US Housing Data May Spur Further Equity Gains, USD Losses

Source: ForexYard

As the market tests various support and resistance levels, traders are discovering a negative correlation between equities and the value of the USD. Each time there is a rally in the equities market, the USD takes moderate losses. This is likely due to investors pulling their money out of forex trading and into the stock market. With the release of U.S. Building Permits today at 12:30 GMT, the equity market may be affected. Look for the impact this has on the USD throughout today’s trading.

Economic News

USD – EUR/USD Fails to Break Significant Resistance Level

Trading of the EUR/USD was extremely volatile today as the pair failed to break a significant resistance level. The Dollar was heavily sold during the Japanese trading session, but two hours into the European session the pair fell short of the significant 1.3300 level and proceeded to fall 1.1%. The pair made a slight recovery and range trading was experienced for the remainder of the day. The EUR/USD closed down at 1.3227 from 1.3245. Against the other major pairs, the Dollar closed up against the Yen at 99.24 from 98.38, while the Dollar lost ground against the Pound to end the day at 1.4997 from 1.4872.

Much of the currency market has been driven by the recent rally in global equity markets. Yesterday was no different. Gains in U.S. equities helped to drive investors into more risky, higher yielding currencies. This has hurt the U.S. Dollar against such currencies as the Australian and New Zealand Dollars.

Due out today are economic indicators that could help to create more volatility in the Dollar’s crosses. U.S. Building Permits, which is considered to be an excellent gauge of future economic activity, is due to be released today at 12:30 GMT, along with the U.S. weekly unemployment claims report. Don’t expect these numbers to shock the market with positive news. After these releases, the Dollar could end the day down against the EUR, testing the 1.3300 level once again.

EUR – ECB Member Discusses Interest Rate Cut

The EUR is experiencing a decline against most currencies as many market participants are predicating future quantitative easing measures by the European Central Bank (ECB). Comments made yesterday by ECB governor Axel Weber have led traders to believe a future interest rate cut will be made during the ECB’s next policy meeting in May. However, the market is also expecting non-traditional policy moves to ease credit conditions in Europe. This could have a negative effect on the European currency, or it could bolster confidence in the EUR’s future.

Yesterday the EUR finished lower against the Pound at 0.8816 from 0.8902, while the EUR finished the day against the Yen at 131.27 from 131.34.

Weber stressed that a floor should be set for European interest rates at 1.00%. Rates currently stand at 1.25%. If progress is not made to turn around Europe’s economy, then we are likely to see similar purchases of government securities by the ECB as those of its American counterpart, the Federal Reserve.

Today’s trading may see the EUR moved by two key data releases; year-on-year CPI and monthly industrial production figures. While many feel inflation has been all but drowned out by media reports of deflationary pressures, some believe that a higher than expected rate of inflation may signal a bit of improvement in the European economy. Monthly industrial production numbers are expected to show a bit of a turnaround. We could see the EUR recover against the Pound to the 0.8850 level.

JPY – Yen Falls from 2-Week Highs

The Yen declined against the Dollar yesterday as reduced risk sentiment had traders aggressively pursuing higher yielding currencies throughout the day. The Japanese currency came off a two-week high against both the Dollar and the EUR. Earlier in the day, traders sold off the Yen in anticipation of better than expected U.S. economic data. Those gains held throughout the day as the numbers beat market estimates. In early morning trading, the USD/JPY was trading at 98.95 while the EUR/JPY was at 130.67.

With little data to come from the Japanese economy this week, we may expect the Yen to continue to trade based on risk sentiment in the market and leading indicators from other economies. Traders are advised to follow the trends of U.S. equity markets as there appears to be a negative correlation with the valuation of the Yen and these markets.

Crude Oil – Crude Oil Inventories Continue to Rise

Despite the large jump in the supply of U.S. Crude Oil Inventories, the price of Crude still remains relatively high. Oil Inventories rose by 5.6 million barrels this week, more than twice the forecasted amount. This is the third consecutive week that Crude Oil stocks have risen. The price of Crude Oil ended the day’s trading at $52.20.

