Friday April 6, 2007 - 14:45:59 GMT
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Forex and Commodity Market Commentary and Analysis (6 April 2007)
The euro weakened vis-√†-vis the U.S. dollar today as the single currency tested bids around the US$ 1.3370 level and was capped around the $1.3430 level. Technically, today‚Äôs intraday low was right around the 23.6% retracement of the move from $1.3410 to $1.3255. The common currency yesterday traded at its highest level since March 2005. The all-important U.S. March non-farm payrolls report was released today and gave the U.S. dollar a reprieve as March non-farm payrolls climbed 180,000, above expectations. Also, January‚Äôs and February‚Äôs payrolls tallies were upwardly revised a cumulative 32,000 jobs. The unemployment rate fell to 4.4%, matching its May 2001 low, and average hourly earnings were up +0.3%. These data contradict the growing notion that the U.S. economy may be slowing and Federal Reserve policymakers are unlikely to be overly concerned with the wages component. Traders will monitor next week‚Äôs Group of Seven meeting. In eurozone news, the German media reported the German government will lift its 2007 GDP forecast from its current 1.7% estimate. Euro bids are cited around the US$ 1.3300/ 1.3245 levels.
The yen depreciated vis-√†-vis the U.S. dollar today as the greenback tested offers around the ¬•119.35 level and was supported around the ¬•118.65 level. The pair moved to its highest level since 27 February after the U.S. March jobs report was released. Japanese finance minister Omi stressed next week‚Äôs Group of Seven meeting will not focus on the yen, stating ‚Äúdiscussion on exchange rates is likely to include the yen, the dollar, the euro, and the yuan.‚ÄĚ Bank of Japan‚Äôs two-day Policy Board meeting will begin on Monday and it is virtually assured the central bank will not lift interest rates at this time. Comments from BoJ Governor Fukui will be closely monitored, especially after last week‚Äôs return of some deflationary consumer prices. Japan‚Äôs foreign reserves jumped to US$ 908.96 billion at the end of March from US$ 905.05 billion. Data released in Japan today saw the February leading index fall to 30.0 from 40.9 in January while the coincident index plummeted to 16.7 from 45.0. The Nikkei 225 stock index lost 0.04% to close at ¬•17,484.78. Dollar bids are cited around the ¬•118.30 level. The euro moved higher vis-√†-vis the yen as the single currency tested offers around the ¬•159.65 level and was supported around the ¬•159.25 level. The British pound appreciated vis-√†-vis the yen as sterling tested offers around the ¬•234.55 level while the Swiss franc came off marginally vis-√†-vis the yen and tested bids around the ¬•97.50 level. The Chinese yuan appreciated vis-√†-vis the U.S. dollar as the greenback closed at CNY 7.7213 in the over-the-counter market, down from CNY 7.7243 and a post-yuan revaluation low. Data released in China saw the Q1 business confidence index improve to 142.0.
The British pound depreciated vis-√†-vis the U.S. dollar today as cable tested bids around the US$ 1.9635 level and was capped around the US$ 1.9720 level. Technically, today‚Äôs intraday low was right around the 61.8% retracement of the move from $1.9915 to $1.9180. NIESR today indicated Bank of England should lift interest rates further despite a deceleration in U.K. economic growth. Cable bids are cited around the US$ 1.9580/ 50 levels. The euro came off vis-√†-vis the British pound as the single currency tested bids around the ‚ā§0.6800 figure and was capped around the ‚ā§0.6815 level.
The Swiss franc depreciated vis-√†-vis the U.S. dollar today as the greenback tested offers around the CHF 1.2225 level and was supported around the CHF 1.2145 level. Technically, today‚Äôs intraday high was just above the 38.2% retracement of the move from CHF 1.2770 to CHF 1.1875. Dollar offers are cited around the CHF 1.2280 level. The euro and British pound moved higher vis-√†-vis the Swiss franc and tested offers around the CHF 1.6345 and CHF 2.4005 levels, respectively.
The Australian dollar moved lower vis-√†-vis the U.S. dollar today as the Aussie tested bids around the US$ 0.8150 level and was capped around the $0.8200 figure. The pair established a fresh, decade-old high yesterday and many traders believe Reserve Bank of Australia will lift interest rates in May. Australian dollar bids are cited around the US$ 0.8085 level.
The Canadian dollar gained marginal ground vis-√†-vis the U.S. dollar today as the greenback tested bids around the C$ 1.1500 figure and was capped around the C$ 1.1530 level. Technically, today‚Äôs intraday low was just below the 38.2% retracement of the move from C$ 1.0925 to C$ 1.1875. U.S. dollar bids are cited around the C$ 1.1450 level.
Gold came off marginally vis-√†-vis the U.S. dollar today as the yellow metal tested bids around the US$ 673.00 figure and was capped around the $ 674.75 level. The strong U.S. jobs report led to the pair‚Äôs decline. Silver was little-changed vis-√†-vis the U.S. dollar as the pair tested bids around the $13.65 level and was capped around the $13.70 level.
Crude oil appreciated vis-√†-vis the U.S. dollar today as light, sweet NYMEX crude oil futures for May delivery tested offers around the US$ 64.24 level and were supported around the US$ 63.94 level. Technically, this week‚Äôs low was just below the 23.6% retracement of the move from $49.90 to $68.09.
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