Wednesday May 2, 2007 - 16:37:19 GMT
Share This Story
GCI Financial - www.gcitrading.com
Forex and Commodity Market Commentary and Analysis (2 May 2007)
The euro gained marginal ground vis-Ã -vis the U.S. dollar today as the single currency tested offers around the US$ 1.3610 level and was supported around the $1.3560 level. Technically, todayâ€™s intraday low was about twenty pips below the 23.6% retracement of the move from $1.3255 to $1.3680. There is speculation that the Eurogroup of finance ministers will discuss the euro's strength in Brussels next week and some traders believe G8 finance ministers will discuss exchange rates on 18-19 May in Germany. The elevated levels of currencies like the euro and British pound reduce imported inflation pressures and act as de facto monetary tightenings. Most traders believe the European Central Bank will lift interest rates by +25 bps next month with another +25bps tightening to follow later this year. Data released in the eurozone today saw EMU-13 March unemployment tick down to 7.2% from 7.3% in February. Also, German April manufacturing PMI rose marginally to 57.0 while EMU-13 April manufacturing PMI remained at a thirteen-month low of 55.4. In U.S. news, ADP reported scant job creation of 64,000 private-sector jobs last month, leading many traders to scale back their expectations for a decent April non-farm payrolls figure this Friday. Marchâ€™s non-farm payrolls creation totaled 180,000 and is likely to be revised this Friday. Other data released in the US today saw Challenger April job cuts climb 44.2% m/m to 70,672. Euro bids are cited around the US$ 1.3515 level.
The yen depreciated vis-Ã -vis the U.S. dollar today as the greenback tested offers around the Â¥120.30 level and was supported around the Â¥119.50 level. Technically, todayâ€™s intraday high was just below the 23.6% retracement of the move from Â¥114.45 to Â¥122.15. Liquidity remained reduced in the Asian session on account of the Golden Week holidays in Japan and China. The Nikkei reported that GDP growth was probably up an annualized 2.6% in the January-to-March period. Data released in Japan overnight saw the April monetary base decline 12.2% y/y, the fourteenth consecutive monthly decline. The Nikkei 225 stock index gained 0.69% to close at Â¥17,394.92. Dollar bids are cited around the Â¥119.20 level. The euro moved higher vis-Ã -vis the yen as the single currency tested offers around the Â¥163.35 level and was supported around the Â¥162.50 level. The British pound came off vis-Ã -vis the yen as sterling tested bids around the Â¥238.50 level while the Swiss franc moved higher vis-Ã -vis the yen and tested offers around the Â¥99.05 level.
The British pound depreciated vis-Ã -vis the U.S. dollar today as cable tested bids around the US$ 1.9865 level and was capped around the $1.9995 level. Technically, todayâ€™s intraday high and low were right around the 23.6% and 50.0% retracements of the move from $1.9545 to $2.0130, respectively. Date released in the U.K. today saw April construction PMI improve to 59.8 from 58.9 in March, its best showing in nearly three years. Also, the March M4 money supply expanded 1.0% m/m and 12.8% y/y and Bank of England reported that March mortgage approvals fell to 111,000 from 117,000 in February. Most traders believe Bank of Englandâ€™s Monetary Policy Committee will raise the repo rate by +25bps next week. Cable bids are cited around the US$ 1.9840/ 1.9795 levels. The euro moved higher vis-Ã -vis the British pound as the single currency tested offers around the â‚¤0.6835 level and was supported around the â‚¤0.6800 figure.
The Swiss franc appreciated marginally vis-Ã -vis the U.S. dollar today as the greenback tested bids around the CHF 1.2115 level and was capped around the CHF 1.2185 level. Technically, todayâ€™s intraday high was right around the 38.2% retracement of the move from CHF 1.2435 to CHF 1.2025. Data released in Switzerland today saw the April PMI survey fall to 61.9 from 62.0 in March. Dollar offers are cited around the CHF 1.2200 figure. The euro came off vis-Ã -vis the Swiss franc as the single currency tested bids around the CHF 1.6490 level and was capped around the CHF 1.6535 level.
The Australian dollar weakened vis-Ã -vis the U.S. dollar today as the Aussie tested bids around the US$ 0.8220 level and was capped around the $0.8280 level. Technically, todayâ€™s intraday low was just above the 50% retracement of the move from $0.8030 to $0.8390. As expected, Reserve Bank of Australia kept its official cash rate unchanged at 6.25% overnight. Most traders did not expect any change in interest rates following last weekâ€™s benign consumer and producer inflation data. RBA will release its quarterly monetary policy statement on Friday and it is expected to maintain its tightening bias. Data released in Australia today saw the April skilled vacancies index fall 2.2% m/m. Australian dollar bids are cited around the US$ 0.8210/ 0.8165 levels.
The Canadian dollar appreciated vis-Ã -vis the U.S. dollar today as the greenback tested bids around the C$ 1.1065 level and was capped around the C$ 1.1140 level. Technically, todayâ€™s intraday high was just below the 76.4% retracement of the move from C$ 1.0925 to C$ 1.1875. Traders lifted the pair overnight following comments from Bank of Canada Governor Dodge who said the loonie is trading above the US$ 0.865 â€“ 0.895 range the central bank utilized in its semi-annual Monetary Policy Report released last Thursday. Dodge noted â€œThere is substantial day-to-day and week-to-week volatility in the dollar. We are above what we had assumed and we will take that into account if we stay there next time." U.S. dollar offers are cited around the C$ 1.1150 level.
Gold depreciated vis-Ã -vis the U.S. dollar today as the yellow metal tested bids around the US$ 667.75 level and was capped around the $675.20 level. The U.S. dollarâ€™s intraday gains and the reduction in Asian trading liquidity this week contributed to the pairâ€™s sell-off. Silver moved lower vis-Ã -vis the U.S. dollar today as the pair tested bids around the US$ 13.03 level and was capped around the $13.36 level.
Crude oil lost ground vis-Ã -vis the U.S. dollar today as light, sweet NYMEX crude oil futures for June delivery tested bids around the US$ 63.09 level and were capped around the $64.66 level. U.S. EIA weekly inventories data released today saw crude stocks up 1.1 million barrels, gasoline stocks down 1.0 million barrels, and distillate stocks off 0.2 million barrels.
Forex Trading News
Daily Forex Market News
Forex news reports can be found on the forex research
headlines page below. Here you will find real-time forex market news reports
provided by respected contributors of currency trading information. Daily forex
market news, weekly forex research and monthly forex news features can be found
Real-time forex market news reports and features providing
other currency trading information can be accessed by clicking on any of the
headlines below. At the top of the forex blog page you will find the latest
forex trading information. Scroll down the page if you are looking for less
recent currency trading information. Scroll to the bottom of fx blog headlines
and click on the link for past reports on forex. Currency world news reports
from previous years can be found on the left sidebar under "FX Archives."