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Daily Market Commentary

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

  1. gcitrading

    gcitrading Contributing Member

    Dec 16, 2008
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    The euro moved lower vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.4260 level and was capped around the $1.4410 level. The common currency continues to unwind on credit-related concerns stemming from Greece’s massive fiscal deficit and the continued improvement in U.S. economic performance. The U.S. dollar has rallied recently on positive news, a shift from its recent underperformance on improving U.S. economic fundamentals. The Federal Open Market Committee this week voted to keep interest rates unchanged and acknowledged improvements in the U.S. labour market. The Fed also reported that it will continue to unwind its emergency spending programs in 2010. Fed funds futures are currently pricing in monetary tightening by June 2010. The FOMC’s next interest rate decision is scheduled for 27 January. Data to be released in the U.S. next week include the Chicago Fed’s national activity index, Q3 gross domestic product, and the GDP price index, personal income, personal spending, durable goods orders, new home sales, and University of Michigan consumer sentiment. In eurozone news, German Chancellor Merkel won approval from the upper house of parliament to enact the Rapid Economic Stimulus Law, an initiative to cut taxes in the new year and provide at least €8.5 billion in fiscal stimulus. Data released in the eurozone today saw an EMU-16 trade surplus of €8.8 billion in October, up from a revised €0.9 billion in September, while the October current deficit narrowed to -€4.6 billion. Also, the German Ifo business climate index expanded to 94.7 in December from an unrevised estimate of 93.9 in November. Additionally, German factory gate prices were up 0.1% m/m and off 5.9% y/y in November. Euro bids are cited around the US$ 1.3885 level.

    The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥90.90 level and was supported around the ¥88.95 level. As expected, Bank of Japan’s Policy Board kept the unsecured overnight call rate unchanged at 0.1%. The central bank reemphasized its commitment to stopping Japan’s deflationary pressures through policy actions. Some traders believe the central bank will eventually move to increase its rinban operations in which it outright purchases Japanese government bonds. The yen was given across the board on rampant speculation the central bank will take actions because it “does not tolerate a year-on-year rate of change in the consumer price index equal to or below zero per cent.” Aggressive action by the central bank – favoured by some in the Hatoyama administration – could lead to a weaker yen. The BoJ also indicated the economic improvement is likely to be moderate until 2010. The Nikkei 225 stock index lost 0.21% to close at ¥10,142.05. U.S. dollar offers are cited around the ¥94.75 level. The euro moved higher vis-à-vis the yen as the single currency tested bids around the ¥130.00 figure and was supported around the ¥127.30 level. The British pound moved higher vis-à-vis the yen as sterling tested offers around the ¥146.55 level while the Swiss franc moved higher vis-à-vis the yen and tested offers around the ¥86.90 level. In Chinese news, the U.S. dollar depreciated vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8330 in the over-the-counter market, down from CNY 6.8335. China reported it attracted US$ 7 billion in foreign direct investment in November. A People’s Bank of China household inflation survey reported many believe prices are escalating too quickly during the economic recovery. The State Administration of Foreign Exchange reiterated it will manage foreign reserves for “safety, liquidity, and return.”

    The British pound came off vis-à-vis the U.S. dollar today as cable tested bids around the US$ 1.6050 level and was capped around the $1.6250 level. Bank of England reported the U.K. financial system is “significantly” more stable and noted U.K. banks plan to increase business lending in 2010 after net business lending fell in October. On the residential loan front, the central bank reported mortgages remain much weaker than before the credit crisis. Data released in the U.K. today saw Q3 business investment growth decelerate to ¬+0.6% q/q and GfK December consumer confidence worsened to -19 from -17 in November. Additionally, CML November gross mortgage lending fell to a six-month low of ₤12.0 billion in November. Cable bids are cited around the US$ 1.5955 level. The euro moved higher vis-à-vis the British pound as cable tested offers around the ₤0.8955 level and was supported around the ₤0.8855 level.
  2. Rider

    Rider New Member

    Nov 24, 2009
    Likes Received:
    State regulators in Georgia closed RockBridge Commercial Bank Friday, bringing the total number of failed banks this year to 134, the Federal Deposit Insurance Corporation said.

    The FDIC said it was unable to find another financial institution to take over the banking operations of the Atlanta-based bank. As a result, the agency said it would mail checks to insured depositors on Monday. The FDIC currently covers accounts up to $250,000.
    RockBridge had about $291.7 million in total deposits and $294.0 million in total assets as of late September.

    The failed bank had an estimated $2.1 million in uninsured funds. But this amount could change once the FDIC obtains additional information from these customers.

    Beginning Monday, customers with deposits exceeding $250,000 at the bank may visit the FDIC's Web page "Is My Account Fully Insured?"

    An average of 11 banks have failed every month this year. The spike in failures has raised concerns about the FDIC's deposit insurance fund, which has slipped into the red for the first time since 1991.

    The fund was $8.2 billion in the hole as of the end of September. But that includes $21.7 billion the agency has earmarked for future bank failures.

    Friday's closures will cost the FDIC an estimated $124.2 million.

    This year's tally of bank failures is the highest number since 1992, when 181 banks failed. But the total is far from 1989's record high of 534 closures which took place during the savings and loan crisis, when the insurance fund also carried a negative balance.

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