{"id":9052,"date":"2010-05-03T16:45:38","date_gmt":"2010-05-03T20:45:38","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=9052"},"modified":"2010-05-03T16:45:38","modified_gmt":"2010-05-03T20:45:38","slug":"forex-daily-market-commentary-53","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/05\/03\/forex-daily-market-commentary-53\/","title":{"rendered":"Forex Daily Market Commentary"},"content":{"rendered":"

By GCI Forex Research<\/strong><\/p>\n

Fundamental Outlook at 1400 GMT (EDT + 0400)<\/strong><\/p>\n

\u20ac<\/strong><\/p>\n

The euro depreciated \t\t\tvis-\u00e0-vis the U.S. dollar today<\/span><\/strong> as the \t\t\tsingle currency tested bids around the US$ 1.3155 level and was \t\t\tcapped around the $1.3340 level. \u00a0Eurozone finance ministers \t\t\tconvened over the weekend and German legislators voted to provide \t\t\tGreece with \u20ac29.6 billion over three years.\u00a0 German Chancellor \t\t\tMerkel reported \u201cIt doesn\u2019t only mean that we help Greece, but that \t\t\twe stabilize the euro as a whole, which helps people in Germany.\u201d\u00a0 \t\t\tMerkel will face challenging regional elections next week and will \t\t\tprobably cede some power.\u00a0 In total, European governments and the \t\t\tInternational Monetary Fund voted to provide \u20ac110 billion in loans \t\t\tto Greece over three years.\u00a0 The European Central Bank voted to \t\t\tsuspend its rating limits on Greek debt, meaning the ECB will still \t\t\taccept sovereign Greek bonds and other instruments as repo-eligible \t\t\tcollateral.\u00a0 While the deal announced over the weekend removes some \t\t\tuncertainty from the market regarding Greece, it remains to be seen \t\t\tif this aid package will be large enough to help Greece \t\t\trestructure.\u00a0 Another major unknown is whether or not Greece will be \t\t\table to effect the necessary public spending cuts required to comply \t\t\twith the terms of its financial bailout package.\u00a0 Additionally, \t\t\tthere is ongoing attention on Spain, Portugal, and other \t\t\thighly-indebted countries that may require similar financial \t\t\tassistance packages.\u00a0 ECB member Ordonez called on Spain to enact \t\t\tmuch-needed labour reform.\u00a0 Eurozone data released today saw April \t\t\tPMI manufacturing improve to 57.6 from 57.5 and EMU-16 producer \t\t\tprice inflation will be released tomorrow.\u00a0 German April PMI \t\t\timproved to 61.5 and French April PMI ticked lower to 56.6.\u00a0 In \t\t\tU.S. news<\/strong>, data released today saw March personal income and \t\t\tpersonal spending increase 0.3% and 0.6%, respectively.\u00a0 The March \t\t\tPCE deflator was up 2.0% y\/y while core PCE were up 0.1% m\/m and \t\t\t1.3% y\/y.\u00a0 Also, April ISM manufacturing improved to 60.4 while the \t\t\tApril ISM prices paid index climbed to 78.0.\u00a0 Moreover, March \t\t\tconstruction spending was up 0.2% m\/m.\u00a0 Euro bids are cited around \t\t\tthe US$ 1.3175 level.<\/span><\/p>\n

<\/span><\/p>\n

<\/span><\/p>\n

\u00a5\/ CNY<\/span><\/strong><\/p>\n

The yen depreciated vis-\u00e0-vis the U.S. dollar today<\/span><\/strong> as the greenback tested offers around the \u00a5<\/a>94.45 \t\t\tlevel and was supported around the \u00a593.85 level. \u00a0Japanese financial \t\t\tmarkets were closed overnight on account of the Golden Week holiday \t\t\tand will be closed through the middle of the week. \u00a0Last week, Bank \t\t\tof Japan kept monetary policy unchanged overnight and reported it \t\t\twill help lenders provide credit, possibly using methods from \t\t\t1998-1999 when lenders gave cash to lenders to address the credit \t\t\tsqueeze.\u00a0 The headline overnight unsecured call rate target was \t\t\tmaintained at 0.1%. BoJ Governor Shirakawa directed the central bank \t\t\tto stimulate lending \u201cwith a view to strengthening the foundations \t\t\tfor economic growth.\u201d He added \u201cThe government is also trying to map \t\t\tout an economic growth strategy, and the Bank of Japan hopes to give \t\t\ta boost to such efforts with new policy measures.\u201d Last week\u2019s data \t\t\treleased in Japan evidence an improving economy that is mired in a \t\t\tdeflationary spiral and the central bank\u2019s enhanced rhetoric last \t\t\tweek reflects that dichotomy.\u00a0 The new forecast for inflation \t\t\tsuggests deflation will end during the next fiscal year with CPI at \t\t\t+0.1%.\u00a0 The Nikkei 225 stock index climbed 1.21% on Friday to close \t\t\tat \u00a511,057.40.\u00a0 U.S. dollar offers are cited around the \u00a596.85 \t\t\tlevel.\u00a0 The euro moved higher <\/strong>vis-\u00e0-vis the yen as the single \t\t\tcurrency tested offers around the \u00a5125.40 level and was supported \t\t\taround the \u00a5123.95 level.\u00a0 The British pound moved higher <\/strong> vis-\u00e0-vis the yen as sterling tested offers around the \u00a5144.10 level \t\t\twhile the Swiss franc moved higher <\/strong>vis-\u00e0-vis the yen and \t\t\ttested offers around the \u00a587.45 level. In Chinese news<\/strong>, the \t\t\tU.S. dollar was unchanged vis-\u00e0-vis the Chinese yuan as the \t\t\tgreenback closed at CNY 6.8253 in the over-the-counter market. \t\t\t\u00a0People\u2019s Bank of China lifted its bank reserve ratios for the third \t\t\ttime this year, taking the ratio for big banks higher by 50bps to \t\t\t17.0% and smaller banks higher to 15.0%, effective 10 May.\u00a0 There is \t\t\tmarket chatter that China may lift its reserve ratio as high as 18% \t\t\tin a bid to manage economic growth.\u00a0 People\u2019s Bank of China is \t\t\texpected to revalue its yuan currency at any time.\u00a0 Data to be \t\t\treleased in China tonight include April PMI manufacturing.<\/span><\/p>\n