Some analysts feel the price of Crude Oil may be fundamentally overvalued. Rising stock markets and an appreciating Dollar may be artificially supporting the commodity. With an absence of positive economic data, the possibility for a drop in Crude Oil prices exists. A possible price target could be below the $49 level.

Technical News

EUR/USD

This pair appears to be range trading with highs near 1.3300 and lows near 1.3150. With the price sitting near the lower figure, and apparently floating in the over-sold territory on the 4-hour chart, an upward correction back towards 1.3300 may be imminent. Buying on lows and selling on highs within this range might be a good strategy today.

GBP/USD

The latest upward movement has pushed this pair into the over-bought territory on the 4-hour and daily charts, signaling an impending downward correction. As the price hovers near the upper border of the daily chart’s Bollinger Bands, the downward pressure may be gaining strength. Going short might be a wise choice today.

USD/JPY

As this pair levels off after its recent volatility, there appears to be a lack of direction as all oscillators remain in neutral territory. With a potential bullish cross forming on the hourly chart’s Slow Stochastic, there is a chance that the next move will be in an upward direction. Traders may consider going long with tight stops today or waiting for a clearer signal.

USD/CHF

This pair appears to be lacking any clear indication of its impending movement as all oscillators indicate neutrality. This pair does show that it is trading in an bullish channel, however, with distinct highs and lows. Buying on the lows and selling on the highs within this channel might be a wise choice.

The Wild Card – AUD/NZD

The recent volatile upward movement pushed the price of this pair above the upper limit on the 4-hour and daily charts’ Bollinger Bands and subsequently drove the price into the over-bought territory on the 4-hour chart’s RSI as well. With a bearish cross beginning to form on the daily chart’s Slow Stochastic, these indicators all point in one direction: down. Traders involved in the forex market have a great opportunity to join this downward movement at a very early stage if they enter the market today.

Forex Market Analysis provided by Forex Yard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

Fundamental Outlook at 1400 GMT (EDT + 0400)

By GCI Fx Research


The euro weakened vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.3145 level and was capped around the US$ 1.3295 level.  Many data were released in the U.S. today. First, March consumer prices fell 0.1%, the latest evidence of decling pricing power, while the annualized print was off 0.4% – the first decline in 54 years.   Second, the New York State Federal Reserve’s April Empire State manufacturing index improved to -14.7 from -38.2 in March.  Third, March industrial output was off 1.5% in March.  Fourth, February net long-term TICS capital flows increased to US$ 22 billion from –US$ 36.8 billion in January, an indication that investment flows may have improved through the course of Q1.  Fifth, the NAHB monthly home builders’ survey improved to +14 in April from +9 in March.  In eurozone news, European Central Bank member Ordonez said the ECB can trim interest rates further and employ unconventional monetary policy measures.  ECB member Weber reported the ECB will “announce a package of non-standard monetary measures in May, which would be applicable into the rest of the year.”  Weber added the ECB has a “bit more leeway” to reduce the refinancing rate further but added he is “critical of lowering the main refinancing rate” below 1%.  The German government is currently reviewing ways to remove illiquid assets from banks’ balance sheets.  Eurogroup chairman Juncker today said economic conditions in the European Union remain grim and warned of a “risk of mass layoffs by the end of the year.”  Euro bids are cited around the US$ 1.3100 figure.

