{"id":9921,"date":"2010-06-02T15:30:34","date_gmt":"2010-06-02T19:30:34","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=9921"},"modified":"2010-06-02T15:30:34","modified_gmt":"2010-06-02T19:30:34","slug":"forex-daily-market-commentary-74","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/06\/02\/forex-daily-market-commentary-74\/","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$ 1.2175 level and was capped around the $1.2275 level.\u00a0 North American dealers lifted the common currency from its intraday lows.\u00a0 European Commission President Barroso called for the establishment of an independent European credit ratings agency.\u00a0 Iran\u2019s central bank today reported it is selling \u20ac45 billion in reserves for U.S. dollars.\u00a0 Three-month U.S. Dollar Libor loans rose to 0.5375% today from 0.53625% yesterday.\u00a0 Its recent high was 0.53844% – reached on 27 May \u2013 and this was the highest level since 6 July 2009.\u00a0 Libor has more than doubled in 2010 on account of the deteriorating credit outlook for banks and the European sovereign debt crisis.\u00a0 European Central Bank member Noyer reported the current EUR\/USD rate is \u201cby no means unusually low.\u201d Spanish Prime Minister Zapatero said he will approve a labour market rule change on 16 June and also noted financial markets are having a \u201cserious difficulty.\u201d Greece reported it is establishing a holding company to help sell its state assets and finance minister Papaconstantinou reported Greece will accelerate privatizations.\u00a0 Data released in the eurozone today saw EMU-16 producer price inflation up 0.9% m\/m and 2.8% y\/y.\u00a0 In U.S. news, data released today saw MBA mortgage applications decelerate to +0.9% while May Challenger job cuts were off 65.1% y\/y.\u00a0 Also, April pending home sales were up 6.0% m\/m and 24.6% y\/y.\u00a0 Philadelphia Fed President Plosser said Fed policy will be impacted by the European Union financial crisis.\u00a0 Euro offers are cited around the US$ 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 \u00a592.20 level and was supported around the \u00a590.90 level.\u00a0 The major news in Japan overnight was the resignation of Prime Minister Hatoyama over his handling of the U.S. military base relocation on Okinawa.\u00a0 A successor has not yet been named but one possibility receiving a lot of attention is finance minister Kan.\u00a0 The market impact will probably be limited over the long-term as Japan does not have much room to issue more debt.\u00a0 If Kan becomes the new Prime Minister, it is possible that Vice finance minister Noda will become the new financial minister.\u00a0 Lower-house elections are forthcoming and the Democratic Party of Japan has a tenuous grip on power.\u00a0 Bank of Japan sources indicated the central bank may lend at least \u00a51 trillion to commercial banks under its new loan program, details of which were announced in May.\u00a0 Japan continues to suffer from moderate deflation that monetary policy and fiscal policy have been unable to resolve.\u00a0 Data released in Japan overnight saw the May monetary base up 3.7% y\/y and data to be released tonight include Q1 capital spending.\u00a0 The Nikkei 225 stock index lost 1.12% to close at \u00a59,603.24.\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 \u00a5112.70 level and was supported around the \u00a5111.00 figure.\u00a0 The British pound moved higher vis-\u00e0-vis the yen as sterling tested offers around the \u00a5135.40 level while the Swiss franc moved higher vis-\u00e0-vis the yen and tested offers around the \u00a579.70 level. In Chinese news, the U.S. dollar depreciated vis-\u00e0-vis the Chinese yuan as the greenback closed at CNY 6.8298 in the over-the-counter market, down from CNY 6.8306.\u00a0 Former People\u2019s Bank of China adviser Fan Gang reported China needs to implement local government debt quotas.\u00a0 Many dealers believe China faces a massive property bubble and needs to rein in further housing speculation. PBoC adviser Li today estimated China\u2019s mainland inflation may reach 3.7% this year, noting China is \u201clightly overheating.\u201d\u00a0 PBoC Governor Zhou reported China has \u201cpromptly\u201d curbed its economic downturn.<\/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$ 1.4550 level and was capped around the $1.4770 level.\u00a0 Bank of England Governor King said the system must seize the opportunity for reform and banks should not be permitted to be \u201ctoo big to fail.\u201d\u00a0 King reiterated support for the BoE\u2019s policy framework, reporting \u201cDespite its volatility, inflation remains low by historic standards, and on track to meet the target in the medium term. The framework has proved resilient to the stress of the financial crisis.\u00a0 It guided our monetary decisions going out into the crisis, and it will guide them coming out of it.\u201d\u00a0 Data released in the U.K. today saw April net consumer credit decline to -\u00a3100 million from the revised prior reading of +\u00a3100 million while April net lending secured on dwellings printed at \u00a3500 million, up from the prior reading of \u00a3200 million.\u00a0 April mortgage approvals grew marginally to 49,000 and the M4 money supply was up 0.0% m\/m and 3.3% y\/y.\u00a0 Finally, May PMI construction improved to 58.5.\u00a0 Cable bids are cited around the US$ 1.4220 level.\u00a0 The euro appreciated vis-\u00e0-vis the British pound as the single currency tested offers around the \u00a30.8375 level and was supported around the \u00a30.8280 level.<\/p>\n

CHF<\/strong><\/p>\n

The Swiss franc depreciated vis-\u00e0-vis the U.S. dollar today as the greenback tested offers around the CHF 1.1600 figure and was supported around the CHF 1.1525 level.\u00a0 Data released in Switzerland today saw April retail sales up 1.3% y\/y, down from a revised 4.0% in March.\u00a0 Swiss National Bank member Leuthard on Friday reported\u00a0 the SNB is interested in a \u201cstable euro,\u201d adding the central bank\u2019s euro reserves have risen to 52%.\u00a0 SNB has undertaken significant franc-selling intervention this year to address the depreciation of the common currency.\u00a0 U.S. dollar bids are cited around the US$ 1.1420 level.\u00a0 The euro lost ground vis-\u00e0-vis the Swiss franc as the single currency tested bids around the CHF 1.4120 level while the British pound lost ground vis-\u00e0-vis the Swiss franc and tested bids around the CHF 1.6860 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":"

The major news in Japan overnight was the resignation of Prime Minister Hatoyama over his handling of the U.S. military base relocation on Okinawa. A successor has not yet been…<\/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-9921","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/9921","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=9921"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/9921\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=9921"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=9921"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=9921"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}