Thursday June 18, 2009 - 21:31:05 GMT
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GCI Financial - www.gcitrading.com
Forex Market Commentary and Analysis (18 June 2009)
The euro lost ground-√†-vis the U.S. dollar today as the single currency tested bids around the US$ 1.3870
level and was capped around the $1.4000 figure.
Traders were unable to push the common currency above the
psychologically-important US$ 1.4000 figure despite gains in U.S. equities
markets and crude oil prices. Many data
were released in the U.S.
today. First, weekly initial jobless
claims climbed 3,000 to 608,000 from a revised 605,000 while continuing jobless
claims printed at 6.687 million from a revised 6.835 million the prior
week. The modest improvement in
continuing claims and small rise in initial claims could be a positive for the
employment sector. Second, the May index
of leading indicators climbed 1.2%, above expectations. Third, the June Philadelphia Fed index of
manufacturing activity improved more than expected to -2.2 from -22.6 in
May. Traders are still talking about the
government‚Äôs plan to enact major changes at the Federal Reserve, including
adding the mandate to become a prudential systemtic risk regulator and reducing
or taking away its consumer finance mandate.
In eurozone news, the German
Chancellor Merkel pledged support for new rules on financial markets
supervision and said they must be ‚Äúcommon and binding.‚ÄĚ The German government
reported it plans to issue ‚ā¨310 billion in new debt through 2013. 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 ¬•96.70 level and was supported around the ¬•95.60
level. Bank of Japan and the Japanese
government upgraded their assessments of the Japanese economy, lending credence
to economists‚Äô view the economy may have already bottomed out. There are tentative signs that industrial
production and the export sector are improving.
The central bank is expected to keep its overnight call rate target
unchanged at 0.10% for the foreseeable future.
The Nikkei 225 stock index lost 1.39% to close at ¬•9,703.72. 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 ¬•135.00 figure and was supported around the ¬•133.00
figure. The British pound moved higher vis-√†-vis the yen as sterling tested
offers around the ¬•158.45 level while the
Swiss franc moved higher vis-√†-vis the yen and tested offers around the ¬•89.35
level. In Chinese news, the U.S.
dollar weakened vis-√†-vis the Chinese yuan as the greenback closed at CNY 6.8337
in the over-the-counter market, down from CNY 6.8360.
British pound weakened vis-√†-vis the U.S. dollar today as cable tested bids
around the US$ 1.6185 level and was capped around the $1.6470 level. Data released in the U.K. today saw
CML May gross mortgage lending decline to ‚ā§10.3 billion. Also, May retail sales were off 0.6% m/m and
1.6% y/y, a stark contrast with April‚Äôs 0.9% m/m and 2.6% y/y increases. Third, May public sector borrowing reached a
record net ‚ā§19.9 billion. Fourth, the May CBI industrial trends survey
rallied to -51 from -56. Cable bids are cited around the US$ 1.6110
level. The euro moved higher vis-√†-vis the British pound as the single currency
tested offers around the ‚ā§0.8605 level and was supported around the ‚ā§0.8490 level.
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