¥/ CNY

The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥99.65 level and was supported around the ¥98.15 level.  Data released in Japan overnight saw February revised industrial output decline 9.4% m/m, unchanged from the preliminary reading.  Bank of Japan is expected to continue its large scale asset purchases as part of its quantitative easing framework.  The Nikkei 225 stock index lost 1.13% to close at ¥8,742.96.  U.S. dollar offers are cited around the ¥104.15 level.  The euro moved lower vis-à-vis the yen as the single currency tested bids around the ¥129.90 level and was capped around the ¥131.80 level.  The British pound moved higher vis-à-vis the yen as sterling tested offers around the ¥149.25 level while the Swiss franc moved lower vis-à-vis the yen and tested bids around the ¥86.05 level.  The Chinese yuan appreciated vis-à-vis the U.S. dollar today as the greenback closed at CNY 6.8200 in the over-the-counter market, down from CNY 6.8320.

The British pound appreciated vis-à-vis the U.S. dollar today as cable tested offers around the US$ 1.5035 level and was supported around the $1.4820 level.  Data released in the U.K. today saw the RICS housing buyers’ index improve to -73.1 from -78.1 in February but a majority of surveyors still reported lower prices.  Also, it was reported that the February government house price index worsened to -12.3% from -11.5%.  Cable bids are cited around the US$ 1.4515 level.  The euro moved lower vis-à-vis the British pound as the single currency tested bids around the ₤0.8785 level and was capped around the ₤0.8915 level.

Daily Market Commentary provided by GCI Financial Ltd.

GCI Financial Ltd (”GCI”) is a regulated securities and commodities trading firm, specializing in online Foreign Exchange (”Forex”) brokerage. GCI executes billions of dollars per month in foreign exchange transactions alone. In addition to Forex, GCI is a primary market maker in Contracts for Difference (”CFDs”) on shares, indices and futures, and offers one of the fastest growing online CFD trading services. GCI has over 10,000 clients worldwide, including individual traders, institutions, and money managers. GCI provides an advanced, secure, and comprehensive online trading system. Client funds are insured and held in a separate customer account. In addition, GCI Financial Ltd maintains Net Capital in excess of minimum regulatory requirements.

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 U.S.ed as investment advice. GCI assumes no responsibility or liability from gains or losses incurred by the information herein contained.

Consumer Prices decline unexpectedly in March. US Dollar mixed in Forex Trading today.

Consumer prices in the U.S. decreased in March after advancing the previous two months according to a report released today by the U.S. Department of Labor. The Consumer Price Index fell by 0.1 percent in March after gaining by 250150currencyexchange0.4 percent in February and by 0.3 percent in January as falling energy prices contributed to the consumer price decrease.

On an annual basis, consumer prices declined by 0.4 percent from March 2008 following a 0.2 percent annual increase in February. March’s price decline surpassed economic forecasts that were expecting a 0.1 percent increase and a 0.1 percent fall in the annual rate.

Core consumer prices, excluding food and energy prices, increased by 0.2 percent in March following a 0.2 percent advancement in February. The annual change in core prices showed a 1.8 percent increase over March 2008 following February’s 1.8 percent annual increase. Market forecasts were predicting core inflation to register a monthly increase of 0.1 percent and an annual increase of 1.7 percent.

Contributing to the lower consumer prices was a decrease in the price for energy as the energy index fell by 3.0 percent in March while the gasoline index also showed a 4.0 percent decline. The food index fell by 0.1 percent in March while the indexes for housing and apparel also declined for the month.

US Dollar mixed in Forex Trading today.

The US Dollar has been mixed in forex trading versus the other major currencies today. The American currency has traded higher versus the euro, Swiss franc and Japanese yen while falling against the British pound, Australian dollar, New Zealand dollar and Canadian dollar.

The US dollar is on track to gain for the second day versus the Swiss franc as the USD/CHF trades at the exchange rate of 1.1438 at 5:43pm EST according to currency data from Oanda. The USD/CHF opened the day trading at 1.1388 and reached an intraday high of 1.1488 before retreating lower.

The euro has fallen versus the dollar after the EUR/USD opened at 1.3244 today to trading at 1.3211 after reaching an intraday high of 1.3297. The British pound has increased versus the dollar as the GBP/USD advanced from its 1.4874 opening to trade at 1.4982 later today.

