Dec. 30 -- Australia’s and New Zealand’s dollars fell, trimming their biggest annual advances in six years against the greenback, as declines in Asian stocks reduced demand for higher-yielding assets.
The Aussie currency snapped a five-day winning streak after the MSCI Asia Pacific Index of regional shares slumped for the first time this week. The Australian and New Zealand dollars were poised for record yearly advances against the yen as traders speculated that both nations’ central banks will raise interest rates next year.
“Markets will struggle for direction today amidst thin liquidity and low volumes,” said Mitul Kotecha, head of global foreign-exchange strategy at Calyon in Hong Kong. “Equity gyrations will dictate direction for currencies.”
Australia’s dollar fell 0.4 percent to 89.13 U.S. cents as of 2:50 p.m. in Sydney, from 89.49 cents yesterday in New York, when it climbed 0.9 percent for its largest advance since Dec. 1. The currency slid 0.2 percent to 82.15 yen. New Zealand’s dollar dropped 0.4 percent to 71.47 U.S. cents and declined 0.2 percent to 65.89 yen.
The MSCI Asia Pacific Index dropped 0.3 percent today. The Standard & Poor’s Index fell 0.1 percent yesterday.
Annual Gains
Australia’s dollar has advanced 27 percent this year versus the greenback and New Zealand’s is up 23 percent, the largest gains since 2003. The Aussie has climbed 29 percent against the yen and the so-called kiwi has risen 26 percent. Those increases lag behind only the Brazilian real and South Africa’s rand among the 16 most-traded currencies.
Benchmark interest rates are 3.75 percent in Australia and 2.5 percent in New Zealand, compared with 0.1 percent in Japan and as low as zero in the U.S., attracting investors to the South Pacific nations’ higher-yielding assets. The risk in such trades is that currency market moves will erase profits.
“Central banks in Australia and New Zealand are likely to hike rates next year,” said Yuji Saito, head of the foreign- exchange group in Tokyo at Societe Generale SA, France’s third- largest bank. “The bias is for their currencies to be bought.”
Australia’s benchmark will rise to 4.75 percent by September and New Zealand’s will reach 3.75 percent, while the U.S. rate will increase to 0.5 percent and Japan’s will be unchanged, according to Bloomberg surveys.
Australia’s dollar may struggle to rise past 90 U.S. cents and will find buyers near 89.05 cents, said Alex Sinton, a senior dealer at ANZ National Bank Ltd. in Auckland. New Zealand’s currency may run into resistance at 72.15 cents and find support at 71.50 cents, he said.
New Zealand’s two-year swap rate, a fixed payment made to receive floating rates which is sensitive to interest-rate expectations, was at 4.62 percent, from 4.63 percent yesterday and 4.34 percent at the beginning of the month.
Australian government bonds rose. The yield on 10-year notes fell three basis points, or 0.03 percentage point, to 5.71 percent, according to data compiled by Bloomberg.
Tuesday, December 29, 2009
Canada Dollar Gains to Strongest Since October on Global Growth
Canada Dollar Gains to Strongest Since October on Global Growth
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Dec. 29 (Bloomberg) -- Canada’s dollar climbed to the strongest level against its U.S. counterpart since October as signs the economic recovery is accelerating worldwide spurred demand for currencies tied to global growth.
The Canadian currency headed for a second monthly gain after an appreciation beyond C$1.04 prompted investors to exit bearish bets on it, traders said. Reports in the U.S. today are forecast to show consumer confidence is rising and a drop in home prices is easing for Canada’s largest trading partner. Global stocks and U.S. stock futures rose.
Canada’s dollar, nicknamed the loonie for the image of the waterfowl on the C$1 coin, strengthened 0.4 percent to C$1.0386 per U.S. dollar at 8:43 a.m. in Toronto, from C$1.0429 yesterday. It touched C$1.0375, the strongest level since Oct. 20, and was poised for a 39 percent gain for the decade. One Canadian dollar buys 96.29 U.S. cents.
“We continue to believe that both technicals and fundamentals will push dollar-Canada down,” Camilla Sutton, a Bank of Nova Scotia currency strategist in Toronto, wrote in a research note to clients today. “Markets have been increasingly focused on the relative strengths of Canada, and in low- liquidity holiday trading it appears that flows are biased to sell dollar-Canada.”
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Dec. 29 (Bloomberg) -- Canada’s dollar climbed to the strongest level against its U.S. counterpart since October as signs the economic recovery is accelerating worldwide spurred demand for currencies tied to global growth.
The Canadian currency headed for a second monthly gain after an appreciation beyond C$1.04 prompted investors to exit bearish bets on it, traders said. Reports in the U.S. today are forecast to show consumer confidence is rising and a drop in home prices is easing for Canada’s largest trading partner. Global stocks and U.S. stock futures rose.
Canada’s dollar, nicknamed the loonie for the image of the waterfowl on the C$1 coin, strengthened 0.4 percent to C$1.0386 per U.S. dollar at 8:43 a.m. in Toronto, from C$1.0429 yesterday. It touched C$1.0375, the strongest level since Oct. 20, and was poised for a 39 percent gain for the decade. One Canadian dollar buys 96.29 U.S. cents.
“We continue to believe that both technicals and fundamentals will push dollar-Canada down,” Camilla Sutton, a Bank of Nova Scotia currency strategist in Toronto, wrote in a research note to clients today. “Markets have been increasingly focused on the relative strengths of Canada, and in low- liquidity holiday trading it appears that flows are biased to sell dollar-Canada.”
Thursday, December 24, 2009
Dollar May Extend Drop on Concern December Rally Unsustainable
Dec. 25 (Bloomberg) -- The dollar declined against the euro on speculation its biggest December rally since the European currency’s 1999 debut is unsustainable.
South Africa’s rand was the best performer versus the dollar yesterday among the 16 most-traded currencies tracked by Bloomberg as gold and other precious metals rallied as the dollar dropped.
“The market has got too far in terms of buying dollars, looking for higher rates,” said Andrew Wilkinson, senior market analyst at Interactive Brokers Group Inc. in Greenwich, Conn.
The dollar was at $1.4371 per euro at 5:03 a.m. in Tokyo, after losing 0.2 percent yesterday and appreciating to $1.4218 on Dec. 22, the strongest level since Sept. 4. The dollar was at 91.56 yen, after a 0.1 percent drop yesterday. The euro was little changed at 131.55 yen.
The yen was headed for a 5.6 percent drop against the dollar this month, the biggest since February.
Japanese consumer prices excluding fresh food fell 1.7 percent from a year earlier in November, according to the median estimate of 25 economists in a Bloomberg survey before the release of figures today.
Bank of Japan Governor Masaaki Shirakawa said in an interview with TV Tokyo this month that the central bank will “persistently” keep interest rates at “virtually zero” to fight deflation.
The U.S. currency has gained 4.4 percent versus the euro in December, paring its 2009 drop to 2.8 percent as signs that the U.S. economic recovery is gaining momentum prompt investors to take off bets against the currency.
Dollar Shorts
“Most of the dollar shorts that were vulnerable have been cleared out over the last four weeks, which has given a more balanced feel to markets,” Camilla Sutton, a Bank of Nova Scotia currency strategist in Toronto, wrote in a research note to clients yesterday. A short position is a bet an underlying security will decline.
Hedge funds and large speculators almost halved bets this month that the dollar will drop against its major rivals, according to data compiled by the Commodity Futures Trading Commission in Washington.
Wagers that the dollar will depreciate against eight currencies, including the euro, yen and pound, outnumbered those on its gain by 136,563 contracts as of Dec. 15, compared with about 250,000 at the end of November.
The franc traded at almost a nine-month high against the euro on speculation the Swiss National Bank will refrain from trying to limit its currency’s gains.
Swiss Franc
The Swiss currency fetched 1.4913 per euro after reaching 1.4850 four days ago, the strongest level since March 12. On that day, the central bank bought foreign currency to limit the franc’s appreciation and support Switzerland’s economy.
Goldman Sachs Group Inc. strategists said on Dec. 23 that they were “stopped out” of a bet that the franc would fall against the Swedish krona. Investors who followed Goldman Sachs’s recommendation initiated in July would have lost about 3.7 percent, the strategists wrote in an e-mail message.
Traders typically place stop losses at levels to protect themselves when a bet moves in the opposite direction.
The rand gained as much as 1.8 percent to 7.4732 versus the dollar, the strongest level in a week, as a rally in gold and platinum boosted earnings prospects for South Africa, the world’s biggest producer of precious metals.
Bullion futures increased 1 percent to $1,104.80 an ounce as the drop in the dollar encouraged investors to buy precious metals as an alternative investment. Platinum climbed 2.9 percent to $1,474 an ounce.
South Africa’s rand was the best performer versus the dollar yesterday among the 16 most-traded currencies tracked by Bloomberg as gold and other precious metals rallied as the dollar dropped.
“The market has got too far in terms of buying dollars, looking for higher rates,” said Andrew Wilkinson, senior market analyst at Interactive Brokers Group Inc. in Greenwich, Conn.
The dollar was at $1.4371 per euro at 5:03 a.m. in Tokyo, after losing 0.2 percent yesterday and appreciating to $1.4218 on Dec. 22, the strongest level since Sept. 4. The dollar was at 91.56 yen, after a 0.1 percent drop yesterday. The euro was little changed at 131.55 yen.
The yen was headed for a 5.6 percent drop against the dollar this month, the biggest since February.
Japanese consumer prices excluding fresh food fell 1.7 percent from a year earlier in November, according to the median estimate of 25 economists in a Bloomberg survey before the release of figures today.
Bank of Japan Governor Masaaki Shirakawa said in an interview with TV Tokyo this month that the central bank will “persistently” keep interest rates at “virtually zero” to fight deflation.
The U.S. currency has gained 4.4 percent versus the euro in December, paring its 2009 drop to 2.8 percent as signs that the U.S. economic recovery is gaining momentum prompt investors to take off bets against the currency.
Dollar Shorts
“Most of the dollar shorts that were vulnerable have been cleared out over the last four weeks, which has given a more balanced feel to markets,” Camilla Sutton, a Bank of Nova Scotia currency strategist in Toronto, wrote in a research note to clients yesterday. A short position is a bet an underlying security will decline.
Hedge funds and large speculators almost halved bets this month that the dollar will drop against its major rivals, according to data compiled by the Commodity Futures Trading Commission in Washington.
Wagers that the dollar will depreciate against eight currencies, including the euro, yen and pound, outnumbered those on its gain by 136,563 contracts as of Dec. 15, compared with about 250,000 at the end of November.
The franc traded at almost a nine-month high against the euro on speculation the Swiss National Bank will refrain from trying to limit its currency’s gains.
Swiss Franc
The Swiss currency fetched 1.4913 per euro after reaching 1.4850 four days ago, the strongest level since March 12. On that day, the central bank bought foreign currency to limit the franc’s appreciation and support Switzerland’s economy.
Goldman Sachs Group Inc. strategists said on Dec. 23 that they were “stopped out” of a bet that the franc would fall against the Swedish krona. Investors who followed Goldman Sachs’s recommendation initiated in July would have lost about 3.7 percent, the strategists wrote in an e-mail message.
Traders typically place stop losses at levels to protect themselves when a bet moves in the opposite direction.
The rand gained as much as 1.8 percent to 7.4732 versus the dollar, the strongest level in a week, as a rally in gold and platinum boosted earnings prospects for South Africa, the world’s biggest producer of precious metals.
