{"id":9612,"date":"2010-05-20T20:10:47","date_gmt":"2010-05-21T00:10:47","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=9612"},"modified":"2010-05-20T20:10:47","modified_gmt":"2010-05-21T00:10:47","slug":"forex-daily-market-commentary-66","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/05\/20\/forex-daily-market-commentary-66\/","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$ 1.2595 level and was supported around the $1.2295 level.\u00a0 The common currency escalated sharply during the North American session on market rumours the European Central Bank was intervening.\u00a0 The rumour precipitated an acute move, propelling the common currency higher by more than 150 pips in short order.\u00a0 There was no official indication as to whether or not the ECB was on the bid but the euro is so oversold that major short-covering can occur anytime rumours like this emerge.\u00a0 There was also a rumour that the ECB held an emergency meeting to discuss the debt crisis in the eurozone and this also led to short-covering.\u00a0 Most technicians believe the euro will test key long-term technical support levels around the US$ 1.2020 level and eventually absorb the psychologically-important US$ 1.2000 figure.\u00a0 The pair also continues to spiral downward in reaction to Germany\u2019s ban on naked short selling this week.\u00a0 ECB President Trichet today reiterated the central bank\u2019s policies do not represent quantitative easing and said the ECB is \u201cinflexibly attached to price stability, our primary mandate.\u201d Data released in the eurozone today saw EMU-16 May consumer condidence worsen to -18 from -15 and many data will be released tomorrow including PMI surveys and current account numbers.\u00a0 German data released today saw April producer prices up 0.8% m\/m and 0.6% y\/y.\u00a0 In U.S. news, data released today saw weekly initial jobless claims grow to 471,000 from last week\u2019s revised 446,000 level and continuing jobless claims fell to 4.625 million.\u00a0 Also, April leading indicators were off 0.1% and the May Philadelphia Fed index ticked higher to 21.4.\u00a0 Fed Governor Tarullo warned the crisis in Europe may slow the global economic recovery and the U.S. economy.\u00a0 The Fed\u2019s balance sheet reached a record US$ 2.35 trillion on recent mortgage purchases.\u00a0 A new financial regulatory bill is sailing through the U.S. Senate and the Fed may find its powers broadened.\u00a0 Outgoing Fed Vice Chairman Kohn called for the U.S. of regulatory tools to prevent asset bubbles.\u00a0 Euro bids are cited around the US$ 1.2140 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 \u00a588.95 level and was capped around the \u00a591.85 level.\u00a0 Traders expanded their long yen positions as global market sentiment crumbled further over European credit woes.\u00a0 Dealers shook off news that Japan\u2019s economy grew less-than-expected in the first quarter on weak consumption.\u00a0 GDP expanded an annualized 4.9% and nominal GDP was up 1.2% q\/q, the largest climb in a decade.\u00a0 Finance minister Kan again called on Bank of Japan to support the economy further.\u00a0 Consumer spending accounted for only about 17% of the quarterly growth rate, the latest indication that final private demand remains moribund.\u00a0 The domestic demand deflator was off 1.9%, a moderation in price declines and the smallest decline in a year.\u00a0 BoJ\u2019s Policy Board will announce its interest rate decision overnight and is expected to keep its benchmark overnight call rate target unchanged at 0.10%.\u00a0 The government will continue to pressure the central bank to do more to counter deflationary pressures. The central bank will likely announce plans to assist lenders in providing credit to certain segments of the Japanese economy.\u00a0 Data released in Japan overnight saw Q1 housing loans were up 1.0% y\/y.\u00a0 The Nikkei 225 stock index lost 1.54% to close at \u00a510,030.31.\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 \u00a5109.45 level and was capped around the \u00a5114.10 level.\u00a0 The British pound moved lower vis-\u00e0-vis the yen as sterling tested bids around the \u00a5126.70 level while the Swiss franc moved lower vis-\u00e0-vis the yen and tested bids around the \u00a577.05 level. In Chinese news, the U.S. dollar appreciated vis-\u00e0-vis the Chinese yuan as the greenback closed at CNY 6.8277 in the over-the-counter market, up from CNY 6.8275.\u00a0 Market talk suggests the U.S. and China will deemphasize a revaluation of the yuan when officials meet soon.<\/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$ 1.4230 level and was capped around the $1.4465 level.\u00a0 Bank of England Monetary Policy Committee member Posen reported eurozone problems will reduce the U.K.\u2019s consumer price inflation despite \u201cupside risks to inflation.\u201d\u00a0 MPC member Tucker warned the sharp monetary easing may lead to exuberance.\u00a0 Data released in the U.K. today saw April retail sales up 0.3% m\/m and 1.8% y\/y.\u00a0 Cable bids are cited around the US$ 1.4110 level.\u00a0 The euro appreciated vis-\u00e0-vis the British pound as the single currency tested offers around the \u00a30.8715 level and was supported around the \u00a30.8560 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 1.1450 level and was capped around the CHF 1.1575 level.\u00a0 The May ZEW survey\u2019s expectations index tumbled to 40.5 from the prior reading of 53.4.\u00a0 Swiss National Bank Vice Chairman Jordan reported the central bank is \u201cdecisively\u201d averting an appreciation of the franc, leading to speculation the SNB\u2019s actions prompted today\u2019s massive short covering in the euro.\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 1.4455 level while the British pound lost ground vis-\u00e0-vis the Swiss franc and tested bids around the CHF 1.6380 level.<\/p>\n

Forex Daily Market Commentary<\/strong><\/em> provided by<\/em><\/strong> GCI Financial Ltd<\/strong><\/a>.<\/strong><\/span><\/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":"

Most technicians believe the euro will test key long-term technical support levels around the US$ 1.2020 level and eventually absorb the psychologically-important US$ 1.2000 figure…<\/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-9612","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/9612","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=9612"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/9612\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=9612"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=9612"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=9612"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}