The Australian dollar has moved higher versus the dollar today as the AUD/USD trades at 0.7269 after opening the day at 0.7167. The New Zealand dollar also increased versus the dollar and the NZD/USD trades at 0.5798 after opening at 0.5775.

The dollar has advanced against the Japanese yen as the USD/JPY trades at 99.37 after opening the day at 98.40 and the dollar has also declined versus the Canadian dollar as the USD/CAD trades at 1.2048 after opening at the 1.2172 exchange rate.

GBP/USD Chart – The British Pound advancing today versus the US Dollar and hovering around the 1.5000 psychological level.

4-15gbpusd

EUR/USD Daily Commentary for 4.15.09

By Fast Brokers

The EUR/USD is consolidating above our 1st tier uptrend line, holding up relatively well considering the brisk selloff on Wall Street in reaction to disappointing U.S. economic data.  The EUR/GBP continues its downturn with the GBP/USD looking to break out of our 2nd tier uptrend line.  Hence, we’re witnessing the perpetuation of status quo among the Euro, Pound, and Dollar due to a lack of significant data from both the EU and Britain.  The Euro is still at a disadvantage with the ECB taking a vague monetary stance, and uncertainty hardly ever yields a positive performance in price. Will the ECB cut its benchmark further or initiate unorthodox liquidity processes?  Nobody knows at this point.  Since the economic data surfacing from the EU over the past month has been mixed, the ECB will likely wait to see if the signs of improvement are only a bounce or a real turn in events.  We’ll witness a couple inflection points shortly, including our 1st tier uptrend and downtrend lines and our 2nd tier uptrend and downtrend lines.  Therefore, the EUR/USD is signaling that it could reach a directional pivot point soon.  Meanwhile, we could see a little pop up to our 1st tier downtrend line intraday.  Fundamentally, we maintain our supports of 1.3271, 1.3223, 1.3192, 1.3162, and 1.3126.  To the topside, we hold our resistances of 1.3323, 1.3351, 1.3375, 1.3413, and1.3462.  The 1.35 area acts a psychological barrier again with 1.30 serving as a key psychological cushion.  The EUR/USD is currently exchanging at 1.3268.

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.

Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.

GBP/USD Daily Commentary for 4.15.09

By Fast Brokers

The Cable has just jumped out of our 2nd tier uptrend line and February highs, leaping over 2 of 3 significant obstacles before a sizable breakout can take place.  The third key barrier is the highly psychological 1.50 level.  Though the Cable is climbing past 1.50 as we speak, the area could prove to be challenging in the near-term, and shouldn’t go down without a fight.  That being said, the GBP/USD is in the process of reconfirming its uptrend as it exercises its clear dominance over the Euro and Dollar.  With a shortage of significant economic data surfacing from Britain this week, the Pound is flying high off of its encouraging data from the past month.  Uncertainty is brewing in the EU and U.S., giving the Pound the upper hand for the near-term.  Hence, the Cable is running without U.S. equities right now.  However, should U.S. markets head higher, this would only add fuel to the fire of the Cable’s present rally.  Whether and uptrend continues to materialize in the GBP/USD over the medium-term is another question.  We could easily see mixed data come from Britain over the next few weeks, stoking uncertainty similar to that in the U.S.  After all, Britain and the U.S. are so intertwined, it would be hard to believe that if the U.S. economy has another setback Britain’s wouldn’t follow suit.  However, right now all is good in the GBP/USD with all indicators in the positive.  Fundamentally, we find resistance of 1.5028 with additional resistances hanging at 1.5080, 1.5121, 1.5185 and 1.5219.  The critical 1.50 could quickly turn into a psychological cushion with 1.55 becoming the psychological barrier. To the downside, we find supports of 1.4988, 1.4946, 1.4883, 1.4834 and 1.4770.   The GBP/USD is currently exchanging at 1.5015.

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.

Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.

