Singapore GIC: Risk Of Economic Stagnation, Then Inflation
SINGAPORE -(Dow Jones)- The world faces the risk of economic stagnation as it pulls out of steep economic downturn, but this could be followed by inflation if policymakers aren't careful, Singapore's sovereign wealth fund said Saturday.
"We appear to have avoided a global depression and are now in a global recovery," which will extend into next year, Tony Tan, deputy chairman of Government of Singapore Investment Corp., told a panel during the annual summit of the Asia-Pacific Economic Cooperation forum in Singapore.
"I expect higher stagnation risk in the medium term to be followed by higher inflation risk after that," Tan said.
"Over the next one to three years, weak growth and excess capacity will be strongly disinflationary," he said. "However, beyond that, over the next five to 10 years, policy errors or political pressure could lead central banks to accommodate higher inflation."
Countries that have racked up little debt, especially in Asia and parts of Latin America, will recover strongly and "in the short term, the bounce could surprise on the upside," Tan said. But activity in "over-leveraged developed economies," especially consumption in the U.S. and U.K., will likely not be as robust as in previous recoveries, he said.
More broadly, "Over the next decade, it looks like economic, political and market risks are going to be higher than the last 20 years before the crisis," Tan said.
"Over time the rise of (emerging markets)--especially China, India and Russia--could, together with competition for limited natural resources, lead to higher geopolitical risks," he said.
GIC is the world's fourth-largest sovereign wealth fund in terms of money managed, according to Deutsche Bank
-By P.R. Venkat, Dow Jones Newswires; +65 64154 152; venkat.pr@dowjones.com
Saturday, November 14, 2009
Brazilian Real Ends Losing Streak on Global Optimism
After speculations suggesting that the Brazilian currency will suffer further interventions from the national central bank to stop is rally, the real had a negative performance this week that only ended today after global optimism rose attractiveness for assets in emergent markets.
The Brazilian real managed to rise more than 1 percent versus the U.S. before the end of today’s session as positive data in Europe and Asia forced up demand for commodities and rose risk appetite, bringing investors to inject capital in Brazil despite speculations that further measures to stop the currency’s rally will be taken.
USD/BRL closed at 1.7269 from an opening rate of 1.7345.
Mexico's Stocks End Higher, Peso Gains Ahead Of Long Weekend
MEXICO CITY (Dow Jones)--Mexico's stocks closed higher Friday ahead of a long weekend, rising for the eighth session in the past nine as U.S. equities gained with the help of positive consumer stocks.
The local stock market's IPC index of leading issues rose 0.8%, or 242.24 points, to 31002.09, resuming an upward path after a brief respite the previous session that pulled the index off a 17-month high. Volume was a moderate 141.1 million shares worth 4.04 billion pesos ($310 million).
Retailer Wal-Mart de Mexico (WMMVY, WALMEX.MX) V shares rose 2.8% to MXN51.56, Soriana (SORIANA.MX) B shares rose 0.5% to MXN32.45, and Comercial Mexicana (COMERCI.MX) UBC shares jumped 10% to MXN11.24.
Comercial Mexicana, which is in the process of negotiating a debt restructuring with derivatives counterparties and other creditors, attributed the gains to "market conditions" in a filing with the exchange.
The peso strengthened against the dollar and was quoted closing in Mexico City at MXN13.0495, compared with MXN13.1915 at Thursday's close and MXN13.4175 a week ago.
A local currency trader said the weaker dollar and corporate peso demand for tax payments due next Tuesday contributed to the currency's gains.
Mexican markets will be closed Monday for the Revolution Day holiday.
Expectations that Congress will wrap up the spending side of the 2010 budget at the weekend also helped the peso, the trader added.
Mexico's budget process has injected volatility into the exchange market as participants weigh the possibility of one or more ratings agencies downgrading the country's sovereign credit rating, without putting its investment grade at risk.
Both Standard & Poor's and Fitch Ratings have a negative outlook for Mexico, and could make a decision once the budget is completed. Most of the concern in the market was over the revenue side of the budget, which was wrapped up at the end of October with Congress improving a number of tax increases.
The currency trader said Mexican interest rates, while low, still allow for some carry trade since they are higher than those in the U.S.
The yield on 20-year government bonds due 2029 slipped 2 basis points to 8.42%, and the yield on bonds maturing in 2018 was flat at 7.86%.
BBVA Bancomer said in a report that uncertainty about the sovereign rating is holding the peso back from making further gains, generating some caution in inflows, although recent data show foreign investors continue to add local bonds to their positions.
The local stock market's IPC index of leading issues rose 0.8%, or 242.24 points, to 31002.09, resuming an upward path after a brief respite the previous session that pulled the index off a 17-month high. Volume was a moderate 141.1 million shares worth 4.04 billion pesos ($310 million).
Retailer Wal-Mart de Mexico (WMMVY, WALMEX.MX) V shares rose 2.8% to MXN51.56, Soriana (SORIANA.MX) B shares rose 0.5% to MXN32.45, and Comercial Mexicana (COMERCI.MX) UBC shares jumped 10% to MXN11.24.
Comercial Mexicana, which is in the process of negotiating a debt restructuring with derivatives counterparties and other creditors, attributed the gains to "market conditions" in a filing with the exchange.
The peso strengthened against the dollar and was quoted closing in Mexico City at MXN13.0495, compared with MXN13.1915 at Thursday's close and MXN13.4175 a week ago.
A local currency trader said the weaker dollar and corporate peso demand for tax payments due next Tuesday contributed to the currency's gains.
Mexican markets will be closed Monday for the Revolution Day holiday.
Expectations that Congress will wrap up the spending side of the 2010 budget at the weekend also helped the peso, the trader added.
Mexico's budget process has injected volatility into the exchange market as participants weigh the possibility of one or more ratings agencies downgrading the country's sovereign credit rating, without putting its investment grade at risk.
Both Standard & Poor's and Fitch Ratings have a negative outlook for Mexico, and could make a decision once the budget is completed. Most of the concern in the market was over the revenue side of the budget, which was wrapped up at the end of October with Congress improving a number of tax increases.
The currency trader said Mexican interest rates, while low, still allow for some carry trade since they are higher than those in the U.S.
The yield on 20-year government bonds due 2029 slipped 2 basis points to 8.42%, and the yield on bonds maturing in 2018 was flat at 7.86%.
BBVA Bancomer said in a report that uncertainty about the sovereign rating is holding the peso back from making further gains, generating some caution in inflows, although recent data show foreign investors continue to add local bonds to their positions.
Chilean Peso Posts Biggest Gains Since June
The Chilean peso had the highest weekly rise in 5 months after the national central bank did not announce measures to halt the currency’s rally, leaving behind speculations that a government intervention will shun investors from the South American nation.
After a Chilean government interest rate policy statement that did not mention that a strong peso could jeopardize the economic recovery in the country, the Chilean currency managed to extend its gains to higher levels making this week to be the sharpest 5 day winning streak since June.
USD/CLP closed the week at 502.05 from an opening rate in Friday of 507.45.
British Pound High on Giant Airlines Fusion
The British pound had an excellent performance in the beginning of this Friday’s session as talks that the biggest airline in the country will merge another European giant in the sector brought optimism to London equities markets making the pound to benefit of a positive scenario.
After British Airways Plc and Ibreas Lines Aereas de Espana SA, two of the biggest airlines in Europe decided to merge, the pound headed to a third straight winning week versus the U.S. dollar and gained terrain versus the euro, which according to some speculations could reach parity with the pound in the
The economic recovery in Britain is finally affecting markets sentiment, the fusion of 2 giant airline groups is an evidence that other merges can follow as long as the economy continues to grow, which is definitely favorable not only for the British currency, but also stocks in London, which have been last attractive than stocks in other European economic centers like Paris or Frankfurt.
EUR/GBP traded at 0.8915 as of 13:27 GMT from a previous rate of 0.9017 in the intraday comparison. GBP/USD traded at 1.6682 from 1.6545 yesterday.
Wednesday, October 28, 2009
Swedish September Retail Sales +0.2% On Month
Swedish September Retail Sales +0.2% On Month
The following is a press release from Statistiska Centralbyran, or SCB, the Swedish central government authority for official statistics.
STOCKHOLM--Retail trade sales increased by 0.2% in September compared to August, seasonally adjusted figures. Compared to September 2008, the retail trade sales increased by 2.7%.
Retail trade for mostly food increased 2.7% compared to September 2008 and retail trade for mostly durables increased by 2.9%.
Statistics Sweden Web site: www.scb.se
The following is a press release from Statistiska Centralbyran, or SCB, the Swedish central government authority for official statistics.
STOCKHOLM--Retail trade sales increased by 0.2% in September compared to August, seasonally adjusted figures. Compared to September 2008, the retail trade sales increased by 2.7%.
Retail trade for mostly food increased 2.7% compared to September 2008 and retail trade for mostly durables increased by 2.9%.
Statistics Sweden Web site: www.scb.se
DATA SNAP: Spain Sep Retail Sales -3.4% On Yr Vs -4% In Aug
MADRID (Dow Jones)--Spanish retail sales continued to fall in September, Spain's National Statistics Institute said Wednesday, as high unemployment weighs on consumer spending.
Spanish retail sales fell 3.4% on the year earlier in September after falling by 4% on the year in August and by 4.6% on the year in July, the INE said in a statement.
In calendar-adjusted terms, retail sales also fell by 3.4% in September.
Spanish consumer spending has been undermined by rapidly rising unemployment and declining consumer confidence as the country's ailing construction industry sheds hundreds of thousands of jobs.
INE Web site: www.ine.es
-By Jonathan House, Dow Jones Newswires; +34 91 395 8121; jonathan.house@dowjones.com
Spanish retail sales fell 3.4% on the year earlier in September after falling by 4% on the year in August and by 4.6% on the year in July, the INE said in a statement.
In calendar-adjusted terms, retail sales also fell by 3.4% in September.
Spanish consumer spending has been undermined by rapidly rising unemployment and declining consumer confidence as the country's ailing construction industry sheds hundreds of thousands of jobs.
INE Web site: www.ine.es
-By Jonathan House, Dow Jones Newswires; +34 91 395 8121; jonathan.house@dowjones.com
Forex: EUR/USD will remain offered below 1.4925/50, targeting 1.4588/36 - Commerzbank
FXstreet.com (Barcelona) - Euro retreat from 1.5060 high has extended on Tuesday to 1.4770 low and the Euro has bounced higher, reaching levels above 1.4800, although, according to Karen Jones, the pair remains on the downside, targeting 1.4588/36 area.
For today Jones foresees Euro recoveries to cap at 1.4925/50: "EUR/USD will remain offered intraday below 1.4925/50 - target 1.4588/36 (55 day ma and uptrend) we look for this to hold and provoke recovery."
For today Jones foresees Euro recoveries to cap at 1.4925/50: "EUR/USD will remain offered intraday below 1.4925/50 - target 1.4588/36 (55 day ma and uptrend) we look for this to hold and provoke recovery."
Vietnam Oct Coal Output Estimated 3.35M Tons; Down 13% On Year
Vietnam Oct Coal Output Estimated 3.35M Tons; Down 13% On Year
HANOI (Dow Jones)--Vietnam's coal production in October is estimated to have fallen 13% from the same month last year to 3.35 million metric tons, the General Statistics Office said Wednesday.
The country produced 2.877 million tons in September, according to revised GSO data.
In the January-October period, the country produced an estimated 34.916 million tons, up 4.2% compared with the same period last year, the GSO said.
Electricity output in October rose 17% from a year earlier to 7.5 billion kilowatt-hours, the GSO said. In September, Vietnam produced 10 billion kWh of electricity.
In the January-October period, Vietnam produced 69.7 billion kWh, up 12.3% from a year earlier.
HANOI (Dow Jones)--Vietnam's coal production in October is estimated to have fallen 13% from the same month last year to 3.35 million metric tons, the General Statistics Office said Wednesday.
The country produced 2.877 million tons in September, according to revised GSO data.
In the January-October period, the country produced an estimated 34.916 million tons, up 4.2% compared with the same period last year, the GSO said.
Electricity output in October rose 17% from a year earlier to 7.5 billion kilowatt-hours, the GSO said. In September, Vietnam produced 10 billion kWh of electricity.
In the January-October period, Vietnam produced 69.7 billion kWh, up 12.3% from a year earlier.
DATA SNAP: German Saxony Oct CPI +0.1% MM, -0.1% YY
FRANKFURT (Dow Jones)--Consumer prices in the German state of Saxony, the first state to release inflation data for October, edged up in October from the previous month, but the overall subdued level of the index still doesn't signal any immediate acceleration in inflation.
Consumer prices rose 0.1% on the month and declined 0.1% on the year, data from the state statistics office showed Wednesday.
Prices for food and household energy continued to exert downward pressure, the data showed. Food and alcohol-free beverage prices fell 0.3% on the month and declined 3.4% on the year, while household energy prices fell 0.2% on the month and were down 6.8% on the year earlier.
In September consumer prices in Saxony fell 0.3% on both monthly and annual terms.
Five other German states will publish inflation data throughout the day Wednesday before the Federal Statistics Office publishes pan-German inflation figures.
Economists in a Dow Jones Newswires survey forecast steady prices on the month and a 0.1% decline on the year.
Web site: www.statistik.sachsen.de
Consumer prices rose 0.1% on the month and declined 0.1% on the year, data from the state statistics office showed Wednesday.
