{"id":9276,"date":"2010-05-10T15:47:57","date_gmt":"2010-05-10T19:47:57","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=9276"},"modified":"2010-05-10T15:47:57","modified_gmt":"2010-05-10T19:47:57","slug":"forex-daily-market-commentary-58","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/05\/10\/forex-daily-market-commentary-58\/","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 sharply vis-\u00e0-vis the U.S. dollar today as the single currency tested offers around the US$ 1.3095 level and was supported around the $1.2805 level.\u00a0 European policymakers convened emergency meetings over the weekend and agreed on a \u20ac500 billion \u201cEuropean Financial Stabilisation Mechanism.\u201d This policy announcement was coupled by a statement from the ECB that it will begin quantitative easing policies that will include the purchase of government debt in the secondary markets.\u00a0 ECB officials reported they would \u201ctake all measures needed to meet (countries\u2019) fiscal targets this year and the years ahead in line with excessive deficit procedures.\u201d\u00a0 ECB also reported it will sterilize its asset purchases by withdrawing liquidity elsewhere.\u00a0 Even though the markets have responded positively to today\u2019s news, questions will emerge regarding the independence of the ECB.\u00a0 ECB President Trichet reported the central bank will remain \u201cfiercely and totally independent.\u201d\u00a0 Greece has approximately \u20ac8.5 billion in bonds maturing on 19 May and Spain and Portugal need to refinance an aggregate \u20ac100 billion by the end of the year.\u00a0 The ECB also announced it will restart some U.S. dollar lending operations to prevent shortages in local markets.\u00a0 Germany is said to have pushed for a loan limit of \u20ac500 billion for the new Stabilisation Mechanism.\u00a0 Data released in the eurozone todays saw May Sentix investor confidence decline to -6.4 from the prior reading of +2.5.\u00a0 The German March trade balance increased to \u20ac17.2 billion and the March current account increased to \u20ac18.0 billion.\u00a0 Also, Bank of France April business sentiment fell back to +102 while March manufacturing production expanded 0.8% m\/m and 6.7% y\/y.\u00a0 Moreover, March industrial production grew 1.0% m\/m and 6.2% y\/y.\u00a0 In U.S. news, the Fed restarted some emergency currency-swap programs to provide a \u201cfull alottment\u201d of U.S. dollars to European central banks.\u00a0 The Fed\u2019s move reversed a recent decision to withdraw some of its emergency liquidity provision policies and the Fed is clearly concerned with managing systemic risk.\u00a0 Euro bids are cited around the US$ 1.2585 level.<\/p>\n

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

The yen depreciated vis-\u00e0-vis the U.S. dollar today as the greenback tested offers around the \u00a593.55 level and was supported around the \u00a591.65 level.\u00a0 Bank of Japan Deputy Governor Yamaguchi said the central bank has \u201cno need to alter the outlook in our semi-annual economic report\u201d following recent market volatility.\u00a0 Finance minister Kan reported equity and currency markets will \u201cstart to stabilize.\u201d\u00a0 Minutes from last month\u2019s BoJ Policy Board meeting were released and policymakers observed \u201cbalance sheet adjustments in the banking sector and the fiscal deficit problem in some European countries might further slow the pace of economic recovery\u201d in the region.\u00a0 BoJ injected \u00a52 trillion into the financial system for a second day, the first back-to-back same-day operations since October 2008.\u00a0 Also, BoJ reestablished a U.S. dollar currency swap agreement with the Fed and other central banks to help stabilize global financial markets. The Nikkei 225 stock index climbed 1.60% to close at \u00a510,530.70.\u00a0 U.S. dollar offers are cited around the \u00a596.85 level.\u00a0 The euro moved higher vis-\u00e0-vis the yen as the single currency tested offers around the \u00a5122.30 level and was supported around the \u00a5118.05 level.\u00a0 The British pound moved higher vis-\u00e0-vis the yen as sterling tested offers around the \u00a5140.55 level while the Swiss franc moved higher vis-\u00e0-vis the yen and tested offers around the \u00a585.40 level. In Chinese news, the U.S. dollar depreciated vis-\u00e0-vis the Chinese yuan as the greenback closed at CNY 6.8266 in the over-the-counter market, up from CNY 6.8258.\u00a0 People\u2019s Bank of China warned \u201cThe European sovereign debt crisis directly affects economic growth in the eurozone and adds a lot of uncertainty to the global economic recovery.\u201d\u00a0 PBoC added the \u201cpotential threat to price stability is increasing.\u201d\u00a0 The central bank also yielded some clues regarding the possibility of ending its U.S. dollar peg, reporting it will manage the yuan \u201cwith reference to a basket of currencies\u201d \u2013 language that was absent from the central bank\u2019s previous quarterly summary. Market chatter continues and indicates that People\u2019s Bank of China may lifts its interest rate by 27bps no later than June following its announcement recently that it is raising its reserve requirement ratio for the third time this year.\u00a0 Many dealers believe China will revalue the yuan before the end of the second quarter.<\/p>\n

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

The British pound appreciated sharply vis-\u00e0-vis the U.S. dollar today as cable tested offers around the US$ 1.5055 level and was supported around the $1.4760 level.\u00a0 As expected, Bank of England kept its main Bank Rate unchanged at 0.50% today and kept its asset purchase program unchanged at \u00a3200 billion.\u00a0 The rare Monday MPC meeting was on account of the General Election on Thursday in the U.K.\u00a0 While the Tories won the General Election, neither the Tories nor Labour has been able to agree a deal with the Liberal Democratic Party or smaller parties to form a majority coalition government.\u00a0 Data to be released in the U.K. tonight include the BRC April retail sales monitor and RICS house price balance.\u00a0 Cable bids are cited around the US$ 1.4335 level.\u00a0 The euro depreciated vis-\u00e0-vis the British pound as the single currency tested bids around the \u00a30.8545 level and was capped around the \u00a30.8750 level.<\/p>\n

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

The Swiss franc appreciated vis-\u00e0-vis the U.S. dollar today as the greenback tested bids around the CHF 1.0925 level and was capped around the CHF 1.1085 level.\u00a0 Swiss National Bank President Hildebrand said eurozone stability programs are a \u201cconcern for all\u201d and added it will not allow franc gains to trigger deflation.\u00a0 U.S. dollar offers are cited around the CHF 1.1270 level.\u00a0 The euro moved higher vis-\u00e0-vis the Swiss franc as the single currency tested offers around the CHF 1.4330 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":"

European policymakers convened emergency meetings over the weekend and agreed on a \u20ac500 billion \u201cEuropean Financial Stabilisation Mechanism.\u201d This policy announcement was coupled by a statement…<\/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-9276","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/9276","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=9276"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/9276\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=9276"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=9276"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=9276"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}