Wednesday April 22, 2009 - 21:59:49 GMT
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GCI Financial - www.gcitrading.com
Forex Market Commentary and Analysis (22 April 2009)
The euro appreciated vis-Ã -vis the U.S. dollar today as the single currency tested offers around the US$ 1.3040
level and was supported around the US$ 1.2885 level. Data released in the U.S. today saw the February housing price index
climb 0.7%, defying expectations of a 0.7% decline and a postive indication
about the severely beleaguered U.S.
housing industry. U.S. banking
giant Morgan Stanley announced a US$ 177 million loss in the first
quarter. The International Monetary Fund
downgraded its global economic outlook and now sees a 2009 economic retraction
of 1.3% from the previous forecast of +0.5%.
In eurozone news, traders
continue to expect the European Central Bank will ease monetary policy next
month, taking the main refinancing rate lower to 1.0% from 1.25%. There is also a strong possibility the ECB
will announce quantitative easing measures next month, possibly by purchasing
sovereign assets in the secondary market or extending the term on its refinancing
bids are cited around the US$ 1.2765 level.
The yen appreciated vis-Ã -vis the U.S. dollar today as the
greenback tested bids around the Â¥97.55 level and was capped around the Â¥98.75
level. Risk aversion returned to the
markets as traders were loath to assume risk in higher-yielding assets ahead of
many Q1 earnings reported in the U.S. Data released in Japan overnight saw the March trade
surplus print at Â¥11.0 billion, above expectations with exports off 45.6% y/y
and imports off 36.7% y/y. The Nikkei
225 stock index climbed 0.18% to close at Â¥8,727.30. 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¥126.20 level and was capped around the Â¥128.10 level. The
British pound moved lower vis-Ã -vis the yen as sterling tested bids around
the Â¥140.60 level while the Swiss franc
moved lower vis-Ã -vis the yen and tested bids around the Â¥83.55 level. The
Chinese yuan depreciated vis-Ã -vis the U.S. dollar today as the greenback
closed at CNY 6.8264 in the over-the-counter market, up from CNY 6.8224. Many
economists believe China
will fall short of its objective of notching 8.0% annual growth in 2009.
British pound depreciated vis-Ã -vis the U.S. dollar today as cable tested bids
around the US$ 1.4470 level and was capped around the $1.4490 level. Sterling fell sharply after the U.K. government reported it plans
to issue significantly more debt this fiscal year than was expected. The government plans to raise â‚¤220 billion in
the 2009-2010 fiscal year, above the previous forecast of â‚¤180 billion. Data
released in the U.K.
today saw the jobless rate reach a 12-year high as claims jumped 73,700 while CML
mortgage lending was off 52% y/y to â‚¤11.5 billion. Minutes from Bank of Englandâ€™s April Monetary
Policy Committee meeting evidenced a unanimous vote to adhere to its plan to
purchase â‚¤75 billion in bonds.
Additionally, it was reported March public sector net borrowing reached
a record â‚¤19.1 billion. Cable bids are
cited around the US$ 1.4350 level. The euro strengthened vis-Ã -vis the
British pound as the single currency tested offers around the â‚¤0.8985 level and
was supported around the â‚¤0.8810 level.
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