Bullion futures increased 1 percent to $1,104.80 an ounce as the drop in the dollar encouraged investors to buy precious metals as an alternative investment. Platinum climbed 2.9 percent to $1,474 an ounce.
Tuesday, December 22, 2009
WORLD FOREX: Yen At 7-Week Low Vs Dlr On Higher Treasury Yield
The yen hit a fresh 7-week low against the dollar in Asia Tuesday, as rising long-term U.S. interest rates prompted hedge funds to buy the higher-yielding currency.
In early Asian trading, the dollar rose at one point to Y91.49, its highest level since Oct. 30. At 0450 GMT, the U.S. currency stood at Y91.36, compared to Y91.19 in New York late Monday, while the euro had climbed to Y130.58 from Y130.25.
Market focus is now on Bank of Japan Gov. Masaaki Shirakawa's speech at 0700 GMT for signs of further monetary easing steps, which could cause the yen to widen its losses, dealers said.
Shirakawa said Monday in an Japanese TV interview that the central bank is ready to act "promptly and boldly" to fight deflation if necessary, hinting at the possibility of taking additional easing measures.
The yield on the benchmark 10-year U.S. Treasury note, which moves inversely with prices, rose to a 4-month high of 3.702% in early Tokyo hours. That prompted U.S. hedge funds to adjust their portfolios by buying high-yielders like the dollar and euro, dealers said.
"Stop-loss (buying) orders were triggered above Y91.00 by U.S. hedge funds," said Hiroshi Maeba, a senior trader at Nomura Securities. "The impact of each trade was magnified amid extremely thin market conditions as many players are away for the Christmas holidays."
Dealers said the dollar may briefly rise to Y92.00 and the euro to Y131.00 if the BOJ chief suggests details of additional monetary measures, pushing Japanese government bond yields lower.
Still, the dollar may remain in a Y89.00-Y92.00 range in a week to come, while the euro may stay in a Y127.50-Y132.50 band, currency analysts said.
"Players want to close their accounts rather than build positions aggressively ahead of the year-end," meaning the exchange rates are likely to remain range-bound, said Daisuke Karakama, a senior market economist at Mizuho Corporate Bank.
Against the dollar, the euro remained flat, trading at $1.4292 compared to $1.4283. The Dollar Index, which measures the currency's value against other major currencies including the yen, stood at 78.036 compared to 78.059 Monday.
In early Asian trading, the dollar rose at one point to Y91.49, its highest level since Oct. 30. At 0450 GMT, the U.S. currency stood at Y91.36, compared to Y91.19 in New York late Monday, while the euro had climbed to Y130.58 from Y130.25.
Market focus is now on Bank of Japan Gov. Masaaki Shirakawa's speech at 0700 GMT for signs of further monetary easing steps, which could cause the yen to widen its losses, dealers said.
Shirakawa said Monday in an Japanese TV interview that the central bank is ready to act "promptly and boldly" to fight deflation if necessary, hinting at the possibility of taking additional easing measures.
The yield on the benchmark 10-year U.S. Treasury note, which moves inversely with prices, rose to a 4-month high of 3.702% in early Tokyo hours. That prompted U.S. hedge funds to adjust their portfolios by buying high-yielders like the dollar and euro, dealers said.
"Stop-loss (buying) orders were triggered above Y91.00 by U.S. hedge funds," said Hiroshi Maeba, a senior trader at Nomura Securities. "The impact of each trade was magnified amid extremely thin market conditions as many players are away for the Christmas holidays."
Dealers said the dollar may briefly rise to Y92.00 and the euro to Y131.00 if the BOJ chief suggests details of additional monetary measures, pushing Japanese government bond yields lower.
Still, the dollar may remain in a Y89.00-Y92.00 range in a week to come, while the euro may stay in a Y127.50-Y132.50 band, currency analysts said.
"Players want to close their accounts rather than build positions aggressively ahead of the year-end," meaning the exchange rates are likely to remain range-bound, said Daisuke Karakama, a senior market economist at Mizuho Corporate Bank.
Against the dollar, the euro remained flat, trading at $1.4292 compared to $1.4283. The Dollar Index, which measures the currency's value against other major currencies including the yen, stood at 78.036 compared to 78.059 Monday.
Saturday, December 19, 2009
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Canadian Currency Touches Three-Week Low as Global Stocks Drop
Canada’s dollar fell for a second week as global stocks slid and its U.S. counterpart gained against most major currencies on signs the American economic recovery is gaining traction.
The Canadian dollar touched the weakest level since Nov. 27 after the nation’s central bank chief reiterated a pledge to keep the benchmark interest rate at a record low through June. The loonie, as the currency is nicknamed, was still the third- best performer among the 16 most-traded currencies tracked by Bloomberg. Retail sales in Canada rose in October for the third straight month, the government is forecast to report next week.
“It’s clearly a dollar play right now,’’ said Fabian Eliasson, head of U.S. currency sales at Mizuho Corporate Bank Ltd. in New York, referring to the greenback. “I look to the Canadian to strengthen against the other majors continuously, mainly based on recovery, continued high commodity prices and a fairly strong U.S. dollar.”
The Canadian currency depreciated 0.6 percent to C$1.0664 per U.S. dollar yesterday in Toronto, from C$1.0601 on Dec. 11, when it posted a 0.2 percent drop for the previous five days. It weakened to C$1.0747 on Dec. 17. One Canadian dollar purchases 93.77 U.S. cents.
Investors should sell the Australian dollar versus the Canadian because “the liquidity party is over,” Morgan Stanley analysts including Emma Lawson in London and Yilin Nie in New York wrote in a note to clients yesterday.
‘Most Overvalued’
“We view the Australian dollar as the most overvalued currency among the Group of 10, while the Canadian dollar has lagged,” they wrote. “The Bank of Canada is likely to hike more than the market currently expects,” while the Reserve Bank of Australia is signaling a slowdown in rate increases.
The so-called Aussie was the worst performer last week among the most-traded currencies. The Mexican peso was the top performer, and the greenback was No. 2.
The Canadian central bank’s conditional pledge to keep its overnight lending rate at 0.25 percent, the lowest ever, until June remains in force, Governor Mark Carney said this week in Toronto. Morgan Stanley’s Nie wrote in a note on Dec. 10 that the bank instead may begin raising the rate in April as an economic recovery in the U.S. gathers speed and inflation picks up faster than it forecast.
The U.S. Federal Open Market Committee said Dec. 16 it will keep its benchmark rate at a range of zero to 0.25 percent for an “extended period,” even as it also said economic conditions improved. The Federal Reserve said the previous day that factories produced more goods last month than forecast.
‘Good for Canada’
Canada and the U.S. share the world’s largest trading relationship, estimated at $1.5 billion a day in goods, according to the U.S. Commercial Service Web site. Labor Department data released Dec. 4 showed the U.S. unemployment rate unexpectedly fell to 10 percent in November from a 26-year high of 10.2 percent the previous month.
“What’s good for the U.S. is good for the Canadian dollar,” said Eliasson. “If we see the recovery is gaining strength and unemployment is coming down in the U.S. and people are looking at 2010 as a continued recovery, that’s going to be good for the Canadian dollar as well because they’re so dependent on exports to the U.S.”
While that will help the Canadian currency gain against most major counterparts, he said, the loonie will face “a tough battle” to appreciate against the U.S. dollar.
Canada’s currency will strengthen to C$1.03 by the end of March, according to the median forecast of 36 analysts surveyed by Bloomberg News. It rose 14 percent this year.
Bonds Fall
Canada’s government bonds fell this week. The yield on the benchmark 10-year note rose two basis points, or 0.02 percentage point, to 3.41 percent. The price of the 3.75 percent security due in June 2019 dropped 18 cents to C$102.76. The two-year note’s yield increased seven basis points to 1.3 percent.
The MSCI World Index, a gauge of stocks in 23 developed nations, fell 1 percent this week, its second straight five-day loss. The Standard & Poor’s 500 Index dropped 0.4 percent.
Retail sales in Canada rose 0.8 percent in October after climbing 1 percent in both September and August, the government’s statistics agency will report on Dec. 21, according to the median forecast of 19 economists surveyed by Bloomberg.
The Canadian dollar touched the weakest level since Nov. 27 after the nation’s central bank chief reiterated a pledge to keep the benchmark interest rate at a record low through June. The loonie, as the currency is nicknamed, was still the third- best performer among the 16 most-traded currencies tracked by Bloomberg. Retail sales in Canada rose in October for the third straight month, the government is forecast to report next week.
“It’s clearly a dollar play right now,’’ said Fabian Eliasson, head of U.S. currency sales at Mizuho Corporate Bank Ltd. in New York, referring to the greenback. “I look to the Canadian to strengthen against the other majors continuously, mainly based on recovery, continued high commodity prices and a fairly strong U.S. dollar.”
The Canadian currency depreciated 0.6 percent to C$1.0664 per U.S. dollar yesterday in Toronto, from C$1.0601 on Dec. 11, when it posted a 0.2 percent drop for the previous five days. It weakened to C$1.0747 on Dec. 17. One Canadian dollar purchases 93.77 U.S. cents.
Investors should sell the Australian dollar versus the Canadian because “the liquidity party is over,” Morgan Stanley analysts including Emma Lawson in London and Yilin Nie in New York wrote in a note to clients yesterday.
‘Most Overvalued’
“We view the Australian dollar as the most overvalued currency among the Group of 10, while the Canadian dollar has lagged,” they wrote. “The Bank of Canada is likely to hike more than the market currently expects,” while the Reserve Bank of Australia is signaling a slowdown in rate increases.
The so-called Aussie was the worst performer last week among the most-traded currencies. The Mexican peso was the top performer, and the greenback was No. 2.
The Canadian central bank’s conditional pledge to keep its overnight lending rate at 0.25 percent, the lowest ever, until June remains in force, Governor Mark Carney said this week in Toronto. Morgan Stanley’s Nie wrote in a note on Dec. 10 that the bank instead may begin raising the rate in April as an economic recovery in the U.S. gathers speed and inflation picks up faster than it forecast.
The U.S. Federal Open Market Committee said Dec. 16 it will keep its benchmark rate at a range of zero to 0.25 percent for an “extended period,” even as it also said economic conditions improved. The Federal Reserve said the previous day that factories produced more goods last month than forecast.
‘Good for Canada’
Canada and the U.S. share the world’s largest trading relationship, estimated at $1.5 billion a day in goods, according to the U.S. Commercial Service Web site. Labor Department data released Dec. 4 showed the U.S. unemployment rate unexpectedly fell to 10 percent in November from a 26-year high of 10.2 percent the previous month.
“What’s good for the U.S. is good for the Canadian dollar,” said Eliasson. “If we see the recovery is gaining strength and unemployment is coming down in the U.S. and people are looking at 2010 as a continued recovery, that’s going to be good for the Canadian dollar as well because they’re so dependent on exports to the U.S.”
While that will help the Canadian currency gain against most major counterparts, he said, the loonie will face “a tough battle” to appreciate against the U.S. dollar.
Canada’s currency will strengthen to C$1.03 by the end of March, according to the median forecast of 36 analysts surveyed by Bloomberg News. It rose 14 percent this year.