Prices for food and household energy continued to exert downward pressure, the data showed. Food and alcohol-free beverage prices fell 0.3% on the month and declined 3.4% on the year, while household energy prices fell 0.2% on the month and were down 6.8% on the year earlier.
In September consumer prices in Saxony fell 0.3% on both monthly and annual terms.
Five other German states will publish inflation data throughout the day Wednesday before the Federal Statistics Office publishes pan-German inflation figures.
Economists in a Dow Jones Newswires survey forecast steady prices on the month and a 0.1% decline on the year.
Web site: www.statistik.sachsen.de
Pound Extend Gains on Retail Sales
Speculations that retail sales would post another month of gains were confirmed providing support for the pound to regain terrain versus the euro and several other currencies, changing the negative outlook for the British currency to a better trajectory.
The pound gained versus most of 16 traded currencies as retail sales in the U.K. touched the highest level in 2 years in October, bringing confidence back towards pound-priced assets, after rather turbulent weeks that shunned away investors from the British currency in foreign-exchange markets.
EUR/GBP traded at 0.9039 as of 21:36 GMT from a previous rate of 0.9118 in the intraday.
Sweden’s Krona Down Further on Economic Outlook
The Swedish currency has been one of the biggest losers in the European currency market as producer prices declined again in September, raising concerns towards the economic recovery in the country.Since RiksBank affirmed that interest rates in Sweden will continue at record low levels to stimulate the economic growth in the Nordic country, the krona has been having negative sessions which aggravated today after producer prices fell in September, evidencing the fragility of the Swedish economy.
USD/SEK closed today at 6.9705 from an opening rate of 6.8691.
Canadian Dollar Strengthens on Decline Speculations
The Canadian dollar had the first session of recovery versus the greenback and several other major currencies after traders speculated that the current losing streak was not reflecting the present status of the Canadian economy, which is being one of the most resilient among wealthy nations.Even if BANK OF CANADA policy makers are constantly stressing on the fact that loonie rates should go down to ensure a fast recovery for the Canadian economy, the loonie gained today after several days of negative performance, after investors interpreted BOC statements as not-so-relevant compared to fundamental data regarding the Canadian economy during the past quarter, which is indicating a solid and resilient economy. The loonie gained today versus almost all major traded currencies except the yen, which gained significantly as investors opted for safety in a day of bearish performance in equities and commodities markets.
Analysts agree that even if policy makers are affecting the loonie’s perform in the short-term, the sentiment towards the Canadian currency remains very positive, as it’s back by crude oil rates, one of the main Canadian exports to the U.S., as also on the North American national economic fundamentals, which are better than most economic regions throughout the world.
USD/CAD traded at 1.0647 as of 20:43 GMT from 1.0716 hours earlier.
Sunday, October 18, 2009
Colombia IGBC Stock Index Rises On Expectations Of Lower Rates
Colombia IGBC Stock Index Rises On Expectations Of Lower Rates
BOGOTA (Dow Jones)--The Colombian stock index rose Friday on investors' expectations the central bank may further cut interest rates in a bid to slow the peso appreciation.
The benchmark IGBC stock index rose 0.7% to 10,942.50 points.
"Investors bought stocks as some of them expect the country's central bank may cut interest rates," said Cesar Tovar, market analyst with local brokerage Nacional de Valores.
Lower interest rates make companies' financial costs fall.
On Thursday evening, Colombian Finance Minister Oscar Ivan Zuluaga said the central bank will evaluate whether to start buying dollars on the spot market to tame the appreciation of the peso.
He said the bank will evaluate taking other measures.
Shares of Grupo de Inversiones Suramericana SA (GRUPOSURA.BO) rose 1.8% to 23,200 Colombian pesos ($12.58).
Shares of state-controlled telephone company Empresa de Telecomunicaciones de Bogota SA (ETB.BO), or ETB, rose 3.6% to COP901.
The Colombian peso strengthened to 1,843.5 pesos to the dollar, from COP1,846 on Thursday. The yield on the benchmark peso-denominated government bond maturing in 2020 fell to 8.603% from 8.748% on Thursday.
BOGOTA (Dow Jones)--The Colombian stock index rose Friday on investors' expectations the central bank may further cut interest rates in a bid to slow the peso appreciation.
The benchmark IGBC stock index rose 0.7% to 10,942.50 points.
"Investors bought stocks as some of them expect the country's central bank may cut interest rates," said Cesar Tovar, market analyst with local brokerage Nacional de Valores.
Lower interest rates make companies' financial costs fall.
On Thursday evening, Colombian Finance Minister Oscar Ivan Zuluaga said the central bank will evaluate whether to start buying dollars on the spot market to tame the appreciation of the peso.
He said the bank will evaluate taking other measures.
Shares of Grupo de Inversiones Suramericana SA (GRUPOSURA.BO) rose 1.8% to 23,200 Colombian pesos ($12.58).
Shares of state-controlled telephone company Empresa de Telecomunicaciones de Bogota SA (ETB.BO), or ETB, rose 3.6% to COP901.
The Colombian peso strengthened to 1,843.5 pesos to the dollar, from COP1,846 on Thursday. The yield on the benchmark peso-denominated government bond maturing in 2020 fell to 8.603% from 8.748% on Thursday.
Argentina Sep Indus Output -10.5% On Yr, +1.1% On Mo - OJF
Argentina Sep Indus Output -10.5% On Yr, +1.1% On Mo - OJF
BUENOS AIRES (Dow Jones)--Argentina's industrial output fell sharply in September on the year, indicating that the an economic recovery is still a ways off.
Industrial production fell 10.5% from the same month a year earlier but rose 1.1% on the month, the think tank Orlando J Ferreres & Asociados, or OJF, reported Friday.
Year-on-year output has now declined each month for the past year, according to OJF. That puts accumulated January through September output down 9.5% from a year earlier.
Still, September's increase in the month-on-month data was the third of its kind in a row, indicating that the industry's doldrums seem to have bottomed out.
OJF said results for the rest of the year will likely improve because they'll be compared with data from late 2008, when the global financial crisis was just starting to have an impact on Argentina.
Moreover, a solid recovery in Brazil, Argentina's top trade partner, as well as a "calmer financial situation," should help the sector through next year, OJF said.
The think tank's estimates coincide with other private sector estimates that indicate output has fallen sharply since the beginning of the global crisis.
But the data clash with official government figures that show only a minor slowdown in production.
The national statistics institute, Indec, will release official industrial output data on October 23.
Indec last reported that August output declined 1.7% on the year but was up 0.6% on the month.
Economists here routinely discard the reliability of official statistics, saying the data are tainted.
Government officials deny the charges.
BUENOS AIRES (Dow Jones)--Argentina's industrial output fell sharply in September on the year, indicating that the an economic recovery is still a ways off.
Industrial production fell 10.5% from the same month a year earlier but rose 1.1% on the month, the think tank Orlando J Ferreres & Asociados, or OJF, reported Friday.
Year-on-year output has now declined each month for the past year, according to OJF. That puts accumulated January through September output down 9.5% from a year earlier.
Still, September's increase in the month-on-month data was the third of its kind in a row, indicating that the industry's doldrums seem to have bottomed out.
OJF said results for the rest of the year will likely improve because they'll be compared with data from late 2008, when the global financial crisis was just starting to have an impact on Argentina.
Moreover, a solid recovery in Brazil, Argentina's top trade partner, as well as a "calmer financial situation," should help the sector through next year, OJF said.
The think tank's estimates coincide with other private sector estimates that indicate output has fallen sharply since the beginning of the global crisis.
But the data clash with official government figures that show only a minor slowdown in production.
The national statistics institute, Indec, will release official industrial output data on October 23.
Indec last reported that August output declined 1.7% on the year but was up 0.6% on the month.
Economists here routinely discard the reliability of official statistics, saying the data are tainted.
Government officials deny the charges.
Forex: USD/CHF ends week below 1.0200
FXstreet.com (Córdoba) – Despite falling on Friday, the Swiss Franc ended the week with sharp gains against the Dollar. USD/CHF finished below 1.0200 but far from intra-week lows that lie at 1.0117 (15-month low). The pair has fallen in 5 out of the last 6 weeks. USD/CHF is still under pressure and the downside bias has a strong support at a downtrend line in daily charts. On the upside has a key resistance level at 1.0230/50, a break above could send it higher.
Against Cable, the Swiss fell sharply on Friday. GBP/CHF extended the rally and finished above 1.6600 at a two week high. The pair rose 450 pips in the last two days.
Against Cable, the Swiss fell sharply on Friday. GBP/CHF extended the rally and finished above 1.6600 at a two week high. The pair rose 450 pips in the last two days.
CURRENCIES: Dollar Up As Weak Data Hits Stocks
CURRENCIES: Dollar Up As Weak Data Hits Stocks
By Deborah Levine
The U.S. dollar advanced versus the euro and Japanese yen on Friday as data showed gains in foreign funds flowing to the U.S. and weakness in consumer confidence spurred selling of stocks.
The dollar and British pound rebounded from recent lows scored the previous day as traders reversed bets that the dollar will fall further, and U.S. equities declined, easing pressure to continue selling the greenback.
"Going into the weekend, today's sell-off in the Dow provides players with a convenient excuse to take profit on short U.S. dollar positions and reload for next week," Michael Woolfolk, senior currency strategist at The Bank of New York Mellon, wrote in emailed comments.
The U.S. dollar index (DXY) rose to 75.584, up from 75.480 in North American trade late Thursday after sliding to a series of 14-month lows earlier in the week.
The dollar bought 90.82 yen, up from 90.59 yen, giving up bigger gains earlier in the session.
The euro traded at $1.4903 versus the dollar, down from $1.4933 after failing to breach the psychologically important $1.50 level.
Reducing the attractiveness of equities and supporting the dollar, a report showed U.S. consumer sentiment pulled back more than anticipated this month.
The University of Michigan/Reuters index fell to 69.4 in early October from 73.5 in September. Analysts surveyed by MarketWatch expected, on average, for the index to read 72.
That followed a report showed U.S. industrial production jumped 0.7% last month, topping expectations. Capacity utilization rose to 70.5% in September from a revised 69.9% in August, also higher than anticipated.
"These diverging signals highlight the recent uncertainty" over whether third-quarter growth can be sustained, analysts at Action Economics wrote. "The downside risks as we approach year-end are clear."
An earlier report from the U.S. Treasury Department showed foreign investors nearly doubled purchases of U.S. assets in August.
Foreign official buyers sold more short-term assets and bought long-term securities. Private investors in other countries bought more U.S. equities and favored longer-term assets of all types, indicating more preference for riskier assets than Treasurys, noted foreign-exchange analysts at Barclays Capital.
Gains in stocks and other indications of investor willingness to make more aggressive investments over the last several months have been detrimental to the dollar, as its safe-haven status is no longer desired.
"Our overall assessment is that these numbers remain mediocre but are not nearly as negative as the July release," Barclays analysts wrote in a note.
Focus also returned to the lack of fluctuations in the Chinese yuan, a day after the U.S. Treasury repeated its previous finding that China was not formally manipulating its currency.
The People's Bank of China set the yuan's official rate 6.8270 against the dollar Friday, according to reports, down slightly from 6.8267 Thursday. The yuan is allowed to fluctuate on 0.5% on either side of the official daily rate.
China's foreign-exchange policy risks "unwinding" some of the progress made in reducing global trade imbalances during the financial crisis, the U.S. Treasury said Thursday in its latest report on foreign-exchange trading.
Weekly move
The dollar index is still headed towards a second weekly loss, sliding more than 1% from last Friday. The yen has seen a roughly 1% increase since last Friday. The shared euro is still up about 1.4% versus the dollar this week.
With much vocalization about the fall in the dollar's value, some analysts and policy makers alike point to the still orderly decline that has left the dollar index down 7% this year, which is not abnormal given the reversal of investor's need for safety in the credit crisis and a readjustment of imports and exports as consumer demand has slowed.
"No policy maker is going to argue for a weak dollar," said Dallas Federal Reserve President Richard Fisher said Friday, according to news reports. Recent movement in the dollar "has to do with trade adjustment."
Euro breather
August trade data for the euro zone showed the 16-nation region swung to a larger-than- deficit with the rest of the world.
The figures come amid rising unease among euro-zone officials and businesses over the strength of the euro, which fell slightly against the dollar to $1.4903 on Friday.
From a technical standpoint, the euro remains "slightly overbought," versus the dollar, wrote Nicole Elliott, a technical analyst at Mizuho Corporate Bank.
Nonetheless, a "weekly close above $1.4800 would confirm that the next leg of the (euro) rally has started," she said.
British pound
The battered pound was the biggest winner among major currencies, continuing to power higher versus the euro and the greenback a day after a Bank of England policy maker signaled satisfaction with the impact of the central bank's quantitative-easing strategy.
The British pound gained ground versus the dollar rising to $1.6355, up from $1.6270 Thursday. The euro slipped 0.8% versus sterling to 91.11 pence.
The British currency has advanced 2.6% this week against the dollar.
Traders said the remarks by Paul Fisher, the bank's director of markets and member of the Monetary Policy Committee, were sufficient to trigger an explosive round of short covering. U.S. Commodity Futures Trading Commission data released last week showed a historic build-up of short positions against British pound futures, noted analysts at Brown Brothers Harriman.
"The fundamentals for the pound are still negative, with interest rate differentials favoring other currencies," they wrote. "Next week's minutes of the Bank of England meeting may also reinforce the fragile nature of the economic recovery, and the likelihood of rates remaining at this low level for some time."
Others cautioned that betting against the pound in the midst of a run of unexpectedly strong third-quarter earnings report by major banks could prove perilous.
