By GCI Fx Research
€
The euro appreciated vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.3085 level and was supported around the US$ 1.2980 level. The common currency gave back earlier gains after the release of U.S. economic data that saw weekly initial jobless claims climb 27,000 to 613,000 while continuing jobless claims were up 93,000 to 6.137 million, the highest level on record. Some economists remain cautiously optimistic about the prospects for the U.S. economy despite the mixed economic data. Other data released in the U.S. today saw March existing home sales fell 3.0% to an annualized 4.57 million units and February’s tally was downwardly revised. In eurozone news, EMU-16 February industrial new orders notched their largest annual decline on record, off 34.5% y/y and 0.6% m/m. These data evidence the acute recession in the eurozone and breakdown in global trade. Other data saw the February current account deficit narrow to -€8.1 billion from a revised -€12.3 billion in January. Other data saw EMU-16 April manufacturing improve to 36.7 from 33.9 and Germany’s PMI established a five-month high and French PMI also improved in both the manufacturing and services sectors. Euro bids are cited around the US$ 1.2765 level.
¥/ CNY
The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥98.45 level and was supported around the ¥97.60 level. Traders reduced their risk aversion overnight and reestablished some positions in higher yielding currencies, causing the yen to soften. There is widespread speculation the Japanese government will downgrade its economic forecast to negative growth for the fiscal year that started this month. Japanese exporters have been unable to export Japan out of the current economic crisis. Bank of Japan is expected to continue its quantitative easing policies. The Nikkei 225 stock index climbed 1.37% to close at ¥8,847.01. 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 ¥128.75 level and was supported around the ¥126.80 level. The British pound moved higher vis-à-vis the yen as sterling tested offers around the ¥143.45 level while the Swiss franc moved higher vis-à-vis the yen and tested offers around the ¥85.15 level. The Chinese yuan appreciated vis-à-vis the U.S. dollar today as the greenback closed at CNY 6.8233 in the over-the-counter market, down from CNY 6.8264.
₤
The British pound appreciated vis-à-vis the U.S. dollar today as cable tested offers around the US$ 1.4595 level and was supported around the $1.4440 level. Data released in the U.K. today saw the CBI industrial trends survey improve marginally to -57 from -58. Sterling regained some of yesterday’s sizable sell-off following a bleaker than expected Budget statement that called for as much as ₤220 billion in new gilts issuance. Cable bids are cited around the US$ 1.4350 level. The euro came off vis-à-vis the British pound as the single currency tested bids around the ₤0.8925 level and was capped around the ₤0.9000 figure.
CHF
The Swiss franc appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the CHF 1.1545 level and was capped around the CHF 1.1675 level. Data released in Switzerland today saw the March trade surplus decrease to CHF 120 million while the April ZEW improved markedly to -27.7 from -57.1 in March. U.S. dollar bids are cited around the CHF 1.1355 level. The euro came off vis-à-vis the Swiss franc as the single currency tested bids around the CHF 1.5080 level while the British pound moved higher vis-à-vis the Swiss franc and tested offers around the CHF 1.7005 level.
Daily Market Commentary provided by GCI Financial Ltd.
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