Thursday April 16, 2009 - 22:31:10 GMT
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GCI Financial - www.gcitrading.com
Forex Market Commentary and Analysis (16 April 2009)
The euro weakened vis-Ã -vis the U.S. dollar today as the single currency tested bids around the US$ 1.3125
level and was capped around the US$ 1.3270 level. The common currency extended recent losses as
traders remained pessimistic about the eurozone economy and reacted to
worsening economic data there. Many data
were released in the U.S.
today. First, the April Philadelphia Fedâ€™s manufacturing survey weakened for
the sixteenth time in the past seventeen months, printing at -24.4 from -35 in
March. Second, weekly initial jobless
claims fell 53,000 to 610,000 while continuing jobless claims climbed 172,000
to 6.022 million. Third, March housing starts were off 10.8% to an annualized
rate of 510,000 while building permits were off 9% to 513,000. The Fedâ€™s Beige Book yesterday was more
optimistic than last monthâ€™s Beige Book and suggested the pace of economic
decline may be moderating in parts of the U.S. In
eurozone news, EMU-16 industrial production fell 2.3% m/m and 18.4% y/y in
February. Additionally, March consumer
price inflation growth decelerated an all-time annualized low of +0.6% y/y in
March from +1.2% y/y in February â€“ significantly below the European Central
Bankâ€™s 2.0% inflation ceiling target.
Most traders believe the ECB will counter these disinflationary
pressures by moving interest rates lower to 1.0% in May and adopting a
quantitative easing policy that could see the central bank purchase sovereign
debt in the secondary market. Euro
bids are cited around the US$ 1.3100 figure.
The yen appreciated vis-Ã -vis the U.S. dollar today as the
greenback tested bids around the Â¥98.55 level and was capped around the Â¥99.50
level. The yen gave back earlier
intraday gains after a slew of U.S.
economic data were released and U.S.
equity markets retained their gains. Data
released in Japan overnight
saw March total orders up 2.6% m/m and off 85.2% y/y, a staggering decline that
acute economic recession. The Nikkei 225
stock index gained 0.14% to close at Â¥8,755.26.
U.S. dollar offers are cited around the Â¥104.15 level. The
euro moved lower vis-Ã -vis the yen as the single currency tested bids around
the Â¥129.35 level and was capped around the Â¥132.00 figure. The British
pound moved lower vis-Ã -vis the yen as sterling tested bids around the Â¥148.40
level while the Swiss franc moved lower vis-Ã -vis
the yen and tested bids around the Â¥85.50 level. The
Chinese yuan depreciated vis-Ã -vis the U.S. dollar today as the greenback
closed at CNY 6.8286 in the over-the-counter market, up from CNY 6.8200. Data released in China today saw a higher-than-expected
Q1 GDP up 6.1% y/y, off from 6.8% in Q4 2008. Other data saw March consumer
price inflation off 1.2% y/y while Q1 producer price inflation was off
4.6%. The Chinese government reported
the economy is still facing a slowdown pressure.
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