Wednesday December 27, 2006 - 15:02:52 GMT
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GCI Financial - www.gcitrading.com
Forex and Commodity Market Commentary and Analysis (27 December 2006)
The euro moved higher vis-Ã -vis the U.S. dollar today as the single currency tested offers around the US$ 1.3175 level and was supported around the $1.3095 level. Technically, todayâ€™s intraday high was right around the 38.2% retracement of the move from $1.3365 to $1.3050. Many U.S. economic data will be released this week including consumer confidence, existing home sales, weekly initial jobless claims, and the Chicago PMI survey. Eurozone data to be released this week include French housing numbers and German GfK consumer confidence on Friday along with EMU-12 money supply figures. Any indication that U.S. economic activity and especially consumer prices may be decelerating may result in U.S. dollar weakness as traders may conclude the Federal Reserve is finishing with its long-standing tightening cycle. Many traders believe the European Central Bank will move interest rates higher in Q1. Euro bids are cited around the US$ 1.3045 level.
The yen appreciated vis-Ã -vis the U.S. dollar today as the greenback tested bids around the Â¥118.45 level and was capped around the Â¥119.20 level. Technically, todayâ€™s intraday low was right around the 76.4% retracement of the move from Â¥121.40 to Â¥109.00. The pair moved lower after the Jiji news agency reported Bank of Japan is likely to discuss raising interest rates by +25bps to 0.50% at next monthâ€™s Policy Board meeting. Most traders expect the central bank to lift rates one time before the end of the current fiscal year in March. Data released in Japan overnight saw November retail sales off 0.1% y/y, the first decline in four months. Liquidity was reduced in Asia on account of strong earthquakes off of Taiwanâ€™s coast that interrupted communications cables. The Nikkei 225 stock index climbed 0.31% to close at Â¥17,223.15. Dollar bids are cited around the Â¥118.10/ Â¥117.40 levels. The euro came off vis-Ã -vis the yen as the single currency tested bids around the Â¥155.60 level and was capped around the Â¥156.25 level. The British pound and Swiss franc weakened vis-Ã -vis the yen as the crosses tested bids around the Â¥231.85 and Â¥96.70 levels, respectively. In Chinese news, Vice Premier Zeng Peiyan announced his country will utilize its foreign exchange reserves to acquire mineral resources.
The British pound gained ground vis-Ã -vis the U.S. dollar today as cable tested offers around the US$ 1.9630 level and was supported around the $1.9525 level. Technically, todayâ€™s intraday high was right around the 38.2% retracement of the move $1.9435 to $1.9745. U.K. property website propertyfinder.com reported it expects house price growth to decelerate in 2007. Cable bids are cited around the US$ 1.9505/ 1.9460 levels. The euro moved higher vis-Ã -vis the U.S. dollar as the single currency tested offers around the â‚¤0.6715 level and was supported around the â‚¤0.6700 figure.
The Swiss franc gained marginal ground vis-Ã -vis the U.S. dollar today as the greenback tested bids around the CHF 1.2160 level and was capped around the CHF 1.2240 level. Technically, todayâ€™s intraday high was right around the 23.6% retracement of the move from CHF 1.3235 to CHF 1.1920. Data released in Switzerland today saw the November UBS private consumption indicator print at 1.89, equal to Octoberâ€™s downwardly revised print. Dollar offers are cited around the CHF 1.2325 level. The euro and British pound moved higher vis-Ã -vis the Swiss franc as the crosses tested offers around the CHF 1.6085 and CHF 2.3975 levels, respectively.
Gold moved higher vis-Ã -vis the U.S. dollar today as the yellow metal tested offers around the US$ 628.85 level and was supported around the $624.13 level. Silver moved higher vis-Ã -vis the U.S. dollar as the pair tested offers around the US$ 12.90 level and was supported around the $12.67 level.
Crude oil came off vis-Ã -vis the U.S. dollar today as light, sweet NYMEX crude oil futures for February delivery tested bids around the US$ 60.65 level and were capped around the $61.32 level. Traders continue to monitor developments in Iran following the Security Councilâ€™s decision to implement sanctions against that country on account of its nuclear activities.
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