Euro Rises From Six-Month Low Against Dollar on Weber, Oil Gain
Aug. 27 (Bloomberg) -- The euro rose from a six-month low versus the dollar as European Central Bank council member Axel Weber said discussion about a reduction in interest rates is ``premature'' and crude oil prices increased for a third day.
Thursday, August 28, 2008
Wednesday, August 27, 2008
Bloomberg
Dollar Rises to Six-Month High on Bets Global Economy Slowing
Aug. 26 (Bloomberg) -- The dollar rose to a six-month high against the euro on evidence the greenback will be the main beneficiary from a global economic slowdown as German business confidence dropped in August more than forecast.
Aug. 26 (Bloomberg) -- The dollar rose to a six-month high against the euro on evidence the greenback will be the main beneficiary from a global economic slowdown as German business confidence dropped in August more than forecast.
Tuesday, August 26, 2008
Friday, August 22, 2008
Thursday, August 21, 2008
Bloomberg
Euro Declines as German Ministry Says Economy Is Deteriorating
Aug. 20 (Bloomberg) -- The euro fell against the dollar to near the lowest level in six months as Germany's Economy Ministry said the outlook for Europe's largest economy has deteriorated even beyond the second quarter.
The pound fell to near a two-year low versus the dollar as minutes of the Bank of England's August meeting indicated British inflation risks may have ``eased a little'' while the outlook for the economy got worse. The dollar has risen 8 percent versus the euro from the record low set in July.
``The market was waiting for a big correction after such a massive dollar rally, but they never got it,'' said Steve Butler, director of foreign-exchange trading at Scotia Capital Inc. in Toronto. ``People are pessimistic about European growth. They are coming back to buy the dollar on a dip.''
The euro decreased 0.2 percent to $1.4748 at 10:38 a.m. in New York, from $1.4776 yesterday, when it touched $1.4631, the lowest since Feb. 20. It reached the record high of $1.6038 on July 15. The currency fell 0.1 percent to 161.92 yen, from 162.13 yesterday, when it touched 160.87, the weakest in three months. The dollar traded at 109.76 yen, compared with 109.72.
The pound dropped 0.3 percent to $1.8621 on the Bank of England's economic outlook, after touching $1.8512 on Aug. 15, the lowest level since July 2006.
BOE policy makers split three ways when they kept the target lending rate unchanged earlier this month, minutes of the Aug. 7 meeting showed today. Governor Mervyn King and six other members of the Monetary Policy Committee held the benchmark at 5 percent, while one official voted for a rate increase and another called for a cut to help sustain growth.
Freddie Mac
The dollar erased its gain versus the yen and pared its advance against the euro after the Wall Street Journal reported that Freddie Mac executives are scheduled to meet with U.S. Treasury Department officials today.
Crude oil increased 1.5 percent to $116.24 a barrel. The euro-dollar exchange rate and oil have had a correlation of 0.9 in the past year, according to Bloomberg calculations. A reading of 1 would mean they move in lockstep.
Futures on the Chicago Board of Trade show a 21 percent chance the U.S. central bank will raise the 2 percent target rate for overnight lending between banks by at least a quarter- point by its Dec. 16 meeting, down from 35 percent odds a week earlier. Policy makers next meet Sept. 16.
The euro fell 0.2 percent to 14.9409 Mexican pesos as Germany's economic ministry said in its monthly report that growth will remain moderate.
The country's BDB banking association said it no longer expects Europe's biggest economy to expand between 2.25 percent and 2.50 percent this year, and will change its growth forecast on Sept. 18. The German economy shrank 0.5 percent in the second quarter, the first contraction in four years.
Aug. 20 (Bloomberg) -- The euro fell against the dollar to near the lowest level in six months as Germany's Economy Ministry said the outlook for Europe's largest economy has deteriorated even beyond the second quarter.
The pound fell to near a two-year low versus the dollar as minutes of the Bank of England's August meeting indicated British inflation risks may have ``eased a little'' while the outlook for the economy got worse. The dollar has risen 8 percent versus the euro from the record low set in July.
``The market was waiting for a big correction after such a massive dollar rally, but they never got it,'' said Steve Butler, director of foreign-exchange trading at Scotia Capital Inc. in Toronto. ``People are pessimistic about European growth. They are coming back to buy the dollar on a dip.''