"We would caution against being short GBP [selling the British pound] when U.S. bank earnings are again generally beating expectations, as markets treat GBP as a proxy for the performance of the financial sector," said Adam Cole, global head of FX strategy at RBC Capital Markets in London.
"Our short-term models also continue to show GBP heavily oversold relative to short rate expectations and bank stocks, consistent with other evidence that short-GBP is a seriously overcrowded trade currently," he wrote in emailed comments.
By Deborah Levine
The U.S. dollar advanced versus the euro and Japanese yen on Friday as data showed gains in foreign funds flowing to the U.S. and weakness in consumer confidence spurred selling of stocks.
The dollar and British pound rebounded from recent lows scored the previous day as traders reversed bets that the dollar will fall further, and U.S. equities declined, easing pressure to continue selling the greenback.
"Going into the weekend, today's sell-off in the Dow provides players with a convenient excuse to take profit on short U.S. dollar positions and reload for next week," Michael Woolfolk, senior currency strategist at The Bank of New York Mellon, wrote in emailed comments.
The U.S. dollar index (DXY) rose to 75.584, up from 75.480 in North American trade late Thursday after sliding to a series of 14-month lows earlier in the week.
The dollar bought 90.82 yen, up from 90.59 yen, giving up bigger gains earlier in the session.
The euro traded at $1.4903 versus the dollar, down from $1.4933 after failing to breach the psychologically important $1.50 level.
Reducing the attractiveness of equities and supporting the dollar, a report showed U.S. consumer sentiment pulled back more than anticipated this month.
The University of Michigan/Reuters index fell to 69.4 in early October from 73.5 in September. Analysts surveyed by MarketWatch expected, on average, for the index to read 72.
That followed a report showed U.S. industrial production jumped 0.7% last month, topping expectations. Capacity utilization rose to 70.5% in September from a revised 69.9% in August, also higher than anticipated.
"These diverging signals highlight the recent uncertainty" over whether third-quarter growth can be sustained, analysts at Action Economics wrote. "The downside risks as we approach year-end are clear."
An earlier report from the U.S. Treasury Department showed foreign investors nearly doubled purchases of U.S. assets in August.
Foreign official buyers sold more short-term assets and bought long-term securities. Private investors in other countries bought more U.S. equities and favored longer-term assets of all types, indicating more preference for riskier assets than Treasurys, noted foreign-exchange analysts at Barclays Capital.
Gains in stocks and other indications of investor willingness to make more aggressive investments over the last several months have been detrimental to the dollar, as its safe-haven status is no longer desired.
"Our overall assessment is that these numbers remain mediocre but are not nearly as negative as the July release," Barclays analysts wrote in a note.
Focus also returned to the lack of fluctuations in the Chinese yuan, a day after the U.S. Treasury repeated its previous finding that China was not formally manipulating its currency.
The People's Bank of China set the yuan's official rate 6.8270 against the dollar Friday, according to reports, down slightly from 6.8267 Thursday. The yuan is allowed to fluctuate on 0.5% on either side of the official daily rate.
China's foreign-exchange policy risks "unwinding" some of the progress made in reducing global trade imbalances during the financial crisis, the U.S. Treasury said Thursday in its latest report on foreign-exchange trading.
Weekly move
The dollar index is still headed towards a second weekly loss, sliding more than 1% from last Friday. The yen has seen a roughly 1% increase since last Friday. The shared euro is still up about 1.4% versus the dollar this week.
With much vocalization about the fall in the dollar's value, some analysts and policy makers alike point to the still orderly decline that has left the dollar index down 7% this year, which is not abnormal given the reversal of investor's need for safety in the credit crisis and a readjustment of imports and exports as consumer demand has slowed.
"No policy maker is going to argue for a weak dollar," said Dallas Federal Reserve President Richard Fisher said Friday, according to news reports. Recent movement in the dollar "has to do with trade adjustment."
Euro breather
August trade data for the euro zone showed the 16-nation region swung to a larger-than- deficit with the rest of the world.
The figures come amid rising unease among euro-zone officials and businesses over the strength of the euro, which fell slightly against the dollar to $1.4903 on Friday.
From a technical standpoint, the euro remains "slightly overbought," versus the dollar, wrote Nicole Elliott, a technical analyst at Mizuho Corporate Bank.
Nonetheless, a "weekly close above $1.4800 would confirm that the next leg of the (euro) rally has started," she said.
British pound
The battered pound was the biggest winner among major currencies, continuing to power higher versus the euro and the greenback a day after a Bank of England policy maker signaled satisfaction with the impact of the central bank's quantitative-easing strategy.
The British pound gained ground versus the dollar rising to $1.6355, up from $1.6270 Thursday. The euro slipped 0.8% versus sterling to 91.11 pence.
The British currency has advanced 2.6% this week against the dollar.
Traders said the remarks by Paul Fisher, the bank's director of markets and member of the Monetary Policy Committee, were sufficient to trigger an explosive round of short covering. U.S. Commodity Futures Trading Commission data released last week showed a historic build-up of short positions against British pound futures, noted analysts at Brown Brothers Harriman.
"The fundamentals for the pound are still negative, with interest rate differentials favoring other currencies," they wrote. "Next week's minutes of the Bank of England meeting may also reinforce the fragile nature of the economic recovery, and the likelihood of rates remaining at this low level for some time."
Others cautioned that betting against the pound in the midst of a run of unexpectedly strong third-quarter earnings report by major banks could prove perilous.
"We would caution against being short GBP [selling the British pound] when U.S. bank earnings are again generally beating expectations, as markets treat GBP as a proxy for the performance of the financial sector," said Adam Cole, global head of FX strategy at RBC Capital Markets in London.
"Our short-term models also continue to show GBP heavily oversold relative to short rate expectations and bank stocks, consistent with other evidence that short-GBP is a seriously overcrowded trade currently," he wrote in emailed comments.
Friday, October 2, 2009
German VDIK: May Up 09 New Car Registration View To 3.7M Units
German VDIK: May Up 09 New Car Registration View To 3.7M Units
FRANKFURT (Dow Jones)--Germany's association of international vehicle manufacturers, VDIK, is considering raising its 2009 outlook for German new car registrations to 3.7 million vehicles from 3.45 million vehicles previously, the association told Dow Jones Newswires Friday.
New registrations in September rose about 20% on the year and about 26% in the first nine months of 2009, the association added, noting these are preliminary figures. In 2008, 3.09 million new cars were registered according to the association.
Company Web site: www.vdik.de
FRANKFURT (Dow Jones)--Germany's association of international vehicle manufacturers, VDIK, is considering raising its 2009 outlook for German new car registrations to 3.7 million vehicles from 3.45 million vehicles previously, the association told Dow Jones Newswires Friday.
New registrations in September rose about 20% on the year and about 26% in the first nine months of 2009, the association added, noting these are preliminary figures. In 2008, 3.09 million new cars were registered according to the association.
Company Web site: www.vdik.de
ECOFIN: Spain Fin Min: Not Worried About Inflation
ECOFIN: Spain Fin Min: Not Worried About Inflation
GOTHENBURG, Sweden -(Dow Jones)- Inflation isn't a concern at the moment, Spanish Finance Minister Elena Salgado said Friday.
Salgado, speaking to journalists on the sidelines of a meeting of European Union finance ministers and central bankers, didn't say whether she was referring to the Spanish economy or the euro zone as a whole.
Subdued inflation among the countries that use the euro has allowed the European Central Bank to cut its key rate to 1.0% from 4.25% over the past year.
Salgado noted that recent stress tests conducted on E.U. banks showed lenders were "resilient."
-By Adam Cohen, Dow Jones Newswires; +322 741 1486; adam.cohen@dowjones.com
GOTHENBURG, Sweden -(Dow Jones)- Inflation isn't a concern at the moment, Spanish Finance Minister Elena Salgado said Friday.
Salgado, speaking to journalists on the sidelines of a meeting of European Union finance ministers and central bankers, didn't say whether she was referring to the Spanish economy or the euro zone as a whole.
Subdued inflation among the countries that use the euro has allowed the European Central Bank to cut its key rate to 1.0% from 4.25% over the past year.
Salgado noted that recent stress tests conducted on E.U. banks showed lenders were "resilient."
-By Adam Cohen, Dow Jones Newswires; +322 741 1486; adam.cohen@dowjones.com
Forex: EUR/USD: Risk on the downside, could test 1.4440 area - Commerzbank
The Euro remains trading on a steady downward parttern since topping at 1.4845 on September 23, reaching, so far 1.4500 low on Asian session, and despite the current pick up, Karen Jones, technical analyst at Commerzbank, observes the possibility of further retreat, heading to levels around 1.4400.
The Euro as started to erode 1.4550 area, and, according to Jones, opening the doors for a deeper downward correction: "EUR/USD has started to erode support at 1.4551/38, leaving under pressure in the near term to see a deeper correction lower."
On the downside, Jones points out to 1.4440 as initial target: "We would expect intraday rallies to now remain capped by 1.4640/75 and while below here the risk is that we will see a deeper to 1.4440 then 1.4381/16 (55 day ma uptrend)."
The Euro as started to erode 1.4550 area, and, according to Jones, opening the doors for a deeper downward correction: "EUR/USD has started to erode support at 1.4551/38, leaving under pressure in the near term to see a deeper correction lower."
On the downside, Jones points out to 1.4440 as initial target: "We would expect intraday rallies to now remain capped by 1.4640/75 and while below here the risk is that we will see a deeper to 1.4440 then 1.4381/16 (55 day ma uptrend)."
ECOFIN: Dutch Fin Min: Happy With US Stance On Strong Dollar
ECOFIN: Dutch Fin Min: Happy With US Stance On Strong Dollar
GOTHENBURG, Sweden -(Dow Jones)- Dutch Finance Minister Wouter Bos Friday said he was happy with the U.S. authorities' stance in favor of a strong U.S. dollar.
"Of course I am," Bos said to reporters, when asked if he was happy after U.S. Treasury Secretary Tim Geithner said a strong dollar was in the interest of the U.S. economy.
Bos, who is meeting other European finance ministers and governors of central banks here, also said that the European Union should play a leading role in the fight to preserve the environment and address climate change.
The Netherlands could adopt a carbon tax like France is planning, he also said.
After addressing the issue of the financial sector and the economy Thursday, E.U. finance ministers are to discuss Friday environmental and employment issues for the second day of their meeting.
GOTHENBURG, Sweden -(Dow Jones)- Dutch Finance Minister Wouter Bos Friday said he was happy with the U.S. authorities' stance in favor of a strong U.S. dollar.
"Of course I am," Bos said to reporters, when asked if he was happy after U.S. Treasury Secretary Tim Geithner said a strong dollar was in the interest of the U.S. economy.
Bos, who is meeting other European finance ministers and governors of central banks here, also said that the European Union should play a leading role in the fight to preserve the environment and address climate change.
The Netherlands could adopt a carbon tax like France is planning, he also said.
After addressing the issue of the financial sector and the economy Thursday, E.U. finance ministers are to discuss Friday environmental and employment issues for the second day of their meeting.
World Bank Head: 2009 Looks "Difficult",2010 "Highly Uncertain"
World Bank Head: 2009 Looks "Difficult",2010 "Highly Uncertain"
ISTANBUL -(Dow Jones)- This year has been "difficult," next year looks "highly uncertain" and more capital may be needed by 2011, the head of the World Bank said Friday.
But large-scale public deployment of financial resources, including by multilateral lenders, has staved off major trouble, Robert Zoellick said at a press conference in Istanbul.
"The danger today is no longer a collapsing economy... but complacency," Zoellick said.
The World Bank, which finances activity in developing nations through bodies such as the International Finance Corporation, has tried to rise to the challenge the global credit crisis has wrought on emerging economies, he said. But more cash will likely be needed, he added.
ISTANBUL -(Dow Jones)- This year has been "difficult," next year looks "highly uncertain" and more capital may be needed by 2011, the head of the World Bank said Friday.
But large-scale public deployment of financial resources, including by multilateral lenders, has staved off major trouble, Robert Zoellick said at a press conference in Istanbul.
"The danger today is no longer a collapsing economy... but complacency," Zoellick said.
The World Bank, which finances activity in developing nations through bodies such as the International Finance Corporation, has tried to rise to the challenge the global credit crisis has wrought on emerging economies, he said. But more cash will likely be needed, he added.
Thursday, September 24, 2009
Forex: USD/CHF rises above 1.0300
FXstreet.com (Córdoba) – Greenback is rising further across the board as U.S. markets are extending losses. USD/CHF broke above 1.0300 and rose to 1.0310. The pair is now up for the day after the Swiss failed to hold gains and is 0.05% above today’s opening price. The next level to consider lies at 1.0325 and above at 1.0360. Dollar is accumulating an increase of more than 70 pips since the opening bell at Wall Street.
Against the Euro, the Franc is pulling back after EUR/CHF fell to 1.5080 posting a fresh 4-month low. In case the pair falls further it could attract the attention of the Swiss National Bank.
Against the Euro, the Franc is pulling back after EUR/CHF fell to 1.5080 posting a fresh 4-month low. In case the pair falls further it could attract the attention of the Swiss National Bank.
Forex: EUR/USD falls further and posts 1.4663 as fresh intra-day low
FXstreet.com (Córdoba) – The Dollar is rising further across the board. EUR/USD broke below 1.4675 and fell to 1.4663, posting a fresh intra-day low. The next level to watch is at the 1.4645 and below at the 1.4600/10 zone (weekly lows). The pair is 0.15% below today’s opening price. The Euro failed to hold gains and lost them after the opening bell at Wall Street.