Bonds Fall
Canada’s government bonds fell this week. The yield on the benchmark 10-year note rose two basis points, or 0.02 percentage point, to 3.41 percent. The price of the 3.75 percent security due in June 2019 dropped 18 cents to C$102.76. The two-year note’s yield increased seven basis points to 1.3 percent.
The MSCI World Index, a gauge of stocks in 23 developed nations, fell 1 percent this week, its second straight five-day loss. The Standard & Poor’s 500 Index dropped 0.4 percent.
Retail sales in Canada rose 0.8 percent in October after climbing 1 percent in both September and August, the government’s statistics agency will report on Dec. 21, according to the median forecast of 19 economists surveyed by Bloomberg.
Thursday, December 17, 2009
Angola, S. Africa: Sub-Saharan African Bond, Currency Preview
The following events and economic reports may influence trading in sub-Saharan African bonds and currencies today. Bond yields and exchange rates are from the previous session.
Angola: The central bank will hold a foreign currency auction, with the results due to be announced on Dec. 21.
The kwanza weakened 0.9 percent to 88.7565 to the dollar at 4:49 p.m. in Luanda.
Burundi: The government will announce the amount of Treasury bills to be sold at the next auction.
The Burundi franc was unchanged against the dollar at 1230.500 by 5:50 p.m. in Bujumbura.
Ghana: The government will hold a Treasury bill auction. The country’s statistics agency will also release producer price inflation figures.
The cedi dropped 0.1 percent to 1.42675 per dollar at 4:58 p.m. in Accra. The interest rate on the 91-day Treasury bill was 24.94 percent on Nov. 26.
Mauritius: The government will hold a Treasury bill auction.
The Mauritian rupee gained 0.7 percent to 28.7970 per dollar at 7:59 p.m. in Port Louis. The interest rate on 364-day bills was 4.6 percent on Dec. 11.
South Africa: The South African Reserve Bank will sell 5.75 billion rand ($764 million) worth of 91-day, 182-day, 273- day and 364-day treasury bills tomorrow at 10 a.m. local time. Last week 90-day bills sold at an average yield of 7.14 percent.
The rand traded at 7.5398 to the dollar as of 6:07 p.m. Johannesburg time, 1.4 percent lower than the close the day before.
Zambia: The government will hold a bond auction.
The Zambian kwacha gained 1.1 percent to 4,690 against the dollar at 5:58 p.m. in Lusaka. Fifteen-year bonds sold at an average yield of 18.91 percent on Nov. 20.
Angola: The central bank will hold a foreign currency auction, with the results due to be announced on Dec. 21.
The kwanza weakened 0.9 percent to 88.7565 to the dollar at 4:49 p.m. in Luanda.
Burundi: The government will announce the amount of Treasury bills to be sold at the next auction.
The Burundi franc was unchanged against the dollar at 1230.500 by 5:50 p.m. in Bujumbura.
Ghana: The government will hold a Treasury bill auction. The country’s statistics agency will also release producer price inflation figures.
The cedi dropped 0.1 percent to 1.42675 per dollar at 4:58 p.m. in Accra. The interest rate on the 91-day Treasury bill was 24.94 percent on Nov. 26.
Mauritius: The government will hold a Treasury bill auction.
The Mauritian rupee gained 0.7 percent to 28.7970 per dollar at 7:59 p.m. in Port Louis. The interest rate on 364-day bills was 4.6 percent on Dec. 11.
South Africa: The South African Reserve Bank will sell 5.75 billion rand ($764 million) worth of 91-day, 182-day, 273- day and 364-day treasury bills tomorrow at 10 a.m. local time. Last week 90-day bills sold at an average yield of 7.14 percent.
The rand traded at 7.5398 to the dollar as of 6:07 p.m. Johannesburg time, 1.4 percent lower than the close the day before.
Zambia: The government will hold a bond auction.
The Zambian kwacha gained 1.1 percent to 4,690 against the dollar at 5:58 p.m. in Lusaka. Fifteen-year bonds sold at an average yield of 18.91 percent on Nov. 20.
Wednesday, December 16, 2009
Australian Dollar Drops to Lowest in 10 Weeks on Risk Aversion
The Australian dollar fell to its lowest level in 10 weeks as traders sold higher-yielding assets before year-end. New Zealand’s dollar slid for a third day.
Australia’s dollar also declined as investors pared bets that the central bank will raise interest rates, damping demand for the nation’s assets. Demand for riskier securities slumped after Greece’s credit rating was cut by Standard & Poor’s yesterday and the company said it would take further action unless the government tackles the European Union’s largest budget deficit.
“No one is really prepared to take any new risk positions prior to the Christmas period, they’re really closing their books and taking profit,” said Timothy Connors, head of foreign exchange at Custom House Global Foreign Exchange in Sydney. The Australian dollar is “potentially a buying opportunity” under 90 cents, he said.
Australia’s currency fell 1.2 percent to 88.98 U.S. cents as of 4:09 p.m. in Sydney from 90.07 cents in New York yesterday. It touched 88.75, the least since Oct. 7. The currency declined 0.8 percent to 80.21 yen.
New Zealand’s dollar slid 1.1 percent to 71.24 U.S. cents from 72.06 cents yesterday. It bought 64.21 yen from 64.68 yen.
Both currencies also declined as the euro fell below $1.45, triggering so called stop-loss orders that accelerated declines, said Tim Kelleher, vice-president of institutional banking and markets at Commonwealth Bank of Australia in Auckland.
“There were a whole lot of stops below $1.45 in the euro and more stops were triggered below $1.4450 and that’s taken every other currency with it,” Kelleher said. “The market is structurally very short of U.S. dollars.”
Consumer Confidence
Benchmark interest rates are 3.75 percent in Australia and 2.5 percent in New Zealand, compared with 0.1 percent in Japan and as low as zero in the U.S., attracting investors to the South Pacific nations’ higher-yielding assets. The risk in such trades is that currency market moves will erase profits.
New Zealand’s currency also weakened as a survey showed consumer confidence fell in the fourth quarter. The household sentiment index declined to 116.9 from a four-year high of 120.3 in the third quarter, according to the survey by Westpac Banking Corp. and McDermott Miller Ltd. A reading above 100 indicates optimists outnumber pessimists.
Swaps traders have reduced to 37 percent the possibility of a rate increase from the Reserve Bank of Australia in February, from 84 percent late last week, according to a Credit Suisse AG index.
Declines in Australia’s dollar may be limited on speculation its 3 percent drop versus the U.S. currency over the past five days is overdone. The so-called Aussie has been the worst-performing currency against the greenback among its 16 most-traded counterparts over that period.
Buying Opportunity
“The market has really scaled back expectations of rate hikes,” in Australia, Mitul Kotecha, Hong Kong-based head of global foreign-exchange strategy at Calyon, the investment banking unit of France’s Credit Agricole SA, said in a Bloomberg Television interview. “This is a temporary weakness we’re seeing in the Aussie dollar and we’re still looking for rates to go higher.” Kotecha recommended buying the currency around the 90-cent level.
Australian government bonds fell. The yield on 10-year notes added three basis points, or 0.03 percentage point, to 5.47 percent, according to data compiled by Bloomberg. The price of the 5.25 percent security due March 2019 slipped 0.21, or A$2.10 per A$1,000 face amount, to 98.43.
The yield on two-year Australian government securities offered a premium of 349 basis points over similar-dated U.S. Treasuries, near the lowest level since Oct. 5.
New Zealand’s two-year swap rate, a fixed payment made to receive floating rates, was unchanged at 4.53 percent.
Australia’s dollar also declined as investors pared bets that the central bank will raise interest rates, damping demand for the nation’s assets. Demand for riskier securities slumped after Greece’s credit rating was cut by Standard & Poor’s yesterday and the company said it would take further action unless the government tackles the European Union’s largest budget deficit.
“No one is really prepared to take any new risk positions prior to the Christmas period, they’re really closing their books and taking profit,” said Timothy Connors, head of foreign exchange at Custom House Global Foreign Exchange in Sydney. The Australian dollar is “potentially a buying opportunity” under 90 cents, he said.
Australia’s currency fell 1.2 percent to 88.98 U.S. cents as of 4:09 p.m. in Sydney from 90.07 cents in New York yesterday. It touched 88.75, the least since Oct. 7. The currency declined 0.8 percent to 80.21 yen.
New Zealand’s dollar slid 1.1 percent to 71.24 U.S. cents from 72.06 cents yesterday. It bought 64.21 yen from 64.68 yen.
Both currencies also declined as the euro fell below $1.45, triggering so called stop-loss orders that accelerated declines, said Tim Kelleher, vice-president of institutional banking and markets at Commonwealth Bank of Australia in Auckland.
“There were a whole lot of stops below $1.45 in the euro and more stops were triggered below $1.4450 and that’s taken every other currency with it,” Kelleher said. “The market is structurally very short of U.S. dollars.”
Consumer Confidence
Benchmark interest rates are 3.75 percent in Australia and 2.5 percent in New Zealand, compared with 0.1 percent in Japan and as low as zero in the U.S., attracting investors to the South Pacific nations’ higher-yielding assets. The risk in such trades is that currency market moves will erase profits.
New Zealand’s currency also weakened as a survey showed consumer confidence fell in the fourth quarter. The household sentiment index declined to 116.9 from a four-year high of 120.3 in the third quarter, according to the survey by Westpac Banking Corp. and McDermott Miller Ltd. A reading above 100 indicates optimists outnumber pessimists.
Swaps traders have reduced to 37 percent the possibility of a rate increase from the Reserve Bank of Australia in February, from 84 percent late last week, according to a Credit Suisse AG index.
Declines in Australia’s dollar may be limited on speculation its 3 percent drop versus the U.S. currency over the past five days is overdone. The so-called Aussie has been the worst-performing currency against the greenback among its 16 most-traded counterparts over that period.
Buying Opportunity
“The market has really scaled back expectations of rate hikes,” in Australia, Mitul Kotecha, Hong Kong-based head of global foreign-exchange strategy at Calyon, the investment banking unit of France’s Credit Agricole SA, said in a Bloomberg Television interview. “This is a temporary weakness we’re seeing in the Aussie dollar and we’re still looking for rates to go higher.” Kotecha recommended buying the currency around the 90-cent level.
Australian government bonds fell. The yield on 10-year notes added three basis points, or 0.03 percentage point, to 5.47 percent, according to data compiled by Bloomberg. The price of the 5.25 percent security due March 2019 slipped 0.21, or A$2.10 per A$1,000 face amount, to 98.43.
The yield on two-year Australian government securities offered a premium of 349 basis points over similar-dated U.S. Treasuries, near the lowest level since Oct. 5.
New Zealand’s two-year swap rate, a fixed payment made to receive floating rates, was unchanged at 4.53 percent.
Monday, December 14, 2009
Euro May Extend Gain From Two-Month Low on Dubai Bailout Pledge
The euro may rise for a second day against the dollar after Abu Dhabi pledged to bail out Dubai World, easing concern Europe’s biggest banks will be forced to write down loans to the state-owned holding company.
It’s “a relief rally,” said George Davis, chief technical analyst for fixed-income and currency strategy at RBC Capital Markets in Toronto. “Dubai’s problems been alleviated for the next few months, and that’s put the market on firmer footing.”
The yen gained yesterday against most of the major currencies tracked by Bloomberg after Japan’s Tankan index of manufacturer confidence exceeded the forecasts of economists. Mexico’s peso briefly pared its advance against the dollar after Standard & Poor’s cut the nation’s credit ratings.