USD/JPY Daily Commentary for 4.15.09

By Fast Brokers

The USD/JPY is recovering from yesterday’s losses after sinking below our 1st tier uptrend line and 2nd tier downtrend line while the currency pair exercised its past positive correlation with U.S. equities.  The move came in reaction to surprisingly negative data from the U.S., giving currency traders a reason to lose faith in America’s economic stabilization.  However, the downturn in the USD/JPY was by no means significant, exemplified by today’s recovery.  The ability for the uptrend to materialize into something substantial remains a question mark as before.  Our first tier uptrend was tight in the first place, so we set a new first tier uptrend line today.  That being said, the USD/JPY sure hasn’t shown confidence in a 100+ future.  The uptrend is very young, giving precedence to the longer-term downtrend still solidly intact.  However, don’t be fooled.  The fundamentals are still in place for a breakout in the USD/JPY.  All the currency pair needs is a true confirmation from the U.S. that we have seen the worst of the economic crisis.  Therefore, we expect to see the continuation of consolidation in the USD/JPY as investors await more earnings from financials and results from the highly anticipated stress tests.  Critical levels on each side are our 101.44 resistance and 97.11 support.  Fundamentally, our 99.79 support turns resistance while we maintain our resistances of 100.28, 100.71, 101.44, and 101.98.  To the downside, we hold our supports of 99.06, 98.16, 97.59, and 97.11 with fresh bottom-end of 96.33.  The USD/JPY is currently exchanging at 99.10.

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.

Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.

Is the S&P 500 running out of gas?

By Adam Hewison

After a spectacular rally from the lows seen last month, the S&P appears to be running into overhead resistance.

Is this the pause that refreshes, or is this the pause that reverses the market back towards the lows?

I have said for some time that I was not that confident that this rally would continue as our long-term “Trade Triangle” remained in a negative mode. In my new video I outline the key areas that I believe will shape this market in the coming weeks and months.

The video features our “Trade Triangle” technology as well as our Fibonacci tools. I will also remind you of a concept that has been around for a while, but one that you might not be aware of.

No matter what happens, you are going to see some extraordinary markets and some wonderful opportunities to make money in the next 6-9 months.

Some investors may be hoping for the best, but be prepared as we might see another dive.
I highly recommend students of the market to take a few minutes and watch my latest video. Even if you’re a seasoned pro you may find what you see interesting and therefore profitable.

As always, my video come is complimentary with no strings attached.

See the New Video Here.

All the best,

Adam Hewison

President, INO.com
Co-creator, MarketClub

Financial Firm’s Profits Help to Sway the Dollar

Source: ForexYard

Many traders are looking towards Wall Street’s reported earnings before placing their forex trades. The Street has been influencing currency moves and with the announcement of some of the world’s largest financial firm’s first quarter results this week, currencies may find direction based on their profits and losses.

Economic News

USD – Nerves on Wall Street Continue to Move Currencies

The U.S. currency continues to strengthen given the recent demand for riskier currencies. Falls in equity markets have driven traders to reduce their positions in riskier, higher yielding currencies. Many of the uncertainties in the currency markets are due to earnings season on Wall Street.

This week brings quarterly results from a number of financial companies, including U.S banks Citigroup and JP Morgan Chase. And the markets are waiting for the U.S. corporate earnings season to get into full swing. Some market players think this week’s reports could show signs that the worst of the financial crisis is over, which means that the USD may still surpass its major counterparts before the end of this trading week.

Last week, the USD rose against the Yen, buoyed by a rally in U.S. shares after positive earnings guidance from U.S. bank Wells Fargo. Analysts’ expecting that if U.S. earnings results show signs that the U.S. is pulling away from the worst of the economic downturn, risk appetite is expected to grow, putting more pressure on the Yen and also providing a lift to the Dollar.

