{"id":9438,"date":"2010-05-14T16:54:34","date_gmt":"2010-05-14T20:54:34","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=9438"},"modified":"2010-05-14T16:54:34","modified_gmt":"2010-05-14T20:54:34","slug":"forex-daily-market-commentary-62","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/05\/14\/forex-daily-market-commentary-62\/","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$ 1.2360 level and was capped around the $1.2575 level.\u00a0 Dealers pushed the common currency lower on rumours that French President Sarkozy threatened France would leave the euro if Germany supported any additional bailout packages.\u00a0 French finance minister Lagarde later characterized the rumours as \u201crubbish\u201d but the pair fell to within twenty pips of their lowest level since April 2009.\u00a0 Some euro bears continue to speculate the pair will move to parity and many dealers are selling the euro on moves higher.\u00a0 Eurozone sovereign credit concerns remain at very elevated levels and are negatively impacting many asset classes and markets.\u00a0 There remains speculation that Greece or other eurozone countries may default on debt obligations, perhaps even this year despite the significant bailout packages that have been appropriated.\u00a0 European Central Bank member Weber reported unconventional measures have been a \u201csuccess\u201d and said there is \u201cno alternative\u201d to a credible fiscal consolidation.\u00a0 In U.S. news, data released today saw April retail sales decline to +0.4% from an upwardly-revised prior reading of +2.1% while the ex-autos component fell to +0.4% from an upwardly-revised +1.2%.\u00a0 Also, April industrial production improved to +0.8% from the revised reading of +0.2% and capacity utilization climbed to 73.7%.\u00a0 Other data saw March business inventories print at +0.4% while mid-May University of Michigan consumer sentiment improved to 73.3 from the prior reading of 72.2.\u00a0 Chicago Fed President Evans said the Fed\u2019s provision of swap lines with European counterparties \u201cwill limit\u201d the contagion impact of European spillover effects \u201cgreatly.\u201d\u00a0 On the U.S. monetary policy front, Evans said he is comfortable with his assessment that \u201caccommodation continues to be appropriate.\u201d\u00a0 Evans expects the economy to expand about 3.5% this year but sees the jobless rate remaining high \u201cfor a number of years.\u201d\u00a0 Euro bids are cited around the US$ 1.2585 level.<\/p>\n

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

The yen depreciated sharply vis-\u00e0-vis the U.S. dollar today as the greenback tested bids around the \u00a591.80 level and was capped around the \u00a593.10 level.\u00a0 Data released in Japan today saw April bankruptcies decline 13.2% y\/y while April machine tool orders were up 220.5% y\/y.\u00a0 Also, the April economy watchers survey was released overnight and the current index improved to 49.8 from the prior reading of 47.4 while the outlook improved to 49.9 from the prior reading of 47.0. Bank of Japan Deputy Governor Yamaguchi this week 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 this week 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 The Nikkei 225 stock index declined 1.49% to close at \u00a510,462.51.\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 \u00a5113.50 level and was capped around the \u00a5117.00 figure.\u00a0 The British pound moved lower vis-\u00e0-vis the yen as sterling tested bids around the \u00a5133.15 level while the Swiss franc moved lower vis-\u00e0-vis the yen and tested bids around the \u00a581.00 figure. 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, down from CNY 6.8280.\u00a0 Data released in China overnight saw April foreign direct investment up an actual 24.69% y\/y, up from the prior reading of 12.08%.\u00a0 Yuan forwards registered their largest weekly gain this year on speculation China will revalue its currency in short order.\u00a0 The U.S. and China will hold their second U.S.-China Strategic and Economic Dialogue in Beijing on 24-25 May.\u00a0 People\u2019s Bank of China member Li Daokui reported \u201cconditions for China\u2019s interest rate adjustment are basically mature now.\u201d<\/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$ 1.4495 level and was capped around the $1.4640 level.\u00a0 Bank of England Governor King was on the tape as saying the U.S. faces some of the same fiscal dangers as Greece.\u00a0 Traders are increasing their positions that would benefit if Bank of England keeps interest rates lower for a longer period of time.\u00a0 Yields on two-year and 10-year gilts fell to their lowest level this year.\u00a0 Traders continue to express doubts that the new coalition government will be able to adequately reduce the U.K.\u2019s mammoth fiscal deficit.\u00a0 The new government has suddenly found an ally in Bank of England Governor King who has publicly supported their decision to reduce spending by as much as \u00a36 billion.\u00a0 Cable bids are cited around the US$ 1.4335 level.\u00a0 The euro depreciated vis-\u00e0-vis the British pound as the single currency tested bids around the \u00a30.8500 figure and was capped around the \u00a30.8620 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":"

Bank of England Governor King was on the tape as saying the U.S. faces some of the same fiscal dangers as Greece. Traders are increasing their positions that would benefit if Bank of England…<\/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-9438","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/9438","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=9438"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/9438\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=9438"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=9438"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=9438"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}