The euro traded at $1.4660 at 7:01 a.m. in Tokyo, after gaining 0.3 percent yesterday. It fell on Dec. 11 to $1.4586, the lowest level since Oct. 5. The euro was at 129.95 yen, following a 0.3 percent decrease yesterday. The dollar fetched 88.63 yen, after sliding 0.5 percent.
Mexico’s peso appreciated 1.1 percent to 12.7451 versus the dollar on speculation the Dubai bailout will spur demand for higher-yielding assets.
The currency pared its gain for about 10 minutes yesterday after S&P lowered Mexico’s foreign-currency debt rating to BBB, the second-lowest investment grade, from BBB+. The outlook on the rating is stable. The country received its investment-grade rating from S&P in February 2002.
Stock Gains
The Standard & Poor’s 500 Index rose for a fourth day yesterday, increasing 0.7 percent after the Dubai government said Abu Dhabi provided $10 billion to help Dubai World meet its obligations.
The yen advanced yesterday versus the dollar for the first time in three days as the Tankan index of sentiment among big makers of products including cars and electronics climbed 9 points to minus 24 in December, the Bank of Japan said in Tokyo. The median forecast of 19 economists in a Bloomberg survey was for a reading of minus 27. A negative number means pessimists outnumber optimists.
Japan’s currency is poised to replace the dollar as the top funding currency for investments in cities from Sydney to Sao Paulo after borrowing from Japan became almost as cheap as U.S. loans for the first time in four months. Rates on 90-day yen loans between banks have fallen the most in 13 years as record deflation prompted the Bank of Japan to start a $113 billion lending program last week.
Outlook for Euro
The difference in the number of wagers by hedge funds and other large speculators on a decline in the euro compared with those on a gain, so-called net shorts, was 511 on Dec. 8, compared with net longs of 22,151 a week earlier. That’s the first time since April 28 that short bets outnumbered longs.
Spain saw the outlook on its AA+ debt rating cut to “negative” from “stable” by S&P last week. Greece’s credit was reduced one step to BBB+ by Fitch Ratings. Portugal’s outlook was also revised to “negative” from “stable” by S&P.
Greek Prime Minister George Papandreou yesterday pledged “radical” action to tackle the country’s budget deficit as officials struggle to convince investors they can get a grip on public finances.
“Dollar strengthening may extend somewhat further against the euro as concerns over fiscal solvency in some euro-zone member countries dominate market focus,” Michael Hart, a currency strategist at Citigroup Inc. in New York, wrote in a research note.
European Output
Industrial production in the nations using the euro retreated 0.6 percent in October following a revised 0.2 percent increase in the previous month, the European Union’s statistics office said yesterday in Luxembourg. Economists in a Bloomberg survey forecast a reading of negative 0.7 percent.
The ZEW Center for European Economic Research in Mannheim will say today its index of German investor and analyst expectations, which aims to predict developments six months ahead, fell to 50.0 from 51.1 in November, according to the median forecast in a separate survey.
“The euro is likely to remain captive to downside risk, depending on the outcome of this week’s economic data,” said Toshiya Yamauchi, manager of foreign-exchange margin trading at Ueda Harlow Ltd. in Tokyo.
The dollar has risen against the euro since a Dec. 4 report showed that U.S. employers cut the fewest jobs in November since the recession began and the unemployment rate unexpectedly fell to 10 percent.
‘Good Data’
“Why is good data suddenly supporting the dollar?” a team of analysts led by Ulrich Leuchtmann at Commerzbank AG in Frankfurt wrote yesterday. “This development makes sense if one relies on good U.S. data eventually leading to an end of the Fed’s zero rate policy. Previously rate rises had moved into the very distant future so that the effect had been ignored. This is obviously changing now.”
Futures on the Chicago Board of Trade indicated a 47 percent chance the Federal Reserve will raise the target lending rate by at least a quarter-percentage point by its June meeting. The odds were 44 percent a month ago. The central bank is next scheduled to decide on borrowing costs at its two-day meeting starting today.
It’s “a relief rally,” said George Davis, chief technical analyst for fixed-income and currency strategy at RBC Capital Markets in Toronto. “Dubai’s problems been alleviated for the next few months, and that’s put the market on firmer footing.”
The yen gained yesterday against most of the major currencies tracked by Bloomberg after Japan’s Tankan index of manufacturer confidence exceeded the forecasts of economists. Mexico’s peso briefly pared its advance against the dollar after Standard & Poor’s cut the nation’s credit ratings.
The euro traded at $1.4660 at 7:01 a.m. in Tokyo, after gaining 0.3 percent yesterday. It fell on Dec. 11 to $1.4586, the lowest level since Oct. 5. The euro was at 129.95 yen, following a 0.3 percent decrease yesterday. The dollar fetched 88.63 yen, after sliding 0.5 percent.
Mexico’s peso appreciated 1.1 percent to 12.7451 versus the dollar on speculation the Dubai bailout will spur demand for higher-yielding assets.
The currency pared its gain for about 10 minutes yesterday after S&P lowered Mexico’s foreign-currency debt rating to BBB, the second-lowest investment grade, from BBB+. The outlook on the rating is stable. The country received its investment-grade rating from S&P in February 2002.
Stock Gains
The Standard & Poor’s 500 Index rose for a fourth day yesterday, increasing 0.7 percent after the Dubai government said Abu Dhabi provided $10 billion to help Dubai World meet its obligations.
The yen advanced yesterday versus the dollar for the first time in three days as the Tankan index of sentiment among big makers of products including cars and electronics climbed 9 points to minus 24 in December, the Bank of Japan said in Tokyo. The median forecast of 19 economists in a Bloomberg survey was for a reading of minus 27. A negative number means pessimists outnumber optimists.
Japan’s currency is poised to replace the dollar as the top funding currency for investments in cities from Sydney to Sao Paulo after borrowing from Japan became almost as cheap as U.S. loans for the first time in four months. Rates on 90-day yen loans between banks have fallen the most in 13 years as record deflation prompted the Bank of Japan to start a $113 billion lending program last week.
Outlook for Euro
The difference in the number of wagers by hedge funds and other large speculators on a decline in the euro compared with those on a gain, so-called net shorts, was 511 on Dec. 8, compared with net longs of 22,151 a week earlier. That’s the first time since April 28 that short bets outnumbered longs.
Spain saw the outlook on its AA+ debt rating cut to “negative” from “stable” by S&P last week. Greece’s credit was reduced one step to BBB+ by Fitch Ratings. Portugal’s outlook was also revised to “negative” from “stable” by S&P.
Greek Prime Minister George Papandreou yesterday pledged “radical” action to tackle the country’s budget deficit as officials struggle to convince investors they can get a grip on public finances.
“Dollar strengthening may extend somewhat further against the euro as concerns over fiscal solvency in some euro-zone member countries dominate market focus,” Michael Hart, a currency strategist at Citigroup Inc. in New York, wrote in a research note.
European Output
Industrial production in the nations using the euro retreated 0.6 percent in October following a revised 0.2 percent increase in the previous month, the European Union’s statistics office said yesterday in Luxembourg. Economists in a Bloomberg survey forecast a reading of negative 0.7 percent.
The ZEW Center for European Economic Research in Mannheim will say today its index of German investor and analyst expectations, which aims to predict developments six months ahead, fell to 50.0 from 51.1 in November, according to the median forecast in a separate survey.
“The euro is likely to remain captive to downside risk, depending on the outcome of this week’s economic data,” said Toshiya Yamauchi, manager of foreign-exchange margin trading at Ueda Harlow Ltd. in Tokyo.
The dollar has risen against the euro since a Dec. 4 report showed that U.S. employers cut the fewest jobs in November since the recession began and the unemployment rate unexpectedly fell to 10 percent.
‘Good Data’
“Why is good data suddenly supporting the dollar?” a team of analysts led by Ulrich Leuchtmann at Commerzbank AG in Frankfurt wrote yesterday. “This development makes sense if one relies on good U.S. data eventually leading to an end of the Fed’s zero rate policy. Previously rate rises had moved into the very distant future so that the effect had been ignored. This is obviously changing now.”
Futures on the Chicago Board of Trade indicated a 47 percent chance the Federal Reserve will raise the target lending rate by at least a quarter-percentage point by its June meeting. The odds were 44 percent a month ago. The central bank is next scheduled to decide on borrowing costs at its two-day meeting starting today.
Currency Market Shifting Focus to Interest Rates on Improving US Fed Outlook
The currency markets seem to be in transition, with a move away from risk-driven trading in favor of returning to a focus on traditional fundamental catalysts as traders boost their bets on rate hikes from the US Federal Reserve.
The Euro corrected a bit higher after Friday’s sharp selloff, adding 0.3% against USD. The British Pound traded lower, giving up 0.2% against the greenback. The US Dollar dropped sharply after Abu Dhabi said it would offer a $10 billion bailout for Dubai after it came close to default over recent weeks but quickly recovered, trading little changed ahead of the opening bell in Europe. We remain short EURUSD at 1.4881 and short GBPUSD at 1.6648.
On balance, the transition in underlying trading dynamics apparently underway in currency markets is likely to be of greatest interest. Indeed, trader’s response to last Friday’s better-than-expected US Retail Sales report was quite telling. The inverse relationship between the US Dollar and equities that had firmly held since last year’s credit crunch dissipated, with both stock prices and the greenback pushing higher. Further still, most major currencies’ (excluding the British Pound) relative performance against USD fell squarely in line with the priced-in yield outlook for the next 12 months. Those currencies looking ahead to significant monetary tightening suffered relatively smaller losses against the greenback, while those with little or no rate hikes on the horizon sank sharply lower.
The Euro corrected a bit higher after Friday’s sharp selloff, adding 0.3% against USD. The British Pound traded lower, giving up 0.2% against the greenback. The US Dollar dropped sharply after Abu Dhabi said it would offer a $10 billion bailout for Dubai after it came close to default over recent weeks but quickly recovered, trading little changed ahead of the opening bell in Europe. We remain short EURUSD at 1.4881 and short GBPUSD at 1.6648.
On balance, the transition in underlying trading dynamics apparently underway in currency markets is likely to be of greatest interest. Indeed, trader’s response to last Friday’s better-than-expected US Retail Sales report was quite telling. The inverse relationship between the US Dollar and equities that had firmly held since last year’s credit crunch dissipated, with both stock prices and the greenback pushing higher. Further still, most major currencies’ (excluding the British Pound) relative performance against USD fell squarely in line with the priced-in yield outlook for the next 12 months. Those currencies looking ahead to significant monetary tightening suffered relatively smaller losses against the greenback, while those with little or no rate hikes on the horizon sank sharply lower.
Wednesday, December 9, 2009
Dollar Snaps Winning Streak As Risk Comes Back
The dollar ended its three-day winning streak Wednesday, as stocks rose and investors moved back into assets with greater exposure to risk.
The move came even as concerns lingered over sovereign debtloads after Standard & Poor's Corp. lowered its ratings outlook on Spain to negative, saying the country will probably see "significantly lower" gross domestic product growth and "persistently high fiscal deficits relative to peers."
In contrast to the pattern seen earlier this week, the dollar failed to garner a safe-haven bid, as investors sought alternatives to both the euro and dollar, with the yen deemed the safest currency bet.
