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Daily Market Commentary

Discussion in 'Forex Daily News & Outlook' started by gcitrading, Aug 18, 2009.

  1. gcitrading

    gcitrading Contributing Member

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    EURO
    The euro moved higher vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.4150 level and was supported around the $1.4065 level. A move higher in Chinese equities prices and corresponding gains in other equities markets – including U.S. asset markets – propelled the common currency higher. Data released in the eurozone today also pushed the common currency higher. It was reported that the German August ZEW economic sentiment index improved to 56.1, its highest level since April 2006 and above the July reading of 39.5. Stronger-than-expected U.K. July consumer price inflation also led to weakness in the U.S. dollar and a bid tone in the euro. Data released in the U.S. today saw the July headline producer price index off 0.9% m/m, worse than expected and below the June reading of 1.8%, while the ex-food and energy component was off 0.1%, down from +0.5% in June. On an annualized basis, July headline PPI was off 6.8% y/y while the ex-food and energy component was up 2.6% y/y. Other data released today saw July housing starts print at 581,000 from a revised 587,000 in June while July building permits came in at 560,000, down from a revised 570,000 in June. Euro bids are cited around the US$ 1.3900 figure.

    JPN/CNY
    The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥95.30 level and was supported around the ¥94.35 level. The big news in Japan today was a story that the Democratic Party of Japan – vying for leadership against the long-incumbent Liberal Democratic Party of Japan – may press Bank of Japan to purchase more Japanese government bonds as part of Japan’s broad quantitative easing framework. The DPJ is likely to gain power after the 30 August election and this could result in a surge in yields. The Nikkei 225 stock index gained 0.1% to close at ¥10,284.96. 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 ¥134.80 level and was supported around the ¥132.80 level. The British pound moved higher vis-à-vis the yen as sterling tested offers around the ¥157.05 level while the Swiss franc moved higher vis-à-vis the yen and tested offers around the ¥88.55 level. In Chinese news, the U.S. dollar lost ground vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8309 in the over-the-counter market, down from CNY 6.8332.
     
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