Tuesday February 6, 2007 - 15:28:17 GMT
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GCI Financial - www.gcitrading.com
Forex and Commodity Market Commentary and Analysis (6 February 2007)
The euro moved higher vis-Ã -vis the U.S. dollar today as the single currency tested offers around the US$ 1.2960 level and was supported around the $1.2910 level. Minor stops were hit below the $1.2925 level, representing the 50% retracement of the move from $1.2480 to $1.3360. Traders await comments from Federal Reserve Chairman Bernanke in the North American session. Other Fed speakers include San Francisco Fed President Yellen and Chicago Fed President Moskow. U.S. Treasury Secretary Paulson will also testify today and may field questions about this weekendâ€™s Group of Seven meeting. In eurozone news, EMU-12 December retail sales printed at a weaker-than-expected 0.3% m/m and 2.1% y/y while German December manufacturing orders were off 0.2%. Also, French November retail sales were up 0.3% m/m, a climb from Octoberâ€™s +0.2% pace. All eyes will be on the European Central Bank this week where policymakers are expected to keep borrowing costs unchanged. ECB President Trichet will speak after Thursdayâ€™s interest rate announcement and is expected to pave the way for a monetary tightening as early as March after which the markets believe the ECB will be on hold. Euro bids are cited around the US$ 1.2885 level.
The yen gained marginal ground vis-Ã -vis the U.S. dollar today as the greenback tested bids around the Â¥119.95 level and was capped around the Â¥120.50 level. Technically, todayâ€™s intraday high was right around the 38.2% retracement of the move from Â¥118.00 to Â¥122.15. Traders continue to ponder the likelihood that the Group of Seven central bankers and finance minister who are convening in Germany this week will specifically mention the yenâ€™s recent weakness or carry trades in their communiquÃ©. At the very least, policymakers will repeat their recent mantra regarding disorderly and volatile currency movements. Data released in Japan today saw the December leading index climb to 25.0 from 18.2 in November while the coincident index backtracked to 61.1 from 65.0. The Nikkei 225 stock index gained 0.36% to close at Â¥17,406.86. Dollar bids are cited around the Â¥119.60 level. The euro appreciated vis-Ã -vis the yen as the single currency tested offers around the Â¥155.95 level and was supported around the Â¥155.25 level. The British pound and Swiss franc moved higher vis-Ã -vis the yen as the crosses tested offers around the Â¥236.90 and Â¥96.70 levels, respectively. The Chinese yuan appreciated vis-Ã -vis the U.S. dollar today as the greenback closed at CNY 7.7555 in the over-the-counter market, down from CNY 7.7609, a fresh post-yuan revaluation low.
The British pound moved sharply higher vis-Ã -vis the U.S. dollar today as cable tested offers around the US$ 1.9705 level and was supported around the $1.9585 level. Technically, todayâ€™s intraday low was right around the 50% retracement of the move from $1.9260 to $1.9915. Data released in the U.K. today saw BRC January like-for-like retail sales climb an annualized 3.1%, the best showing in three years. Most traders believe Bank of Englandâ€™s Monetary Policy Committee will be on hold when policymakers convene tomorrow and Thursday to deliberate monetary policy. Cable bids are cited around the US$ 1.9535 level. The euro weakened vis-Ã -vis the British pound as the single currency tested bids around the â‚¤0.6575 level and was capped around the â‚¤0.6595 level.
The Swiss franc gained ground vis-Ã -vis the U.S. dollar today as the greenback tested bids around the CHF 1.2425 level and was capped around the CHF 1.2495 level. The January consumer price index and SECO consumer climate index will be released on Thursday and Swiss National Bank President Blattner speaks on Friday. Dollar offers are cited around the CHF 1.2520 level. The euro came off vis-Ã -vis the Swiss franc as the single currency tested bids around the CHF 1.6095 level while the British pound gained ground vis-Ã -vis the Swiss franc and tested offers around the CHF 2.4510 level.
The Australian dollar moved higher vis-Ã -vis the U.S. dollar today as the Aussie tested offers around the US$ 0.7780 level and was supported around the $0.7740 level. Technically, the pair stopped just short of testing the 38.2% retracement of the move from $0.7935 to $0.7695. Data released in Australia today saw the Q4 2006 NAB business confidence index improve to +4 from +2 in Q3. Australian dollar bids are cited around the US$ 0.7695 level.
The Canadian dollar depreciated marginally vis-Ã -vis the U.S. dollar today as the greenback tested offers around the US$ 1.1840 level and was supported around the $1.1805 level. Technically, the pair continues to orbit the C$ 1.1830 level, representing the 50% retracement of the move from C$ 1.2730 to C$ 1.0930. Data released in Canada today saw December building permits off 7.8% m/m. Traders await Canadian employment data on Friday. U.S. dollar bids are cited around the C$ 1.1765 level.
Gold climbed higher vis-Ã -vis the U.S. dollar today as the yellow metal tested offers around the US$ 658.35 level and was supported around the $647.85 level. Technically, the market is trying to consolidate around a base of US$ 650.00. Silver appreciated vis-Ã -vis the U.S. dollar as the pair tested offers around the US$ 13.84 level and were supported around the $13.42 level.
Crude oil jumped higher vis-Ã -vis the U.S. dollar today as light, sweet NYMEX crude oil futures for March delivery tested bids around the US$ 59.96 level and was supported around the $58.84 level. Continued frigid temperatures in the oil-dependent U.S. Northeast kept the pair bid. Traders await tomorrowâ€™s weekly U.S. inventories data.
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