By GCI Fx Research
€
The euro came off vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.3380 level and was supported around the US$ 1.3125 level. The common currency rocketed higher after it was reported the Obama administrations is said to be pushing General Motors into bankruptcy with 1 June as a likely deadline for preparing their legal filing. General Motors is attempting to reach an agreement with bondholders to exchange about US$ 28 billion in debt into equity and to get necessary concessions from the United Auto Workers union. Bankruptcy fears escalated and U.S. equity markets weakened on the news, taking the greeback lower. Traders are poised for this week’s first quarter earnings reports from major U.S. banks including Goldman Sachs which is poised to issue earnings data tomorrow. Some dealers believe U.S. equity markets may benefit even if earnings are not very strong because they believe the worst of the bad news may already be priced into the market. President Obama will speak tomorrow on the economy and Federal Reserve Chairman Bernanke is scheduled to speak tomorrow and Friday. In eurozone news, most major European financial markets were closed on account of the Easter Monday holiday. Euro bids are cited around the US$ 1.3100 figure.
¥/ CNY
The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥100.05 level and was capped around the ¥100.70 level. Data released in Japan overnight saw the March domestic corporate goods price index decline 0.2% m/m and 2.2% y/y. Industrial production and capacity utilization data will be released on Wednesday. There is a lot of talk among traders that the yen could enter a period of weakness over the coming months. The Nikkei 225 stock index lost 0.44% to close at ¥8,924.43. 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 ¥148.65 level and was supported around the ¥146.40 level. The British pound moved higher vis-à-vis the yen as sterling tested offers around the ¥148.65 level while the Swiss franc moved higher vis-à-vis the yen and tested offers around the ¥88.40 level. The Chinese yuan appreciated vis-à-vis the U.S. dollar today as the greenback closed at CNY 6.8318 in the over-the-counter market, down from CNY 6.8343. People’s Bank of China reported this weekend that it will continue to provide liquidity to the financial markets and stimulate economic growth. Data released in China saw new yuan loans surge to CNY 1.89 trillion in March, above the CNY 1.0 trillion level for the third consecutive month.
₤
The British pound appreciated vis-à-vis the U.S. dollar today as cable tested offers around the US$ 1.4850 level and was supported around the $1.4600 figure. Liquidity was nil in the London market on account of the Easter Monday bank holiday. Prime Minister Brown is facing intense political scrutiny on account of a Labour email ploy gone awry to direct criticism at rival Tories. Cable bids are cited around the US$ 1.4515 level. The euro moved higher vis-à-vis the British pound as the single currency tested offers around the ₤0.9020 level and was supported around the ₤0.8960 level.
CHF
The Swiss franc appreciated sharply vis-à-vis the U.S. dollar today as the greenback tested offers around the CHF 1.1325 level and was capped around the CHF 1.1605 level. Traders moved into francs as liquidity was difficult to find during the Easter Monday holiday. U.S. dollar bids are cited around the CHF 1.1275 level. The euro and British pound came off vis-à-vis the Swiss franc as the crosses tested bids around the CHF 1.5135 and CHF 1.6790 levels, respectively.
Daily Market Commentary provided by GCI Financial Ltd.
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