EURO

The euro strengthened vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.5855 level and was supported around the $1.5740 level. The common currency reclaimed some of yesterday’s lost ground ahead of today’s Group of Seven meeting in Washington, D.C. Most traders expect the G7 will probably reiterate its usual mantra about excessive currency volatility being undesirable and may not be more direct on account of resistance from U.S. monetary authorities. Still, the possibility persists that G7 policymakers may include a statement in their communiqué that is more direct and raises the chances that officials will intervene in the currency markets. Data released in the U.S. today saw the mid-April University of Michigan consumer sentiment index fall to 63.2 from 69.5 in late March. Also, March import prices were higher 2.8% m/m and a record 14.8% y/y. In eurozone news, the German March wholesale price index was up 1.6% m/m and 7.1% y/y. Euro bids are cited around the US$ 1.5345 level.

JPN/CNY

The yen appreciated sharply vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥100.60 level and was capped around the ¥102.25 level. Technically, today’s intraday low was right around the 38.2% retracement of the move from ¥108.60 to ¥95.70. The yen moved higher as traders grew more risk averse ahead of today’s Group of Seven meeting in Washington, D.C. ECB President Trichet yesterday said policymakers “deplore” excessive currency volatility and some are speculating global decision-makers may be planning to intervene to stop the U.S. dollar’s recent weakness. Data released in Japan overnight saw the March corporate goods price index rise 0.5% m/m and 3.9% y/y, its fastest pace in 27 years. The Nikkei 225 stock index gained 2.92% to close at ¥13,323.73. Dollar offers are cited around the ¥103.65 level. The euro moved lower vis-à-vis the yen as the single currency tested bids around the ¥159.40 level and was capped around the ¥161.35 level. The British pound and Swiss franc came off vis-à-vis the yen as the crosses tested bids around the ¥198.40 and ¥100.85 levels, respectively. The Chinese yuan depreciated vis-à-vis the U.S. dollar as the greenback closed at CNY 7.0065 in the over-the-counter market, up from CNY 6.9916. Data released in China overnight saw the March trade surplus increase to US$ 13.4 billion while foreign reserves reached US$ 1.68 trillion at the end of March. Also, People’s Bank of China reported its monetary tightening policies have shown positive results including a deceleration in M2 money supply growth.

STERLING

The British pound moved higher vis-à-vis the U.S. dollar today as cable tested offers around the US$ 1.9765 level and was supported around the $1.9680 level. Technically, today’s intraday high was right around the 23.6% retracement of the move from $2.1160 to $1.9335. Despite yesterday’s 25bps rate cut by Bank of England, three-month sterling Libor rose to 5.9275% overnight – an indication that interbank lending rates may continue to remain stubbornly high as banks horde cash. Cable bids are cited around the US$ 1.9605 levels. The euro appreciated vis-à-vis the British pound as the single currency tested offers around the ₤0.8035 level and was supported around the ₤0.7975 level.

SWISS

The Swiss franc appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the CHF 0.9965 level and was capped around the CHF 1.0090 level. Swiss National Bank President Roth said the franc’s strength since the beginning of the year is a “correction of the excesses of the past.” U.S. dollar offers are cited around the CHF 1.0375 level. The euro and British pound appreciated vis-à-vis the U.S. dollar as the greenback tested bids around the CHF 1.5790 and CHF 1.9655 levels, respectively.

Posted in Categories: Contributor, External Research, Forex.

(No Ratings Yet)

 Loading ...