EUR – The European Currency Rebounds against the Dollar

In yesterday’s trading the European currency extended its gains vs. the greenback, rising 1.4% to $1.3363. The British pound also took more ground, rising 1.3% to $1.4842. Against the Japanese yen however, the EUR declined the most in a week before Germany’s Federal Statistics Office releases its report on wholesale prices Wednesday, supporting the case for the region’s central bank to cut Interest Rates. The price figure is expected to slump 7.1% in March from a year earlier.

However, Europe’s single currency may weaken during the next few days on concern European Central Bank (ECB) officials this week will signal they may keep lowering rates to support growth. ECB President Jean-Claude Trichet already said last week the central bank is studying unorthodox ways of boosting the European economy. Some in the market continue to hold the view that the EUR remains laden by expectations of another Rate cut and the prospect of unconventional monetary easing, and the EUR is likely to halt its gains versus the Dollar, in the nearest future.

JPY – Carry Trade has is Again a Trader’s Favorite

The Yen has begun to strengthen from a 5-month low versus the Dollar last week as fears of a prolonged recession are driving traders to the Yen. The currency is often seen as safe haven plays in the forex market. Traders may have been a bit premature in driving up higher yielding currencies as global equity markets went on a tear the past month and a half. There has been very little concrete evidence of a sustained economic turnaround. This in turn has once again provided a boost to the Yen as a safe haven currency.

The return of the carry trade is again becoming widely popular. Japanese Interest rates once again are in the basement and there are other nations providing significantly higher rates of returns. Due to the weak Yen, many traders have jumped back into this type of strategy and it has provided healthy returns the past two months. This could be a signal of the global economy returning to the previous economic cycle.

Oil – Crude Oil Inventories to be Released Today

The commodity is still recovering from its 5% plunge in price after the International Energy Agency slashed its forecast for Crude demand in 2009. The Agency predicts a drop of 2.8% in global demand for Oil. Crude Oil has not been able to steadily trade above the $51 price level, though Oil has risen over 10% this year. It appears traders are waiting for signs of a significant economic recovery. Many analysts have claimed a bottom has been reached in Crude Oil trading, though that remains to be seen. A fair value for Crude Oil may be $45.

Today the market is anticipating the release of the weekly U.S. Crude Oil inventories report from the Energy Information Agency. Traders are expecting Crude stocks to rise by 2 million barrels this past week. A reading above this mark may help to send the price of Crude lower, perhaps below the $50 mark once again.

Technical News

EUR/USD

The typical range trading on the 4-hour chart continues. Both the daily RSI and Slow Stochastic are floating in neutral territory. However, the pair currently sits near the bottom border of the hourly chart’s RSI, suggesting an upward correction may be imminent. When the upwards breach occurs, going long with tight stops appears to be preferable strategy.

GBP/USD

The price of this pair appears to be floating in the over-bought territory on the daily chart’s RSI indicating a downward correction may be imminent. The downward direction on the 4-hour chart’s Momentum oscillator also supports this notion. When the downwards breach occurs, going short with tight stops appears to be preferable strategy.

USD/JPY

The daily chart is showing mixed signals with its RSI fluctuating at the neutral territory. However, the 4-hour chart’s RSI is already floating in the oversold territory indicating that a bullish correction might take place in the nearest future. When the upwards breach occurs, going long with tight stops appears to be preferable strategy.

USD/CHF

The pair has been range-trading for a while now, with no specific direction. The Daily chart’s Slow Stochastic providing us with mixed signals. All oscillators on the 4 hour chart do not provide a clear direction as well. Waiting for a clearer sign on the hourlies might be a good strategy today.

The Wild Card – Crude Oil

Oil prices are once again dropping, and a barrel of oil is currently traded around $49.26. And now, all oscillators on the 4-hour chart are giving bullish signals, indicating that oil prices might go up. This might give forex traders a great opportunity to enter a very popular trend.

