Tuesday June 2, 2009 - 22:41:50 GMT
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GCI Financial - www.gcitrading.com
Forex Market Commentary and Analysis (2 June 2009)
The euro appreciated vis-Ã -vis the U.S. dollar today as the single currency tested offers around the US$ 1.4245
level and was supported around the US$ 1.4100 figure. U.S.
equity markets staged a further recovery in response to better-than-expected U.S. pending
home sales data that saw an increase of 6.7% in April, significantly above the
0.4% estimate. There is a growing
consensus that the U.S.
economy has bottomed out. May ADP
employment change data and ISM non-manufacturing data will be released tomorrow. In
eurozone news, the EMU-16 unemployment rate escalated to its highest level
since September 1999, rising to 9.2% from 8.9% in March. Notably, 3.1 million people have lost their
jobs in the eurozone over the past year and this will have an ongoing
appreciable impact on final private demand.
Other data saw French April producer price inflation off 0.6% m/m and
5.5% y/y. The European Central Bank
convenes on Thursday and most traders believe policymakers will keep the ECBâ€™s
main refinancing rate unchanged at the current record low of 1.0%. Euro
bids are cited around the US$ 1.3435 level.
The yen appreciated vis-Ã -vis the U.S. dollar today as the
greenback tested bids around the Â¥95.30 level and was capped around the Â¥96.65
level. The U.S. dollar fell sharply
across the board as traders reduced their long U.S. dollar exposure on fears
that major foreign holders of U.S. dollar assets may have a declining risk
appetite for U.S.
assets. The Nikkei 225 stock index
climbed 0.3% to close at Â¥9,704.31. 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¥137.45 level and was supported around the Â¥135.75 level. The
British pound moved higher vis-Ã -vis the yen as sterling tested offers around
the Â¥159.20 level while the Swiss franc
moved higher vis-Ã -vis the yen and tested offers around the Â¥90.55 level. In Chinese news, the U.S. dollar strengthened
vis-Ã -vis the Chinese yuan as the greenback closed at CNY 6.8298 in the
over-the-counter market, up from CNY 6.8257.
British pound appreciated sharply vis-Ã -vis the U.S. dollar today as cable
tested offers around the US$ 1.6595 level and was supported around the $1.6320
level. Many data were released in the U.K. today.
First, April net lending to individuals expanded â‚¤1.287 billion, up from a
revised â‚¤693 million in March. Second,
May PMI construction improved to 45.9.
Third, April mortgage approvals increased to 43,000 from 40,000. Fourth, mortgage approvals improved to
43,201, an eleven-month high that indicated the housing sector may be
improving. Fifth, the April M4 money
supply expanded 0.2% m/m and 17.4% y/y. Sixth,
BSA reported April gross mortgage lending was unchanged from March at â‚¤1.5
billion. Cable bids are cited around the US$ 1.6070 level. The euro
appreciated vis-Ã -vis the British pound as the single currency tested offers
around the â‚¤0.8670 level and was supported around the â‚¤0.8600 figure.
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