\u00a3<\/span><\/strong><\/p>\n

The British pound \t\t\tdepreciated vis-\u00e0-vis the U.S. dollar today<\/span><\/strong> as cable tested bids around the US$ 1.5210 level and was capped \t\t\taround the $1.5315 level. \u00a0Bank of England Governor King reported \t\t\tlate last week that the next U.K. political leader will need to \t\t\toversee tough fiscal reductions, suggesting it will be difficult for \t\t\tthe new Prime Minister to escape \u201clame duck\u201d status.\u00a0 The U.K. has a \t\t\t\u00a3163.4 billion budget deficit, equivalent to around 11.6% of the \t\t\tcountry\u2019s gross domestic product.\u00a0 The Tories\u2019 candidate, David \t\t\tCameron, won last week\u2019s final debate against Liberal Democratic \t\t\tcandidate Clegg and Labour\u2019s Prime Minister Brown.\u00a0 The General \t\t\tElection will take place on 6 May and Cameron is expected to win but \t\t\tParliament may be hung.\u00a0 Data to be released in the U.K. next week \t\t\tinclude March consumer credit, March net lending secured on \t\t\tdwellings, March mortgage approvals, the March M4 money supply, \t\t\tApril PMI manufacturing, the April BRC shop price index, and April \t\t\tNationwide consumer confidence.\u00a0 Cable bids are cited around the US$ \t\t\t1.5030 level.\u00a0 The euro depreciated <\/strong>vis-\u00e0-vis the British \t\t\tpound as the single currency tested bids around the \u00a30.8665 level \t\t\tand was capped around the \u00a30.8705 level.<\/span><\/p>\n

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

The Swiss franc \t\t\tdepreciated <\/span><\/strong>vis-\u00e0-vis the U.S. dollar \t\t\ttoday as the greenback tested offers around the CHF 1.0845 level and \t\t\twas supported around the CHF 1.0745 level. \u00a0Data released in \t\t\tSwitzerland saw the April purchasing managers index print at 65.9, \t\t\tup from the prior reading of 65.5.\u00a0 April consumer price inflation \t\t\tdata will be released on Thursday along with April unemployment data \t\t\tand March retail sales data on Friday.\u00a0 Data released this weekend \t\t\tconfirmed the Swiss National Bank has spent more than CHF 40 billion \t\t\tto buy euro this year with CHF 30.2 billion in franc sales in the \t\t\tfirst quarter alone.\u00a0 Data Swiss National Bank President Hildebrand \t\t\tlast week said the SNB will continue to counter any \u201cexcessive\u201d \t\t\tgains of the franc, noting there would be a \u201cnegative impact\u201d if the \t\t\tfranc appreciates \u201csharply due to its role as a safe haven \t\t\tcurrency.\u201d\u00a0 Hildebrand noted the SNB \u201cwill not allow such a \t\t\tdevelopment to turn into a new deflation hazard\u201d and is \u201cacting \t\t\tdecisively to prevent an excessive appreciation.\u201d\u00a0 Hildebrand also \t\t\tcalled on European leaders to conclude negotiations over Greece\u2019s \t\t\taid package \u201crapidly.\u201d U.S. dollar offers are cited around the CHF \t\t\t1.0930 level.\u00a0 The euro moved higher<\/strong> vis-\u00e0-vis the Swiss \t\t\tfranc as the single currency tested offers around the CHF 1.4340 \t\t\tlevel while the British pound appreciated<\/strong> vis-\u00e0-vis the Swiss \t\t\tfranc and tested offers around the CHF 1.6530 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":"

Eurozone finance ministers convened over the weekend and German legislators voted to provide Greece with \u20ac29.6 billion over three years. German Chancellor Merkel…<\/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-9052","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/9052","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=9052"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/9052\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=9052"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=9052"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=9052"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}