Tuesday February 12, 2008 - 15:46:02 GMT
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GCI Financial - www.gcitrading.com
Forex Market Commentary and Analysis (12 February 2008)
The euro moved
higher vis-√†-vis the U.S. dollar today as the single currency tested offers
around the US$ 1.4605 level and was supported around the $1.4495 level. Technically, today‚Äôs intraday high was right
around the 38.2% retracement of the move from $1.4015 to $1.4965. German finance minister Steinbrueck said
European Central Bank President Trichet ‚Äúdid not signal a change of paradigm in
policy‚ÄĚ and added ‚Äúan interest rate cut is not necessary.‚ÄĚ Steinbrueck predicted no recession for the
eurozone economy but said there will be a ‚Äúflattening of growth.‚ÄĚ Data released
today saw the February ZEW economic expectations index improve to -39.5 from
-41.6 in January while the current economic index fell to 33.7 from 56.6. Slovenian finance minister Bajuk hawkishly
said EMU-15 inflation is a ‚Äúvery serious problem.‚ÄĚ In
U.S. news, traders await testimony from Federal Reserve Chairman Bernanke
and Treasury Secretary Paulson on Thursday to see if the yield any additional
clues about monetary and fiscal stimuli.
Euro bids are cited around the US$ 1.4380 level.
The yen depreciated vis-√†-vis the U.S. dollar today as the
greenback tested offers around the ¬•107.55 level and was supported around the
¬•106.75 level. Technically, today‚Äôs
intraday high was right around the 50% retracement of the move from ¬•110.10 to
¬•104.95. The yen was pressured today
after Credit Suisse posted decent quarterly results. Traders had expected some European banks to
post disappointing results like their U.S. counterparts on account of
write-downs related to the subprime crisis but the early intraday performance
in European bourses raised risk appetites and lessened demand for yen. Traders await the results of the two-day Bank
of Japan Policy Board meeting that begins on Thursday with most traders expecting
the overnight call rate to remain unchanged at 0.50% for the next few
months. Data released in Japan overnight
saw orders for industrial machinery fall 1.5% y/y to ¬•523.7 billion. Traders also await Thursday‚Äôs GDP data in Japan. The Nikkei 225 stock index gained 0.04% to
close at ¬•13,021.96. Dollar bids are
cited around the ¬•105.65/ 104.95 levels.
The euro moved higher
vis-√†-vis the yen as the single currency tested offers around the ¬•156.65 level
and was supported around the ¬•154.85 level.
The British pound and Swiss franc
appreciated vis-√†-vis the yen as the crosses tested offers around the
¬•210.25 and ¬•97.65 levels, respectively.
In Chinese news, yuan trading
will recommence after the Chinese New Year holiday.
British pound appreciated vis-√†-vis the U.S. dollar today as cable tested offers around the US$ 1.9610 level
and was supported around the $1.9440 level.
The pair hit stops above the $1.9605 level, representing the 38.2%
retracement of the move from $1.9955 to $1.9385. Data released in the U.K. today saw January
consumer price inflation up an annualized 2.2%, above December‚Äôs 2.1% print but
below the 2.3% estimate. Bank of England
is currently in a monetary easing cycle and CPI numbers above 2.0% make it
difficult for policymakers to justify substantial monetary easing. Other data released today saw CML report that
mortgage affordability worsened in December.
Also, BRC January like-for-like retail sales expanded 2.6% and Lloyds
TSB reported U.K.
firms‚Äô confidence has fallen to a five-year low. Cable bids are cited around the US$ 1.9260
level. The euro gained marginal ground vis-√†-vis the British pound as the
single currency tested offers around the ‚ā§0.7460 level and was supported around
the ‚ā§0.7425 level.
franc appreciated vis-√†-vis the U.S. dollar today as the greenback tested
bids around the CHF 1.0980 level and was capped around the CHF 1.1040
level. The February ZEW survey will be
released on Thursday followed by December retail sales on Friday. U.S. dollar offers are cited around the CHF
1.1155 level. The euro and British pound moved higher vis-√†-vis the Swiss franc
as the crosses tested offers around the CHF 1.6050 and CHF 2.1560 levels,
The Australian dollar moved higher vis-√†-vis the U.S. dollar today as the Aussie tested
offers around the US$ 0.9085 level and was supported around the $1.9440
level. Traders continue to bid the A$
higher as traders anticipate additional monetary tightening from Reserve Bank
of Australia. The markets are currently pricing in another
25bps of rate hikes from RBA in March.
Data released in Australia
today saw the NAB January business confidence index fall to its lowest level
since September 2001. Australian dollar
bids are cited around the US$ 0.8990 level.
The New Zealand dollar appreciated
vis-√†-vis the U.S. dollar today as the kiwi tested offers around the US$ 0.7955
level and was supported around the $0.7865 level. New Zealand dollar bids are cited
around the US$ 0.7840 level.
The Canadian dollar appreciated
vis-√†-vis the U.S. dollar today as
the greenback tested bids around the C$ 0.9935 level and was capped around the
C$ 1.0040 level. The pair continues to
orbit the $0.9990 level, representing the 23.6% retracement of the move from C$
1.0380 to C$ 0.9870. U.S. dollar offers
are cited around the C$ 1.0065/ 1.0125 levels.
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