THE FASTBROKERS RESEARCH TEAM afirms: “For the downside, the EUR/USD has multiple uptrend lines serving as technical cushions along with weekly lows and the psychological 1.45 level. Therefore, the EUR/USD has several lines of defense to the downside. Though the uptrend is intact, we are initiating a neutral outlook on the EUR/USD as we monitor the behavior of the Dollar and U.S. equities.”
THE FASTBROKERS RESEARCH TEAM afirms: “For the downside, the EUR/USD has multiple uptrend lines serving as technical cushions along with weekly lows and the psychological 1.45 level. Therefore, the EUR/USD has several lines of defense to the downside. Though the uptrend is intact, we are initiating a neutral outlook on the EUR/USD as we monitor the behavior of the Dollar and U.S. equities.”
EU Barroso: Economic, Financial Situation Still Fragile
EU Barroso: Economic, Financial Situation Still Fragile
BRUSSELS -(Dow Jones)- The financial system and the global economy remain fragile, European Commission President Jose Manuel Barroso said Thursday, warning that state support measures are still needed.
According to the text of a speech delivered on the sidelines of the Group of 20 industrialized and developing countries, Barroso said it is too soon for governments to withdraw fiscal stimulus spending and other efforts to foster economic recovery.
"We need to keep support measures in place, but be ready with an exit strategy," he said in the speech at the University of Pittsburgh.
Barroso said the G20 leaders, who are meeting Thursday and Friday in Pittsburgh, should agree to financial-market reforms, including an international agreement to rein-in pay and bonuses. Some European Union leaders want a pact to include strict pay caps for bankers, while the U.S. favors a less-severe approach.
BRUSSELS -(Dow Jones)- The financial system and the global economy remain fragile, European Commission President Jose Manuel Barroso said Thursday, warning that state support measures are still needed.
According to the text of a speech delivered on the sidelines of the Group of 20 industrialized and developing countries, Barroso said it is too soon for governments to withdraw fiscal stimulus spending and other efforts to foster economic recovery.
"We need to keep support measures in place, but be ready with an exit strategy," he said in the speech at the University of Pittsburgh.
Barroso said the G20 leaders, who are meeting Thursday and Friday in Pittsburgh, should agree to financial-market reforms, including an international agreement to rein-in pay and bonuses. Some European Union leaders want a pact to include strict pay caps for bankers, while the U.S. favors a less-severe approach.
U.S. markets turn negative; Dollar holds near session highs
FXstreet.com (Córdoba) – Wall Street erased early gains and now is holding in the negative side, near the lows of the day. The Dow Jones is losing 0.50% and the Nasdaq is falling further, 1.35% to 2102 units. Crude-oil is plunging for the second day in a row and falls almost 4%. Gold is testing levels below $1000 an oz. Dollar remains stable near the highs of the session.
Greenback is rising across the board and a break above today highs could send it even higher. EUR/USD has a support zone at 1.4670, if it breaks below; the pair could restart the downside rally. GBP/USD is oversold and approaching to the 1.6000 area. The Swiss Franc is still holding gains against the Dollar and also across the board. EUR/CHF fell to a 3-month low while GPB/CHF tumbled below 1.6500 posting the lowest price since April.
Greenback is rising across the board and a break above today highs could send it even higher. EUR/USD has a support zone at 1.4670, if it breaks below; the pair could restart the downside rally. GBP/USD is oversold and approaching to the 1.6000 area. The Swiss Franc is still holding gains against the Dollar and also across the board. EUR/CHF fell to a 3-month low while GPB/CHF tumbled below 1.6500 posting the lowest price since April.
Dollar consolidates gains
FXstreet.com (Buenos Aires) – Greenback has spent the last two hours consolidating gains after high yielding currencies surrender on an expected drop in August New Home Sales early in the U.S. Dollar has gain strongly against GBP and CAD particularly, in the first case, after BOE’s Governor King said currency weakness will help the economy recovery; earlier this week, BOC’s Governor also warned about CAD strength delaying economic performance.
Both Australian and New Zealand dollars remain slightly positive on the day, while against Euro, dollar is turning positive. Far from the day close, if greenback remains at current levels, seems likely will extend gains during next Asian session.
Both Australian and New Zealand dollars remain slightly positive on the day, while against Euro, dollar is turning positive. Far from the day close, if greenback remains at current levels, seems likely will extend gains during next Asian session.
UPDATE: ECB, Others Extend Dollar,Swiss Franc Liquidity Operations
UPDATE: ECB, Others Extend Dollar,Swiss Franc Liquidity Operations
(Rewrites, adds detail.)
FRANKFURT -(Dow Jones)- The European Central Bank and other leading central banks Thursday said they will extend liquidity-providing operations through January 2010 to further cushion money markets.
The ECB, in agreement with other leading central banks including the U.S. Federal Reserve, decided to continue conducting U.S. dollar liquidity providing operations from October 2009 to January 2010, the ECB said Thursday.
The Bank of England and the Swiss National Bank took similar action and the Bank of Japan also said it will continue dollar liquidity providing operations into January 2010.
Accordingly, the ECB will continue to conduct seven-day dollar repurchase operations against ECB-eligible collateral in the form of a fixed-rate tender with full allotment, the bank said.
However, "given the limited demand and the improved conditions in funding markets," the 84-day U.S. dollar tender will be discontinued after the operation to be held Oct. 6, it said.
The ECB retains the right to restart the 84-day tender "if needed" along with other dollar liquidity-providing operations that have been discontinued.
In agreement with the Swiss National Bank, the ECB will also continue to hold Swiss franc liquidity-providing swap operations until Jan. 31, 2010, "to support further improvements in the short-term Swiss franc funding markets." Separately, the SNB said it, the ECB and the Hungarian and Polish central banks will conduct euro-Swiss franc foreign exchange swaps with a term of seven days through January 2010.
The BOE said in a separate statement that it will "continue to keep its U.S. dollar repo operations under review in the light of market conditions."
Web site: www.ecb.int
(Rewrites, adds detail.)
By Emese Bartha
Of DOW JONES NEWSWIRES
FRANKFURT -(Dow Jones)- The European Central Bank and other leading central banks Thursday said they will extend liquidity-providing operations through January 2010 to further cushion money markets.
The ECB, in agreement with other leading central banks including the U.S. Federal Reserve, decided to continue conducting U.S. dollar liquidity providing operations from October 2009 to January 2010, the ECB said Thursday.
The Bank of England and the Swiss National Bank took similar action and the Bank of Japan also said it will continue dollar liquidity providing operations into January 2010.
Accordingly, the ECB will continue to conduct seven-day dollar repurchase operations against ECB-eligible collateral in the form of a fixed-rate tender with full allotment, the bank said.
However, "given the limited demand and the improved conditions in funding markets," the 84-day U.S. dollar tender will be discontinued after the operation to be held Oct. 6, it said.
The ECB retains the right to restart the 84-day tender "if needed" along with other dollar liquidity-providing operations that have been discontinued.
In agreement with the Swiss National Bank, the ECB will also continue to hold Swiss franc liquidity-providing swap operations until Jan. 31, 2010, "to support further improvements in the short-term Swiss franc funding markets." Separately, the SNB said it, the ECB and the Hungarian and Polish central banks will conduct euro-Swiss franc foreign exchange swaps with a term of seven days through January 2010.
The BOE said in a separate statement that it will "continue to keep its U.S. dollar repo operations under review in the light of market conditions."
Web site: www.ecb.int
DATA SNAP: French Unemployed Rises 0.7% MM In Aug To 2.553M
DATA SNAP: French Unemployed Rises 0.7% MM In Aug To 2.553M
PARIS (Dow Jones)--The number of people seeking work in France rose by 0.7% last month against July, data from the state employment office showed Wednesday.
The number of job seekers in the euro zone's second-largest economy rose by 18,100 units to 2.553 million in August, the data showed.
On the year, the number of unemployed people seeking a job was up by 25.8%, the office said.
-By Gabriele Parussini, Dow Jones Newswires; +33 1 4017 1766; gabriele.parussini@dowjones.com;
By Gabriele Parussini
Of DOW JONES NEWSWIRES
PARIS (Dow Jones)--The number of people seeking work in France rose by 0.7% last month against July, data from the state employment office showed Wednesday.
The number of job seekers in the euro zone's second-largest economy rose by 18,100 units to 2.553 million in August, the data showed.
On the year, the number of unemployed people seeking a job was up by 25.8%, the office said.
-By Gabriele Parussini, Dow Jones Newswires; +33 1 4017 1766; gabriele.parussini@dowjones.com;
DATA SNAP: French Unemployed Rises 0.7% MM In Aug To 2.553M
DATA SNAP: French Unemployed Rises 0.7% MM In Aug To 2.553M
PARIS (Dow Jones)--The number of people seeking work in France rose by 0.7% last month against July, data from the state employment office showed Wednesday.
The number of job seekers in the euro zone's second-largest economy rose by 18,100 units to 2.553 million in August, the data showed.
On the year, the number of unemployed people seeking a job was up by 25.8%, the office said.
By Gabriele Parussini
Of DOW JONES NEWSWIRES
PARIS (Dow Jones)--The number of people seeking work in France rose by 0.7% last month against July, data from the state employment office showed Wednesday.
The number of job seekers in the euro zone's second-largest economy rose by 18,100 units to 2.553 million in August, the data showed.
On the year, the number of unemployed people seeking a job was up by 25.8%, the office said.
DATA SNAP: French Unemployed Rises 0.7% MM In Aug To 2.553M
DATA SNAP: French Unemployed Rises 0.7% MM In Aug To 2.553M
PARIS (Dow Jones)--The number of people seeking work in France rose by 0.7% last month against July, data from the state employment office showed Wednesday.
The number of job seekers in the euro zone's second-largest economy rose by 18,100 units to 2.553 million in August, the data showed.
On the year, the number of unemployed people seeking a job was up by 25.8%, the office said.
-By Gabriele Parussini, Dow Jones Newswires; +33 1 4017 1766; gabriele.parussini@dowjones.com;
Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=DN%2BOIjleI61npsBGKQv9oA%3D%3D. You can use this link on the day this article is published and the following day.
By Gabriele Parussini
Of DOW JONES NEWSWIRES
PARIS (Dow Jones)--The number of people seeking work in France rose by 0.7% last month against July, data from the state employment office showed Wednesday.
The number of job seekers in the euro zone's second-largest economy rose by 18,100 units to 2.553 million in August, the data showed.
On the year, the number of unemployed people seeking a job was up by 25.8%, the office said.
-By Gabriele Parussini, Dow Jones Newswires; +33 1 4017 1766; gabriele.parussini@dowjones.com;
Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=DN%2BOIjleI61npsBGKQv9oA%3D%3D. You can use this link on the day this article is published and the following day.
US Existing Single-Family Home Sales-Sep 24
US Existing Single-Family Home Sales-Sep 24
Existing home sales data are seasonally adjusted annual rates (in millions).
Average and median sales prices are not seasonally adjusted in thousand dollars.
Source: National Association of Realtors.
