{"id":9550,"date":"2010-05-18T14:55:56","date_gmt":"2010-05-18T18:55:56","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=9550"},"modified":"2010-05-18T14:55:56","modified_gmt":"2010-05-18T18:55:56","slug":"forex-daily-market-commentary-64","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/05\/18\/forex-daily-market-commentary-64\/","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 vis-\u00e0-vis the U.S. dollar today as the single currency tested offers around the US$ 1.2445 level and was supported around the $1.2315 level. The common currency gained marginal ground after eurozone finance ministers reported the Greek debt crisis will not engender excessive tightening policies.\u00a0 European Union Economic and Monetary Affairs Commissioner Rehn reported the European Union will \u201ctake a look\u201d at the deficit reduction plans of all 27 European Union governments before June.\u00a0 Greece confirmed receipt of a \u20ac14.5 billion loan tranche from the European Union.\u00a0 European Central Bank Weber warned against a return to \u201cbusiness as normal\u201d in the economic recovery process.\u00a0 Three-month U.S. dollar Libor reached 0.46469% today, up from Monday\u2019s level of 0.46%, while the euro Libor rate fell to 0.63%.\u00a0 Data released in the eurozone today saw EMU-16 April consumer price inflation up 0.5% m\/m and 1.5% y\/y at the headline level and 0.8% y\/y at the core level.\u00a0 The May ZEW economic sentiment index fell to 37.6 from the prior reading of 46.0 while the EMU-16 March trade balance printed at \u20ac4.5 billion.\u00a0 The German May ZEW economic sentiment index fell to 45.8 while the current situation sub-index came in at -21.6.\u00a0 Also, French Q1 non-farm payrolls were off 0.1% q\/q with wages up 0.7% q\/q.\u00a0 In U.S. news, data released today saw the April headline producer price index off 0.1% m\/m and up 5.5% y\/y with the ex-food and energy rate up 0.2% m\/m and 1.0% y\/y.\u00a0 Also, April housing starts were up 5.8% m\/m to an annualized 672,000 units and April building permits were off 11.5% m\/m to an annualized 606,000 units.\u00a0 Traders are trying to reconcile how the European debt crisis may decelerate the removal of monetary accommodation by the Fed.\u00a0 Euro bids are cited around the US$ 1.2140 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 \u00a592.95 level and was supported around the \u00a592.30 level.\u00a0 Bank of Japan overnight resumed the provision of U.S. dollars to lenders as dollar borrowing costs continue to escalate globally on account of European sovereign debt woes.\u00a0 BoJ is offering unlimited U.S. dollar loans for 84 days from 20 May to 12 August at a fixed interest rate of 1.24% against eligible collateral as part of this program.\u00a0 The central bank\u2019s previous U.S. dollar lending operations commenced in September 2008 following the collapse of U.S. banking giant Lehman Brothers.\u00a0 Bids for the loans totaled US$ 210 million, a relatively low number that represented good news. BoJ\u2019s Policy Board convenes on 20-21 May and some dealers expect it will provide information regarding its lending program this week designed to stimulate certain sectors of the economy including technology.\u00a0 Data released in Japan overnight saw the March tertiary industry index decline 3.0% m\/m, down from the revised prior reading of -0.3%.\u00a0 Also, April consumer confidence improved to 42.1 while April machine tool orders were up 200.9% y\/y.\u00a0 Additionally, April Nationwide department sales were off 3.7% y\/y and Tokyo-area department store sales were off 4.9% y\/y.\u00a0 The Nikkei 225 stock index gained 0.07% to close at \u00a510,242.64.\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 \u00a5115.45 level and was supported around the \u00a5113.75 level.\u00a0 The British pound moved higher vis-\u00e0-vis the yen as sterling tested offers around the \u00a5134.80 level while the Swiss franc moved higher vis-\u00e0-vis the yen and tested offers around the \u00a582.35 level. In Chinese news, the U.S. dollar depreciated vis-\u00e0-vis the Chinese yuan as the greenback closed at CNY 6.8274 in the over-the-counter market, down from CNY 6.8277.\u00a0 People\u2019s Bank of China adviser Xia Bin reported \u201cdiversification is a long-term trend\u201d and added the euro\u2019s problems will not deter China from diversifying its sizable foreign currency reserves.\u00a0 PBoC official Li De reported the central bank \u201cwill be very prudent\u201d over interest rate adjustments.\u00a0 Yuan forwards gained ground following a report from eurozone finance ministers that Greece\u2019s debt crisis will not precipitate \u201cexcessive\u201d tightening policies.<\/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$ 1.4405 level and was capped around the $1.4520 level.\u00a0 Cable spun lower during the North American session as traders continued to sell sterling on concerns the new coalition government will be unable to materially reduce the U.K.\u2019s bloated budget deficit and national debt.\u00a0 Data released in the U.K. today saw April headline consumer price inflation was up 0.6% m\/m and 3.7% y\/y while the core CPI index was up 3.1% y\/y.\u00a0 Both the headline and core year-over-year rates remain at significantly elevated levels and Bank of England Governor George cited elevated oil prices, a weaker pound, and restoration of the VAT sales tax rate at 17.5% as \u201cfactors that are masking the downward pressure on inflation from the substantial margin of spare capacity in the economy.\u201d\u00a0 The 3.7% print was the highest since November 2008.\u00a0 The BoE Monetary Policy Committee expects CPI inflation will fall back to target within a year.\u00a0 New Chancellor of the Exchequer Osborne reconfirmed the new government\u2019s \u201cabsolute commitment to maintaining price stability\u201d and to reducing spending by \u00a36 billion in 2010-2011.\u00a0\u00a0 Cable bids are cited around the US$ 1.4110 level.\u00a0 The euro appreciated vis-\u00e0-vis the British pound as the single currency tested offers around the \u00a30.8605 level and was supported around the \u00a30.8540 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 1.1265 level and was capped around the CHF 1.1380 level.\u00a0 Swiss National Bank President Hildebrand late yesterday reported the central bank is \u201cready to act\u201d against the current strengthening of the franc, noting it is jeopardizing the economic recovery and Swiss price stability.\u00a0 Hildebrand warned that Europe\u2019s \u201cdramatic\u201d situation is \u201cvery difficult\u201d and might worsen, pledging action in a \u201cdecisive manner.\u201d\u00a0 U.S. dollar bids are cited around the US$ 1.1110 level.\u00a0 The euro gained ground vis-\u00e0-vis the Swiss franc as the single currency tested offers around the CHF 1.4045 level while the British pound lost ground vis-\u00e0-vis the Swiss franc and tested bids around the CHF 1.6295 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 Union Economic and Monetary Affairs Commissioner Rehn reported the European Union will \u201ctake a look\u201d at the deficit reduction plans of all 27 European Union governments before June…<\/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-9550","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/9550","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=9550"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/9550\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=9550"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=9550"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=9550"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}