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Forex - Fundamental research
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Wednesday,
03 September 2008,
13:46 GMT
GCI Forex Research
by FX Research Desk
Daily market commentary
The euro extended recent losses vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.4465 level and was capped around the $1.4615 level. The common currency reached its lowest level since early February as traders reacted to a further pullback in oil prices. NYMEX crude oil futures for October delivery traded as low as the $105 handle after hurricane Gustav weakened. Data released in the U.S. today saw July construction spending off 0.6% while the August ISM manufacturing index ticked lower to 49.9 from 50.0 in July. Kansas City Federal Reserve President Hoenig hawkishly said “The current stance of policy, while understandably calibrated for responding to the immediate financial crisis, will make it difficult to achieve our mandate for price stability over the longer term.
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Tuesday,
02 September 2008,
01:38 GMT
GCI Forex Research
by FX Research Desk
Daily market commentary
The euro weakened vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.4595 level and was capped around the $1.4720 level. Technically, today’s intraday high was right around the 76.4% retracement of the move from $1.4315 to $1.6040. The common currency moved lower after hurricane Gustav weakened in strength as it approaches the Gulf of Mexico, resulting in a pullback in crude oil prices to the $112 handle. There has been a strong positive correlation between the euro and the price of oil over the last several weeks. Data released in the eurozone today saw German July retail sales fall 1.5% m/m and was unchanged y/y. Also, EMU-15 manufacturing activity contracted for the third consecutive month in August, improving to 47.
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Thursday,
28 August 2008,
06:22 GMT
GCI Forex Research
by FX Research Desk
Daily market commentary
The euro moved higher vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.4775 level and was supported around the $1.4630 level. Different factors led to gains by the common currency. First, tropical storm Gustav is nearing the U.S. oil-rich gulf region and chased NYMEX crude oil futures for October delivery above the $119 handle, leading to U.S. dollar weakness. Second, the U.S. Federal Deposit Insurance Corporation reported more U.S. banks are at risk for failure than anytime since 2003 and the U.S. media reported the FDIC may need to tap U.S. Treasury funds to finance the expected wave of bank failures. Third, some hawkish comments are still being offered by European Central Bank officials.
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Wednesday,
27 August 2008,
01:45 GMT
GCI Forex Research
by FX Research Desk
Daily market commentary
The euro moved sharply lower vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.4570 level and was capped around the $1.4760 level. The common currency reached its lowest level since 14 February as traders continued to scale back their expectations concerning regarding eurozone interest rates, especially as EMU-15 economic data continue to weaken. Data released in the U.S. today saw July new home sales climb 2.4% to an annualized 515,000 rate, following yesterday’s existing home sales data. Second, the August Richmond Fed manufacturing index remained steady at -16. Third, the August consumer confidence index climbed to 56.9 from 51.9. Many recent U.S. economic data have been improving and stabilizing in part, a stark contrast to what is happening in the eurozone.
• EUR
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Tuesday,
26 August 2008,
12:44 GMT
GCI Forex Research
by FX Research Desk
Daily market commentary
The euro moved lower vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.4695 level and was capped around the $1.4805 level. Technically, today’s intraday high and low were around the 38.2% and 76.4% retracement of the move from $1.4630 to $1.4910, respectively. The common currency was on the defensive for a couple of reasons. First, U.S. July existing home sales were up 3.9% to an annualized 5.0 million rate, possible evidence the beleaguered U.S. housing sector may be reaching a bottom. Second, the International Monetary Fund downgraded its 2008 GDP growth forecast to 1.4% from 1.7% and trimmed its 2009 eurozone GDP growth forecast to 0.9% from 1.2%. Third, Denmark’s central bank rescued the country’s tenth largest bank, Roskilde Bank, in a US$ 896.
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Friday,
22 August 2008,
05:02 GMT
GCI Forex Research
by FX Research Desk
Daily market commentary
The euro moved sharply higher vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.4890 level and was supported around the $1.4730 level. The common currency rallied on growing speculation the U.S. government will bail out U.S. mortgage banking giants Fannie Mae and Freddie Mac, leading to a significant decrease in shareholder equity. The U.S. dollar also suffered on news that U.S. investment banking giant Lehman Brothers is having difficulties selling up to 50% of its current value. Traders also sold U.S. dollars after data revealed the U.S. July index of leading indicators fell 0.7%, worse-than-expected. It was also reported that the Philadelphia Fed’s August manufacturing index improved to -12.
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Thursday,
07 August 2008,
02:05 GMT
GCI Forex Research
by FX Research Desk
Daily market commentary
The euro depreciated vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.5395 level and was capped around the $1.5515 level. The common currency extended recent losses and reached its lowest level since 16 June. As expected, the Federal Open Market Committee kept the federal funds rate unchanged at 2.00% yesterday and contrary to much speculation, the only dissenter seeking higher rates was Dallas Fed President Fisher. The FOMC reported “Economic activity expanded in the second quarter, partly reflecting growth in consumer spending and exports. However, labor markets have softened further and financial markets remain under considerable stress. Tight credit conditions, the ongoing housing contraction, and elevated energy prices are likely to weigh on economic growth over the next few quarters.
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