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Daily Market Commentary

Discussion in 'Forex Daily News & Outlook' started by gcitrading, Apr 16, 2009.

  1. gcitrading

    gcitrading Contributing Member

    Dec 16, 2008
    Likes Received:
    The euro weakened vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.3125 level and was capped around the US$ 1.3270 level. The common currency extended recent losses as traders remained pessimistic about the eurozone economy and reacted to worsening economic data there. Many data were released in the U.S. today. First, the April Philadelphia Fed’s manufacturing survey weakened for the sixteenth time in the past seventeen months, printing at -24.4 from -35 in March. Second, weekly initial jobless claims fell 53,000 to 610,000 while continuing jobless claims climbed 172,000 to 6.022 million. Third, March housing starts were off 10.8% to an annualized rate of 510,000 while building permits were off 9% to 513,000. The Fed’s Beige Book yesterday was more optimistic than last month’s Beige Book and suggested the pace of economic decline may be moderating in parts of the U.S. In eurozone news, EMU-16 industrial production fell 2.3% m/m and 18.4% y/y in February. Additionally, March consumer price inflation growth decelerated an all-time annualized low of +0.6% y/y in March from +1.2% y/y in February – significantly below the European Central Bank’s 2.0% inflation ceiling target. Most traders believe the ECB will counter these disinflationary pressures by moving interest rates lower to 1.0% in May and adopting a quantitative easing policy that could see the central bank purchase sovereign debt in the secondary market. Euro bids are cited around the US$ 1.3100 figure.

    The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥98.55 level and was capped around the ¥99.50 level. The yen gave back earlier intraday gains after a slew of U.S. economic data were released and U.S. equity markets retained their gains. Data released in Japan overnight saw March total orders up 2.6% m/m and off 85.2% y/y, a staggering decline that evidences Japan’s acute economic recession. The Nikkei 225 stock index gained 0.14% to close at ¥8,755.26. U.S. dollar offers are cited around the ¥104.15 level. The euro moved lower vis-à-vis the yen as the single currency tested bids around the ¥129.35 level and was capped around the ¥132.00 figure. The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥148.40 level while the Swiss franc moved lower vis-à-vis the yen and tested bids around the ¥85.50 level. The Chinese yuan depreciated vis-à-vis the U.S. dollar today as the greenback closed at CNY 6.8286 in the over-the-counter market, up from CNY 6.8200. Data released in China today saw a higher-than-expected Q1 GDP up 6.1% y/y, off from 6.8% in Q4 2008. Other data saw March consumer price inflation off 1.2% y/y while Q1 producer price inflation was off 4.6%. The Chinese government reported the economy is still facing a slowdown pressure.

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