Forex Market Analysis provided by Forex Yard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

Fundamental Outlook at 1400 GMT (EDT + 0400)

By GCI Fx Research

The euro weakened vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.3225 level and was capped around the US$ 1.3380 level.  Technically, today’s intraday low was just above the 23.6% retracement of the move from $1.6040 to $1.2330.  The common currency retraced some of its intraday losses after the release of U.S. March producer price inflation data that saw the headline index decline 1.2% m/m after climbed 0.1% in February.  The core PPI index fell to 0.0% m/m from +0.2% in February. These data indicate pricing power at the factory gates remains quite weak, particularly with the headline index off 3.5% y/y.  Other data released today saw March retail sales decline 1.1% m/m, defying expectations of a 0.3% increase, while February’s tally was upwardly revised to +0.3%.  Traders await remarks from President Obama and Federal Reserve Chairman Bernanke during the North American session.  Goldman Sachs’s confirmation that it earned about US$ 1.6 billion in profit in Q1 was received in a lukewarm fashion by dealers.  Attention now focuses on Citigroup’s, JPMorgan Chase’s, and Morgan Stanley’s earnings. In eurozone news, the German government will decide on 21 April whether or not it will establish a “bad bank” to absorb banks’ illiquid assets to restart lending activity and help remove toxic assets from banks’ balance sheets.  Data released in France saw the February current account deficit narrow to €2.2 billion.  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 ¥98.95 level and was capped around the ¥100.40 level.  The yen was stronger across the board as traders reduced their risk appetites overnight despite a decent earnings report from Goldman Sachs.  Traders are still slow to add riskier asset plays to their portfolio following yesterday’s strong indication the Obama administration is likely pushing General Motors to file for bankruptcy.  Rumours that Delphi may be forced to liquidate led to more yen demand.  The Nikkei 225 stock index lost 0.92% to close at ¥8,842.68.  U.S. dollar offers are cited around the ¥104.15 level.  The euro moved lower vis-à-vis the yen as the single currency tested bids around the ¥131.25 level and was capped around the ¥134.30 level.  The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥147.25 level while the Swiss franc moved lower vis-à-vis the yen and tested bids around the ¥86.70 level.  The Chinese yuan depreciated vis-à-vis the U.S. dollar today as the greenback closed at CNY 6.8320 in the over-the-counter market, up from CNY 6.8318.

The British pound appreciated vis-à-vis the U.S. dollar today as cable tested offers around the US$ 1.4930 level and was supported around the $1.4820 level.  Bank of England reported it wants to enhance payment and settlement systems so that it can further reduce systemic risk.  Traders are also examining possible fallout from the political row involving Prime Minister Brown and Labour.  Cable bids are cited around the US$ 1.4515 level.  The euro moved lower vis-à-vis the British pound as the single currency tested bids around the ₤0.8890 level and was capped around the ₤0.9005 level.

CHF

The Swiss franc depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the CHF 1.1445 level and was supported around the CHF 1.1320 level.  Swiss National Bank allocated €13.2 billion in a euro/ Swiss franc swap today as part of its quantitative easing framework to weaken the franc.  U.S. dollar bids are cited around the CHF 1.1275 level.  The euro moved lower vis-à-vis the Swiss franc as the single currency tested bids around the CHF 1.5105 level while the British pound gained ground vis-à-vis the Swiss franc and tested offers around the CHF 1.7060 level.

Daily Market Commentary provided by GCI Financial Ltd.

GCI Financial Ltd (”GCI”) is a regulated securities and commodities trading firm, specializing in online Foreign Exchange (”Forex”) brokerage. GCI executes billions of dollars per month in foreign exchange transactions alone. In addition to Forex, GCI is a primary market maker in Contracts for Difference (”CFDs”) on shares, indices and futures, and offers one of the fastest growing online CFD trading services. GCI has over 10,000 clients worldwide, including individual traders, institutions, and money managers. GCI provides an advanced, secure, and comprehensive online trading system. Client funds are insured and held in a separate customer account. In addition, GCI Financial Ltd maintains Net Capital in excess of minimum regulatory requirements.

