{"id":9236,"date":"2010-05-07T13:59:25","date_gmt":"2010-05-07T17:59:25","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=9236"},"modified":"2010-05-07T13:59:25","modified_gmt":"2010-05-07T17:59:25","slug":"forex-daily-market-commentary-57","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/05\/07\/forex-daily-market-commentary-57\/","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 appreciated \t\t\tvis-\u00e0-vis the U.S. dollar today<\/span><\/strong> as the \t\t\tsingle currency tested bids around the US$ 1.2795 level and was \t\t\tsupported around the $1.2585 level. \u00a0The common currency retraced \t\t\tsome of yesterday\u2019s losses and traders were surprised by the sharp \t\t\tincrease in U.S. April non-farm payrolls data that saw a gain of \t\t\t+290,000, about +100,000 stronger than expectations.\u00a0 The April \t\t\tunemployment rate ticked higher to 9.9% from 9.7% and April private \t\t\tpayrolls printed at +231,000, up from the upwardly revised print of \t\t\t+174,000 in March.\u00a0 Overall March non-farm payrolls were upwardly \t\t\trevised to +230,000 from +162,000 and even when temporary census \t\t\tworkers are factored in, today\u2019s print was relatively strong.\u00a0 Other \t\t\tdata saw April average hourly earnings climb 0.0% m\/m and 1.6% y\/y \t\t\twhile April average weekly hours worked remained steady at 34.1.\u00a0 \t\t\tThe household survey reported the U.S. economy has now added about \t\t\t1.6 million jobs year-to-date.\u00a0 Notably, manufacturering jobs \t\t\tincreased at their strongest pace since August 1998 and service \t\t\tsector jobs grew the most since November 2006.\u00a0 Traders will \t\t\tstruggle to reconcile continued improvements in the U.S. economy \t\t\tagainst the backdrop of the weaker aggregate economic climate in \t\t\tEurope and other global risk factors. \u00a0There is talk that \t\t\tyesterday\u2019s precipitous decline in U.S. equity prices was caused by \t\t\thuman error or program trading.\u00a0 In eurozone news<\/strong>, German \t\t\tMarch industrial production was up 4.0% m\/m and 8.6%.\u00a0 Many dealers \t\t\tcontinue to express disappointment that the European Central Bank \t\t\tdid not send more acute signals yesterday regarding its commitment \t\t\tto shoring up confidence in the eurozone.\u00a0 ECB President Trichet \t\t\tindicated policymakers did not discuss purchasing eurozone bonds in \t\t\tthe secondary market but most ECB-watchers believe the central bank \t\t\twill be forced to adopt extensive quantitative easing policies.\u00a0 \t\t\tEurozone finance ministers are convening an emergency meeting in \t\t\tBrussels this evening.\u00a0 Euro bids are cited around the US$ 1.2295 \t\t\tlevel.<\/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>92.85 \t\t\tlevel and was supported around the \u00a590.00 figure. \u00a0Bank of Japan \t\t\treported it is going to inject \u00a52 trillion into the financial system \t\t\tto assist in stabilizing the markets following yesterday\u2019s volatile \t\t\tglobal trading activity.\u00a0 BoJ\u2019s actions represent its first same-day \t\t\trepurchase operations since December when the central bank reacted \t\t\tto the Dubai World crisis and BoJ\u2019s actions were the largest since \t\t\tDecember 2008.\u00a0 Finance minister Kan reported Group of Seven \t\t\tofficials will hold a conference call to discuss the Greek debt \t\t\tcrisis later today.\u00a0 Albeit the intraday low was exactly \u00a590.00, \t\t\tthere was no talk the government intervened overnight and a Ministry \t\t\tof Finance official reported joint currency intervention is \t\t\t\u201cunlikely.\u201d\u00a0 April monetary base data released overnight saw growth \t\t\tof 2.9% y\/y.\u00a0 The Nikkei 225 stock index lost 3.10% to close at \t\t\t\u00a510,364.59.\u00a0 U.S. dollar offers are cited around the \u00a596.85 level.\u00a0 \t\t\tThe euro moved higher <\/strong>vis-\u00e0-vis the yen as the single \t\t\tcurrency tested offers around the \u00a5118.35 level and was supported \t\t\taround the \u00a5113.60 level.\u00a0 The British pound moved higher <\/strong> vis-\u00e0-vis the yen as sterling tested offers around the \u00a5138.15 level \t\t\twhile the Swiss franc moved higher <\/strong>vis-\u00e0-vis the yen and \t\t\ttested offers around the \u00a583.75 level. In Chinese news<\/strong>, the \t\t\tU.S. dollar depreciated vis-\u00e0-vis the Chinese yuan as the greenback \t\t\tclosed at CNY 6.8258 in the over-the-counter market, down from CNY \t\t\t6.8266. \u00a0Market chatter surfaced today that People\u2019s Bank of China \t\t\tmay lifts its interest rate by 27bps no later than June following \t\t\tits announcement last Sunday that it is raising its reserve \t\t\trequirement ratio for the third time this year.\u00a0 A Chinese \t\t\tthink-tank overnight said China should revalue the yuan trading \t\t\tband.\u00a0 Many dealers believe China will revalue the yuan before the \t\t\tend of the second quarter.<\/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$ 1.4475 level and was capped \t\t\taround the $1.4935 level.\u00a0 Cable continues to move lower on account \t\t\tof political kabuki in the U.K.\u00a0 Even though the Tories\u2019 Cameron won \t\t\tthe most votes in yesterday\u2019s General Election, his party does not \t\t\thave a majority government and there is a lot of horse-trading going \t\t\ton between the Tories, Labour, Liberal Democrats, and other minor \t\t\tparties to determine who will be able to form a coalition.\u00a0 The lack \t\t\tof an outright political majority in the U.K. will hang heavily on \t\t\tthe U.K. as that country\u2019s fiscal deficit is among the worst in the \t\t\tindustrialized world.\u00a0 Many data were released in the U.K. today.\u00a0 \t\t\tFirst, April Halifax house prices were off 0.1% m\/m.\u00a0 Second, April \t\t\tPPI input prices were up 0.6% m\/m and 13.1% y\/y while April PPI \t\t\toutput was up 1.4% m\/m and 5.7% y\/y.\u00a0 Also, PPI core output was up \t\t\t1.1% m\/m and 4.4% y\/y.\u00a0 Cable bids are cited around the US$ 1.4335 \t\t\tlevel.\u00a0 The euro appreciated <\/strong>vis-\u00e0-vis the British pound as \t\t\tthe single currency tested offers around the \u00a30.8805 level and was \t\t\tsupported around the \u00a30.8440 level.<\/span><\/p>\n

