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Daily Market Commentary - 9/2/2009

Discussion in 'Forex Daily News & Outlook' started by gcitrading, Feb 9, 2009.

  1. gcitrading

    gcitrading Contributing Member

    Dec 16, 2008
    Likes Received:
    9 February 2009, Monday
    Fundamental Outlook at 1500 GMT (EST + 0500)

    The euro appreciated vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.3095 level and was supported around the $1.2870 level. Traders will pay close attention to President Obama’s news conference tonight in which he will discuss his administrations plans to spend the US$ 800+ fiscal stimulus that could be passed by the U.S. Senate as early as tomorrow. Critics believe the Obama plan does little to stimulate the real economy in the short-term and is long on politically-expedient pork. Dealers are also awaiting remarks from Treasury Secretary Geithner tomorrow regarding the bailout program for distressed U.S. mortgage holders. It was also reported that the Conference Board’s January employment trends index was off 1.0% to 96.6. In eurozone news, the European Union announced it will hold a summit in late February to coordinate action on the global economic crisis. In December, EU officials agreed on an aggregate €200 billion economic stimulus without mentioning specifics. Significant tensions remain between the U.K., French, and German governments on economic recovery policies. German finance minister applauded efforts to develop a “bad bank” to purchase and hold toxic assets but said the European Central Bank and European Commission should give the European Union flexibility on how to proceed. Eurogroup Chairman Juncker said he is concerned about the lack of cohesion among member countries regarding plans to coordinate economic policies. German data released today saw the December trade surplus narrow to €10.7 billion. Bank of France reported Q1 GDP was off 0.6% q/q. Euro bids are cited around the US$ 1.2475 level.

    The yen appreciated marginally vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥90.90 level and was capped around the ¥92.40 level. Traders are paying close attention to the political situation in Japan where more than half of Japanese voters are said to favour the opposition Democratic Party to replace the Liberal Democratic Party and embattled Prime Minister Aso. Economics minister Yosano yesterday said the government may need to consider more fiscal spending to support the economy above the current stimulus program. Data released in Japan overnight saw preliminary December machine tool orders off 1.7% m/m and 84.4% y/y. Also, January corporate bankruptcies were up 16%, a six-year high, while January bank lending rose 3.7% y/y. Data to be released next week are likely to show Japan’s economy shrank at its fastest pace since 1974 in the final three months of 2008. Additional data released overnight saw the January Economy Watchers Survey print at 17.1, up from December’s all-time-low of 15.9. The Nikkei 225 stock index lost 1.33% to close at ¥7,969.03. U.S. dollar offers are cited around the ¥104.15 level. The euro moved higher vis-à-vis the yen as the single currency tested offers around the ¥120.00 level and was supported around the ¥117.05 level. The British pound moved higher vis-à-vis the yen as sterling tested offers around the ¥137.30 level while the Swiss franc moved lower vis-à-vis the yen and tested bids around the ¥78.05 level. The Chinese yuan depreciated vis-à-vis the U.S. dollar as the greenback closed at CNY 6.8392 in the over-the-counter market, up from CNY 6.8334. The government reported “A slowing economy has dented residential income growth as well as consumer expectations. Some consumption hot spots are starting to cool off.” Data released in China today saw January producer price inflation off 1.3% m/m.
    #1 gcitrading, Feb 9, 2009
    Last edited by a moderator: Feb 9, 2009

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