Single
Total Month Median Avg Family Month Median Avg
Month Sales % chg Sply Price Price Sales % chg Sply Price Price
-2009-
Aug 5.100 -2.7 8.5 177.7 222.8 tbr tbr tbr tbr tbr
Jul 5.240 7.2 9,3 181.5 227.4 4.610 6.5 8.6 178.3 238.5
Jun 4.890 3.6 9.4 182.0 227.9 4.330 2.6 8.9 181.6 228.5
May 4.720 1.3 9.8 174.7 218.1 4.220 1.2 9.1 174.6 218.3
Apr 4.660 2.4 10.1 166.6 208.8 4.170 2.2 9.5 166.0 208.5
Mar 4.550 -3.4 9.6 169.9 211.3 4.080 -3.3 9.0 169.7 211.4
Feb 4.710 4.9 9.7 168.2 210.3 4.220 4.2 9.1 167.9 210.4
Jan 4.490 -5.3 9.7 164.8 206.7 4.050 -4.7 9.2 164.2 205.9
-2008-
Dec 4.740 4.4 9.4 175.7 217.6 4.250 4.7 8.8 175.0 217.0
Nov 4.540 -8.1 11.0 180.3 223.0 4.060 -7.5 10.6 179.9 222.8
Oct 4.940 -3.1 10.2 186.4 229.6 4.390 -3.3 9.7 185.7 229.3
Sep 5.100 3.4 10.1 191.4 235.0 4.540 3.9 9.4 190.3 234.2
Aug 4.930 -1.2 10.6 203.2 245.6 4.370 -0.5 10.0 201.9 244.7
Jul 4.990 1.8 11.0 210.1 253.0 4.390 1.9 10.4 208.9 252.4
Jun 4.900 -1.0 11.0 215.0 257.7 4.310 -1.6 11.0 213.6 256.8
May 4.950 2.1 10.9 207.9 252.7 4.380 1.9 10.5 206.0 251.2
Apr 4.850 -1.4 11.3 201.3 247.3 4.300 -1.1 10.7 199.6 246.2
Mar 4.920 -0.6 10.0 200.1 247.2 4.350 -0.9 9.6 197.6 245.4
Feb 4.950 0.8 9.7 195.8 242.2 4.390 0.7 9.2 193.6 240.7
Jan 4.910 0.0 10.2 199.8 245.7 4.360 0.9 10.0 197.2 243.9
-2007-
Dec 4.910 -2.2 9.7 207.0 254.0 4.320 -2.0 9.4 205.0 253.0
Nov 5.020 -0.8 10.1 208.8 255.7 4.410 -0.5 9.8 207.3 255.5
Oct 5.060 -1.0 10.5 206.7 255.1 4.430 -0.4 10.2 204.8 253.6
Sep 5.110 -7.1 10.3 210.5 257.3 4.450 -7.5 10.0 208.6 256.3
Aug 5.500 -4.5 9.6 224.4 269.3 4.810 -4.0 9.3 223.7 269.3
Jul 5.760 0.2 9.5 228.6 276.0 5.010 0.0 9.2 228.5 277.3
Jun 5.750 -3.0 9.1 229.0 276.2 5.010 -2.9 9.0 229.2 277.9
May 5.930 0.0 8.9 222.7 270.6 5.160 -0.2 8.7 221.9 271.2
Apr 5.930 -2.9 8.5 219.9 268.2 5.170 -3.0 8.3 219.3 269.1
Mar 6.110 -7.4 7.5 217.4 265.1 5.330 -8.1 7.2 216.2 264.9
Feb 6.600 3.4 6.9 213.5 260.0 5.800 3.8 6.6 212.4 260.3
Jan 6.380 1.8 6.7 210.9 257.3 5.590 1.6 6.5 209.3 257.2
-2006-
Dec 6.270 0.3 6.6 221.6 268.0 5.500 0.2 6.4 220.8 268.5
Nov 6.250 -0.3 7.3 217.3 265.1 5.490 -0.5 7.1 216.7 266.0
Oct 6.270 0.6 7.4 218.9 264.6 5.520 1.1 7.2 219.6 266.4
Sep 6.230 -1.3 7.3 220.9 266.4 5.460 -1.3 7.1 221.1 267.7
Aug 6.310 -0.2 7.3 224.0 270.0 5.530 0.4 7.1 224.0 271.4
Jul 6.320 -2.6 7.3 230.2 275.4 5.510 -3.3 7.2 230.9 277.5
Jun 6.490 -2.8 6.9 229.3 275.8 5.700 -2.2 6.8 230.1 277.7
May 6.680 -0.4 6.4 228.5 273.7 5.830 -0.9 6.3 228.5 275.1
Apr 6.710 -2.8 6.1 222.6 269.1 5.880 -2.6 6.0 222.6 270.5
Mar 6.900 -0.6 5.6 217.6 264.5 6.040 -0.8 5.4 217.2 265.8
Feb 6.940 2.8 5.2 217.8 263.6 6.090 2.5 5.0 216.8 263.6
Jan 6.750 0.0 5.1 217.4 265.9 5.940 1.4 5.0 219.7 268.7
-2005-
Dec 6.750 -4.0 5.1 222.0 268.0 5.860 -4.7 4.9 221.6 269.2
Nov 7.030 -0.3 5.0 225.0 271.0 6.150 -0.5 4.9 225.2 272.5
Oct 7.050 -2.1 4.9 229.0 273.0 6.180 -1.7 4.8 229.2 274.6
Sep 7.200 -0.1 4.6 225.0 271.0 6.290 0.2 4.6 225.4 272.7
Aug 7.210 1.1 4.7 229.0 275.0 6.280 1.0 4.7 229.6 276.2
Jul 7.130 -1.9 4.6 228.0 274.0 6.220 -1.7 4.5 227.7 275.5
Jun 7.270 1.8 4.4 229.0 275.0 6.330 1.6 4.5 229.0 276.1
May 7.140 -0.4 4.3 217.0 265.0 6.230 -0.6 4.3 215.8 265.2
Apr 7.170 2.9 4.1 214.0 261.0 6.270 2.8 4.2 213.5 260.9
Mar 6.970 0.6 4.0 203.0 254.0 6.100 0.5 4.0 201.5 254.6
Feb 6.930 0.1 4.1 189.0 241.0 6.070 0.2 4.0 186.8 239.9
Jan 6.920 1.6 3.8 189.0 241.0 6.060 1.5 3.7 186.1 239.5
-2004-
Dec 6.810 -2.4 3.9 191.0 244.0 5.970 -2.8 3.9 188.9 242.8
Nov 6.980 2.0 4.4 190.0 242.0 6.140 1.8 4.3 188.1 240.8
Oct 6.840 0.7 4.3 187.0 239.0 6.030 1.0 4.3 185.4 238.2
Sep 6.790 0.4 4.2 187.0 237.0 5.970 0.5 4.2 185.7 236.4
Aug 6.760 -1.2 4.5 190.0 241.0 5.940 -1.0 4.5 188.8 239.9
Jul 6.840 -2.6 4.3 191.0 243.0 6.000 -2.8 4.4 190.2 243.1
Jun 7.020 1.9 4.1 191.0 245.0 6.170 1.8 4.2 191.0 245.5
May 6.890 1.5 4.2 184.0 236.0 6.060 1.3 4.3 182.4 234.5
Apr 6.790 3.3 4.3 179.0 230.0 5.980 3.5 4.3 177.1 229.0
Mar 6.570 2.7 4.4 175.0 223.0 5.780 2.7 4.4 174.0 223.0
Feb 6.400 NA 4.5 169.0 216.0 5.630 NA 4.5 168.1 215.9
-By Kareema Clark; Dow Jones Newswires; 202-646-1880;
csstat@dowjones.com
Related Fixed Story:
84391 US ECONOMIC INDICATORS: Housing statistics
GBP/USD close to daily low
FXstreet.com (Buenos Aires) – GBP/USD remains close to 1.6060 daily low and strong support area, having lost around 330 pips from Asian high. Pair remains strongly bearish after breaking under 1.6110 and a daily close under 1.6110 will confirm the head and shoulders figure clear in daily charts, putting extra downside pressure in the pair.
Despite current rally seems a bit overextended to the downside, pair shows no intention of an upside correction at this point. Clearly under 1.6060, next support to consider comes at 1.6020 area, ahead of 1.5980. Corrective movements will find resistance at 1.6086 and 1.6110, that should keep the upside capped to validate the figure
Despite current rally seems a bit overextended to the downside, pair shows no intention of an upside correction at this point. Clearly under 1.6060, next support to consider comes at 1.6020 area, ahead of 1.5980. Corrective movements will find resistance at 1.6086 and 1.6110, that should keep the upside capped to validate the figure
ECB,Other Central Banks Extend Dollar, Swiss Franc Liquidity Operations
ECB,Other Central Banks Extend Dollar, Swiss Franc Liquidity Operations
FRANKFURT -(Dow Jones)- The European Central Bank's Governing Council has decided, in agreement with other leading central banks, including the U.S. Federal Reserve, to continue conducting U.S. dollar liquidity providing operations from October 2009 to January 2010, the ECB said Thursday.
A similar decision has been taken by the Bank of England and the Swiss National Bank, the ECB said in a statement. The Bank of Japan also said it will continue dollar liquidity providing operations into January 2010.
In agreement with the Swiss National Bank, the ECB will also continue conducting Swiss franc liquidity providing swap operations until Jan. 31, 2010 "to support further improvements in the short-term Swiss franc funding markets."
Web site: www.ecb.int
-By Emese Bartha, Dow Jones Newswires; +49 69 2972 5516, emese.bartha@dowjones.com
Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=DN%2BOIjleI61npsBGKQv9oA%3D%3D. You can use this link on the day this article is published and the following day.
FRANKFURT -(Dow Jones)- The European Central Bank's Governing Council has decided, in agreement with other leading central banks, including the U.S. Federal Reserve, to continue conducting U.S. dollar liquidity providing operations from October 2009 to January 2010, the ECB said Thursday.
A similar decision has been taken by the Bank of England and the Swiss National Bank, the ECB said in a statement. The Bank of Japan also said it will continue dollar liquidity providing operations into January 2010.
In agreement with the Swiss National Bank, the ECB will also continue conducting Swiss franc liquidity providing swap operations until Jan. 31, 2010 "to support further improvements in the short-term Swiss franc funding markets."
Web site: www.ecb.int
-By Emese Bartha, Dow Jones Newswires; +49 69 2972 5516, emese.bartha@dowjones.com
Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=DN%2BOIjleI61npsBGKQv9oA%3D%3D. You can use this link on the day this article is published and the following day.
Forex: GBP/USD: Pound dives below 1.6100, at two-months low
FXstreet.com (Barcelona) - The Pound is going through a shocking selloff on Thursday and from 1.6380 intra-day high ahead of the European markets opening, the pair has dived below 1.6100, and the Pound hit a fresh 2-month low at 1.6065; 1.4% below its day opening level.
According to james chen, technical analyst at FX Solutions a strong break below 1.6100 could open the doors towards 1.5800: "In the case of GBP/USD, the immediate event to watch for would be a strong breakdown below 1.6100 support, in which case the 1.5800 price region would be a clear further support target to the downside. Like other major currencies against the U.S. dollar, GBP is still entrenched within an overall uptrend, but this could very well be in jeopardy on GBP/USD if the pair continues to lose ground."
According to james chen, technical analyst at FX Solutions a strong break below 1.6100 could open the doors towards 1.5800: "In the case of GBP/USD, the immediate event to watch for would be a strong breakdown below 1.6100 support, in which case the 1.5800 price region would be a clear further support target to the downside. Like other major currencies against the U.S. dollar, GBP is still entrenched within an overall uptrend, but this could very well be in jeopardy on GBP/USD if the pair continues to lose ground."
Mexico's Stocks Open Lower, Peso Weaker Vs Dollar
Mexico's Stocks Open Lower, Peso Weaker Vs Dollar
By Anthony Harrup
Of DOW JONES NEWSWIRES
MEXICO CITY (Dow Jones)--Mexican stocks opened lower Thursday, continuing their downward momentum into a fifth straight session after a recent climb to 15-month highs.
The market's benchmark IPC index was down 1.1% to 28,642.96 points around 10:15 a.m. EDT. Volume was 36.6 million shares worth 966.2 million pesos ($72.1 million).
Cement company Cemex (CX) CPO shares were off 0.4% to MXN17.37. Cemex said Wednesday that underwriters of its capital increase will exercise their over-allotment option to buy an additional 195 million CPO shares.
The overallotments raise Cemex's proceeds from the share offer to $1.78 billion from $1.55 billion, money the company will use to pay down debt under the $15 billion debt rescheduling agreement completed last month with creditors.
The peso was weaker against the U.S. dollar, quoted in Mexico City at MXN13.4125, compared with MXN13.3375 at Wednesday's close.
The peso has remained under pressure this week with participants cautious about the 2010 budget negotiations in Congress, as well as mixed local economic data. While retail sales for July picked up from June, unemployment in August continued to rise, reaching 6.3%, its highest level since the 1995 crisis.
Scotiabank said in a report that Moody's decision this week to upgrade Brazil to investment grade - joining Fitch and Standard & Poor's - also put some pressure on the peso.
The Bank of Mexico reported Thursday that consumer prices rose 0.39% in the first half of September, in line with expectations. The increase brought annual inflation down to 5% - its lowest level since May 2008.
While stocks and currency were under selling pressure, local government bonds were gaining, pushing yields lower. The yield on bonds due 2018 was down 4 basis points to 7.93%, and 2027 bond yields were down 5 basis points to 8.45%.
"Foreign investors continue to gradually enter the local market," ING Mexico said in a report.
-By Anthony Harrup, Dow Jones Newswires; (5255) 5001 5727, anthony.harrup@dowjones.com
Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=DN%2BOIjleI61npsBGKQv9oA%3D%3D. You can use this link on the day this article is published and the following day.
By Anthony Harrup
Of DOW JONES NEWSWIRES
MEXICO CITY (Dow Jones)--Mexican stocks opened lower Thursday, continuing their downward momentum into a fifth straight session after a recent climb to 15-month highs.
The market's benchmark IPC index was down 1.1% to 28,642.96 points around 10:15 a.m. EDT. Volume was 36.6 million shares worth 966.2 million pesos ($72.1 million).
Cement company Cemex (CX) CPO shares were off 0.4% to MXN17.37. Cemex said Wednesday that underwriters of its capital increase will exercise their over-allotment option to buy an additional 195 million CPO shares.
The overallotments raise Cemex's proceeds from the share offer to $1.78 billion from $1.55 billion, money the company will use to pay down debt under the $15 billion debt rescheduling agreement completed last month with creditors.
The peso was weaker against the U.S. dollar, quoted in Mexico City at MXN13.4125, compared with MXN13.3375 at Wednesday's close.
The peso has remained under pressure this week with participants cautious about the 2010 budget negotiations in Congress, as well as mixed local economic data. While retail sales for July picked up from June, unemployment in August continued to rise, reaching 6.3%, its highest level since the 1995 crisis.
Scotiabank said in a report that Moody's decision this week to upgrade Brazil to investment grade - joining Fitch and Standard & Poor's - also put some pressure on the peso.
The Bank of Mexico reported Thursday that consumer prices rose 0.39% in the first half of September, in line with expectations. The increase brought annual inflation down to 5% - its lowest level since May 2008.
While stocks and currency were under selling pressure, local government bonds were gaining, pushing yields lower. The yield on bonds due 2018 was down 4 basis points to 7.93%, and 2027 bond yields were down 5 basis points to 8.45%.
"Foreign investors continue to gradually enter the local market," ING Mexico said in a report.
-By Anthony Harrup, Dow Jones Newswires; (5255) 5001 5727, anthony.harrup@dowjones.com
Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=DN%2BOIjleI61npsBGKQv9oA%3D%3D. You can use this link on the day this article is published and the following day.
