Thursday April 9, 2009 - 20:24:57 GMT
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GCI Financial - www.gcitrading.com
Forex Market Commentary and Analysis (9 April 2009)
The euro came off vis-√†-vis the U.S. dollar today as the single currency tested bids around the US$ 1.3125
level and was capped around the US$ 1.3335 level. Traders continued to sell the common currency
ahead of the long Easter holiday weekend.
European Central Bank member Provopoulos reported ‚ÄúIt will take time for these unprecedented fiscal
and monetary interventions to have a positive effect.‚ÄĚ Regarding the
possibility the ECB will undertake ‚Äúunconventional‚ÄĚ policy options, he added
‚ÄúThe ECB's interventions with respect to the non-conventional measures are
decided each time after careful evaluation under prevailing circumstances. The assessment of the type and scale of such
interventions is based on the basic criterion of whether the benefits will reach
the end-user, in other words households and businesses." ECB President
Trichet reported ‚Äúone can imagine further interest rate cuts.‚ÄĚ Data released today saw German industrial
production off 2.9% in February and off 20.6% y/y. Also, German final March consumer price
inflation was off 0.1% m/m and up 0.5% y/y.
The ECB‚Äôs monthly bulletin reported ‚ÄúThere may be stronger than
anticipated positive effects due to the decrease in commodity prices and to
policy measures taken. There are
concerns that the turmoil in financial markets could have a stronger impact on
the real economy, as well as that protectionist pressures could intensify and
that there could be adverse developments in the world economy stemming from a
disorderly correction of global imbalances.‚ÄĚ In U.S. news, weekly initial jobless claims were off 20,000 to
654,000 while continuing jobless claims weer up 95,000 to 5.84 million. It was also reported that February import
prices were up 0.5% m/m and off 14.9% y/y, the largest annualized decline since
1982. Additionally, the February trade
gap fell more than expected, printing at ‚ÄďUS$ 25.97 billion from January‚Äôs
print of ‚ÄďUS$ 36.20 billion. Traders are
expressing some optimism with the current round of corporate Q1 earnings
including Wells Fargo‚Äôs US$ 3 billion profit in Q1. Euro
bids are cited around the US$ 1.3100 figure.
The yen depreciated vis-√†-vis the U.S. dollar today as the
greenback tested offers around the ¬•100.55 level and was supported around the ¬•99.65
level. Data released in Japan
overnight saw February core machinery orders unexpectedly climb +1.4% m/m, the
first improvement in five months. Also,
March machine tool orders were up +7.7% m/m and off a staggering 84.5%
y/y. The Nikkei 225 stock index climbed
3.74% to close at ¬•8,916.06. U.S. dollar
offers are cited around the ¬•104.15 level.
The euro moved lower
vis-√†-vis the yen as the single currency tested bids around the ¬•131.85 level
and was capped around the ¬•133.50 level.
The British pound moved higher
vis-√†-vis the yen as sterling tested offers around the ¬•148.00 figure while the Swiss franc moved lower vis-√†-vis
the yen and tested bids around the ¬•86.55 level. The
Chinese yuan depreciated vis-√†-vis the U.S. dollar today as the greenback
closed at CNY 6.8340 in the over-the-counter market, up from CNY 6.8320.
British pound came off vis-√†-vis the U.S. dollar today as cable tested bids
around the US$ 1.4585 level and was capped around the $1.4780 level. Bank of England‚Äôs Monetary Policy Committee
kept its main Bank rate unchanged at 0.5% today and agreed to keep injecting
‚ā§75 billion in new liquidity into the economy.
This represented the first time in seven months the MPC did not change
policy. The Bank is expected to continue
purchasing assets for the next two months.
Data released in the U.K.
today saw March output producer prices climb 0.1% m/m and 2.0% y/y, the weakest
rise since July 2007. Core output prices were up 0.2% m/m and 3.3% y/y and
input prices were up 1.0% m/m. It was
also reported that the February trade balance printed at -‚ā§7.3 billion. Cable bids are cited around the US$ 1.4515
level. The euro came off vis-√†-vis the British pound as the single
currency tested offers around the ‚ā§0.8960 level and was capped around the ‚ā§0.9085
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