was not discussed during \t\tthe meeting.\u00a0 Hatoyama reported both the government and central bank \t\twill take measures to counter deflation.\u00a0 Bank of Japan this week \t\tmaintained its assessment of the economy, reporting \u201cJapan\u2019s economy has \t\tbeen picking up mainly due to improvement in overseas economic \t\tconditions and to various policy measures.\u201d\u00a0 BoJ reiterated the economy \t\tstill lacks \u201cmomentum to support a self-sustained recovery in domestic \t\tprivate demand.\u201d\u00a0 The central bank also reported corporate sentiment is \t\timproving, capital spending is leveling out, and the deceleration in \t\tconsumer prices will moderate.\u00a0 Data released in Japan yesterday saw the \t\tFebruary current account total print at \u00a51.47 trillion while February \t\tmachine orders were off 5.4% m\/m and 7.1% y\/y.\u00a0 Also, March bankruptcies \t\twere off 14.5% y\/y and March machine tool orders were up 262.1% y\/y.\u00a0 \t\tAdditionally, the March economy watchers\u2019 survey improved at the both \t\tthe current and outlook levels.\u00a0 The Nikkei 225 stock index climbed \t\t0.32% to close at \u00a511,204.34.\u00a0 U.S. dollar offers are cited around the \t\t\u00a596.85 level.\u00a0 The euro moved higher <\/strong>vis-\u00e0-vis the yen as the \t\tsingle currency tested offers around the \u00a5125.80 level and was supported \t\taround the \u00a5124.65 level.\u00a0 The British pound moved higher <\/strong> vis-\u00e0-vis the yen as sterling tested offers around the \u00a5144.30 level \t\twhile the Swiss franc moved higher <\/strong>vis-\u00e0-vis the yen and tested \t\toffers around the \u00a587.70 level. In Chinese news<\/strong>, the U.S. dollar \t\tdepreciated vis-\u00e0-vis the Chinese yuan as the greenback closed at CNY \t\t6.8236 in the over-the-counter market, down from CNY 6.8243. \u00a0The \t\tgovernment plans to sell about CNY 200 billion of bonds on behalf of \t\tlocal governments this quarter.\u00a0 The move higher in the yuan was \t\texpected by most dealers as simmering tensions between the U.S. and \t\tChina have thawed a little bit in the run-up to next week\u2019s meeting in \t\tWashington, D.C. between leadership from the two countries.\u00a0 Treasury \t\tSecretary Geithner met with Chinese leadership in Beijing yesterday to \t\tstress the importance of bilateral relations.\u00a0 People\u2019s Bank of China \t\tsold about CNY 15 billion in three-year bills this week, its first sale \t\tsince June 2008 and the central bank\u2019s latest attempt to drain liquidity \t\tand manage money supply growth.\u00a0 There is a growing sense that China is \t\tclose to announcing an important shift in its currency policy, possibly \t\tincluding a further liberalization 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$ 1.5390 \t\tlevel and was supported around the $1.5265 level. \u00a0As expected, Bank of \t\tEngland\u2019s Monetary Policy Committee kept its main Bank rate unchanged at \t\t0.50% yesterday and kept its asset purchase program unchanged at \u00a3200 \t\tbillion.\u00a0 Bank for International Settlements yesterday issued a stern \t\twarning about the size of U.K. sovereign debt.\u00a0 Many data were released \t\tin the U.K. this week. First, March Halifax house prices were up 1.1% \t\tm\/m and 5.2% y\/y for the most recent three-month period.\u00a0 Second, \t\tFebruary industrial production was up 1.0% m\/m and off 0.1% y\/y.\u00a0 Third, \t\tFebruary manufacturing production was up 1.3% m\/m and 1.4% y\/y.\u00a0 Fourth, \t\tthe March NIESR GDP estimate came in at +0.4%, unchanged from the \t\trevised prior reading.\u00a0 Cable bids are cited around the US$ 1.4455 \t\tlevel.\u00a0 The euro moved higher<\/strong> vis-\u00e0-vis the British pound as the \t\tsingle currency tested offers around the \u00a30.8775 level and was supported \t\taround the \u00a30.8705 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\t1.0655 level and was capped around the CHF 1.0760 level. \u00a0Swiss National \t\tBank Governing Board member Danthine said \u201cavoiding inflation\u201d is a \t\t\u201cmedium-term\u201d challenge.\u00a0 Data released in Switzerland this week \u00a0saw \t\tthe March unemployment rate decline to 4.2% from 4.4% in February.\u00a0 \t\tSwiss National Bank\u2019s 2009 Annual Report was released this week in which \t\tthe central bank indicated it expects GDP growth around 1% this year, \t\tdown from the prior forecast of 1.5%.\u00a0 Swiss National Bank is thought to \t\thave intervened again this week by selling the franc but this will \t\tremain unconfirmed and is far from certain because while the pair \t\tappreciated quickly, it did not appreciate by more than 35 pips.\u00a0 U.S. \t\tdollar offers are cited around the CHF 1.0920 level.\u00a0 The euro moved \t\thigher<\/strong> vis-\u00e0-vis the Swiss franc as the single currency tested \t\toffers around the CHF 1.4395 level while the British pound moved \t\thigher<\/strong> vis-\u00e0-vis the Swiss franc and tested offers around the CHF \t\t1.6510 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":"

Fitch downgraded Greece\u2019s credit rating to the lowest investment grade possible but European officials announced plans to support Greece if needed, pushing the yield on 10-year Greek debt down…<\/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-8461","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/8461","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=8461"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/8461\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=8461"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=8461"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=8461"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}