Gold Rally Reflects Long-Term Dollar Woes - Platts Exec
Gold Rally Reflects Long-Term Dollar Woes - Platts Exec
LONDON (Dow Jones)--The gold price rise in U.S. dollar terms is an indication that the currency has problems that are unlikely to go away, Jorge Montepeque, director at Platts, said at the S&P Goldman Sachs Commodity Index seminar in London.
Montepeque said while gold has risen in dollar terms it has fallen in euro terms. "It tells me the dollar has a huge problem and I don't think it will improve," Montepeque told the audience at the seminar.
Montepeque said U.S. debt is a large reason for that.
At 1414 GMT, spot gold was trading at $1,007.50 a troy ounce, up 15% since the start of the year.
-By Devon Maylie, Dow Jones Newswires; +44 (0)20 7842 9483; devon.maylie@dowjones.com
Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=DN%2BOIjleI61npsBGKQv9oA%3D%3D. You can use this link on the day this article is published and the following day.
(END) Dow Jones Newswires
September 24, 2009 10:23 ET (14:23 GMT)
LONDON (Dow Jones)--The gold price rise in U.S. dollar terms is an indication that the currency has problems that are unlikely to go away, Jorge Montepeque, director at Platts, said at the S&P Goldman Sachs Commodity Index seminar in London.
Montepeque said while gold has risen in dollar terms it has fallen in euro terms. "It tells me the dollar has a huge problem and I don't think it will improve," Montepeque told the audience at the seminar.
Montepeque said U.S. debt is a large reason for that.
At 1414 GMT, spot gold was trading at $1,007.50 a troy ounce, up 15% since the start of the year.
-By Devon Maylie, Dow Jones Newswires; +44 (0)20 7842 9483; devon.maylie@dowjones.com
Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=DN%2BOIjleI61npsBGKQv9oA%3D%3D. You can use this link on the day this article is published and the following day.
(END) Dow Jones Newswires
September 24, 2009 10:23 ET (14:23 GMT)
Saturday, September 19, 2009
PRESS DIGEST - British business
The Times
PRIMARY HEALTH RAISES FUNDS
Primary Health Properties ( PHP.L) has become the latest real estate-based group to raise funds in order to benefit from opportunities to acquire assets and reduce debt. The company is scrutinising 21 properties worth just over 90 million pounds. Primary Health has raised 60 million pounds, before expenses, through a placing and open offer pitched at 230 pence. Although the shares contracted almost 10 percent following the move, they have outperformed the broader sector over the past month and analysts believe the value of its properties could start to rise.
The Daily Telegraph
BA DIVES INTO DOGFIGHT: UK AIRLINE BIDS TO TEAM UP WITH JAL
British Airways (BAY.L has intervened in the battle between American Airlines and Delta over the future of Japan Airlines (9205.T). The company is lobbying on behalf of AA, which is its partner in the Oneworld airline alliance, after Delta tried to lure JAL into the rival SkyTeam alliance. It is reported that Delta has offered to inject 50 billion yen (336 million pounds) into JAL in return for a stake with the condition that it defects to SkyTeam. AA is believed to have made a counter offer of 300 million dollars (185 million pounds).
AVIVA PAYOUT
An offer by Aviva (AV.L) to pay out 500 million pounds to nearly one million policyholders in two of its with-profits funds has been approved by the High Court. The two funds are CGNU and Culac, also known as the company's "inherited estate". Aviva is sitting on a surplus of 1.2 billion pounds in the two funds. Eligible customers will receive between 200 and 1,150 pounds each.
BLUEBAY SUFFERS
Full-year pre-tax profits at BlueBay Asset Management (BBAY.L) have fallen by more than half from 50.1 million pounds to 17.5 million pounds for the year ending June. The fixed income manager has been hit by an exodus of clients from the most expensive funds and the market sell-off towards the end of 2008. Confidence is returning however, with a reported 15 percent rise to 27.8 billion dollars in assets under management in July and August.
The Independent
SKY FURY OVER OFCOM'S "EXTREME" INTERVENTION
Broadcaster BSkyB (BSY.L) has reacted angrily to Ofcom's proposals to regulate the pay-TV market. The group criticised the regulator's intervention as "extreme and unprecedented". Ofcom aims to force Sky to offer wholesale its premium content, which includes Premier League football, to its market rivals at a reduced price. Sky said the proposals "go beyond" competition law and that Ofcom's financial modelling was not "fit for purpose".
SONGBIRD ESTATES INCREASES STAKE IN CANARY WHARF
Songbird Estates (SBDC.L ) plans to spend 112.5 million pounds on boosting its stake in Canary Wharf, despite having recently come up with terms for a rights issue to rescue it. The real estate firm will buy 54 million shares in Canary Wharf from Germany's Commerzbank, increasing its stake to 69.3 percent. David Pritchard, chairman of Songbird, said the buyout "demonstrates the commitment to the company by a core set of investors". The proceeds of the rights issue, which were earmarked to repay an 880 million pound loan to Citibank, will now also partly finance the buyout.
EXCEPTIONAL CHARGES HIT PROFITS AT DOBBIESFOREX-Dollar rebounds from 1-year low versus euro
* Waning risk appetite boosts dollar's safe-haven appeal
* Dollar rises versus yen on Japanese official's comments
* Sterling drops as Lloyds' news fans financial jitters (Adds comment, updates prices)
By Wanfeng Zhou
NEW YORK, Sept 18 (Reuters) - The dollar rebounded from a one-year low against the euro on Friday as waning risk appetite cut demand for higher-yielding currencies and boosted safe-haven demand for the greenback.
Sterling declined across the board, hitting a near five-month low euro on renewed concerns about the UK banking sector.
The dollar has sold off sharply this month as investors shifted into riskier assets on increasing signs the global economy is recovering. The prospect of low U.S. yields and concerns about the U.S. fiscal deficit fueled dollar selling.
But the currency gained a respite on Friday as investors trimmed their positions ahead of holidays in Japan and Singapore next week, although the trend for broad dollar weakness was seen as likely to persist.
"Today overall has been a retracement day and a profit-taking day," said Andrew Busch, a global FX strategist at BMO Capital Markets in Chicago. "(But) I don't see anything on the horizon just yet that would take us out of this sell-the-U.S. dollar mode."
With no U.S. data to lend direction, currencies are taking their cues from equity and commodity markets. World equities .MIWD00000PUS came under pressure after scaling an 11-month peak as investors took stock of recent hefty gains, although Wall Street ended higher in a choppy session.
"I still think that currencies are at the mercy of the stock market," said Fabian Eliasson, vice president of currency sales at Mizuho Corporate Bank in New York.
In late New York trading, the euro EUR= fell 0.3 percent to $1.4701. It hit a one-year high on Thursday and has risen 2.6 percent so far this month.
The dollar index .DXY, which measures the dollar's value against a basket of six major currencies, rose 0.4 percent to 76.500, having bounced off Thursday's one-year low of 76.010.
STERLING SLUMPS
The yen fell after Japanese Finance Minister Hirohisa Fujii said he did not want to be perceived as backing a strong yen. [ID:nTKU105559]
The dollar was last up 0.4 percent at 91.38 yen JPY=, having rebounded from a seven-month low hit on WednesdayMonday, September 7, 2009
Stocks and USD lower on concern about US Economic growth
As FED Chairman Ben Bernanke yesterday raised concern on US economic growth USD and stocks went lower.
Overnight News Bullets
SZ Unemployment Rate (Oct) out at 2.6% vs. 2.5% expected. Prior at 2.5%.
GE Trade Balance (Sep) out at 18.1B vs. 16.0B expected. Prior at 14.1B.
JN Eco Watchers Survey (Oct): Current out at 41.5 vs. 42.9 prior. Outlook out at 43.1 vs. 46.0 prior.
GE Current Account (Sep) out at 15.4B vs. 12.1B expected. Prior at 8.8B.
CZ CPI MoM/YoY (Oct) out at 0.6%/4.0% vs. 0.4%/4.0% expected. Prior at -0.3%/2.8%.
CZ Unemployment Rate (Oct) out at 5.8% vs. 5.9% expected. Prior at 6.2%.
SW Industrial Production MoM/YoY (Sep) out at -0.6%/1.1% vs. 0.5%/2.9% expected. Prior at -0.5%/2.8%.
UK BoE keeps rates unchanged at 5.75% as expected.
EC ECB keeps rates unchanged at 4.00% as expected.
CA Housing Starts (Oct) out at 219.5K vs. 228K expected. Prior at 281.3K.
US Initial/Cont. Claims out at 317K/2579K vs. 325/2560 expected.
CA New Housing Price Index MoM (Sep) out at 0.3% vs. 0.4% expected. Prior at 0.4%.
US EIA Natural Gas Storage Change out at 36 vs. 30 expected. Prior at 66.
UK Leading Indicator Index MoM (Sep) out at -0.1% vs. -0.2% prior.
UK Coincident Indicator MoM (Sep) out 0.1% vs. 0.2% prior.
US ICSC Chain Store Sales YoY (Oct) out at 1.6% vs. 2.0% expected. Prior at 1.7%.
JN Industrial Production MoM/YoY (Sep F) out unchanged at -1.4%/0.8% as expected.
JN Capacity Utilization (Sep F) out at 108.6 vs. 109.7 prior.
Markets
FX: Further dollar weakness after Bernanke comments. GBPUSD over 2.11, EURUSD over 1.47.
Fixed Income: US notes higher and JGBs complete second weekly gain. European bonds little changed.
Stocks: Asian equities mixed, with Nikkei down about 1%, Hang Seng and ASX higher. American equities broadly lower with exception of S&P only up a marginal 0.07%
Commodities: Crude prices higher with December contract again over $96 a barrel. Gold consolidates around $834 an ounce.
O/N Data Heat map:
Calendar
Today's Highlights:
| Time (GMT) | Region | Release | Consensus |
| 09:00 | SW | AMS Unemployment Rate (OCT) | 3.20% |
| 09:00 | NO | Producer Prices Incl. Oil MoM/YoY (OCT) | 2.3% / -0.2% |
| 09:00 | NO | CPI Headline MoM/YoY (OCT) | 0.4% / 0.0% |
| 09:00 | NO | CPI Core MoM/YoY (OCT) | 0.2% / 1.6% |
| 09:30 | UK | Visible Trade Balance GBP/Month (SEP) | -?‚??6900 |
| 09:30 | UK | Trade Balance Non-EU GBP/Month (SEP) | -?‚??3900 |
| 09:30 | UK | Total Trade Balance (SEP) | -?‚??4100 |
| 11:00 | EC | Euro-Zone OECD Leading Indicators (SEP) | Prior 107.3 |
| 13:30 | US | Trade Balance (SEP) | -$58.5B |
| 13:30 | CA | International Merchandise Trade (SEP) | C$3.9 |
| 13:30 | US | Import Price Index MoM/YoY (OCT) | 1.2% / 9.0% |
| 15:00 | US | University of Michigan Confidence (NOV) | 80 |
| 18:00 | US | Baker Hughes U.S. Rig Count (NOV) | 1795 |
This and Next Week???‚¬?„?s Highlights:
| Date | Region | Release |
| 11-Nov | JN | Domestic CGPI, Current Account Total, Trade Balance BOP Basis |
| 12-Nov | JN | BoJ Monetary Policy Meeting, Bankruptcies, Consumer Confidence, Consumer Confidence Households, a string of GDP???‚¬?„?s |
| 12-Nov | SW | A string of CPI???‚¬?„?s |
| 12-Nov | UK | A string of PPI???‚¬?„?s, DLCG UK House Prices |
| 13-Nov | UK | Rics House Price Balance |
| 13-Nov | AU | NAB Business Confidence/Conditions, Westpac Consumer Confidence, Wage Cost Index |
| 13-Nov | UK | A string of CPI???‚¬?„?s, Retail Price Index, RPI ex. Mort. Int. Payments |
| 13-Nov | GE | ZEW Survey (Econ.sentiment), ZEW Survey (Current situation) |
| 13-Nov | EC | ZEW Survey (Econ.sentiment), E-Z Industrial Produktion |
| 13-Nov | US | IBD/TIPP Economic Optimism, Monthly Budget Statement, Pending Home Sales, ABC Consumer Confidence |
What's going on?
Federal Reserve Chairman Bernanke testified to lawmakers, acknowledging the economic expansion would cool. Speculation is reheating that further rate cuts would take place in US following 75 bp cuts over the past 2 months.
Dollar depreciated against 13 most-traded currencies on rate cut speculation, with cable now above 2.11 and yuan heading for biggest weekly gain since 2005.
Global equities are broadly lower on sentiment of slowing US economy, with financial in Asia leading losses. Commodity and energy stock gains balance the picture somewhat as rising commodity prices support the resource providers.
An approaching storm in North Sea and weeks-long outage in Texas refinery pushed crude prices back to $100 a barrel trajectory, with December contract again trading over $96.
FX
FX Trading Strategies
| Pair | Supp. | Resis. | Comments |
| USDJPY | 111.6 | 113.25 | We have signals on both sides for a break-out play. For the upside we placed an order to buy at 112.89 bid, targeting 113.30. Stop offer at 112.74. To the downside, we sell 112.22 offer, targeting 111.60, stop at 112.51 bid. We placed ?‚?? positions. . |
The dollar may start recovery today
EUR/USD (1.4332)
European & US sessions forecast levels: 1.4050/1.4445
Trend Sessions: European: Neutral
US: Neutral/Downward
Market Focus: 4:30 AM EU Sentix Indicator, 6:00 AM Germany Factory orders.