"The fact that we didn't get any more negative follow-through from the Spain news suggests that we're back to this risk trading," with the euro gaining as stocks rise, said Jacob Oubina, currency strategist at Forex.com in Bedminster, N.J.
On Wednesday afternoon the euro was at $1.4725 from $1.4698 late Tuesday, according to EBS via CQG. The dollar was at Y87.80 from Y88.36, while the euro was at Y129.30 from Y129.87. The pound was at $1.6260 from $1.6276. The dollar was at CHF1.0266 from CHF1.0273.
The Dollar Index, which tracks the dollar's value against a trade-weighted basket of six currencies, was at 76.043 from 76.236.
Higher-yielding currencies including Canada and Australia rallied on the day, underscoring the fact the popular trade centered on moving into riskier assets and away from the dollar remains very much a market force. That strategy had been thrown into question by the November U.S. employment report, which fueled expectations that the Federal Reserve might raise interest rates faster than anticipated.
"This idea that the dollar is getting ready to move in line with more traditional growth and interest rate fundamentals, and away from this so-called risk trade may not be happening yet," said Robert Lynch, currency strategist at HSBC in New York. "The risk trade is still an important influence over these dollar movements."
The yen was the biggest beneficiary of investors' concerns over sovereign credit, and even as sentiment turned in favor of higher-yielding currencies in New York trading, the Japanese currency held onto its gains. Japan has its own fiscal issues, but these shortcomings are widely known and have long been priced into the currency, whereas worries about the long-term fiscal position of the U.S. have more recently surfaced. Therefore, the yen proved more attractive as a safe haven, said analysts.
The pound fell sharply before retracing much of its loss by late afternoon, in the aftermath of the U.K. Chancellor of the Exchequer Alistair Darling's Pre-Budget Report to Parliament as investors reacted in disappointment to his presentation. Darling's predictions that the U.K. economy would grow 1% to 1.5% in 2010 were seen as overly optimistic, analysts said.
The euro had been under pressure during much of the day after S&P switched Spain's outlook.
"The market doesn't like it at all," Sebastien Galy, currency strategist at BNP Paribas in New York, said of the concerns over sovereign debt. "Until we see some cleanups in balance sheets, the world is quiet rightfully concerned."
Still, the common currency managed to garner support from rising U.S. stocks late in the day.
During Wednesday's session, currencies took unusually steep swings up and down. The pound traded between an intraday high at $1.6375 and a low at $1.6170.
"[Darling's] projections for GDP were seen as somewhat overly optimistic, so his forecast for deficit reductions become a little bit suspect," said Omer Esiner, senior market analyst at Travelex Global Business Payments.
"If we see actual growth in the U.K. underperform those forecasts, then it suggests that the budget deficit and the dire state of public finances will continue to be an issue," he said.
Separately, analysts at JP Morgan said the improving growth backdrop and fading of downside risks in Switzerland has encouraged the Swiss National Bank to emphasize that it doesn't view its current monetary stance as appropriate indefinitely, and could signal changes in its stance at its policy meeting Thursday.
"We think the SNB will use tomorrow's December policy meeting to announce that it is starting to remove some of its unconventional policy measures," JP Morgan said.
Meanwhile, New Zealand's central bank Thursday kept the Official Cash Rate at a record low 2.50% but said it may remove monetary stimulus around mid-2010. The New Zealand dollar gained more than 1.5% against the U.S. dollar by late afternoon.
The move came even as concerns lingered over sovereign debtloads after Standard & Poor's Corp. lowered its ratings outlook on Spain to negative, saying the country will probably see "significantly lower" gross domestic product growth and "persistently high fiscal deficits relative to peers."
In contrast to the pattern seen earlier this week, the dollar failed to garner a safe-haven bid, as investors sought alternatives to both the euro and dollar, with the yen deemed the safest currency bet.
"The fact that we didn't get any more negative follow-through from the Spain news suggests that we're back to this risk trading," with the euro gaining as stocks rise, said Jacob Oubina, currency strategist at Forex.com in Bedminster, N.J.
On Wednesday afternoon the euro was at $1.4725 from $1.4698 late Tuesday, according to EBS via CQG. The dollar was at Y87.80 from Y88.36, while the euro was at Y129.30 from Y129.87. The pound was at $1.6260 from $1.6276. The dollar was at CHF1.0266 from CHF1.0273.
The Dollar Index, which tracks the dollar's value against a trade-weighted basket of six currencies, was at 76.043 from 76.236.
Higher-yielding currencies including Canada and Australia rallied on the day, underscoring the fact the popular trade centered on moving into riskier assets and away from the dollar remains very much a market force. That strategy had been thrown into question by the November U.S. employment report, which fueled expectations that the Federal Reserve might raise interest rates faster than anticipated.
"This idea that the dollar is getting ready to move in line with more traditional growth and interest rate fundamentals, and away from this so-called risk trade may not be happening yet," said Robert Lynch, currency strategist at HSBC in New York. "The risk trade is still an important influence over these dollar movements."
The yen was the biggest beneficiary of investors' concerns over sovereign credit, and even as sentiment turned in favor of higher-yielding currencies in New York trading, the Japanese currency held onto its gains. Japan has its own fiscal issues, but these shortcomings are widely known and have long been priced into the currency, whereas worries about the long-term fiscal position of the U.S. have more recently surfaced. Therefore, the yen proved more attractive as a safe haven, said analysts.
The pound fell sharply before retracing much of its loss by late afternoon, in the aftermath of the U.K. Chancellor of the Exchequer Alistair Darling's Pre-Budget Report to Parliament as investors reacted in disappointment to his presentation. Darling's predictions that the U.K. economy would grow 1% to 1.5% in 2010 were seen as overly optimistic, analysts said.
The euro had been under pressure during much of the day after S&P switched Spain's outlook.
"The market doesn't like it at all," Sebastien Galy, currency strategist at BNP Paribas in New York, said of the concerns over sovereign debt. "Until we see some cleanups in balance sheets, the world is quiet rightfully concerned."
Still, the common currency managed to garner support from rising U.S. stocks late in the day.
During Wednesday's session, currencies took unusually steep swings up and down. The pound traded between an intraday high at $1.6375 and a low at $1.6170.
"[Darling's] projections for GDP were seen as somewhat overly optimistic, so his forecast for deficit reductions become a little bit suspect," said Omer Esiner, senior market analyst at Travelex Global Business Payments.
"If we see actual growth in the U.K. underperform those forecasts, then it suggests that the budget deficit and the dire state of public finances will continue to be an issue," he said.
Separately, analysts at JP Morgan said the improving growth backdrop and fading of downside risks in Switzerland has encouraged the Swiss National Bank to emphasize that it doesn't view its current monetary stance as appropriate indefinitely, and could signal changes in its stance at its policy meeting Thursday.
"We think the SNB will use tomorrow's December policy meeting to announce that it is starting to remove some of its unconventional policy measures," JP Morgan said.
Meanwhile, New Zealand's central bank Thursday kept the Official Cash Rate at a record low 2.50% but said it may remove monetary stimulus around mid-2010. The New Zealand dollar gained more than 1.5% against the U.S. dollar by late afternoon.
Low-yielding Currency Boosted
The U.S dollar rose Tuesday while US shares fell into the red. Worries over the financial health of several governments pushed investors to sell riskier assets but shifted to safe-haven US dollar.
Credit rating agency Moody's Investors Services said public finances in the U.S. and the U.K. were deteriorating. Meanwhile, Moody's also further cut its ratings on six Dubai state-linked companies.
Euro fell against US dollar to a below US$1.47 level as Fitch Ratings downgraded Greece's debt rating to BBB+ from A-, the first time in 10 years a major ratings agency has put Greece below an A grade. On Monday, Standard & Poor's warned it might downgrade its rating on Greece's national debt. Data showing German industrial output fell unexpectedly in October also weighed on the euro.
The high yielding Australian dollar also declined this morning after Wall Street's tumble. At 0700 AEDT, the Australian dollar was trading at $US0.9026/28, down 1.11 per cent from Tuesday's close of $US0.9126/29. The yen also tend to gain, stabilizing at above 88.35 per dollar. Japan's third-quarter revised gross domestic product (GDP) numbers are due to be released and analysts expect the economy to have grown at a much slower pace than its initial estimate.
Credit rating agency Moody's Investors Services said public finances in the U.S. and the U.K. were deteriorating. Meanwhile, Moody's also further cut its ratings on six Dubai state-linked companies.
Euro fell against US dollar to a below US$1.47 level as Fitch Ratings downgraded Greece's debt rating to BBB+ from A-, the first time in 10 years a major ratings agency has put Greece below an A grade. On Monday, Standard & Poor's warned it might downgrade its rating on Greece's national debt. Data showing German industrial output fell unexpectedly in October also weighed on the euro.
The high yielding Australian dollar also declined this morning after Wall Street's tumble. At 0700 AEDT, the Australian dollar was trading at $US0.9026/28, down 1.11 per cent from Tuesday's close of $US0.9126/29. The yen also tend to gain, stabilizing at above 88.35 per dollar. Japan's third-quarter revised gross domestic product (GDP) numbers are due to be released and analysts expect the economy to have grown at a much slower pace than its initial estimate.
Monday, December 7, 2009
Brazil and Mexico: Latin American Bond and Currency Preview
The following events and economic reports may influence trading in Latin American local bonds and currencies today. Bond yields and exchange rates are from yesterday’s session.
Brazil: Prices measured by the IGP-DI increased 0.15 percent in November, reversing 0.04 percent deflation in October, according to a Bloomberg survey of 27 economists.
The Getulio Vargas Foundation will release the data at 5 a.m. New York time.
The real gained 0.3 percent to 1.7268 per U.S. dollar.
The yield on Brazil’s zero-coupon, real-denominated bond due in January 2011 fell five basis points, or 0.05 percentage point, to 10.40 percent, according to Bloomberg prices.
Other prices in Latin American markets:
Mexico: The peso strengthened 0.1 percent to 12.6578 per dollar.
The yield on Mexico’s 10 percent bond due December 2024 fell two basis points to 8.10 percent, according to Banco Santander SA.
Argentina: The peso rose 0.1 percent to 3.8041 per dollar.
The yield on the country’s inflation-linked peso bonds due in December 2033 fell nine basis points to 10.85 percent, according to Citigroup Inc.’s local unit.
Chile: The peso was little changed at 502.45 per dollar.
The yield for a basket of Chile’s 10-year peso bonds in inflation-linked currency units, called unidades de fomento, was unchanged at 3.33 percent, according to Bloomberg composite prices.
Colombia: The peso rose 0.1 percent to 2,005.49 per dollar.
The yield on Colombia’s 11 percent bonds due in July 2020 rose seven basis points to 8.16 percent.
Peru: The sol advanced 0.2 percent to 2.8620 per dollar.
The yield on Peru’s 8.6 percent bond maturing August 2017 was unchanged at 4.93 percent, according to Citigroup Inc.’s unit in Lima.
Brazil: Prices measured by the IGP-DI increased 0.15 percent in November, reversing 0.04 percent deflation in October, according to a Bloomberg survey of 27 economists.
The Getulio Vargas Foundation will release the data at 5 a.m. New York time.
The real gained 0.3 percent to 1.7268 per U.S. dollar.
The yield on Brazil’s zero-coupon, real-denominated bond due in January 2011 fell five basis points, or 0.05 percentage point, to 10.40 percent, according to Bloomberg prices.
