Wednesday May 13, 2009 - 22:17:23 GMT
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GCI Financial - www.gcitrading.com
Forex Market Commentary and Analysis (13 May 2009)
The euro depreciated vis-√†-vis the U.S. dollar today as the single currency tested bids around the US$ 1.3565
level and was capped around the US$ 1.3720 level. Risk aversion returned to the markets as
traders discounted recent economic improvements and challenged the view that
the global banking sector is on the mend.
Data released in the U.S.
today saw March business inventories decline 1.0% to US$ 1.401 trillion. Additionally, April retail sales were off
more than expected at -0.4%, underscoring the tenuous condition of final
private demand. The ex-autos component
was off 0.5% and the decrease in spending represented the eighth decline in ten
months. Other data saw April import
prices climb 1.6% m/m and decline 16.3% y/y.
In eurozone news, German finance
minister Steinbrueck said Germany
is ‚Äúsurprised‚ÄĚ by the European Commission‚Äôs plan to possibly conduct stress
tests on banks. Data released in the
eurozone today saw EMU-16 industrial production decline to a new record low in
March, off 2.0% m/m and 20.2% y/y.
reported its annual inflation rate rose 0.1% y/y in April, its lowest level in
more than 50 years. European Central
Bank member Weber cautioned that German and eurozone price inflation data may
produce negative readings this month and remain there throughout the
summer. Regarding the financial markets,
he added ‚ÄúWhat we've seen in
financial markets over the recent months is some return of confidence. I think
that is something that is very important.
Now people are back to evaluating risk, there's a lot more reasonable
risk appetite. We're not yet back to a period where risk is again viewed in
such a way that I would fear an underpricing of risk any time soon, but some
reemergence of risk appetite is there.‚ÄĚ 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 ¬•95.15 level and was capped around the ¬•96.70
level. Risk aversion returned to the
markets today as traders lack confidence that a sustainable rally is afoot in
the financial markets. Data released in Japan overnight
saw April corporate bankruptcy cases up 15.4% y/y while the March current
account surplus was off 48.8% y/y at ¬•1.486 trillion. Moreover, the March trade balance was off
89.3% y/y and April bank lending was up 3.0%.
Additionally, it was reported
historically-strong trade deficit withered in April, printing at -¬•201.52
billion the first twenty days of the month.
The Nikkei 225 yesterday stock index climbed 0.45% today to close at
¬•9,340.49. 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 ¬•129.35 level and was capped around
the ¬•132.40 level. The British pound moved lower vis-√†-vis the yen as sterling tested bids
around the ¬•144.15 level while the Swiss
franc moved lower vis-√†-vis the yen and tested bids around the ¬•85.95 level.
In Chinese news, the U.S. dollar appreciated
vis-√†-vis the Chinese yuan as the greenback closed at CNY 6.8225 in the
over-the-counter market, up from CNY 6.8215.
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