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Daily Market Commentary

Discussion in 'Forex Daily News & Outlook' started by gcitrading, Jul 20, 2009.

  1. gcitrading

    gcitrading Contributing Member

    Dec 16, 2008
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    The euro moved higher vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.4250 level and was supported around the $1.4095 level. The common currency moved higher following a positive day in U.S. equities markets that was precipitated by news that troubled U.S. commercial lender CIT Group may receive US$ 3 billion in emergency financing from existing bondholders. The National Association of Business Economics reported the U.S. economy should stabilize in the second half of this year bit added a “robust recovery is unlikely” and warned of more job cuts. Data released in the U.S. today saw June leading indicators print a stronger-than-expected 1.3%, albeit lower than May’s revised 1.3% print. Traders will pay close attention to the June Chicago Fed National Activity Index tomorrow along with testimony from Federal Reserve Chairman Bernanke. Any indication from Bernanke regarding an exit strategy from the Fed’s massive dosage of monetary stimuli could result in significant price activity. In eurozone news, the German June producer price index fell 0.1% m/m and 4.6% y/y – the strongest annual decline since 1986. The European Commission today gave Germany permission to expand its economic crisis measures to afford companies easier access to aid money. A French government source yesterday criticized the European Central Bank’s calls for a moderation in budget deficits. ECB President Trichet yesterday said eurozone members needs to implement credible debt-reduction plans when feasible. Euro bids are cited around the US$ 1.3435 level.

    The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥94.80 level and was supported around the ¥94.10 level. Bank of Japan Governor Shirakawa will visit China tonight through 24 July and will meet with the heads of People’s Bank of China and Bank of Korea. Japanese financial markets were closed today for a market holiday. Traders will look for additional economic indications this week that the central bank will be able to unwind its monetary stimuli by the end of the year. BoJ Governor Shirakawa last week announced the central bank was only extending some of its emergency facilities by another three months – until the end of the year – because of the recent improvements in the Japanese economy. The Nikkei 225 stock index climbed 0.55% on Friday to close at ¥9,395.32. 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 ¥134.75 level and was supported around the ¥132.75 level. The British pound moved higher vis-à-vis the yen as sterling tested offers around the ¥156.45 level while the Swiss franc moved higher vis-à-vis the yen and tested offers around the ¥88.70 level. In Chinese news, the U.S. dollar weakened vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8298 in the over-the-counter market, down from CNY 6.8304.

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