Other prices in Latin American markets:
Mexico: The peso strengthened 0.1 percent to 12.6578 per dollar.
The yield on Mexico’s 10 percent bond due December 2024 fell two basis points to 8.10 percent, according to Banco Santander SA.
Argentina: The peso rose 0.1 percent to 3.8041 per dollar.
The yield on the country’s inflation-linked peso bonds due in December 2033 fell nine basis points to 10.85 percent, according to Citigroup Inc.’s local unit.
Chile: The peso was little changed at 502.45 per dollar.
The yield for a basket of Chile’s 10-year peso bonds in inflation-linked currency units, called unidades de fomento, was unchanged at 3.33 percent, according to Bloomberg composite prices.
Colombia: The peso rose 0.1 percent to 2,005.49 per dollar.
The yield on Colombia’s 11 percent bonds due in July 2020 rose seven basis points to 8.16 percent.
Peru: The sol advanced 0.2 percent to 2.8620 per dollar.
The yield on Peru’s 8.6 percent bond maturing August 2017 was unchanged at 4.93 percent, according to Citigroup Inc.’s unit in Lima.
Sunday, December 6, 2009
Yen Rises on Speculation Japanese Companies Bringing Home Funds
Yen Rises on Speculation Japanese Companies Bringing Home Funds
Share Business ExchangeTwitterFacebook| Email | Print | A A A By Ron Harui
Dec. 7 (Bloomberg) -- The yen strengthened against the euro and the dollar, ending four days of losses, on speculation Japanese companies are bringing back overseas earnings.
Japan’s currency also gained as exporters took advantage of its biggest weekly decline in a decade against the dollar to purchase it. The yen rose versus all of its 16 major counterparts on the prospect companies such as Mitsubishi UFJ Financial Group Inc. and Hitachi Ltd. will repatriate funds from share sales. The dollar weakened versus the euro before Federal Reserve Chairman Ben S. Bernanke speaks today in Washington.
“There’s talk the Japanese firms which are undertaking capital increases will repatriate the proceeds of overseas share offerings into yen over the next couple of weeks,” said Yuji Saito, head of the foreign-exchange group in Tokyo at Societe Generale SA, France’s third-largest bank. “This is a factor for buying the Japanese currency.”
The yen advanced to 133.98 per euro as of 6:34 a.m. in London from 134.54 in New York on Dec. 4. The currency climbed to 89.94 per dollar from 90.56, following a 4.5 percent slump last week, the most since February 1999. The dollar fell to $1.4893 per euro from $1.4858 on Dec. 4, when it rose to $1.4822, the strongest since Nov. 20.
Share Business ExchangeTwitterFacebook| Email | Print | A A A By Ron Harui
Dec. 7 (Bloomberg) -- The yen strengthened against the euro and the dollar, ending four days of losses, on speculation Japanese companies are bringing back overseas earnings.
Japan’s currency also gained as exporters took advantage of its biggest weekly decline in a decade against the dollar to purchase it. The yen rose versus all of its 16 major counterparts on the prospect companies such as Mitsubishi UFJ Financial Group Inc. and Hitachi Ltd. will repatriate funds from share sales. The dollar weakened versus the euro before Federal Reserve Chairman Ben S. Bernanke speaks today in Washington.
“There’s talk the Japanese firms which are undertaking capital increases will repatriate the proceeds of overseas share offerings into yen over the next couple of weeks,” said Yuji Saito, head of the foreign-exchange group in Tokyo at Societe Generale SA, France’s third-largest bank. “This is a factor for buying the Japanese currency.”
The yen advanced to 133.98 per euro as of 6:34 a.m. in London from 134.54 in New York on Dec. 4. The currency climbed to 89.94 per dollar from 90.56, following a 4.5 percent slump last week, the most since February 1999. The dollar fell to $1.4893 per euro from $1.4858 on Dec. 4, when it rose to $1.4822, the strongest since Nov. 20.
Saturday, December 5, 2009
North Korea revalues its currency
Citizens of North Korea will spend this week getting used to a new version of the country's currency, as the won is revalued for the first time in 17 years.
By exchanging old 1,000 won bills for new 10 won notes the Government in Pyongyang wants to curb the activities of traders in the black market, wiping out their savings.
Citizens will be limited to exchanging the equivalent of $60 at the old rate. The prices paid by consumers will change, but in theory the value of the goods should remain the same as the Government wants to ensure people still have the same buying power with their money.
The plan is also aimed at keeping inflation under control. Last week news about the currency revaluation, or redenomination, was slow to trickle out of the country, as it was initially announced through a closed circuit system that is transmitted directly through speakers in homes and streets.
It is reported that some people have tried to swap old currency notes with Chinese citizens living in North Korea, as the restrictions on exchanging old won bills do not apply to them.
It is thought United Nations sanctions that followed North Korea's second nuclear weapons test earlier this year are starting to bite on the country's battered economy.
By exchanging old 1,000 won bills for new 10 won notes the Government in Pyongyang wants to curb the activities of traders in the black market, wiping out their savings.
Citizens will be limited to exchanging the equivalent of $60 at the old rate. The prices paid by consumers will change, but in theory the value of the goods should remain the same as the Government wants to ensure people still have the same buying power with their money.
The plan is also aimed at keeping inflation under control. Last week news about the currency revaluation, or redenomination, was slow to trickle out of the country, as it was initially announced through a closed circuit system that is transmitted directly through speakers in homes and streets.
It is reported that some people have tried to swap old currency notes with Chinese citizens living in North Korea, as the restrictions on exchanging old won bills do not apply to them.
It is thought United Nations sanctions that followed North Korea's second nuclear weapons test earlier this year are starting to bite on the country's battered economy.
Daily Currency Analysis
EUR/USD
The Euro maintained a firm tone in early Europe on Thursday, consolidating close to the 1.51 area against the dollar ahead of the ECB policy meeting.
Yen
Risk appetite also improved during the Asian session on Thursday which dampened demand for the Japanese currency as sentiment was boosted by news that the Bank of America would repay TARP funds.
Domestic policy issues will remain a significant influence with further pressure for more aggressive Bank of Japan action to curb the deflation threat. In this context, there will also be continuing pressure for yen gains to be resisted. The dollar broke above the 87.50 resistance area and was close to 87.90 in early Europe.
The dollar pushed to highs near 88.45 and held gains in New York trading while the yen secured only a limited recovery on the crosses following European-session losses
Sterling
A more confident tone in global equity markets, initially helped Sterling push back towards 1.67 against the dollar on Thursday. The PMI services-sector index weakened to 56.6 from 57.1 the previous month. The initial impact was limited as it was still comfortably above the 50 threshold.
Sterling did, however, weaken steadily during the day with a low below 1.6550 in New York while the Euro pushed back to the 0.91 level.
The UK currency is still being damaged by underlying fears surrounding the government debt position and any deterioration in risk appetite tends to intensify selling pressure on the currency
Swiss franc
The dollar continued to probe support levels below parity against the franc on Thursday and hit a low of 0.9960 before rallying back above the 1.00 level later in the US session. The Euro ended little changed against the franc, still significantly below the 1.51 level.
The ECB was slightly more dovish than expected which will provide some near-term franc support. There is still likely to be considerable caution ahead of the quarterly monetary policy meeting next week. Speculation of further National Bank protests against franc strength will tend to curb Swiss currency support
Australian dollar
There were further Australian dollar gains to a high of 0.9320 against the US currency on Thursday The domestic retail sales data was close to market expectations and trends in risk appetite remained dominant. Gold pushed to a fresh record highs which underpinned the Australian currency while regional equity markets were firm.
Risk appetite generally weakened during the day which curbed Australian dollar support while there was also speculation that the Reserve Bank was selling the local currency above the 0.93 level. In this environment, the Australian dollar weakened to lows below 0.9240 later in the US session. Underlying confidence should remain relatively robust in the very short term with strong buying support on dips
The Euro maintained a firm tone in early Europe on Thursday, consolidating close to the 1.51 area against the dollar ahead of the ECB policy meeting.
Yen
Risk appetite also improved during the Asian session on Thursday which dampened demand for the Japanese currency as sentiment was boosted by news that the Bank of America would repay TARP funds.
Domestic policy issues will remain a significant influence with further pressure for more aggressive Bank of Japan action to curb the deflation threat. In this context, there will also be continuing pressure for yen gains to be resisted. The dollar broke above the 87.50 resistance area and was close to 87.90 in early Europe.
The dollar pushed to highs near 88.45 and held gains in New York trading while the yen secured only a limited recovery on the crosses following European-session losses
Sterling
A more confident tone in global equity markets, initially helped Sterling push back towards 1.67 against the dollar on Thursday. The PMI services-sector index weakened to 56.6 from 57.1 the previous month. The initial impact was limited as it was still comfortably above the 50 threshold.
Sterling did, however, weaken steadily during the day with a low below 1.6550 in New York while the Euro pushed back to the 0.91 level.
The UK currency is still being damaged by underlying fears surrounding the government debt position and any deterioration in risk appetite tends to intensify selling pressure on the currency
Swiss franc
The dollar continued to probe support levels below parity against the franc on Thursday and hit a low of 0.9960 before rallying back above the 1.00 level later in the US session. The Euro ended little changed against the franc, still significantly below the 1.51 level.
The ECB was slightly more dovish than expected which will provide some near-term franc support. There is still likely to be considerable caution ahead of the quarterly monetary policy meeting next week. Speculation of further National Bank protests against franc strength will tend to curb Swiss currency support
Australian dollar
There were further Australian dollar gains to a high of 0.9320 against the US currency on Thursday The domestic retail sales data was close to market expectations and trends in risk appetite remained dominant. Gold pushed to a fresh record highs which underpinned the Australian currency while regional equity markets were firm.
Risk appetite generally weakened during the day which curbed Australian dollar support while there was also speculation that the Reserve Bank was selling the local currency above the 0.93 level. In this environment, the Australian dollar weakened to lows below 0.9240 later in the US session. Underlying confidence should remain relatively robust in the very short term with strong buying support on dips
Wednesday, December 2, 2009
Euro/Usd: Key Resistance On Target
The world’s economy is slowly moving out the deep recession, but the recovery might be fragile and set-backs are possible along the way. The historical traction of the United States is missing yet, as the country faces a massive deleveraging in both the financial and household areas. The U.S. trade deficit increased to US 36.5 billion in September, more than the expected USD 32 billion. Imports and exports rose in the third quarter, admitting that the country has moved away from the bottom. Domestic demand should rise in the coming months, but not at the same pace seen during the credit era. As a result, the Federal Reserve will keep rates low for some more time. The jobless rate, now at 10.2%, is the main priority. Fed officials know there will be no real growth until credit will somehow begin to flow again. Spending and consumer confidence will remain subdued in this economic environment.
Aussie Dollar Rocketing on Rates Hike
The Australian dollar rose versus most of the 16 main traded currencies as interest rates were once again raised in the country, making the Aussie currency one of the most attractive investment in foreign-exchange markets this year.
A day of high risk appetite which several optimistic news coming from Dubai and China helped the Australian dollar to gain further after the Reserve Bank of Australian raised interested rates for the third time in a row, adding attractiveness to the already alluring Australian currency.
AUD/USD traded at 0.9242 as of 18:12 GMT from a previous rate of 0.9153.
A day of high risk appetite which several optimistic news coming from Dubai and China helped the Australian dollar to gain further after the Reserve Bank of Australian raised interested rates for the third time in a row, adding attractiveness to the already alluring Australian currency.