Daily Strategy: The dollar remains weak against the euro after the Friday’s report for new jump of U.S. Unemployment Rate and Non-farm payrolls. The U.S. Unemployment closes 10% that probably will happen till the end of 2009. The overall technical analyses show that the dollar is still below the key resistance at 1.4445. The break above this level will open the way for levels of 1.47/1.48. It is expecting mix trading today with movements into both directions.
European & US sessions forecast levels: 1.4050/1.4445
Trend Sessions: European: Neutral
US: Neutral/Downward
Market Focus: 4:30 AM EU Sentix Indicator, 6:00 AM Germany Factory orders.
Daily Strategy: The dollar remains weak against the euro after the Friday’s report for new jump of U.S. Unemployment Rate and Non-farm payrolls. The U.S. Unemployment closes 10% that probably will happen till the end of 2009. The overall technical analyses show that the dollar is still below the key resistance at 1.4445. The break above this level will open the way for levels of 1.47/1.48. It is expecting mix trading today with movements into both directions.
Weekly Technical Strategy EURUSD
EURUSD: Continues To Hold Above Its MT Rising Trendline
With declines to as low as 1.4176 reversed and a neutral candle printed the past week, EUR continues to maintain above its medium term rising trendline initiated at the 1.2456 level. This leaves the pair biased to the upside towards its YTD high sited at the 1.4446 level where a decisive penetration will put it on the path to further upside gains towards the 1.4719 level, its Dec 18'08 high and possibly higher targeting the 1.4875 level, representing its Sept 21'09 high. On the other hand, downside targets are located at the 1.4176 level, its Sept 01'09 low and the 1.4088 level, representing rising trendline. Below there though not expected at the current price levels could drive the pair further lower towards the 1.3747 level, its Jun 16'09 low. On the whole, we maintain that while the pair holds above its rising trendline, outlook for further upside gain remains
Directional Bias:
Nearer Term -Mixed
Short Term - Bullish
Medium Term -Bullish
Performance in %:
Past Week: +0.05%
Past Month: +0.55%
Past Quarter: +5.89%
Year To Date: +2.32%
Weekly Range:
High -1.4378
Low -1.4176
G20: FSB Draghi: Need Reform Momentum To Avoid Future Crisis
LONDON -(Dow Jones)- Signs that the world economy is in a sustainable recovery are becoming clearer, but many underlying problems have yet to be resolved, Indonesia's central bank governor said Friday.
In an interview with Dow Jones Newswires, ahead of a meeting of the Group of 20 industrialized and emerging economies in London, Bank Indonesia Acting Governor Darmin Nasution said he remained "cautious" about the outlook.
"We don't know whether there will be a double dip. Hopefully not. I think we can say the majority opinion now is the recovery is more and more certain," Nasution said.
"But many, several problems in the financial sector haven't been resolved yet. We don't expect that the recovery is there and then all (of the problems are) forgotten about."
Nasution said that Bank Indonesia's decision Thursday to keep interest rates on hold at 6.5% - marking a pause in an easing cycle that began in December - had been the result of "deep consideration."
Asked whether further rates cuts could be ruled out, he said that if there were no significant changes in the data, the central bank would tend not to alter policy.
-By Natasha Brereton, Dow Jones Newswires, +44-20-7842-9254, natasha.brereton@dowjones.com
(END) Dow Jones Newswires
September 04, 2009 12:59 ET (16:59 GMT)
G20: BOJ Gov: Discussed General Thinking Of Exit Strategy
LONDON -(Dow Jones)- Bank of Japan Governor Masaaki Shirakawa said Saturday that he exchanged general views with other nations over how and when to exit unorthodox monetary and fiscal measures but he didn't give a clear indication on whether or not Japan will need to terminate these steps in the immediate future.
The Group of 20 industrial and developing nations "exchanged opinions about the timing and ways to terminate extraordinary measures many countries have taken and what kind of points we must pay attention to when exiting," Shirakawa told reporters after attending a G20 meeting of finance ministers and central bank heads.
As for a cap on bonus payments to bankers, Senior Vice Finance Minister Wataru Takeshita said, at a joint press conference with the BOJ chief, that Japan will push efforts to avoid excessive risk taking.
-By Megumi Fujikawa, Dow Jones Newswires; 813-6895-7559; megumi.fujikawa@dowjones.com
(END) Dow Jones Newswires
September 05, 2009 12:52 ET (16:52 GMT)
G20: FSB Draghi: Need Reform Momentum To Avoid Future Crisis
LONDON -(Dow Jones)- General financial conditions are improving but financial reform momentum needs to continue in order to ensure that the recent financial crisis doesn't happen again, the chairman of the Financial Stability Board said Saturday.
Financial "conditions are improving and with their improvement, the banks profitability is improving," Mario Draghi said at a press briefing after a meeting of finance ministers from the group of 20 industrial and developing nations. Draghi is also an ECB governing council member and governor of the Bank of Italy.
He said that although financial conditions were improving, "more needs to done to make the financial system resilient."
He said the G20 finance ministers backed the need to keep the momentum going on financial reform. He said the FSB will be charged with providing guidelines on improving the quality of capital held by financial institutions and providing guidelines on compensation.
On banker compensation, he said the FSB would be focused on tackling the structure rather than the level of compensationBIS: CBRC Liu - Loan Growth More Stable In 2nd Half
BIS: CBRC Liu - Loan Growth More Stable In 2nd Half
LONDON -(Dow Jones)- The head of China's banking regulator said Sunday that growth of new yuan loans should stabilize in the second half, and that generally he sees no problem with lending conditions.
Speaking on the sidelines of meetings of central bank officials in Basel, China Banking Regulatory Commission Chairman Liu Mingkang said that Chinese loan growth was "still quite good," despite recent declines.
New yuan loans fell sharply to CNY355.9 billion in July from CNY1.53 trillion in June, sending shock waves through China's equity market. There are reports that lending weakened even further in August.
Liu noted that the stock and ratio of non-performing loans had fallen in the first half of 2009, as lending had increased.
In "the second half of this year, I think that the speed [of loan growth] will be more stable and we monitor the risks envisaged very closely," Liu said. "In general, I don't think that there is any problem."
Saturday, September 5, 2009
Economic News
USD - Dollar Trades Lower Before U.S. Jobs Report
The U.S. Dollar was slightly stronger vs. the EUR on Thursday, as investors squared positions ahead of the U.S. Non-Farm Payrolls report later today. The USD also traded near a week low against the British Pound before a U.S. government report forecast to showed employers eliminated fewer jobs last month, sapping demand for the greenback as a refuge from the global recession. The USD traded at $1.6323 per pound from $1.6275 yesterday, after falling to $1.6413, the lowest level since Aug. 25.
The greenback briefly extended gains against the Japanese Yen on Thursday, after the Institute for Supply Management said its services index rose to 48.4 in August from 46.4 in July. The U.S. currency finished trading at 92.58 Yen from 92.28 Yen, and is poised for a 4th weekly loss, the longest stretch since December.
Today's Non-Farm payrolls data is expected to have a strong impact on the U.S currency. Any result could be a surprise, and the Dollar could go either way as a result. In any case, traders are unsure how the market will react to today's data. A weak report could feed risk aversion, boost Treasuries and actually aid the U.S Dollar. Then again, a better than expected result might be seen as a sign of relative U.S. economic strength, and lift the Dollar. Or it could also encourage risk-taking and aid commodities and higher-yielding currencies at the Dollar's expense.
EUR - EUR Drops versus the Dollar on ECB President Trichet's Comments
The EUR gave back early gains against most major counterparts after the European Central Bank kept Interest Rates at a record low of 1%, and stated that the period of contraction has come to an end in the Euro-Zone. The EUR/USD cross slipped to $1.4250, after having slipped from a peak of $1.4346 on Thursday. This was after the European Central Bank President, Jean Claude Trichet made less hawkish statements than many expected.
Meanwhile, the European currency also headed for its first weekly decline versus the Pound since Aug. 7 after ECB's Trichet warned yesterday of a rather uneven recovery, even as the ECB raised its growth forecasts. The British Pound advanced as economic data showed the U.K. services sector growing more rapidly than had been anticipated last month. The news sent the GBP/USD cross as high as $1.643 during Thursday's trading session.
Trichet's remarks that the economic recovery is not strong enough to start withdrawing monetary stimulus measures hurt the single currency too. Still, market players reported good support under $1.4200, which should hold into the today's job reports data from the U.S.
JPY - The Yen Pulls Back From 7 Week High
The Japanese Yen weakened against 14 of its 16 major counterparts on Thursday on speculation Asian stocks will extend a global equity rally, spurring demand for higher-yielding assets. The JPY retreated from a 7 week high against the U.S Dollar as higher share prices prompted investors to trim holdings of the low-risk Japanese currency.
The Yen's retreat also occurred due to a rally in Chinese shares prompting investors to trim holdings of the low-risk JPY. Japan's currency may decline for a second day versus the EUR as futures on the Nikkei 225 Stock Average expiring in September closed at 10,235 in New York yesterday, higher than 10,230 in Osaka.
Crude Oil - Oil Under Pressure on OPEC Output Expectations
Crude Oil ended Thursday's volatile trading without any gains as investors reacted to a weekly jobless report. Prices settled at $68.12 a barrel, as disappointing news from the labor market outweighed economic optimism from data showing that the U.S. service sector and retail sales improved. Traders are also eyeing news that big Oil producers are increasing output. OPEC is expected to leave output targets unchanged when it next meets on September 9th in Vienna.U.S. Crude prices have been range bound between $65 to $75 a barrel since the start of August, fluctuating on the latest clues about the speed of an impending economic recovery. However, there's not a whole lot of momentum in the market in either direction. The trend for Crude Oil, which has been down, is still in force this week. Oil prices are not likely to break out of the confines of the current range in the short term, analysts say.
Tuesday, September 1, 2009
Hungarian Forint Declines on Asian Bearish Markets
The Hungarian currency declined together following most of Eastern European countries currencies, as a negative performance in Asian stock markets declined attractiveness for riskier assets, spurring demand for safety in dollar and yen priced assets.
Several Eastern European currencies declined today like the Polish zloty and the Russian ruble, mostly influenced by an increase in risk aversion regarding the future of the world economy, since evidences of a complete recovery are still lacking in virtually all economic regions throughout the world. The Hungarian forint also dropped, since Hungary is facing one of the worse recession among the European Union country members.
USD/HUF traded at 190.06 as of 10:44 GMT from an opening rate of 189.30 yesterday.
Canadian Dollar Declines Sharply on Oil Faltering Demand
The Canadian dollar started this week losing versus most of the 16 main traded currencies as a negative performance in stocks and commodities influenced the loonie’s attractiveness today, as investors opted for the safety of the greenback.
After last week’s declarations from the Bank of Canada affirming that a strong loonie could delay the economic recovery in the North American nation, the loonie’s attractiveness decline, also being affected today by a bearish stock market in Asia and a decline in demand for commodities, erasing the Canadian currency past weeks’ gains.
USD/CAD traded at 1.0974 as of 10:26 GMT from an opening rate of 1.0915 yesterday.
Monday, August 31, 2009
New Zealand Dollar Falls on Central Bank Governor Interview
The New Zealand dollar started this week losing versus the greenback and the yen as higher-yielding currencies attractiveness declined while risk aversion grew among traders globally, shunning investors from assets in the South Pacific region.
After a radio interview in which Allan Border, Reserve Bank Of Newzealand Governor, stated that a strong kiwi is affecting the nation’s exports performance, the New Zealand currency declined versus most of the 16 main traded currencies, also influenced by a negative performance in Asian stock markets, mainly in China, where the Shanghai Composite Index declined more than 6 percent, decreasing attractiveness for the relatively riskier trading options in New Zealand and Australia.
A decline in the kiwi rates will be extremely favorable for New Zealand’s economic recovery, according to specialists. The bullish patterns perceived in the last two months for the New Zealand currency may delay the recovery in the South Pacific nation, as a strong currency declines competitiveness for a country’s products, but as long as volatility remains high, with multiple reports proving support for contradictory speculations, it will be difficult to determine how well the kiwi will perform, as well as the New Zealand economy as a whole, considering its export-oriented profile.
NZD/JPY traded at 63.45 as of 10:54 GMT from an opening rate of 63.74 yesterday. NZD/USD followed the same trend, being traded at 0.6839 from 0.6815.
Wednesday, August 26, 2009
US Dollar Rallies as Durable Goods Orders Surge, Japanese Yen Gains on Uneasy Risk Appetite
Written by Terri Belkas, Currency Strategist
For the second day in a row, surprisingly strong US data did little to spur risk appetite as investor optimism has been exhausted. That said, the US dollar did show a positive reaction to the news, suggesting that fundamentals may start to play a greater role in price action for the currency. Indeed, US durable goods orders surged 4.9 percent in July, the biggest rise in two years, as the ultra-volatile non-defense aircraft component jumped by 107.2 percent as Boeing orders doubled in July to 44 from 20. However, durable goods orders excluding transportation only rose 0.8 percent, and non-defense capital goods orders excluding aircraft - a gauge of business investment - actually fell for the first time since April, suggesting that this surprisingly strong number is a misleading sign of growth.
