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Daily Market Commentary

Discussion in 'Forex Daily News & Outlook' started by gcitrading, Apr 22, 2009.

  1. gcitrading

    gcitrading Contributing Member

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    EURO
    The euro appreciated vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.3040 level and was supported around the US$ 1.2885 level. Data released in the U.S. today saw the February housing price index climb 0.7%, defying expectations of a 0.7% decline and a postive indication about the severely beleaguered U.S. housing industry. U.S. banking giant Morgan Stanley announced a US$ 177 million loss in the first quarter. The International Monetary Fund downgraded its global economic outlook and now sees a 2009 economic retraction of 1.3% from the previous forecast of +0.5%. In eurozone news, traders continue to expect the European Central Bank will ease monetary policy next month, taking the main refinancing rate lower to 1.0% from 1.25%. There is also a strong possibility the ECB will announce quantitative easing measures next month, possibly by purchasing sovereign assets in the secondary market or extending the term on its refinancing operations. Euro bids are cited around the US$ 1.2765 level.

    JPN/CNY
    The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥97.55 level and was capped around the ¥98.75 level. Risk aversion returned to the markets as traders were loath to assume risk in higher-yielding assets ahead of many Q1 earnings reported in the U.S. Data released in Japan overnight saw the March trade surplus print at ¥11.0 billion, above expectations with exports off 45.6% y/y and imports off 36.7% y/y. The Nikkei 225 stock index climbed 0.18% to close at ¥8,727.30. 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 ¥126.20 level and was capped around the ¥128.10 level. The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥140.60 level while the Swiss franc moved lower vis-à-vis the yen and tested bids around the ¥83.55 level. The Chinese yuan depreciated vis-à-vis the U.S. dollar today as the greenback closed at CNY 6.8264 in the over-the-counter market, up from CNY 6.8224. Many economists believe China will fall short of its objective of notching 8.0% annual growth in 2009.

    STERLING
    The British pound depreciated vis-à-vis the U.S. dollar today as cable tested bids around the US$ 1.4470 level and was capped around the $1.4490 level. Sterling fell sharply after the U.K. government reported it plans to issue significantly more debt this fiscal year than was expected. The government plans to raise ₤220 billion in the 2009-2010 fiscal year, above the previous forecast of ₤180 billion. Data released in the U.K. today saw the jobless rate reach a 12-year high as claims jumped 73,700 while CML mortgage lending was off 52% y/y to ₤11.5 billion. Minutes from Bank of England’s April Monetary Policy Committee meeting evidenced a unanimous vote to adhere to its plan to purchase ₤75 billion in bonds. Additionally, it was reported March public sector net borrowing reached a record ₤19.1 billion. Cable bids are cited around the US$ 1.4350 level. The euro strengthened vis-à-vis the British pound as the single currency tested offers around the ₤0.8985 level and was supported around the ₤0.8810 level.
     
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