Daily Market Commentary

24 April 2009
Friday

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GCI Foreign Exchange Research: www.gcitrading.com/fxnews/
FX Research Desk: fxnews@gcitrading.com
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Fundamental Outlook at 1400 GMT (EDT + 0400)

€

The euro appreciated vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.3300 figure and was supported around the US$ 1.3110 level. The common currency darted higher following some positive European data and a strong day in the U.S. equity markets on news the Obama administration is extending another US$ 2 billion in loans to General Motors. The Federal Reserve reported the recession and market turbulence have “substantially reduced” reserves at some of the nineteen largest U.S. banks, noting most banks maintain capital “well in excess” of regulatory standards. The Fed also said the government is prepared to aid U.S. banks that are experiencing problems. The Fed’s stress tests results of U.S. banks will be released on 4 May. Group of Seven officials convening this weekend will likely not announce any new actions in their communiqué and will likely not include new verbiage on exchange rate. Data released in the U.S. today saw March new home sales decline 0.6% to an annualized 356,000 rate and fall 30.6% y/y. Also, March durable goods orders were off 0.8% with the ex-transportation component off 0.6%. In eurozone news, the IMF called on the ECB to reduce rates further and “in a timely manner.” The German Ifo business confidence index improved to 83.7 in April from 82.2 in March. Many economists believe the worst may be behind the German economy but today’s print remains recessionary. Additionally, French March consumer spending was up 1.1% m/m and 0.6% y/y. Euro bids are cited around the US$ 1.2765 level.

¥/ CNY

The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥96.65 level and was capped around the ¥98.15 level. Data released in Japan overnight saw March corporate service price index climb 0.9% m/m and decline 2.1% y/y. The Nikkei 225 stock index lost 1.57% to close at ¥8,707.99. 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 ¥127.25 level and was capped around the ¥129.25 level. The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥141.15 level while the Swiss franc moved higher vis-à-vis the yen and tested offers around the ¥85.60 level. The Chinese yuan appreciated vis-à-vis the U.S. dollar today as the greenback closed at CNY 6.8230 in the over-the-counter market, down from CNY 6.8233. People’s Bank of China adviser Fan said China can still record 7-8% growth this year.

₤

The British pound depreciated vis-à-vis the U.S. dollar today as cable tested bids around the US$ 1.4575 level and was capped around the $1.4770 level. Chancellor of the Exchequer Darling said the markets can support the U.K. government’s planned ₤125 billion of gilts issuance this year. March retail sales were up 0.3% m/m and up 1.5% y/y and Q1 GDP were off 1.9% q/q and 4.1% y/y. Cable bids are cited around the US$ 1.4350 level. The euro moved higher vis-à-vis the British pound as the single currency tested offers around the ₤0.9080 level and was supported around the ₤0.8920 level.

Technical Outlook at 1230 GMT (EDT + 0400)

(Bid Price) (Today’s Intraday Range)

EUR/ USD 1.3260 1.3300, 1.3112
USD/ JPY 97.03 98.13, 96.63
GBP/ USD 1.4680 1.4772, 1.4575
USD/ CHF 1.1387 1.1525, 1.1347
AUD/ USD 0.7218 0.7227, 0.7105
USD/CAD 1.2087 1.2266, 1.2070
NZD/USD 0.5714 0.5730, 0.5598
EUR/ JPY 128.62 129.25, 127.24
EUR/ GBP 0.9028 0.9080, 0.8918
GBP/ JPY 142.34 144.49, 141.14
CHF/ JPY 85.18 85.59, 84.25

Support Resistance Support Resistance

EUR/ USD USD/ JPY

L1. 1.2465 1.3205 87.05 92.70

L2. 1.2350 1.3315 86.00 96.05

L3. 1.2130 1.3595 84.50 98.90

GBP/ USD USD/ CHF

L1. 1.4070 1.4615 1.1400 1.1815

L2. 1.3500 1.4890 1.1205 1.2250

L3. 1.3290 1.5340 1.0880 1.2430

AUD/ USD USD/ CAD

L1. 0.6305 0.6780 1.2030 1.2615

L2. 0.6015 0.6965 1.1805 1.2785

L3. 0.5535 0.7260 1.1445 1.3375

NZD/ USD EUR/ JPY

L1. 0.4975 0.5545 111.25 122.45

L2. 0.4620 0.5730 105.30 131.10

L3. 0.4380 0.6055 93.10 140.60

EUR/ GBP EUR/ CHF

L1. 0.8745 0.9805 1.4590 1.5260

L2. 0.8495 1.0140 1.4300 1.5560

L3. 0.8185 1.0310 1.4110 1.5855

GBP/ JPY CHF/ JPY

L1. 125.30 134.40 76.30 81.75

L2. 119.45 137.15 73.20 84.00

L3. 115.20 141.80 70.80 87.30

SCHEDULE

Friday, 24 April 2009
all times GMT
(last release in parentheses)

0400 US Group of Seven finance ministers meet

0645 France March consumer spending (-2.0% m/m)

0645 France March consumer spending (-2.0% y/y)

0800 Germany April Ifo, expectations (81.6)

0800 Germany April Ifo, business climate (82.1)

0800 Germany April Ifo, current assessment (82.7)

0830 UK Q1 gross domestic product (-1.6% q/q)

0830 UK Q1 gross domestic product (-2.0% y/y)

0830 UK March retail sales (-1.9% m/m)

0830 UK March retail sales (0.4% y/y)

1230 US March durable goods orders (3.4%)

1230 US March durable goods, ex-transportation (3.9%)

1400 US March new home sales (337,000)

1400 US March new home sales (4.7% m/m)

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.