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 U.S.ed as investment advice. GCI assumes no responsibility or liability from gains or losses incurred by the information herein contained.

US Retail Sales fall more than expected, Producer Prices decline. Dollar mixed in Forex Trading.

U.S. Retail Sales decreased unexpectedly in March according to a report by the U.S. Commerce Department released today. Advance estimates of March retail sales showed that sales decreased by 1.1 percent to $344.4 billion from February. On an annual basis, retail sales have decreased by 9.4 percent from the March 2008 level. Market forecasts were 250150usdchangeexpecting an increase of 0.3 percent for March following February’s revised increase of 0.3 percent.

March’s retail sales numbers were weighted down by a 5.9 percent decline in electronics & appliance store sales, a 2.2 percent decline in miscellaneous stores retailers and a 2.3 percent fall in motor vehicle & parts dealers. Other notable declines for the month were building material & supplies dealers, furniture & home furnishings stores, clothing & clothing accessories stores and nonstore retailers. Positive contributors to the retail sales data were food & beverage stores with a 0.5 percent increase and health & personal care stores with a 0.4 percent increase.

Retail sales excluding automobiles decreased by 0.9 percent in March following February’s revised 1.0 percent gain. The sales minus autos monthly decline also surpassed market forecasts that were expecting sales minus automobiles to register no change for the month.

Producer Prices fall after two months of increases.

The Producer Price Index, released in a separate report by the Department of Labor, fell more than expected in March as energy costs dropped and eased inflation on finished goods. Producer prices fell by 1.2 percent in the month of March following an increase of 0.1 percent in February and an increase of 0.8 percent in January. The annual rate of change for March showed that producer prices were 3.5 percent lower than the March of 2008 level following February’s annual rate registered a 1.3 percent decrease. Market forecasts were expecting monthly producer prices to show no change in March and the annual rate to register a 2.2 percent decline.

Helping to contribute to the lower ppi in March was the energy index which decreased by 5.5 percent for the month after increasing by 1.3 percent in February. Gasoline prices dropped by 13.1 percent in March after gaining by 8.7 percent in February while food prices declined by 0.7 percent for the month.

Core producer prices, excluding food and energy prices, showed no change in March following a rise of 0.2 percent in February. On an annual basis, core producer prices advanced by 3.8 percent for March compared with an increase of 4.0 percent in February. Market forecasts were expecting a 0.1 percent gain in monthly core prices and a 4.0 percent annual increase.

Forex Market – US Dollar shows mixed results today.

The U.S. dollar has been mixed in forex trading today against the major currencies. The dollar has gained against the euro, Australian dollar, Swiss franc and New Zealand dollar while declining versus the Canadian dollar, British pound and the Japanese yen.

The euro has been falling versus the dollar after gaining mightily yesterday. The EUR/USD has declined from today’s 1.3328 opening at 00:00GMT to trading at approximately 1.3273 in the afternoon of the US trading session at 1:08pm ET according to currency data from Oanda.

The British pound has gained today versus the American currency as the GBP/USD has gone from 1.4851 to trading at 1.4888 dollars per pound. The dollar has also declined against the Japanese yen today as the USD/JPY has fallen from its 99.84 opening to trading at 98.83.

The dollar has fallen against the Canadian dollar after the USD/CAD’s opening at 1.2217 earlier today to trading later at 1.2130. Meanwhile, the USD has advanced against the Swiss franc from 1.1355 to trading at 1.1386. The Australian dollar has lost ground versus the USD as the AUD/USD trades at 0.7250 after opening today at 0.7282 while the New Zealand dollar has declined versus the USD and trades at 0.5838 after opening at 0.5899.

USD/JPY Chart – The US Dollar declining versus the Japanese Yen in forex trading action and falling sharply under the 100 yen to the dollar level today(Hourly Chart).

Today's Forex Chart
Today's Forex Chart