Wednesday June 27, 2007 - 15:03:55 GMT
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GCI Financial - www.gcitrading.com
Forex and Commodity Market Commentary and Analysis (27 June 2007)
The euro depreciated vis-√†-vis the U.S. dollar today as the single currency tested bids around the US$ 1.3415 level and was capped around the $1.3455 level. Technically, today‚Äôs intraday low was right around the 61.8% retracement of the move from $1.3255 to $1.3680. Data released in the U.S. today was on the weak side with new orders for durable goods off 2.8% in May and the ex-transportation component off 1.0%. Core capital goods orders ‚Äď ex-aircraft and defense ‚Äď were off 3.0%, the largest decline since January‚Äôs 4.4% tumble. Traders await tomorrow‚Äôs Federal Open Market Committee interest rate decision with most dealers believing the Fed will keep the federal funds target rate at 5.25%. As is usual, the Fed‚Äôs policy statement will be closely scrutinized to see if policymakers are becoming more comfortable with the recent pullback in inflationary pressures. In eurozone news, European Central Bank member Wellink reported ‚Äútightening has not yet come to an end.‚ÄĚ Euro bids are cited around the US$ 1.3375/ 55 levels.
The yen appreciated sharply vis-√†-vis the U.S. dollar today as the greenback tested bids around the ¬•122.25 level and was capped around the ¬•123.25 level. Stops were reached below the ¬•122.60 level, representing the 23.6% retracement of the move from ¬•117.60 to ¬•124.15. Traders are still talking about the Japanese government‚Äôs shift in sentiment regarding the yen as policymakers yesterday reported they are ‚Äúcarefully watching‚ÄĚ the yen‚Äôs continued weakness. Data released in Japan today saw May retail sales climb 0.5% m/m and 0.1% y/y, the first increase in eight months. The Nikkei 225 stock index lost 1.20% to close at ¬•17,849.28. Dollar bids are cited around the ¬•121.65 level. The euro weakened vis-√†-vis the yen as the single currency tested bids around the ¬•164.25 level and was capped around the ¬•165.85 level. The British pound and Swiss franc lost ground vis-√†-vis the yen as the crosses tested bids around the ¬•243.95 and ¬•99.45 levels, respectively.
The British pound lost ground vis-√†-vis the U.S. dollar today as cable tested bids around the US$ 1.9925 level and was capped around the $1.9985 level. Technically, today‚Äôs intraday low was right around the 38.2% retracement of the move from $1.9590 to $2.0130. Data released in the U.K. today saw the CBI‚Äôs monthly retail survey reveal that 37% of retailers indicate year-on-year sales were up in June, compared with 20% that indicated they were down. The +17% balance is off from May‚Äôs +31% balance and April‚Äôs +44% balance. Also, BBA reported that U.K. mortgage lending and mortgage approvals surged to six-month highs last month, a positive indication given Bank of England‚Äôs continued monetary tightening. Cable bids are cited around the US$ 1.9860 level. The euro came off marginally vis-√†-vis the British pound as the single currency tested bids around the ‚ā§0.6725 level and was capped around the ‚ā§0.6740 level.
The Swiss franc lost marginal ground vis-√†-vis the U.S. dollar today as the greenback tested offers around the CHF 1.2300 figure and was supported around the CHF 1.2270 level. Technically, today‚Äôs intraday low was right around the 76.4% retracement of the move from CHF 1.2355 to CHF 1.1995. Data released in Switzerland today saw the June KOF leading indicator improve to +1.98 from +1.96 in May, suggesting Swiss GDP growth will remain strong through the end of the year. Dollar offers are cited around the CHF 1.2325/ 50 levels. The euro and British pound came off vis-√†-vis the Swiss franc as the crosses tested bids around the CHF 1.6485 and CHF 2.4485 levels, respectively.
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