Tuesday November 18, 2008 - 16:31:53 GMT
Share This Story
GCI Financial - www.gcitrading.com
Forex Market Commentary and Analysis (18 November 2008)
The euro moved marginally lower vis-√†-vis the U.S. dollar today as
the single currency tested bids around the US$ 1.2570 level and was capped
around the $1.2685 level. Traders are
closely watching congressional testimony from Federal Reserve Chairman Bernanke
and Treasury Secretary Paulson today.
Paulson recently noted the credit crisis has moved beyond the housing
sector and both officials are likely to face extreme pressure regarding an
automakers‚Äô bailout or stabilization board.
There will also be grilling related to the Bush administration‚Äôs
decision to not purchase up to US$ 700 billion in toxic assets pursuant to the
Emergency Economic Stabilization Act. Instead
of being appropriated to the Troubled Asset Relief Program, the funds are
likely to be injected directly into banks.
Data released in the U.S.
today saw October producer prices fall a record 2.8% following September‚Äôs 0.4%
decline and October PPI was up 5.2%.
Core PPI was up 0.4% m/m and 4.4% y/y.
Other data saw September net capital inflows of US$ 143.4 billion, large
enough to cover the US$ 56.47 billion trade deficit that month. Fed funds futures are fully pricing in a
50bps cut in the federal funds target rate to 1.00% by the Federal Open Market
Committee next month. Data released n
last year saw October industrial production up 1.3% with October capacity
utilization at 76.4%. In eurozone news, the European
Parliament called for the European Central Bank‚Äôs rate-setting power to be
shifted from the larger Governing Council to the smaller Executive Board, a
move that will likely fail because it would require 27 European Union members
to ratify changes to the treaty. ECB
member Noyer said there have recently been some signs of improvement in the
money markets. Euro bids are cited
around the US$ 1.2135 level.
The yen depreciated vis-√†-vis the U.S.
dollar today as the greenback tested
offers around the ¬•97.15 level and was supported around the ¬•96.05 levels. The pair retraced most of the intraday losses
incurred in late North American dealing yesterday. Traders are closely watching the political
kabuki in Japan
where the opposition Democrats are trying force an early election by delaying
key bills designed to assist struggling banks.
Traders are closely monitoring this week‚Äôs Bank of Japan Policy Board
meeting with most expecting no additional easing at this time after having cut
the unsecured call rate by 20bps to 30bps in October. Still, it is possible the
central bank may adopt other measures designed to steer money market rates
lower. Economy minister Yosano warned the next fiscal year beginning in April
could also see negative growth. The
Nikkei 225 stock index lost 2.28% to close at ¬•8,328.41. U.S. dollar offers are cited around the
¬•104.15 level. The euro moved higher vis-√†-vis the yen as the single currency
tested offers around the ¬•122.95 level and was supported around the ¬•121.00
figure. The British pound moved higher vis-√†-vis the yen as sterling tested
offers around the ¬•146.00 figure while the
Swiss franc gained ground vis-√†-vis the yen and tested offers around the ¬•80.95
The Chinese yuan depreciated vis-√†-vis the U.S. dollar as the
greenback closed at CNY 6.8284 in the over-the-counter market, up from CNY
British pound moved higher vis-√†-vis the U.S. dollar today as cable tested offers
around the US$ 1.5090 level and was supported around the $1.4935 level. Data released in the U.K. today saw
consumer price inflation decline in October at its fastest pace since at least
1997. CPI growth decelerated to 4.5% y/y
from 5.2% y/y in September, representing its lowest level since July and off
0.2% m/m. Core inflation fell to 1.9% y/y
from 2.2% y/y in September. Short
sterling interest rate futures are pricing in additional easing by Bank of
England‚Äôs Monetary Policy Committee over the coming months. Chancellor of the Exchequer Darling reported
the government will continue to purchasing shares at discounted prices in
companies that participate in its recapitalization scheme. Cable bids are cited around the US$ 1.4315
level. The euro moved lower vis-√†-vis the British pound as the single
currency tested bids around the ‚ā§0.8355 level and was capped around the ‚ā§0.8450
franc depreciated vis-√†-vis the U.S. dollar today as the greenback tested
offers around the CHF 1.2025 level and was supported around the CHF 1.1970
level. Data released in Switzerland
today saw Swiss retail sales climb 6.4% y/y while October unemployment reached
2.5%. U.S. dollar offers are cited
around the CHF 1.2120 level. The euro and British pound appreciated
vis-√†-vis the Swiss franc as the crosses tested offers around the CHF 1.5190
and CHF 1.8090 levels, respectively.
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."