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

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

The Swiss franc \t\t\tappreciated <\/span><\/strong>vis-\u00e0-vis the U.S. dollar \t\t\ttoday as the greenback tested bids around the CHF 1.1055 level and \t\t\twas capped around the CHF 1.1175 level. \u00a0Data released in \t\t\tSwitzerland today saw the April unemployment rate decline to 4.0% \t\t\tfrom 4.2% in March while March retail sales printed at 4.5%, up from \t\t\tthe prior reading of 3.1%.\u00a0 Swiss Economy minister Leuthard verbally \t\t\tintervened, saying the franc\u2019s strength vis-\u00e0-vis the euro must stay \t\t\twithin a \u201ccertain limit.\u201d\u00a0 The franc went on a rampage yesterday as \t\t\tthe Swiss National Bank was deemed to have been absent from the \t\t\tmarket.\u00a0 The central bank may have deemed that euro sentiment is so \t\t\tnegative that it would have been futile to buy euro for francs.\u00a0 The \t\t\tCHF 1.4320 level on the cross has been talked about a lot as a key \t\t\tlevel the SNB has supported before yesterday.\u00a0 U.S. dollar offers \t\t\tare cited around the CHF 1.1270 level.\u00a0 The euro moved higher<\/strong> vis-\u00e0-vis the Swiss franc as the single currency tested offers \t\t\taround the CHF 1.4185 level while the British pound depreciated<\/strong> vis-\u00e0-vis the Swiss franc and tested bids around the CHF 1.6090 \t\t\tlevel.<\/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":"

In eurozone news, German March industrial production was up 4.0% m\/m and 8.6%. Many dealers continue to express disappointment that the European Central Bank did not send more acute signals…<\/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-9236","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/9236","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=9236"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/9236\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=9236"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=9236"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=9236"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}