Friday April 24, 2009 - 19:52:17 GMT
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GCI Financial - www.gcitrading.com
Forex Market Commentary and Analysis (24 April 2009)
The euro appreciated vis-√†-vis the U.S. dollar today as the single currency tested offers around the US$ 1.3300
figure and was supported around the US$ 1.3110 level. The common currency darted higher following
some positive European data and a strong day in the U.S. equity markets on news the
Obama administration is extending another US$ 2 billion in loans to General
Motors. The Federal Reserve reported the
recession and market turbulence have ‚Äúsubstantially reduced‚ÄĚ reserves at some
of the nineteen largest U.S.
banks, noting most banks maintain capital ‚Äúwell in excess‚ÄĚ of regulatory
standards. The Fed also said the
government is prepared to aid U.S.
banks that are experiencing problems.
The Fed‚Äôs stress tests results of U.S. banks will be released on 4
May. Group of Seven officials convening
this weekend will likely not announce any new actions in their communiqu√© and
will likely not include new verbiage on exchange rate. Data released in the U.S. today saw March
new home sales decline 0.6% to an annualized 356,000 rate and fall 30.6% y/y. Also, March durable goods orders were off
0.8% with the ex-transportation component off 0.6%. In eurozone news, the IMF called on the
ECB to reduce rates further and ‚Äúin a timely manner.‚ÄĚ The German Ifo business confidence index
improved to 83.7 in April from 82.2 in March.
Many economists believe the worst may be behind the German economy but
today‚Äôs print remains recessionary. Additionally,
French March consumer spending was up 1.1% m/m and 0.6% y/y. Euro
bids are cited around the US$ 1.2765 level.
The yen appreciated vis-√†-vis the U.S. dollar today as the
greenback tested bids around the ¬•96.65 level and was capped around the ¬•98.15
level. Data released in Japan overnight
saw March corporate service price index climb 0.9% m/m and decline 2.1%
y/y. The Nikkei 225 stock index lost
1.57% to close at ¬•8,707.99. 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 ¬•127.25 level
and was capped around the ¬•129.25 level.
The British pound moved lower
vis-√†-vis the yen as sterling tested bids around the ¬•141.15 level while the Swiss franc moved higher vis-√†-vis
the yen and tested offers around the ¬•85.60 level. The
Chinese yuan appreciated vis-√†-vis the U.S. dollar today as the greenback
closed at CNY 6.8230 in the over-the-counter market, down from CNY 6.8233. People‚Äôs
Bank of China adviser Fan said China
can still record 7-8% growth this year.
British pound depreciated vis-√†-vis the U.S. dollar today as cable tested bids
around the US$ 1.4575 level and was capped around the $1.4770 level. Chancellor of the Exchequer Darling said the
markets can support the U.K.
government‚Äôs planned ‚ā§125 billion of gilts issuance this year. March retail sales were up 0.3% m/m and up
1.5% y/y and Q1 GDP were off 1.9% q/q and 4.1% y/y. Cable bids are cited around the US$ 1.4350
level. The euro moved higher vis-√†-vis the British pound as the single
currency tested offers around the ‚ā§0.9080 level and was supported around the
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