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.
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