AUD/USD traded at 0.9242 as of 18:12 GMT from a previous rate of 0.9153.
British Pound Remains Bid Following BoE Comments, Euro Approaching Yearly High
The British pound continued to retrace the sell-off from the previous week and crossed back above the 20-Day SMA (1.6636) to reach a high of 1.6684, and may hold a broad range throughout the remainder of the week as investors weigh the outlook for future policy. Meanwhile, Bank of England Chief Economist Spencer Dale held a hawkish outlook for inflation and said that the expansion in the asset purchase program paired with record-low interest rates “increases the likelihood that asset prices may move out of line with their fundamental values.”
As a result, Mr. Dale anticipates price pressures to rise “sharply” over the near-term and went onto say that “it is quite possible that the governor (Mervyn King) will have to write a letter to the chancellor (Alistair Darling) early in the New Year explaining why inflation is more than 1 percentage point above the inflation target.” At the same time, the chief economists said that economic activity has “begun to stabilize” and sees the nation “moving into a period of renewed expansion” as policy makers take unprecedented steps to stimulate the ailing economy. Meanwhile, the economic docket showed building activity in the U.K. weakened at a slower pace in November as the PMI reading increased to 47.0 from 46.2, and conditions are likely to improve going into the following year as the central bank sees the nation emerging from its worst recession since the post-war period.
The Euro advanced against the greenback for the third-day to reach a high of 1.5111, and looks poised to test the yearly high at 1.5146 as the single-currency continues to benefit from the rise in risk appetite. As the rally remains well-supported by the 50-Day SMA at 1.4858, we may see the EUR/USD continue to retrace sharp decline from August 2008 as market sentiment improves. Nevertheless, producer prices in the Euro-Zone increased 0.2% in October amid expectations for a flat reading, while the annualized rate slipped 6.7% from the previous year after tumbling a revised 7.6% in September to mark the tenth consecutive monthly decline. The breakdown of the report showed the cost of energy increased 1.0% during the month to lead the index higher, while prices for non-durable goods slipped 0.3% after falling 0.1% in September.
The U.S. dollar weakened against most of its major counterparts as market participants moved into higher-yielding investments, and the rise in risk appetite is likely to drive to drive the greenback lower going into the North American trade as the it remains the most popular funding-currency, next to the Japanese Yen. Nevertheless, the ADP employment report for November is expected to show a 150K drop in private payrolls following the 203K decline in the previous month, while Treasury Secretary Timothy Geithner is schedule to testify in front of the Senate Agricultural Committee on the over-the-counter (OTC) derivatives market at 14:30 GMT. Moreover, the Fed’s Beige Book will cross the wires at 19:00 GMT, and comments from the central bank are likely to move the currency market as investors weigh the outlook for future policy.
As a result, Mr. Dale anticipates price pressures to rise “sharply” over the near-term and went onto say that “it is quite possible that the governor (Mervyn King) will have to write a letter to the chancellor (Alistair Darling) early in the New Year explaining why inflation is more than 1 percentage point above the inflation target.” At the same time, the chief economists said that economic activity has “begun to stabilize” and sees the nation “moving into a period of renewed expansion” as policy makers take unprecedented steps to stimulate the ailing economy. Meanwhile, the economic docket showed building activity in the U.K. weakened at a slower pace in November as the PMI reading increased to 47.0 from 46.2, and conditions are likely to improve going into the following year as the central bank sees the nation emerging from its worst recession since the post-war period.
The Euro advanced against the greenback for the third-day to reach a high of 1.5111, and looks poised to test the yearly high at 1.5146 as the single-currency continues to benefit from the rise in risk appetite. As the rally remains well-supported by the 50-Day SMA at 1.4858, we may see the EUR/USD continue to retrace sharp decline from August 2008 as market sentiment improves. Nevertheless, producer prices in the Euro-Zone increased 0.2% in October amid expectations for a flat reading, while the annualized rate slipped 6.7% from the previous year after tumbling a revised 7.6% in September to mark the tenth consecutive monthly decline. The breakdown of the report showed the cost of energy increased 1.0% during the month to lead the index higher, while prices for non-durable goods slipped 0.3% after falling 0.1% in September.
The U.S. dollar weakened against most of its major counterparts as market participants moved into higher-yielding investments, and the rise in risk appetite is likely to drive to drive the greenback lower going into the North American trade as the it remains the most popular funding-currency, next to the Japanese Yen. Nevertheless, the ADP employment report for November is expected to show a 150K drop in private payrolls following the 203K decline in the previous month, while Treasury Secretary Timothy Geithner is schedule to testify in front of the Senate Agricultural Committee on the over-the-counter (OTC) derivatives market at 14:30 GMT. Moreover, the Fed’s Beige Book will cross the wires at 19:00 GMT, and comments from the central bank are likely to move the currency market as investors weigh the outlook for future policy.
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Tuesday, December 1, 2009
The U.S. Dollar Meeting Support Lines
The economic recovery is underway in the United States, but growth should remain volatile and fragmented for some time. Unemployment is the big challenge, while the housing market should give some relief the household pockets. The U.S. dollar is expected to decline further over the medium/long term, albeit it finds good supports at current levels.
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U.S.: A weaker dollar positive?
In the United States, the Conference Board leading economic indicator index increased for the six straight month in September. Eight out of ten components improved, confirming that the economic recovery is underway. The expansion of global economies, as well as the decline of the U.S. dollar, should help exports over the medium term. However, growth might remain fragile for some time, as domestic demand is still weak. In reality, a weaker dollar could be the cure for the huge U.S. current account deficit, which has declined steady since its peak in 2005. The housing market is at the contrary expanding, although swinging data is common during this stage of growth. After few good months of gains during which housing starts rebounded 23% from April’s low, housing starts rose only 0.5% in September to 590,000 units annualized from Augusts’ 587,00. Starts are up 23% from April, but they are still 28% below the level of one year ago.
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U.S.: A weaker dollar positive?
In the United States, the Conference Board leading economic indicator index increased for the six straight month in September. Eight out of ten components improved, confirming that the economic recovery is underway. The expansion of global economies, as well as the decline of the U.S. dollar, should help exports over the medium term. However, growth might remain fragile for some time, as domestic demand is still weak. In reality, a weaker dollar could be the cure for the huge U.S. current account deficit, which has declined steady since its peak in 2005. The housing market is at the contrary expanding, although swinging data is common during this stage of growth. After few good months of gains during which housing starts rebounded 23% from April’s low, housing starts rose only 0.5% in September to 590,000 units annualized from Augusts’ 587,00. Starts are up 23% from April, but they are still 28% below the level of one year ago.
Monday, November 30, 2009
Dollar Edges Higher
The dollar was mixed against the majors, climbing higher against the euro to 1.4628 but sliding versus the British pound past the 1.64-level to 1.6419. Spot gold rose to a new record high above the $1,080-mark to $1,083.50 per ounce while crude oil continued to trade beneath $80-per barrel.
The US economic reports released earlier today saw September durable goods and factory orders. The headline durable goods orders increased by 1.4% in September versus 1.0% previously, while the ex-transportations figure rose by 1.2% from 0.9% in August. Meanwhile, factory orders reversed the 0.8% decline in August, increasing by 0.9%.
The key highlight on Wednesday will be the ADP private sector payrolls, which are seen improving to reflect a loss of 188.0k jobs in October from 254.0k jobs a month earlier. Also due out tomorrow will be the October non-manufacturing ISM report, estimated to improve to 51.8 from 50.9 in September.
The US economic reports released earlier today saw September durable goods and factory orders. The headline durable goods orders increased by 1.4% in September versus 1.0% previously, while the ex-transportations figure rose by 1.2% from 0.9% in August. Meanwhile, factory orders reversed the 0.8% decline in August, increasing by 0.9%.
The key highlight on Wednesday will be the ADP private sector payrolls, which are seen improving to reflect a loss of 188.0k jobs in October from 254.0k jobs a month earlier. Also due out tomorrow will be the October non-manufacturing ISM report, estimated to improve to 51.8 from 50.9 in September.
Saturday, October 10, 2009
EUR/USD last trade 1.2850 - One Euro is worth $1.2850 US dollars.The first currency (in this example, the EURO) is referred to as the base currency and the second (/USD) as the counter or quote currency.
The FOREX has a DAILY trading volume of around $1.5 trillion dollars - 30 times larger than the combined volume of all U.S. equity markets. This means that 1,498,574 skilled traders could each take 1 million dollars out of the FOREX market every day and the FOREX would still have more money left than the New York Stock exchange every day!
The FOREX plays a vital role in the world economy and there will always be a tremendous need for the FOREX. International trade increases as technology and communication increases. As long as there is international trade, there will be a FOREX market. The FX market has to exist so a country like Japan can sell products in the United States and be able to receive Japanese Yen in exchange for US Dollar.
There's plenty of money to be made using FOREX for plenty of traders that use the right trading techniques / tactics that will allow them to profit immensely. And, with only 5% of the daily turnover of volume coming from banks, government and large corporations who need to hedge, the other 95% is for speculation and profit.
The FOREX has a DAILY trading volume of around $1.5 trillion dollars - 30 times larger than the combined volume of all U.S. equity markets. This means that 1,498,574 skilled traders could each take 1 million dollars out of the FOREX market every day and the FOREX would still have more money left than the New York Stock exchange every day!
The FOREX plays a vital role in the world economy and there will always be a tremendous need for the FOREX. International trade increases as technology and communication increases. As long as there is international trade, there will be a FOREX market. The FX market has to exist so a country like Japan can sell products in the United States and be able to receive Japanese Yen in exchange for US Dollar.
There's plenty of money to be made using FOREX for plenty of traders that use the right trading techniques / tactics that will allow them to profit immensely. And, with only 5% of the daily turnover of volume coming from banks, government and large corporations who need to hedge, the other 95% is for speculation and profit.
Few points that differentiates the top dealers from the rest:
Education: The professionals are intellectuals in their field and they are aware of every single characteristic of the trading. These intellectuals have the best knowledge of their field and they learn new things from every trade. They work in the Forex market with a more humble attitude or else the market will get them wrong.
The organization of Forex trading: Those who are professional of Forex trading they have a unique working method. They thoroughly follow the guidelines as they know that the trade that functionalize on their methods gets a decent success rate.
Cost Factor: Price factor is also included in the trading method as they know that the price factor is really important factor.
Money Organization: The dealers have to take an extra care of the damages as they cannot trade without cash in your account.
Behavior of the trade: These professionals are also aware of what will be the behavior and choices those can be effective for the decisions taken by the dealers. They are aware of the fact that not everybody can be successful.
Education: The professionals are intellectuals in their field and they are aware of every single characteristic of the trading. These intellectuals have the best knowledge of their field and they learn new things from every trade. They work in the Forex market with a more humble attitude or else the market will get them wrong.
The organization of Forex trading: Those who are professional of Forex trading they have a unique working method. They thoroughly follow the guidelines as they know that the trade that functionalize on their methods gets a decent success rate.
Cost Factor: Price factor is also included in the trading method as they know that the price factor is really important factor.
Money Organization: The dealers have to take an extra care of the damages as they cannot trade without cash in your account.
Behavior of the trade: These professionals are also aware of what will be the behavior and choices those can be effective for the decisions taken by the dealers. They are aware of the fact that not everybody can be successful.
