{"id":9122,"date":"2010-05-04T15:30:29","date_gmt":"2010-05-04T19:30:29","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=9122"},"modified":"2010-05-04T15:30:29","modified_gmt":"2010-05-04T19:30:29","slug":"forex-daily-market-commentary-54","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/05\/04\/forex-daily-market-commentary-54\/","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 sharply vis-\u00e0-vis the U.S. dollar today as the single currency tested bids around the US$ 1.3035 level and was capped around the $1.3215 level.\u00a0 The common currency tumbled again on renewed Greek and European woes.\u00a0 A \u20ac110 billion bailout package for Greece including a sizable contribution from Germany was announced over the weekend and some traders are speculating the package may not be large enough to meet all of Greece\u2019s needs over the next three years.\u00a0 The Greek bailout puts the spotlight on other highly-indebted eurozone countries.\u00a0 At the end of 2009, Greece had a total debt equivalent to US$ 236 billion with US$ 45 billion owed to Germany, US$ 75 billion owed to France, and US$ 15 billion owed to the U.K.\u00a0 At the end of 2009, Italy\u2019s total debt was US$ 1.4 trillion, including US$ 511 billion owed to France, US$ 190 billion owed to Germany, and US$ 77 billion owed to the U.K.\u00a0 At the end of 2009, Spain had US$ 1.1 trillion in debt including US$ 238 billion owed to Germany, US$ 220 billion owed to France, and US 114 billion owed to the U.K.\u00a0 At the end of 2009, Ireland had a total debt of US$ 867 billion including US$ 184 billion owed to Germany, US$ 188 billion owed to the U.K., and US$ 60 billion owed to France.\u00a0 At the end of 2009, Portugal\u2019s total debt totaled US$ 286 billion with US$ 86 billion owed to Spain, US$ 47 billion owed to Germany, US$ 45 billion owed to France, and US$ 24 billion owed to the U.K.\u00a0 Collectively, these data evidence a massive amount of money owed to Germany, a country that will likely continue to play the lead role in regional bailouts.\u00a0 Furthermore, last week\u2019s credit downgrades to Spain and Portugal might render it less likely those countries will be able to fulfill all of their debt obligations.\u00a0 Data released in the eurozone today saw EMU-16 producer price inflation up 0.6% m\/m and 0.9% y\/y.\u00a0 Also, German March retail sales were off 2.4% m\/m and up 2.7% y\/y.\u00a0 Chartists are eyeing reported stops below the US$ 1.2990 and US$ 1.2900 levels with some bears talking about a downside target around the US$ 1.2740 level.\u00a0 There is talk that the European Central Bank may need to enact stronger plans to deal with the eurozone\u2019s problems with some whispers about a quantitative easing policy that could see the ECB purchase bonds in the secondary market.\u00a0 In U.S. news, data released today saw March factory orders climb 1.3%, unchanged from the upwardly revised 1.3% print.\u00a0 Also, March pending home sales were up 5.3% m\/m and 23.5% y\/y.\u00a0 Data to be released on Friday include April non-farm payrolls and unemployment data.\u00a0 Estimates indicate non-farm payrolls may have increased 189,000 last month with the unemployment rate hanging steady around 9.7%.\u00a0 Former Federal Reserve Chairman Volcker reported U.S. unemployment will be \u201ctoo high for too long.\u201d\u00a0 Euro bids are cited around the US$ 1.2990 level.<\/p>\n

