DAILY MARKET
COMMENTARY
4 July 2008
Friday
_____________________________________________________________________
GCI Foreign
Exchange Research:
www.gcitrading.com/fxnews/
FX
Research Desk:
fxnews@gcitrading.com
_____________________________________________________________________
Fundamental Outlook at 1400
GMT (EDT + 0400)
€
The euro depreciated
vis-à-vis the U.S. dollar today as the single currency
tested bids around the US$ 1.5655 level and was capped around the
$1.5725 level.
Liquidity was reduced on account of the U.S.’s Independent Day
national holiday.
Traders are still talking about yesterday’s post-rate hike
comments from European Central Bank President Trichet in which he
acknowledged risks of higher inflation and lower economic growth,
adding the central bank has no policy bias at this time. This dented expectations
that elevated inflation costs would force ECB policymakers to raise
interest rates further this year. ECB’s Weber reported “Our decision
yesterday to increase the key interest rates by 25 basis points will
be a contribution to ensure price stability in the medium term."
ECB’s Liebscher added “We have no bias where future rate decisions
are concerned. We have no pre-commitment; the analysis of incoming
data will determine our actions. It's clear that current
inflation is higher, and the high inflation will last longer, than
we have previously assumed. My main concern is that there will be
gruesome upward changes to the inflation outlook. Risks to price
stability are clearly present, and they are more obvious than
before. We see high risks of second-round effects - in some
countries in the euro zone, we already see signs of second-round
effects materializing.”
Data released in the eurozone today saw German manufacturing
orders decline for the sixth consecutive month in May, off 0.9%.
Banco de Espana sees Q2
GDP growth slowing. Euro bids are cited around the $1.5645/ $1.5230
levels.
¥/
CNY
The yen depreciated
appreciated vis-à-vis the U.S. dollar today as the greenback tested
bids around the ¥106.60 level and was capped around the ¥106.85
level. Today’s intraday
range was tight on account of the U.S.
market holiday.
Technically, today’s intraday low was right around the 38.2%
retracement of the move from ¥124.15 to ¥95.70. Bank of Japan released a
consumer expectations survey overnight that indicates about 90% of
those polled expect higher prices one year from now. Data released in
Japan overnight saw the
May leading index fall to 92.6 while May leading indicators came in
at 40.0 with the coincident index at 33.3. Economy minister Ota said
the global surge in crude oil prices and slowing U.S. economy are directly impacting
Japan’s economy. The Nikkei 225 stock index
lost 0.21% to close at ¥13,237.89. Dollar bids are cited around
the ¥103.00/ 101.35 levels. The euro came off vis-à-vis
the yen as the single currency tested bids around the ¥167.10 level
and was capped around the ¥168.05 level. The British pound and Swiss
franc weakened vis-à-vis the yen as the crosses tested bids
around the ¥211.25 and ¥103.85 levels, respectively. The Chinese yuan
depreciated vis-à-vis the U.S. dollar as the greenback closed at
CNY 6.8589 in the over-the-counter market, up from CNY
6.8510.
₤
The British pound
weakened vis-à-vis the U.S. dollar today as cable tested bids
around the US$ 1.9795 level and was capped around the $1.9845
level. Today’s intraday
was limited on account of the U.S.
market holiday. Cable
bids are cited around the US$ 1.9360/ 1.9100 levels. The euro moved higher
vis-à-vis the British pound as the single currency tested offers
around the ₤0.7930 level and was supported around the ₤0.7905
level.
CHF
The Swiss franc
appreciated vis-à-vis the U.S. dollar today as the greenback tested
bids around the CHF 1.0235 level and was capped around the CHF
1.0275 level. Today’s
range was extremely tight on account of the U.S.
market holiday. U.S.
dollar bids are cited around the CHF 1.0020 level. The euro and British pound came
off vis-à-vis the Swiss franc as the crosses tested bids around
the CHF 1.6060 and 2.0285 levels,
respectively.
Technical
Outlook at 1230 GMT (EDT + 0400)
(Bid Price)
(Today’s Intraday
Range)
EUR/ USD
1.5680
1.5726,
1.5653
USD/ JPY
106.65
106.87,
106.61
GBP/ USD
1.9825
1.9846,
1.9794
USD/ CHF
1.0256
1.0277,
1.0237
AUD/ USD
0.9635
0.9638,
0.9590
USD/CAD
1.0156
1.0190, 1.0139
NZD/USD
0.7581
0.7583, 0.7541
EUR/
JPY
167.25 168.05,
167.12
EUR/ GBP
0.7910
0.7930,
0.7903
EUR/ CHF
1.6086
1.6120, 1.6075
GBP/
JPY
211.44
212.05,
211.24
CHF/ JPY
103.98 104.24, 103.83
Support
Resistance
Support
Resistance
EUR/ USD
USD/ JPY
L1.
1.5225
1.5645
101.95
106.60
L2.
1.5035
1.5840
100.60
109.95
L3.
1.4805
1.6020
98.75
113.30
GBP/ USD
USD/ CHF
L1.
1.9520
1.9760
1.0135
1.0565
L2.
1.9395
1.9880
0.9990
1.0730
L3.
1.9100
2.0000
0.9875
1.1040
AUD/ USD
USD/
CAD
L1.
0.9380
0.9655
0.9870
1.0175
L2.
0.9215
0.9735
0.9715
1.0370
L3.
0.9005
1.0115
0.9465
1.0520
NZD/
USD
EUR/
JPY
L1.
0.7700
0.8105
160.60
166.65
L2.
0.7595
0.8420
158.35
167.75
L3.
0.7275
0.8665
154.80
168.95
EUR/
GBP
EUR/ CHF
L1.
0.7740
0.8120
1.5975
1.6250
L2.
0.7555
0.8310
1.5855
1.6470
L3.
0.7440
0.8570
1.5730
1.6760
GBP/ JPY
CHF/ JPY
L1.
200.60
208.50
98.70
103.30
L2.
197.55
211.35
97.00
105.40
L3.
192.70
217.15
95.85
107.70
SCHEDULE
Friday, 4 July
2008
all times
GMT
(last release in
parentheses)
N/A
US
U.S. markets closed
0500
Japan
May leading index (92.8%)
0500
Japan
May coincident index (101.7%)
1000
Germany
May factory orders (-1.8% m/m)
1000
Germany
May factory orders (15.0% y/y)
1400
Canada
June Ivey PMI (62.5)
DISCLAIMER: GCI’s Daily Market Commentary is
provided for informational purposes only. The information contained
in these reports is gathered from reputable news sources and is not
intended to be used as investment advice. GCI assumes no
responsibility or liability from gains or losses incurred by the
information herein contained.
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