Tuesday, October 6, 2009
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Google’s use of the DART cookie enables it to serve ads to your users based on their visit to your sites and other sites on the Internet. This is to provide advertisements about goods and services of interest to you.
Users may opt out of the use of the DART cookie by visiting the “Google Ad and Content Network Privacy Policy“.
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You can reset your browser to refuse all cookies or to indicate when a cookie is being sent. However, some website features or services may not function properly without cookies.
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Users may opt out of the use of the DART cookie by visiting the “Google Ad and Content Network Privacy Policy“.
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You can reset your browser to refuse all cookies or to indicate when a cookie is being sent. However, some website features or services may not function properly without cookies.
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Thursday, September 17, 2009
Learn All About FOREX
The foreign exchange market or better known as FOREX is when one currency is traded for another country’s currency. It is an alternative form of business where the goods to be bought and sold are money itself using money.
In the past, people would normally engage in stocks and pool their savings in the money market to build up their investment portfolio.
Nowadays, with more than 1.5 trillion USD of FOREX being exchanged on a daily basis, even the “small-time” investor can participate in the FOREX market. There is leverage in the FOREX market where a minimum amount of currency can have access to a large deal of money.
A lot more advantages to study and dive into FOREX trading include the following:
Why FOREX?
24-hour trading
Compared to stocks, FOREX trading is twenty-fours. A FOREX trader can trade right away once they spot an opportunity to buy low and sell high. Remember, money has time value. And a lot of factors in the economics and politics of a government affect how low a currency will drop or how high a currency will gain. It is fairly easy to say buy low and sell high. But the trick is to know when to do it. With twenty-four trading, the FOREX trader has the ultimate advantage already. Since, after all, time is money.
High liquidity
A market or business is considered very liquid if the assets involved can enable the person to directly meet his payment obligations. In other words, if cash is at hand—immediately. What is a more liquid market than the FOREX market?
FOREX has high liquidity, because it can be traded swiftly, without considerable loss of value, and anytime within the trading hours or in FOREX trading’s case—24/7.
No commission
FOREX trading need not have brokers in between to facilitate. With other forms of money market ventures and stock trading, brokers come in handy; because they are able to handle varied forms of portfolios and company stocks for the investor. Even if FOREX trading is involved with multiple currencies, it is a very direct business where the trader himself can act on his own; thus no commissions are leaked out and all profits are kept!
Steady market availability
In all businesses, businessmen strive for a steady market, if not an increasing one. Why spend time in a trading scene when it is short-term?
Because FOREX trading is all about the buying and selling of currencies, it is a continuously moving market. Money make the world go round, as the cliché goes.
The market will always be there. The trader only has to be aware of the rising and falling of the currencies. When is the currency starting to be weak? When is it going strong? Is there a trend?
Taking action
This benefits and advantages all the more make FOREX trading a very attractive business venture. For first time FOREX traders, why not inquire now at your home bank on how to start making your money work for you? FOREX trading is the way to go.
In the past, people would normally engage in stocks and pool their savings in the money market to build up their investment portfolio.
Nowadays, with more than 1.5 trillion USD of FOREX being exchanged on a daily basis, even the “small-time” investor can participate in the FOREX market. There is leverage in the FOREX market where a minimum amount of currency can have access to a large deal of money.
A lot more advantages to study and dive into FOREX trading include the following:
Why FOREX?
24-hour trading
Compared to stocks, FOREX trading is twenty-fours. A FOREX trader can trade right away once they spot an opportunity to buy low and sell high. Remember, money has time value. And a lot of factors in the economics and politics of a government affect how low a currency will drop or how high a currency will gain. It is fairly easy to say buy low and sell high. But the trick is to know when to do it. With twenty-four trading, the FOREX trader has the ultimate advantage already. Since, after all, time is money.
High liquidity
A market or business is considered very liquid if the assets involved can enable the person to directly meet his payment obligations. In other words, if cash is at hand—immediately. What is a more liquid market than the FOREX market?
FOREX has high liquidity, because it can be traded swiftly, without considerable loss of value, and anytime within the trading hours or in FOREX trading’s case—24/7.
No commission
FOREX trading need not have brokers in between to facilitate. With other forms of money market ventures and stock trading, brokers come in handy; because they are able to handle varied forms of portfolios and company stocks for the investor. Even if FOREX trading is involved with multiple currencies, it is a very direct business where the trader himself can act on his own; thus no commissions are leaked out and all profits are kept!
Steady market availability
In all businesses, businessmen strive for a steady market, if not an increasing one. Why spend time in a trading scene when it is short-term?
Because FOREX trading is all about the buying and selling of currencies, it is a continuously moving market. Money make the world go round, as the cliché goes.
The market will always be there. The trader only has to be aware of the rising and falling of the currencies. When is the currency starting to be weak? When is it going strong? Is there a trend?
Taking action
This benefits and advantages all the more make FOREX trading a very attractive business venture. For first time FOREX traders, why not inquire now at your home bank on how to start making your money work for you? FOREX trading is the way to go.
How did the taipans and billionaires get so filthy rich?!
Besides the more obvious hard work and diligence and always saving little by little in their piggy banks, the really rich guys know how to work up the foreign exchange.
Basically, foreign exchange trading or simply FOREX trading is just the buying and selling of the world’s currencies. Money today is not the same as money tomorrow. Money has time value. The worth of a currency can go up or down.
There is one secret that FOREX traders live by. And it is buy low, sell high. Don’t ever forget that rule.
However, the trick is to know when to buy and when to sell. In FOREX trading, everything is by speculation. Sure, there are graphs to aid decisions. Business pages also give out strategies for the day. But the next step is always a guess based from the previous actions.
FOREX traders like to call their speculations as smart guesses. Usually, patterns on the currency values can be derived from how the politics of a specific country is running.
For example, if there is a plan to oust the president, most probably the value of that country’s currency will go down—how low, we don’t know. Usually. Because there are still a lot of factors to consider why a currency is going strong or not.
Improvement on the tourism sector can mean more foreign investments. This will be good for a particular currency, but this may affect how the other countries are doing.
These are just trade scenarios. As the cliché goes, one man’s medicine may be another man’s poison. One country’s good tidings may be another country’s, well, downfall.
That is why in FOREX trading, another secret to live by is to be aware of the national news in the country concerned.
Current events have a say on the economics of a country. Money makes the world go round, so to speak.
But, if one is truly serious in earning their first million in FOREX trading, another secret is—it might be a good idea to invest in a FOREX trading training school. Learn from the pros and conquer the world afterwards.
Let me leave you one last secret I learned from my father. If everyone is going in this direction, go the other way. This applies to FOREX and other areas of life. You won’t ever get rich by following the crowd.
Besides buying low and selling high, follow that last secret and you might just join the ranks of the taipans and billionaires.
Besides the more obvious hard work and diligence and always saving little by little in their piggy banks, the really rich guys know how to work up the foreign exchange.
Basically, foreign exchange trading or simply FOREX trading is just the buying and selling of the world’s currencies. Money today is not the same as money tomorrow. Money has time value. The worth of a currency can go up or down.
There is one secret that FOREX traders live by. And it is buy low, sell high. Don’t ever forget that rule.
However, the trick is to know when to buy and when to sell. In FOREX trading, everything is by speculation. Sure, there are graphs to aid decisions. Business pages also give out strategies for the day. But the next step is always a guess based from the previous actions.
FOREX traders like to call their speculations as smart guesses. Usually, patterns on the currency values can be derived from how the politics of a specific country is running.
For example, if there is a plan to oust the president, most probably the value of that country’s currency will go down—how low, we don’t know. Usually. Because there are still a lot of factors to consider why a currency is going strong or not.
Improvement on the tourism sector can mean more foreign investments. This will be good for a particular currency, but this may affect how the other countries are doing.
These are just trade scenarios. As the cliché goes, one man’s medicine may be another man’s poison. One country’s good tidings may be another country’s, well, downfall.
That is why in FOREX trading, another secret to live by is to be aware of the national news in the country concerned.
Current events have a say on the economics of a country. Money makes the world go round, so to speak.
But, if one is truly serious in earning their first million in FOREX trading, another secret is—it might be a good idea to invest in a FOREX trading training school. Learn from the pros and conquer the world afterwards.
Let me leave you one last secret I learned from my father. If everyone is going in this direction, go the other way. This applies to FOREX and other areas of life. You won’t ever get rich by following the crowd.
Besides buying low and selling high, follow that last secret and you might just join the ranks of the taipans and billionaires.
FOREX
The foreign exchange market (currency, forex, or FX) trades currencies. It lets banks and other institutions easily buy and sell currencies. [1]
The purpose of the foreign exchange market is to help international trade and investment. A foreign exchange market helps businesses convert one currency to another. For example, it permits a U.S. business to import European goods and pay Euros, even though the business's income is in U.S. dollars.
In a typical foreign exchange transaction a party purchases a quantity of one currency by paying a quantity of another currency. The modern foreign exchange market started forming during the 1970s when countries gradually switched to floating exchange rates from the previous exchange rate regime, which remained fixed as per the Bretton Woods system.
The foreign exchange market is unique because of
* its trading volumes,
* the extreme liquidity of the market,
* its geographical dispersion,
* its long trading hours: 24 hours a day except on weekends (from 22:00 UTC on Sunday until 22:00 UTC Friday),
* the variety of factors that affect exchange rates.
* the low margins of profit compared with other markets of fixed income (but profits can be high due to very large trading volumes)
* the use of leverage
As such, it has been referred to as the market closest to the ideal perfect competition, notwithstanding market manipulation by central banks. According to the Bank for International Settlements,[2] average daily turnover in global foreign exchange markets is estimated at $3.98 trillion. Trading in the world's main financial markets accounted for $3.21 trillion of this. This approximately $3.21 trillion in main foreign exchange market turnover was broken down as follows:
* $1.005 trillion in spot transactions
* $362 billion in outright forwards
* $1.714 trillion in foreign exchange swaps
* $129 billion estimated gaps in reporting
The purpose of the foreign exchange market is to help international trade and investment. A foreign exchange market helps businesses convert one currency to another. For example, it permits a U.S. business to import European goods and pay Euros, even though the business's income is in U.S. dollars.
In a typical foreign exchange transaction a party purchases a quantity of one currency by paying a quantity of another currency. The modern foreign exchange market started forming during the 1970s when countries gradually switched to floating exchange rates from the previous exchange rate regime, which remained fixed as per the Bretton Woods system.
The foreign exchange market is unique because of
* its trading volumes,
* the extreme liquidity of the market,
* its geographical dispersion,
* its long trading hours: 24 hours a day except on weekends (from 22:00 UTC on Sunday until 22:00 UTC Friday),
* the variety of factors that affect exchange rates.
* the low margins of profit compared with other markets of fixed income (but profits can be high due to very large trading volumes)
* the use of leverage
As such, it has been referred to as the market closest to the ideal perfect competition, notwithstanding market manipulation by central banks. According to the Bank for International Settlements,[2] average daily turnover in global foreign exchange markets is estimated at $3.98 trillion. Trading in the world's main financial markets accounted for $3.21 trillion of this. This approximately $3.21 trillion in main foreign exchange market turnover was broken down as follows:
* $1.005 trillion in spot transactions
* $362 billion in outright forwards
* $1.714 trillion in foreign exchange swaps
* $129 billion estimated gaps in reporting
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