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Daily Market Commentary

Discussion in 'Forex Daily News & Outlook' started by gcitrading, Mar 12, 2009.

  1. gcitrading

    gcitrading Contributing Member

    Dec 16, 2008
    Likes Received:
    The euro depreciated vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.2730 level and was capped around the $1.2870 level. European Central Bank President Trichet reported the current main refinancing rate target is “at a very, very low level” but intimated rates could go lower. Trichet added “It is absolutely clear that the present year will be a year of recession in a large number of countries. It is the same in most industrialized economies. It is in the projections of most economists, whether public or private, that in the course of 2010, starting from a very low level, because it is clear that 2009 is a year of deep slowing down, that we will progressively see a pickup.” Other ECB officials have recently suggested rates could even move lower from their current all-time lows. Also, German January industrial output fell 7.5% m/m, the largest decline on record, and was off 19.3% y/y. EMU-16 January producer price inflation was off 0.8% m/m and 0.5% y/y. In U.S. news, January business inventories declined 1.1% m/m and February headline retail sales were off 0.1% last month, better-than-expected. Also, January retail sales were upwardly revised to +1.8% from the preliminary 1.0% level. Additionally, weekly initial jobless claims rose 9,000 to 654,000 while continuing jobless claims surged to 5.317 million, the highest level since at least 1967. Euro bids are cited around the US$ 1.2385 level.

    The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥98.50 level and was supported around the ¥95.65 level. Data released in Japan overnight saw gross real gross domestic product for October - December upwardly revised to -3.2% q/q from the preliminary -3.3% print. This will likely result in a larger contraction to gross domestic product data in the current January – March period. Japan’s fiscal year-end concludes at the end of this month and its economy is suffering from strong deflationary pressures, negative growth, and a current account surplus that recently turned negative – traditionally one of Japan’s strong suits. The annualized contraction in October – December 2008 printed at -12.7%. The Nikkei 225 stock index lost 2.41% to close at ¥7,198.25. 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 ¥125.55 level and was supported around the ¥122.10 level. The British pound moved higher vis-à-vis the yen as sterling tested offers around the ¥135.50 level while the Swiss franc moved lower vis-à-vis the yen and tested bids around the ¥81.30 level. The Chinese yuan appreciated vis-à-vis the U.S. dollar as the greenback closed at CNY 6.8383 in the over-the-counter market, down from CNY 6.8399. Data released in China overnight saw January – February industrial output up 3.8% y/y.

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