Friday May 8, 2009 - 18:27:47 GMT
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GCI Financial - www.gcitrading.com
Forex Market Commentary and Analysis (8 May 2009)
The euro moved higher vis-Ã -vis the U.S. dollar today as the single currency tested offers around the US$ 1.3570
level and was supported around the US$ 1.3250 level. The
April U.S. non-farm payrolls reports was released today and payrolls were off
539,000 last month with the unemployment rate higher at 8.9%, the highest level
since 1983. Marchâ€™s and Aprilâ€™s jobless
tallies were downwardly revised by a combined 66,000 workers. The U.S. economy
has now lost 5.7 million jobs since the beginning of the recession in December
2007 with 4.7 million job losses in the last four months. The rate of marginally attached and
involuntary part-time workers unemployment level reached 15.8% and average
hourly earnings were up 3.2% y/y to $18.51.
U.S. equities reacted
positively to the news and there is a growing optimism in the market that
suggests the U.S.
economy may have already bottomed out. Other
data released in the U.S.
saw March wholesale inventories improve to -1.6%. The markets easily absorbed yesterdayâ€™s results
banksâ€™ stress tests. The U.S. Treasury
reported banks will need to raise at least another US$ 65 billion to remain
well-capitalized. In eurozone news, German March industrial production was off 20.4%
y/y and the March trade surplus improved to â‚¬11.3 billion from â‚¬8.6 billion. Germanyâ€™s
Economy Ministry today predicted unemployment will peak in 2010. Euro
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¥98.70 level and was capped around the Â¥99.55
level. Minutes from Bank of Japanâ€™s
Policy Board were released overnight and evidenced a consensus among
policymakers that the central bankâ€™s Japanese government bond purchases should
be limited. The central banks also
voted unanimously to keep interest rates unchanged at 0.1% and expanded its
range of collateral for its liquidity provision operations. The Nikkei 225 yesterday stock index climbed
0.50% to close at Â¥9,432.83. U.S. dollar
offers are cited around the Â¥104.15 level.
The euro moved higher
vis-Ã -vis the yen as the single currency tested offers around the Â¥134.00 figure
and was supported around the Â¥132.15 level.
The British pound moved higher
vis-Ã -vis the yen as sterling tested offers around the Â¥150.15 level while the Swiss franc moved higher vis-Ã -vis
the yen and tested offers around the Â¥88.85 level. In Chinese news, the U.S. dollar appreciated vis-Ã -vis the Chinese
yuan as the greenback closed at CNY 6.8250 in the over-the-counter market, up
from CNY 6.8220.
British pound appreciated vis-Ã -vis the U.S. dollar today as cable tested offers
around the US$ 1.5145 level and was supported around the $1.4965 level. Data released in the U.K. today saw April
factory gate prices rise at their slowest pace in five years as output producer
prices up 1.2% y/y, down from Marchâ€™s 2.0% gain. Core output prices were up 0.4% m/m and 2.4%
y/y. April input producer prices were off 5.0% y/y and off 1.0% m/m. Confederation of British Industry called on
called on the U.K.
government to enact immediate cuts in public spending. Cable bids are cited around the US$ 1.4735
level. The euro moved higher vis-Ã -vis the British pound as the single
currency tested offers around the â‚¤0.8975 level and was supported around the
franc appreciated sharply vis-Ã -vis the U.S. dollar today as the greenback
tested offers around the CHF 1.1335 level and was supported around the CHF
1.1080 level. Data released in Switzerland
today saw the April unemployment rate climb to 3.4%. U.S. dollar bids are cited around the CHF
1.0975 level. The euro moved lower vis-Ã -vis the Swiss franc as the single
currency tested bids around the CHF 1.5060 level while the British pound came off vis-Ã -vis the Swiss franc and tested
bids around the CHF 1.6790 level.
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