Thursday November 4, 2004 - 21:24:14 GMT
Share This Story
GCI Financial - www.gcitrading.com
Forex Market Commentary and Analysis (4 November 2004)
The euro extended recent gains vis-à-vis the U.S. dollar today as the single currency tested offers around the psychologically-important US$ 1.2900 figure after European dealing kept the pair bid above the $1.2785 level. Dealers moved back into euros following a minor pop higher for the dollar on the heels of the U.S. Presidential election. Attention is back focused on the U.S.’s widening trade, budget, and current account deficits with market participants growing increasingly concerned about the U.S.’s ability to finance these imbalances. Traders also moved into euros ahead of tomorrow’s key October non-farm payrolls data that are expected to see around 160,000 new jobs created last month. Data released in the U.S. today saw weekly initial jobless claims fall 19,000 to 332,000 last week, a larger-than-expected fall. Other data released today saw Q3 productivity slow considerably to a +1.9% pace, more-than-forecast but around half of the previous quarter’s 3.9% rate. Unit labous costs were up +1.6%. Traders paid close attention to an ECB press conference today in which President Trichet said “there is no strong indication as yet that medium-term inflationary pressures are building in the euro area.” He added “strong vigilance is warranted with regard to all developments that could increase such risks.” ECB policymakers do not seem overly concerned about the rise of the euro given its dampening effect on inflation. Traders also bought euros on the deteriorating health of Palestinian leader Arafat who is said to be clinging to life in a Paris hospital. The Swiss franc was the largest beneficiary of this news given its traditional safe-haven status. Traders are skeptical that any possible successors can improve the stalled peace process between Israel and Palestine. Euro bids are cited around the $1.2860/40 levels.
The yen retraced most of its intraday gains vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥ 105.70 level before moving back to the ¥106.15 level during North American dealing. Today’s intraday low represented a fresh multi-month low for the dollar as traders continue to push the pair deeper into the ¥105 handle, hunting for stops and bids. A fall in the price of December NYMEX crude futures to an intraday low of $48.70 gave traders some of the confidence needed to sell dollars for yen. All eyes are fixated on tomorrow’s non-farm payrolls data with many technicians expecting a move to the ¥105.50/25 levels if the U.S. jobs situation fails to live up to its billing. The euro surged higher vis-à-vis the yen today as the single currency tested offers around the ¥136.80 level after finding some goods bids around the ¥136.00 figure. The move represented the cross’s highest level since 26 October. In Chinese news, the Chinese media reported financial officials reiterated their call to make the yuan more flexible, adding this time that fundamental preparations have been made. This naturally led to increased speculation that People’s Bank of China will widen the bank around the RMB sooner rather than later.
Forex Trading News
Daily Forex Market News
Forex news reports can be found on the forex research
headlines page below. Here you will find real-time forex market news reports
provided by respected contributors of currency trading information. Daily forex
market news, weekly forex research and monthly forex news features can be found
Real-time forex market news reports and features providing
other currency trading information can be accessed by clicking on any of the
headlines below. At the top of the forex blog page you will find the latest
forex trading information. Scroll down the page if you are looking for less
recent currency trading information. Scroll to the bottom of fx blog headlines
and click on the link for past reports on forex. Currency world news reports
from previous years can be found on the left sidebar under "FX Archives."