Friday June 12, 2009 - 18:23:43 GMT
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GCI Financial - www.gcitrading.com
Forex Market Commentary and Analysis (12 June 2009)
The euro moved lower vis-√†-vis the U.S. dollar today as the single currency tested bids around the US$ 1.3935
level and was capped around the $1.4130 level. The common currency ended higher for the week
but gave back some of yesterday‚Äôs gains.
Traders cited increasing pessimism about the prospects for an economic
recovery in the eurozone. European
Central Bank President Trichet bearishly said the eurozone‚Äôs economic situation
is still ‚Äúdifficult and unpredictable‚ÄĚ but noted the central bank is
maintaining price stability despite all of the stimuli in the economy and
remaining ‚Äúpermanently alert and cautious.‚ÄĚ
The euro was also dented by weaker-than-expected April industrial
production data that were off 1.9% m/m and 21.6% y/y ‚Äď the steepest annual
decline since at least January 1990. Also,
the German May wholesale price indes was up 0.1%. The euro also came off on comments from
Canadian finance minister Flaherty who indicated ‚Äúmore work (needs) to be done
in some of the Europearn countries, with repsect to their banking system.‚ÄĚ In
U.S. news, April import prices were up 1.3% m/m, the largest monthly rise
since July 2008, and were off 17.6% y/y ‚Äď the largest decline since at least
1982. Additionally, the mid-June University of Michigan consumer sentiment indicator
ticked higher to 69.0 from 68.7. Euro
bids are cited around the US$ 1.3435 level.
The yen depreciated vis-√†-vis the U.S. dollar today as the
greenback tested offers around the ¬•98.40 level and was supported around the ¬•97.45
level. Japanese finance minister Yosano
reported the Japanese government supports U.S.
policies and the soundness of the U.S.‚Äôs debt. Group of Eight officials are not expected to
discuss exchange rate issues at this weekend‚Äôs meeting of finance ministers in Italy. Data released in Japan overnight saw the May
consumer sentiment index print at 35.7, up from 32.4 in April, reaching its
highest level since March 2008. Also,
April revised industrial output printed at +5.9% m/m. The Nikkei 225 stock index climbed 1.55% to
close at ¬•10,135.82. U.S. dollar offers
are cited around the ¬•104.15 level. The euro moved higher vis-√†-vis the yen
as the single currency tested offers around the ¬•138.30 level and was supported
around the ¬•136.90 level. The British pound moved higher
vis-√†-vis the yen as sterling tested offers around the ¬•162.60 level while the Swiss franc moved higher vis-√†-vis
the yen and tested offers around the ¬•91.50 level. In Chinese news, the U.S. dollar strengthened vis-√†-vis the Chinese
yuan as the greenback closed at CNY 6.8344 in the over-the-counter market, up
from CNY 6.8323.
British pound depreciated vis-√†-vis the U.S. dollar today as cable tested bids
around the US$ 1.6340 level and was capped around the $1.6595 level. Cable moved higher this week but ceded some
territory today as traders booked profits.
Sterling was driven higher earlier in the
week on rising U.K.
inflation expectations. Chancellor of
the Exchequer Darling will reported seek an agenda on assets and oil at this
weekend‚Äôs Group of Eight meeting in Italy. Cable
bids are cited around the US$ 1.6215 level.
The euro appreciated vis-√†-vis
the British pound as the single currency tested offers around the ‚ā§0.8540
level and was capped around the ‚ā§0.8480 level.
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