Thursday August 19, 2004 - 16:28:40 GMT
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GCI Financial - www.gcitrading.com
Forex Market Commentary and Analysis (19 August 2004)
The euro moved higher vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.2380 level after finding good bids around the $1.2325 level. Stops were hit above the $1.2360 level during the move higher and the $1.2340 level was supportive during the retracement during North American dealing. News that Iraq’s al-Sadr is apparently not going to leave the shrine in which he is ensconced weighed on the greenback today as did fresh “pre-emptive” Iranian threats against U.S. interests. Data released in the U.S. today saw July leading economic indicators fall 0.3% while the coincident and lagging index climbed +0.1% and +0.5% respectively. Weekly initial jobless claims data were released today that saw a 3,000 decrease to 331,000 for the week ending 14 August with no obvious impact from Hurricane Charley. The four-week moving average fell 2,500 to 337,000 while continuing claims rose 16,000 to 2.904 million. Early whisper numbers about August’s non-farm payrolls are focusing on job creation of 100,000 to 200,000 workers this month if Charley doesn’t have a major impact on the economy. Minneapolis Fed President Stern last night said the Fed “still has accommodative or expansionary policies in place.” Interestingly, Stern did not see the oil price shock or the recent deceleration in job creation as major threats to his forecast for 4% real GDP growth. Euro bids are cited around the $1.2280 level.
The yen was little changed vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥109.60 level and remained supported above the ¥109.30 level, a very narrow range. Front-month NYMEX crude futures reached a high around $47.15 today and moved slightly lower to the $46.85 level during North American dealing. The pair is apparently trapped in a range pending further developments in the oil market. Capital flows data released in the five trading days ending 13 August saw net yen inflows of ¥1.4482 trillion during the period with foreign investors as net buyers of Japanese equities and JGBs. The Nikkei 225 stock index climbed +1.20% to close at ¥10,903.53. Dollar bids are cited around the ¥109.20 level and dollar offers are seen around the ¥110.20 level. The euro gained ground vis-à-vis the yen today as the single currency tested offers around the ¥135.55 level and was supported around the ¥ 134.60 level. Euro bids are seen around the ¥134.70 level.
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