GCI Forex Research

Daily Market Commentary

24 July 2008
Thursday

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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 (EST + 0400)

 

€

The euro came off vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.5625 level and was capped around the $1.5715 level.  The common currency came off despite a significant drop in U.S. June existing home sales of 2.6% to 4.86 million annualized units, a ten-year low.  Other data released today saw weekly initial jobless claims rise 34,000 to 406,000 while continuing jobless claims were off 9,000 to 3.107 million. Yesterday’s Federal Reserve Beige Book reported “the pace of economic activity has slowed somewhat since the last report.”  Fed policymakers continue to be relatively hawkish in their statements.  In eurozone news, the EMU-15 purchasing managers’ index contracted for the second consecutive month – dropping to 47.8 - while the German Ifo business climate index declined for the fourth consecutive month, off to 97.5 from 101.2 in June.  Other data saw the EMU-15 May current account balance print at -€7.3 billion.  Euro bids are cited around the $1.5230 level.

 

¥/ CNY

The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥107.25 level and was capped around the ¥107.95 level.  Bank of Japan Policy Board member Mizuno noted “I think there is a possibility that it will take more time than the BOJ officially says before the Japanese economy will recover.” Data released in Japan today saw Japanese exports fall for the first time in nearly five years, off 88.9% y/y to ¥138.6 billion.  The Nikkei 225 stock index gained 2.18% to close at ¥13,603.31.  Dollar bids are cited around the ¥103.65 level.  The euro came off vis-à-vis the yen as the single currency tested bids around the ¥167.90 level and was capped around the ¥169.45 level. The British pound and Swiss franc slumped vis-à-vis the yen as the crosses tested bids around the ¥212.75 and ¥103.35 levels, respectively.  The Chinese yuan appreciated vis-à-vis the U.S. dollar as the greenback closed at CNY 6.8289 in the over-the-counter market, down from CNY 6.8297.  A Chinese government report was issued and concluded consumer prices increases are likely to moderate.

 

₤

The British pound fell sharply vis-à-vis the U.S. dollar today as cable tested bids around the US$ 1.9815 level and was capped around the $1.9990 level.  Data released in the U.K. today saw June retail sales fall 3.9%, its largest fall since at least 1986 but inflationary pressures moved higher.  Cable bids are cited around the $1.9360 level. The euro moved higher vis-à-vis the British pound as the single currency tested offers around the ₤0.7905 level and was supported around the ₤0.7845 level. 

 

CHF

The Swiss franc appreciated vis-à-vis the U.S. dollar today as the greenback closed at CHF 1.0350 level and was capped around the CHF 1.0405 level.  Most traders expect Swiss National Bank to keep interest rates unchanged for the foreseeable future.  U.S. dollar offers are cited around the CHF 1.0515 level.  The euro and British pound came off vis-à-vis the Swiss franc as the crosses tested bids around the CHF 1.6225 and CHF 2.0560 levels, respectively.

 

 

Technical Outlook at 1230 GMT (EDT + 0400)

 

           (Bid Price)       (Today’s Intraday Range)                    

 

EUR/ USD      1.5673                1.5713, 1.5637
USD/ JPY       107.58                107.97, 107.41
GBP/ USD      1.9829                1.9992, 1.9815
USD/ CHF      1.0383                1.0403, 1.0353
AUD/ USD     0.9604                0.9635, 0.9570
USD/CAD      1.0091                1.0116, 1.0076
NZD/USD      0.7425                0.7450, 0.7401
EUR/ JPY       168.66                169.44, 168.54
EUR/ GBP      0.7904                0.7906, 0.7845
EUR/ CHF      1.6275                1.6297, 1.6250
GBP/ JPY       213.34                215.81, 213.30
CHF/ JPY       103.58                104.01, 103.56

    
 

Support                      Resistance                  Support                   Resistance

 

EUR/ USD                                                          USD/ JPY

  

L1.       1.5225                         1.5645                           101.95                       106.60

L2.       1.5035                         1.5840                           100.60                       109.95

L3.       1.4805                         1.6020                            98.75                        113.30

 

   GBP/ USD                                                        USD/ CHF

 

L1.       1.9520                         1.9760                         1.0135                         1.0565

L2.       1.9395                         1.9880                         0.9990                         1.0730

L3.       1.9100                         2.0000                         0.9875                         1.1040

 

 AUD/ USD                                                       USD/ CAD

 

L1.       0.9380                         0.9655                         0.9870                         1.0175

L2.       0.9215                         0.9735                         0.9715                         1.0370

L3.       0.9005                         1.0115                         0.9465                         1.0520

  

 NZD/ USD                                                       EUR/ JPY

 

L1.       0.7700                         0.8105                         160.60                         166.65

L2.       0.7595                         0.8420                         158.35                         167.75

L3.       0.7275                         0.8665                         154.80                         168.95

 

  EUR/ GBP                                                       EUR/ CHF

 

L1.       0.7740                         0.8120                         1.5975                         1.6250

L2.       0.7555                         0.8310                         1.5855                         1.6470

L3.       0.7440                         0.8570                         1.5730                         1.6760

 

  GBP/ JPY                                                        CHF/ JPY

 

L1.       200.60                         208.50                           98.70                        103.30

L2.       197.55                         211.35                           97.00                        105.40

L3.       192.70                         217.15                           95.85                        107.70

 

 

SCHEDULE

 

Thursday, 24 July 2008
all times GMT
(last release in parentheses)

 

0645    France             July business confidence (102)

0645    France             July production outlook

0730    Germany         July PMI, manufacturing (52.6)

0730    Germany         July PMI, services (52.1)

0800    Germany         July Ifo, business climate (101.3)

0800    Germany         July Ifo, expectations (94.7)

0800    Eurozone         July PMI, manufacturing (49.2)

0800    Eurozone         July PMI, services (49.1)

0800    Eurozone         May current account (-€300 million)

0830    UK                  June retail sales (3.5% m/m)

0830    UK                  June retail sales (8.1% y/y)

1230    US                   Weekly initial jobless claims (366,000)

1230    US                   Continuing jobless claims (3.122 million)

1400    US                   June existing home sales (4.99 million)

1400    US                   June existing home sales (2.0% m/m)

1400    US                   New York Federal Reserve President Geithner testifies

2330    Japan               July Tokyo-area consumer price index (1.5% y/y)

2330    Japan               July Tokyo-area CPI, ex-food, energy (0.3% y/y)

2330    Japan               National consumer price index (1.3% y/y)

2330    Japan               National CPI, ex-food, energy (-0.1% y/y)

2350    Japan               Foreign purchases of Japanese equities and bonds

2350    Japan               Japanese purchases of foreign equities and bonds

2350    Japan               June corporate service prices (0.6% y/y)

 

Friday, 25 July 2008
all times GMT
(last release in parentheses)

 

0800    Eurozone         July M3 money supply (10.4%)

0800    Eurozone         July M3 money supply (10.5% y/y)

0830    UK                  Q2 GDP (0.3% q/q)

0830    UK                  Q2 GDP (2.3% y/y)

0830    UK                  May index of services (0.3%)

1230    US                   June durable goods orders (0.0%)

1230    US                   June durable goods orders, ex-transportation (-0.9%)

1400    US                   July University of Michigan consumer sentiment (56.6)

1400    US                   June new home sales (512,000)

1400    US                   June new home sales (-2.5% 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.