{"id":9783,"date":"2010-05-27T12:45:52","date_gmt":"2010-05-27T16:45:52","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=9783"},"modified":"2010-05-27T12:45:52","modified_gmt":"2010-05-27T16:45:52","slug":"forex-daily-market-commentary-71","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/05\/27\/forex-daily-market-commentary-71\/","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$ 1.2340 level and was supported around the $1.2155 level.\u00a0 The common currency pushed higher after China indicated it will continue to be a long-term investor in euro-denominated assets, contrasting with market chatter that suggested China would reduce exposure to longer-term euro assets.\u00a0 On the other hand, Kuwait Investment Authority noted it may reduce its investments in the eurozone.\u00a0 European Central Bank member Nowotny said he does \u201cnot see any risks that are endangering\u201d the ECB\u2019s \u201cnear 2%\u201d inflation target.\u00a0 ECB member Gonzalez-Paramo said the ECB\u2019s \u201carsenal has not been exhausted\u2026our capacity to act\u2026is unlimited.\u201d\u00a0 The ECB reported eurozone banks deposited \u20ac294.5 billion with it overnight.\u00a0 Formber Bundesbank President Schlesinger said the euro is \u201cnot in danger\u201d and it\u2019s level \u201cis not catastrophically low.\u201d\u00a0 Spain\u2019s parliament today approved a \u20ac15 billion austerity package.\u00a0 Data released in Germany today saw provisional May consumer price inflation data for German states come in at or above expectations.\u00a0 National CPI was up 0.1% m\/m and 1.2% y\/y with the harmonized level up the same amounts.\u00a0 Also, the French May consumer confidence indicator ticked lower to -38 from -37.\u00a0\u00a0 In U.S. news, Richmond Fed President Lacker said the U.S. economy will continue to expand.\u00a0 Lacker also said he is \u201cdecreasingly comfortable\u201d with the Fed\u2019s commitment to keep rates low for an \u201cextended period.\u201d St. Louis Fed President Bullard reported he does \u201cnot see\u201d how European contagion could occur in the U.S\u201d and said \u201cconsumers are generally feeling better about the U.S. economy.\u201d Data released in the U.S. today saw Q1 gross domestic product up an annualized 3.0% q\/q rate, down from the prior reading of 3.2% q\/q as consumption was reduced lower.\u00a0 Also, the Q1 GDP price index improved to 1.0% and core PCE was up 0.6% q\/q.\u00a0 Additionally, weekly initial jobless claims fell to +460,000 while continuing jobless claims fell back to 4.607 million.\u00a0 Euro offers are cited around the US$ 1.2620 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 \u00a590.60 level and was supported around the \u00a589.80 level.\u00a0 Some risk appetite returned to the market today after China indicated it is not reducing its diversification into euro-denominated assets and this led to a weaker yen.\u00a0 Fed Chairman Bernanke spoke in Tokyo yesterday and said \u201cPolitical interference in monetary policy can generate undesirable boom-bust cycles that ultimately lead to both a less-stable economy and higher inflation.\u201d Bank of Japan Governor Shirakawa reported \u201cPrice stability is certainly one important element in achieving a stable financial environment. That is, however, not the sole factor.\u201d\u00a0 Minutes of the 30 April BoJ Policy Board meeting yesterday revealed the BoJ should \u201cdevise ways to avoid its excessive involvement in resource allocation among individual firms.\u201d\u00a0 Data released in Japan overnight saw the April merchandise trade balance fall to \u00a5742.3 billion.\u00a0 Data to be released tonight include household spending, employment numbers, and consumer price inflation.\u00a0 The Nikkei 225 stock index climbed 1.23% to close at \u00a59,639.72.\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 \u00a5111.50 level and was supported around the \u00a5109.20 level.\u00a0 The British pound moved higher vis-\u00e0-vis the yen as sterling tested offers around the \u00a5131.95 level while the Swiss franc moved higher vis-\u00e0-vis the yen and tested offers around the \u00a578.70 level. In Chinese news, the U.S. dollar appreciated vis-\u00e0-vis the Chinese yuan as the greenback closed at CNY 6.8312 in the over-the-counter market, up from CNY 6.8290.\u00a0\u00a0 The State Administration of Foreign Exchange reported Europe will remain a major investment market for China, countering speculation China would reduce its euro-denominated holdings.\u00a0 People\u2019s Bank of China increased interest rates on three-month bills for a second consecutive auction, the latest evidence the central bank is absorbing excess liquidity at higher interest rates.\u00a0 Yuan forwards continued to rebound after an eight-month low earlier in the week as traders speculated China will revalue its yuan.\u00a0 U.S. Treasury Secretary Geithner this week said revaluating the yuan is \u201cabsolutely\u201d in China\u2019s best interest.<\/p>\n

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

The British pound appreciated vis-\u00e0-vis the U.S. dollar today as cable tested offers around the US$ 1.4585 level and was supported around the $1.4365 level. Data released in the U.K. today saw the May distributive trades survey print at -18, an unexpected drop.\u00a0 Data to be released in the U.K. tonight include the May GfK consumer confidence survey.\u00a0 Bank of England will expand its long-term funding mechanism next month and will incorporate a two-tier auction system that accepts a wider array of collateral to address stresses in the financial system.\u00a0 Chancellor of the Exchequer Osborne this week reported the new Cameron government hopes to decrease fiscal spending by at least \u00a36 billion in what would be an abrupt shift from the policies of former Prime Minister Brown.\u00a0 Cable bids are cited around the US$ 1.4110 level.\u00a0 The euro appreciated vis-\u00e0-vis the British pound as the single currency tested offers around the \u00a30.8510 level and was supported around the \u00a30.8420 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 1.1500 figure and was capped around the CHF 1.1615 level.\u00a0 Data released in Switzerland today saw the Q1 employment level remain steady at 3.961 million with the employment level up 0.1% y\/y.\u00a0 April trade balance data will be released tomorrow followed by the May KOF Swiss leading indicator.\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 1.4220 level while the British pound gained ground vis-\u00e0-vis the Swiss franc and tested offers around the CHF 1.6830 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":"

Some risk appetite returned to the market today after China indicated it is not reducing its diversification into euro-denominated assets and this led to a weaker yen. Fed Chairman Bernanke spoke…<\/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-9783","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/9783","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=9783"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/9783\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=9783"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=9783"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=9783"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}