Adding to the mix, US new home sales rose for the fourth straight month in July, this time by 9.6 percent, the sharpest increase since February 2005, to a ten-month high of 433,000. A further breakdown shows that supply levels fell to 7.5 months from 8.5 months as median prices fell slightly from the previous month to $210,100, though values are still down 11.5 percent from a year ago. In coming months, there is potential for sales to remain supported by lower prices and the US government's first-time home buyer tax credit of up to $8,000. However, the program expires on December 1, and with unemployment rates likely to rise further, a significant downdraft could hit the sector once again.
The second round of US Q2 GDP estimates is due to hit the wires, but the results will only be market-moving if we see revisions. The preliminary reading is forecasted to be revised down to -1.4 percent from -1.0 percent, though this would still represent a sharp improvement from Q1, when GDP plunged 6.4 percent. Readings in line with expectations may not have a very big impact on price action, but better-than-anticipated results could lead carry trades higher, especially in light of speculation that the recession may have ended in Q2. On the flip side, surprisingly weak numbers could crush these hopes and trigger the return of risk aversion.
Euro Breaks Below Support Despite Rise in German Business Confidence
The euro initially jumped this morning following the release of the German IFO business confidence survey, but subsequently dove on broad US dollar demand. The IFO index rose to 90.5 in August from 87.4, marking the fifth consecutive increase and beating expectations for a rise to 89. It looks like the steep rally in equities in July along with Germany's 85 billion euro stimulus package has helped to boost sentiment. However, with the growth seen in Q2 anticipated to moderate later in the year, sentiment may follow suit. Looking to EURUSD, the pair broke below support and former resistance at 1.4260, and though solid support has come into play at 1.4210, the ability of the DXY index to hold above a key trendline connecting the July 2008 and August 2009 lows indicates that the greenback remains within an uptrend.
British Pound Breaks Down vs. US Dollar, Outlook for GBP/JPY Looks Bleak
The British pound remained one of the weakest major currencies as GBPUSD broke below a rising trendline connecting the June and July lows, leaving the door open to further declines. Meanwhile, GBPJPY also experienced a steep drop, but failed to break below the July 17 and July 22 lows of 152.31/39, but based on the GBPUSD decline, there is potential for the JPY cross to follow suit. As mentioned in recent days, the macroeconomic outlook for the nation remains bleak, especially after traders learned last week that the UK government posted a deficit of 8 billion pounds in July, the biggest since recordkeeping began in 1993, highlighting the dour state of the nation's finances. Standard & Poor's lowered its outlook on the UK's AAA credit rating to “negative” from “stable” in May for this very reason, and if we see this trend continue, the risk for an actual downgrade will grow and put greater pressure on the British pound.
New Zealand Dollar Down Ahead of NZ Trade Results
According to forecasts published by Bloomberg News, the New Zealand trade deficit is projected to have narrowed during July to NZ$150 million from NZ$417 million due primarily to a drop in imports. In fact, imports are anticipated to slow to NZ$3.3 billion from NZ$3.62 billion, while exports are projected to slip to NZ$3.15 billion from NZ$3.2 billion. With the recent improvements in the New Zealand economy, imports have held up rather well, which has been the main driver of the drop in the trade balance last month. However, a further decline in exports will hurt the case for a global economic recovery, and thus, a New Zealand economic recovery. Overall, a surprise widening of the trade deficit should impact the New Zealand dollar the most, and could lead pairs like NZDUSD and NZDJPY lower.
• Euro Breaks Below Support Despite Rise in German Business Confidence
• British Pound Breaks Down vs. US Dollar, Outlook for GBP/JPY Looks Bleak
• New Zealand Dollar Down Ahead of NZ Trade Results
For the second day in a row, surprisingly strong US data did little to spur risk appetite as investor optimism has been exhausted. That said, the US dollar did show a positive reaction to the news, suggesting that fundamentals may start to play a greater role in price action for the currency. Indeed, US durable goods orders surged 4.9 percent in July, the biggest rise in two years, as the ultra-volatile non-defense aircraft component jumped by 107.2 percent as Boeing orders doubled in July to 44 from 20. However, durable goods orders excluding transportation only rose 0.8 percent, and non-defense capital goods orders excluding aircraft - a gauge of business investment - actually fell for the first time since April, suggesting that this surprisingly strong number is a misleading sign of growth.
Adding to the mix, US new home sales rose for the fourth straight month in July, this time by 9.6 percent, the sharpest increase since February 2005, to a ten-month high of 433,000. A further breakdown shows that supply levels fell to 7.5 months from 8.5 months as median prices fell slightly from the previous month to $210,100, though values are still down 11.5 percent from a year ago. In coming months, there is potential for sales to remain supported by lower prices and the US government's first-time home buyer tax credit of up to $8,000. However, the program expires on December 1, and with unemployment rates likely to rise further, a significant downdraft could hit the sector once again.
The second round of US Q2 GDP estimates is due to hit the wires, but the results will only be market-moving if we see revisions. The preliminary reading is forecasted to be revised down to -1.4 percent from -1.0 percent, though this would still represent a sharp improvement from Q1, when GDP plunged 6.4 percent. Readings in line with expectations may not have a very big impact on price action, but better-than-anticipated results could lead carry trades higher, especially in light of speculation that the recession may have ended in Q2. On the flip side, surprisingly weak numbers could crush these hopes and trigger the return of risk aversion.
Euro Breaks Below Support Despite Rise in German Business Confidence
The euro initially jumped this morning following the release of the German IFO business confidence survey, but subsequently dove on broad US dollar demand. The IFO index rose to 90.5 in August from 87.4, marking the fifth consecutive increase and beating expectations for a rise to 89. It looks like the steep rally in equities in July along with Germany's 85 billion euro stimulus package has helped to boost sentiment. However, with the growth seen in Q2 anticipated to moderate later in the year, sentiment may follow suit. Looking to EURUSD, the pair broke below support and former resistance at 1.4260, and though solid support has come into play at 1.4210, the ability of the DXY index to hold above a key trendline connecting the July 2008 and August 2009 lows indicates that the greenback remains within an uptrend.
British Pound Breaks Down vs. US Dollar, Outlook for GBP/JPY Looks Bleak
The British pound remained one of the weakest major currencies as GBPUSD broke below a rising trendline connecting the June and July lows, leaving the door open to further declines. Meanwhile, GBPJPY also experienced a steep drop, but failed to break below the July 17 and July 22 lows of 152.31/39, but based on the GBPUSD decline, there is potential for the JPY cross to follow suit. As mentioned in recent days, the macroeconomic outlook for the nation remains bleak, especially after traders learned last week that the UK government posted a deficit of 8 billion pounds in July, the biggest since recordkeeping began in 1993, highlighting the dour state of the nation's finances. Standard & Poor's lowered its outlook on the UK's AAA credit rating to “negative” from “stable” in May for this very reason, and if we see this trend continue, the risk for an actual downgrade will grow and put greater pressure on the British pound.
New Zealand Dollar Down Ahead of NZ Trade Results
According to forecasts published by Bloomberg News, the New Zealand trade deficit is projected to have narrowed during July to NZ$150 million from NZ$417 million due primarily to a drop in imports. In fact, imports are anticipated to slow to NZ$3.3 billion from NZ$3.62 billion, while exports are projected to slip to NZ$3.15 billion from NZ$3.2 billion. With the recent improvements in the New Zealand economy, imports have held up rather well, which has been the main driver of the drop in the trade balance last month. However, a further decline in exports will hurt the case for a global economic recovery, and thus, a New Zealand economic recovery. Overall, a surprise widening of the trade deficit should impact the New Zealand dollar the most, and could lead pairs like NZDUSD and NZDJPY lower.
The latest market alerts and analysis
Lower capital inflows. US long-term capital inflow fell to US$11.2bn in April from US$55.4bn the previous month as some central bank Treasury holdings were reduced and this will tend to weaken dollar sentiment
Crude Oil Puts Mexican Peso Further Down
The Crude oil has been declining this week as uncertainties towards its demand have been rising on markets globally, Mexico, one of the biggest suppliers of oil to the United States, is witnessing a severe decline on its national currency as the demand for crude oil falters.
The Mexican currency has been one of the most volatile these days, influenced by constant sentiment changes in global financial markets, which affect the crude oil rates and consequently the sentiment towards the peso, since Mexico is a key-oil exporter to the United States. This week losses are the sharpest in more than a month, directly related to crude oil rates.
USD/MXN traded at 13.11 as of 21:39 GMT from an opening rate today of 13.02.
Friday, August 21, 2009
Last gasp Fibo at 1.4351 before range highs
EUR/USD is closing in on 1.4351, the 76.4% retracement of the 1.4446/1.4045 decline. Strong Europian PMI.data, doubts from joe stiglitz on the dollar’s reserve role and a break-out to the topside in oil have given the markets the ammo they need to push for the topside. Steadier Chinese stocks and firm US shares are a bonus, suggesting correction, not collapse.
Above 1.4413 is next chart resistance ahead of 1.4445 resistance and 1.4450 barriers, which are growing in size by the day.
Be nimble, be quick and get the heck out near the top of the old candlesticks ahead of 1.4450!
European Morning Wrap Up; risk on
- Australia’s Treasurer Wayne Swan says romove tax on government bonds to make them more attractive
- Shanghai share index ends up 1.7%
- French August flash manufacturing PMI 50.2, up from 48.1 in July, highest read in 15 months. Services 48.9, up from 45.5. Composite 50.9, up from 47.3, highest read in 15 months
- German August flash manufacturing PMI 49.0 better than median forecast 47.0 and highest read in 12 months, services 54.1 better than median forecast 48.6 and highest read in16 months . Composite 54.2 and highest read in 15 months
- Euro zone August flash manufacturing PMI 47.9 better than median forecast 47.5 and highest read for 14 months, services 49.5 better than median forecast 46.5 and highest read for15 months, and highest read in 15 months
Risk on. Sentiment boosted by release of better than expected European PMI data.
EUR/USD having started off around 1.4215 has been as high as 1.4335 so far. There have been muttering of Asian central bank sales above 1.4300, but personally haven’t been able to confirm such. China probably won’t leave it too much longer before it makes a concerted stand to slow the rally given it’s well-touted dnt option interest. We’re presently at 1.4325.
The market will have also noted .The Nobel-prize winning economist feels the dollar’s role as a good store of value is “questionable” and feels the currency has high degree of risk.
Cable has had a good morning. Having stood around 1.6440 it’s been as high as 1.6577 so far, bolstered by better risk sentiment.
USD/JPY touch firmer, JPY weak across the board given improved risk appetite. USD/JPY at 93.85 from early 93.60. Sources note layered sell orders from 94.00 up through 94.50.
Aussie has had a very good morning, obviously bolstered by better risk appetite. But the move by the Australian government to remove interest withholding tax (IWT) on government bonds, to make them more attractive, will also have given aussie a good fillip.
AUD/USD having stood at .8235 in early Europe is presently up at .8330.
EUR/USD continues higher
EUR/USD continues to rally, presently up at 1.4325, having been as high as 1.4334.
The euro is being underpinned by the release of better than expected European PMIdata and rallying European stocks.
So far I’ve had no concrete confirmation of Asian central bank selling, although there have been vague mutterings. I still think China will not let this rally gather too much momentum given their well-touted dnt option interest.
Cable extends gains above 1.6500; sell orders noted
Cable has extended it’s gains above 1.6500, presently at 1.6535. The move comes with European stocks heading higher, risk appetite in decent shape after the release of better than expected European PMI data this morning.
Technical resistances now 1.6545/50 and 1.6580.
Talk of some sell orders now lined up at 1.6540/50, but not thought to be overly large. Will be interesting to see whether they’re enough to hold back the present rally.
Thursday, August 13, 2009
Pound Climbs on Renewed European Optimism
The pound climbed today versus the yen and the dollar, as optimistic reports in Europe brought worldwide traders to bet in a hastening economic recovery in the region, damping demand for safer assets and increasing risk appetite.
The pound benefited today from a report in Germany indicating an unexpected growth of 0.3 from the first quarter, being the same figures also perceived in France, while forecasts indicated a contraction of 0.3 percent for both countries. The pound also benefited today from an improved sentiment in stock markets that pushed high-yielding currencies like the South Korean won to the highest rise in a week, making investors which were again confused by negative reports to return to riskier positions in search for higher yielding operations.
Today’s reports in both Germany and France, were highly unexpected and changed traders, investors and analysts perspectives regarding the future economic conditions in the European Union, since these countries lead a main role regarding the bloc’s financial health, and a rebound in the region must derogatorily rely on their stabilization. Despite this fact, the United Kingdom has a more delicate financial system and current situation than the Eurozone, being the credit system more similar to Eastern European countries, which may result in a longer period of recession for both regions than for the countries which adopted the euro.
Euro Continues Rally on Eurozone Members Growth
The euro gained versus the dollar and other several currencies today as countries like Germany and France indicated a unexpected growth for the previous quarter, surprising traders and analysts, raising the positive sentiment towards the Eurozone currency.
A perfect scenario for a bullish pattern in the euro-dollar chart was set today as the German and French economies grew in the second quarter, as the Federal Reserve affirmed yesterday that interest rates in the United States shall remain low for an extended period of time, forcing the dollar down versus most of the 16 main traded currencies. Today, speculations indicate that a report is likely to show an economic rebound for all the current Eurozone country members, which is also favoring the outlook for the euro, which has been bearish since last week when it reached the highest level in months.
The euro is likely to remain high during the day if the report confirms the Eurozone diminishing contraction. Risk has returned to markets, and signs coming from main economies in Europe like Germany and France helped the euro to pare half of last risk aversion wave losses in the beginning of the week, but it is hard to determine until what level it may climb, since markets remain highly volatile.
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