Thursday September 23, 2004 - 14:45:57 GMT
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GCI Financial - www.gcitrading.com
Forex Market Analysis and Commentary (23 September 2004)
The euro moved higher vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.2335 level before settling back around the $1.2305 level during North American dealing. Data released in the U.S. today saw weekly initial jobless claims rise 14,000 to 350,000 in the week ending 18 September while the four-week moving average rose to 341,000 and continuing claims rose 5,000 to 2.883 million. The common currency is now trading around 130 points higher on the week and many traders believe the pair will launch another assault on the $1.2350 level. Data released in the eurozone today saw preliminary September CPI data for two German states come in below expectations and economists believe the pan-German CPI data may also come in on the low end of expectations in what would be positive news for the ECB. Traders are paying attention to developments in Greece as the EU has sharply revised Greece’s budget deficit and debt levels for 2003, creating suspicions that 2004’s and 2005’s levels will not be fiscally sound. French August HICP came in at +0.2% m/m and +2.5% y/y while Italian retail sales fell 0.3% y/y in July. Traders await August existing home sales and August durable goods orders in the U.S. tomorrow. Euro bids are cited $1.2235 level.
The yen gained a small amount of ground vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥110.30 level after testing offers around the ¥110.95 level. Japanese financial markets were closed overnight in observance of the second national holiday this week and will reopen overnight. Stops were hit below the ¥110.55 level during the pair’s pullback in North American dealing today as Swiss banks were seen on the offer in large size. The pair, however, traded at its highest level since 16 August before moving lower. Dollar bids are cited around the ¥110.25 level. The euro gained ground vis-à-vis the yen today as the single currency tested offers around the ¥136.55 level after testing bids around the ¥135.60 level. In Chinese news, Premier Wen said “real economic conditions” will dictate Chinese interest rates. Also, G7 finance ministers will meet their Chinese counterparts in Washington, D.C. next week and Treasury’s Taylor has intimated there will be language regarding flexible exchange rates in the communiqué.
The British pound escalated higher vis-à-vis the U.S. dollar today as cable offers around the US$ 1.8050 level and was supported around the $1.7925 level during early European dealing. Data released in the U.K. today saw the manufacturing sector’s order books contract this month while the rate of output growth decelerated, according to the CBI. These data are the latest in a string of U.K. economic data to evidence a slowdown in the U.K. economy. Cable bids are cited around the $1.7960 level. The euro came off vis-à-vis the British pound as the single currency tested bids around the £0.6825 level after failing to get above the £0.6850 level.
The Swiss franc traded in a relatively narrow range vis-à-vis the U.S. dollar today as the greenback tested offers around the CHF 1.2610 level and tested bids around the CHF 1.2540 level. The pair has traded in a general CHF 1.2860/ 1.2370 range for two months now. The euro gained some ground vis-à-vis the Swiss franc today as the single currency tested offers around the CHF 1.5480 level and was supported around the CHF 1.5440 level.
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