{"id":9346,"date":"2010-05-11T17:48:36","date_gmt":"2010-05-11T21:48:36","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=9346"},"modified":"2010-05-11T17:48:36","modified_gmt":"2010-05-11T21:48:36","slug":"forex-daily-market-commentary-59","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/05\/11\/forex-daily-market-commentary-59\/","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 vis-\u00e0-vis the U.S. dollar today as the single currency tested bids around the US$ 1.2665 level and was capped around the $1.2800 figure.\u00a0\u00a0\u00a0 The common currency extended yesterday\u2019s losses as traders expressed skepticism that the rescue packages announced by eurozone officials early yesterday will suffice in addressing the bloc\u2019s major debt woes.\u00a0 In fact, the common currency traded lower than Friday\u2019s close following last week\u2019s major sell-off.\u00a0 Ireland\u2019s budget deficit-to-GDP ration remains 14.3% and Greece\u2019s remains 13.6%, underscoring the major debt problems faced by many eurozone countries including these, Spain, Portugal, and Italy.\u00a0 There are renewed forecasts that the common currency will eventually decline to parity with the U.S. dollar.\u00a0 European Central Bank member Nowotny reported \u201cthe intention is to get again control of the unorderly markets and I think this is a goal that has been achieved remarkably in an effective way.\u201d\u00a0 EMU-16 central banks yesterday began purchasing eurozone government bonds in the secondary market as a quantitative easing measure.\u00a0 ECB member Wellink went one step further today, saying \u201cIf there are excessive deficits at a certain moment, fines should be considered more quickly. Deny countries who are erring the access to European structural funds.\u201d\u00a0 Data released in Germany today saw the April consumer price index decline 0.1% m\/m and up 1.0% y\/y while the EU-harmonized index was off 0.1% and up 1.0% y\/y.\u00a0 Also, the April wholesale price index was up 1.7% m\/m and 6.0% y\/y.\u00a0 In U.S. news, Fed Chairman Bernanke reported the eurozone\u2019s approximate US$ 1 trillion aid package is \u201cbasically not a panacea\u201d and called for \u201cfundamental underlying changes\u201d in countries\u2019 economies.\u00a0 The Senate today approved an amendment to a regulatory overhaul bill that will audit the Fed\u2019s emergency-lending programs during the financial crisis over the past couple of years.\u00a0 Richmond Fed President Lacker reported \u201cWe are already seeing evidence that employment is on the path to steady growth.\u201d\u00a0 Data released in the U.S. today saw March wholesale inventories decline to +0.4% from the prior reading of +0.6%.\u00a0 Euro bids are cited around the US$ 1.2585 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 \u00a592.21 level and was capped around the \u00a593.40 level.\u00a0 Traders again moved back into yen as doubts resurfaced regarding the adequacy of the \u20ac500 billion deal announced over the weekend to support debt-laden eurozone countries.\u00a0 Bank of Japan Deputy Governor Yamaguchi yesterday 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 yesterday 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 yesterday 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 this weekend to help stabilize global financial markets.\u00a0 Data to be released in Japan overnight include April official reserve assets.\u00a0 The Nikkei 225 stock index lost 1.14% to close at \u00a510,411.10.\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 \u00a5116.90 level and was capped around the \u00a5119.40 level.\u00a0 The British pound moved higher vis-\u00e0-vis the yen as sterling tested offers around the \u00a5139.65 level while the Swiss franc moved lower vis-\u00e0-vis the yen and tested bids around the \u00a582.95 level. In Chinese news, the U.S. dollar depreciated vis-\u00e0-vis the Chinese yuan as the greenback closed at CNY 6.8293 in the over-the-counter market, up from CNY 6.8266.\u00a0 People\u2019s Bank of China adviser Xin Bin said the central bank\u2019s quarterly report released yesterday is a signal the central bank will permit the yuan to appreciate vis-\u00e0-vis the U.S. dollar.\u00a0 The central bank yesterday 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.\u00a0 Many data were released in China overnight. First, the April trade balance expanded to US$ 1.68 billion from the prior reading of \u2013US$ 7.24 billion.\u00a0 Second, April NDRC housing prices improved to 12.8 from the prior reading of 11.7.\u00a0 Third, April producer prices were up 6.8% y\/y and April consumer prices were up 2.8% y\/y.\u00a0 Fourth, April retail sales growth decelerated to +18.5% y\/y.\u00a0 Fifth, April industrial production was up 17.8% y\/y.\u00a0 Sixth, April new yuan loans expanded to CNY 774.0 billion from the prior reading of CNY 510.7 billion.<\/p>\n

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

The British pound appreciated sharply vis-\u00e0-vis the U.S. dollar today as cable tested offers around the US$ 1.5005 level and was supported around the $1.4720 level.\u00a0 Cable moved higher after Prime Minister Brown resigned from office and tendered his resignation to Her Majesty the Queen, who quickly accepted incoming Prime Minister Cameron\u2019s plea to form a new government.\u00a0 Sterling moved higher on this news on the premise that a Tory-Liberal Democrat coalition may be more successful in reducing the U.K.\u2019s bloated debt and deficit problems than a Labour-Liberal Democrat coalition.\u00a0 Today\u2019s political drama ends more than twelve years of uninterrupted Labour rule.\u00a0 Data released in the U.K. saw the April RICS house price balance increase to 17% from the prior reading of 9%.\u00a0 Also, March industrial production was up 2.0% m\/m and 2.0% y\/y with manufacturing production up 2.3% m\/m and 3.3% y\/y.\u00a0 The April NIESR GDP estimate will be released tonight.\u00a0 Cable bids are cited around the US$ 1.4335 level.\u00a0 The euro depreciated vis-\u00e0-vis the British pound as the single currency tested bids around the \u00a30.8475 level and was capped around the \u00a30.8615 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 1.1035 level and was capped around the CHF 1.1135 level.\u00a0 Data released in Switzerland today saw the April SECO consumer confidence survey improve to +14 from the prior reading of -7, exceeding expectations.\u00a0 April producer and import prices will be released tomorrow.\u00a0 Swiss National Bank Chairman Hildebrand reiterated the central bank\u2019s policy is prepared to fight inflation and deflation and reiterated the SNB will not permit an excessive appreciation of the franc.\u00a0 U.S. dollar offers are cited around the CHF 1.1270 level.\u00a0 The euro moved lower vis-\u00e0-vis the Swiss franc as the single currency tested bids around the CHF 1.4030 level while the British pound appreciated vis-\u00e0-vis the Swiss franc and tested offers around the CHF 1.6620 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":"

Cable moved higher after Prime Minister Brown resigned from office and tendered his resignation to Her Majesty the Queen, who quickly accepted incoming Prime Minister Cameron\u2019s plea to form a new government…<\/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-9346","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/9346","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=9346"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/9346\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=9346"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=9346"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=9346"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}