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

The yen appreciated vis-\u00e0-vis the U.S. dollar today as the greenback tested bids around the \u00a594.40 level and was capped around the \u00a594.95 level.\u00a0 Japanese financial markets remained closed overnight on account of the Golden Week holiday and will be closed through the middle of the week.\u00a0 Last week, Bank of Japan kept monetary policy unchanged overnight and reported it will help lenders provide credit, possibly using methods from 1998-1999 when lenders gave cash to lenders to address the credit squeeze.\u00a0 The headline overnight unsecured call rate target was maintained at 0.1%. BoJ Governor Shirakawa directed the central bank to stimulate lending \u201cwith a view to strengthening the foundations for economic growth.\u201d He added \u201cThe government is also trying to map out an economic growth strategy, and the Bank of Japan hopes to give a boost to such efforts with new policy measures.\u201d Last week\u2019s data released in Japan evidence an improving economy that is mired in a deflationary spiral and the central bank\u2019s enhanced rhetoric last week reflects that dichotomy.\u00a0 The new forecast for inflation suggests deflation will end during the next fiscal year with CPI at +0.1%.\u00a0 April monetary base data will be released on 6 May.\u00a0 The Nikkei 225 stock index climbed 1.21% on Friday to close at \u00a511,057.40.\u00a0 U.S. dollar offers are cited around the \u00a596.85 level.\u00a0 The euro moved lower vis-\u00e0-vis the yen as the single currency tested bids around the \u00a5123.60 level and was capped around the \u00a5125.45 level.\u00a0 The British pound moved lower vis-\u00e0-vis the yen as sterling tested bids around the \u00a5143.10 level while the Swiss franc moved lower vis-\u00e0-vis the yen and tested bids around the \u00a586.30 level. In Chinese news, the U.S. dollar appreciated vis-\u00e0-vis the Chinese yuan as the greenback closed at CNY 6.8268 in the over-the-counter market, up from CNY 6.8253.\u00a0 Data released in China overnight saw the April HSBC manufacturing PMI index decline to 55.4 from the prior reading of 57.0.\u00a0 The reported pullback in Chinese manufacturing data suggests import-dependent industrialized countries may have seen a deceleration in economic growth last month.\u00a0 Chinese banks are increasing their reserves after People\u2019s Bank of China raised its bank reserves ratio for the third time this year this weekend and Chinese equities declined to a seven-month low today.\u00a0 There is market chatter that China may lift its reserve ratio as high as 18% in a bid to manage economic growth.\u00a0 People\u2019s Bank of China is expected to revalue its yuan currency at any time.\u00a0 Data to be released in China tonight include April PMI manufacturing.<\/p>\n

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

The British pound depreciated vis-\u00e0-vis the U.S. dollar today as cable tested bids around the US$ 1.5125 level and was capped around the $1.5265 level.\u00a0 Political pundits are now forecasting the Tories may have edged ahead and may be closer to winning an outright victory at this Thursday\u2019s General Election.\u00a0 Sterling could get a boost if the Tories win because the party has long been perceived as pro-sterling.\u00a0 Many data were released in the U.K. today.\u00a0 First, March net consumer credit printed at \u00a3300 million, down from the revised \u00a3600 million prior reading. Second, March net lending secured on dwellings fell sharply to \u00a3300 million from an upwardly revised \u00a31.8 billion.\u00a0 Third, March mortgage approvals climbed to 48,900 from a downwardly revised 46,900.\u00a0 Fourth, the M4 money supply indicator grew 0.2% m\/m and 3.6% y\/y.\u00a0 Fifth, April PMI manufacturing printed at 58.0 improved to 58.0 from a revised 57.3.\u00a0 Cable bids are cited around the US$ 1.5030 level.\u00a0 The euro depreciated vis-\u00e0-vis the British pound as the single currency tested bids around the \u00a30.8630 level and was capped around the \u00a30.8670 level.<\/p>\n

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

The Swiss franc depreciated vis-\u00e0-vis the U.S. dollar today as the greenback tested offers around the CHF 1.0945 level and was supported around the CHF 1.0840 level.\u00a0 Data released this weekend confirmed the Swiss National Bank has spent more than CHF 40 billion to buy euro this year with CHF 30.2 billion in franc sales in the first quarter alone.\u00a0 Data Swiss National Bank President Hildebrand last week said the SNB will continue to counter any \u201cexcessive\u201d gains of the franc, noting there would be a \u201cnegative impact\u201d if the franc appreciates \u201csharply due to its role as a safe haven currency.\u201d\u00a0 Hildebrand noted the SNB \u201cwill not allow such a development to turn into a new deflation hazard\u201d and is \u201cacting decisively to prevent an excessive appreciation.\u201d\u00a0 Hildebrand also called on European leaders to conclude negotiations over Greece\u2019s aid package \u201crapidly.\u201d April consumer price inflation data will be released on Thursday.\u00a0 U.S. dollar offers are cited around the CHF 1.0930 level.\u00a0 The euro moved lower vis-\u00e0-vis the Swiss franc as the single currency tested bids around the CHF 1.4320 level while the British pound appreciated vis-\u00e0-vis the Swiss franc and tested offers around the CHF 1.6595 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":"

A \u20ac110 billion bailout package for Greece including a sizable contribution from Germany was announced over the weekend and some traders are speculating the package may not be large enough…<\/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-9122","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/9122","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=9122"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/9122\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=9122"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=9122"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=9122"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}