The euro decreased 0.2 percent to $1.4748 at 10:38 a.m. in New York, from $1.4776 yesterday, when it touched $1.4631, the lowest since Feb. 20. It reached the record high of $1.6038 on July 15. The currency fell 0.1 percent to 161.92 yen, from 162.13 yesterday, when it touched 160.87, the weakest in three months. The dollar traded at 109.76 yen, compared with 109.72.
The pound dropped 0.3 percent to $1.8621 on the Bank of England's economic outlook, after touching $1.8512 on Aug. 15, the lowest level since July 2006.
BOE policy makers split three ways when they kept the target lending rate unchanged earlier this month, minutes of the Aug. 7 meeting showed today. Governor Mervyn King and six other members of the Monetary Policy Committee held the benchmark at 5 percent, while one official voted for a rate increase and another called for a cut to help sustain growth.
Freddie Mac
The dollar erased its gain versus the yen and pared its advance against the euro after the Wall Street Journal reported that Freddie Mac executives are scheduled to meet with U.S. Treasury Department officials today.
Crude oil increased 1.5 percent to $116.24 a barrel. The euro-dollar exchange rate and oil have had a correlation of 0.9 in the past year, according to Bloomberg calculations. A reading of 1 would mean they move in lockstep.
Futures on the Chicago Board of Trade show a 21 percent chance the U.S. central bank will raise the 2 percent target rate for overnight lending between banks by at least a quarter- point by its Dec. 16 meeting, down from 35 percent odds a week earlier. Policy makers next meet Sept. 16.
The euro fell 0.2 percent to 14.9409 Mexican pesos as Germany's economic ministry said in its monthly report that growth will remain moderate.
The country's BDB banking association said it no longer expects Europe's biggest economy to expand between 2.25 percent and 2.50 percent this year, and will change its growth forecast on Sept. 18. The German economy shrank 0.5 percent in the second quarter, the first contraction in four years.
Wednesday, August 20, 2008
Yen
Yen Advances as Credit Losses Damp Demand for Higher Yields
Aug. 19 (Bloomberg) -- The yen increased to a three-month high against the euro on speculation financial firms will report more losses, reducing demand for higher-yielding assets funded by loans in Japan.
Aug. 19 (Bloomberg) -- The yen increased to a three-month high against the euro on speculation financial firms will report more losses, reducing demand for higher-yielding assets funded by loans in Japan.
Dollar Eases
USD Eases on Data, Oil
by Korman Tam
8/19/2008 3:17:00 PM
The dollar continued to relinquish its gains versus the majors in Tuesday trading, falling to 1.4791 against the euro and giving back the 110-handle versus the yen. Rebounding oil and commodity prices, combined with more evidence of deterioration in the US housing market prompted further profit taking in the greenback. Crude oil edged up to a session high of 116.12 but closed at 114.31 while spot gold recovered above the $800-level to $810/oz.
The economic reports released earlier in the session saw housing starts slump by 11% to 965k units for July, down from 1.066mln units a month prior. Building permits reversed the16.4% increase from June, sinking by 17.7% to its lowest level in 17-years at 937k units, down sharply from 1.138mln units previously. Meanwhile, producer prices firmed in July as core PPI increased to 0.7% up from 0.2% a month earlier and 3.5% compared with 3.0% from the previous month. Headline producer prices shot up to 9.8% versus 9.2% from a year earlier.
The next batch of US data are slated for release on Thursday, including weekly jobless claims, leading indicators, and the Philadelphia Fed manufacturing survey. Weekly jobless claims are seen easing slightly to 433k, down from 450k, while July leading indicators are estimated to worsen to -0.2% from -0.1%. The Philadelphia Fed manufacturing survey is expected to improve to -14.0, from -16.3 from July.
by Korman Tam
8/19/2008 3:17:00 PM
The dollar continued to relinquish its gains versus the majors in Tuesday trading, falling to 1.4791 against the euro and giving back the 110-handle versus the yen. Rebounding oil and commodity prices, combined with more evidence of deterioration in the US housing market prompted further profit taking in the greenback. Crude oil edged up to a session high of 116.12 but closed at 114.31 while spot gold recovered above the $800-level to $810/oz.
The economic reports released earlier in the session saw housing starts slump by 11% to 965k units for July, down from 1.066mln units a month prior. Building permits reversed the16.4% increase from June, sinking by 17.7% to its lowest level in 17-years at 937k units, down sharply from 1.138mln units previously. Meanwhile, producer prices firmed in July as core PPI increased to 0.7% up from 0.2% a month earlier and 3.5% compared with 3.0% from the previous month. Headline producer prices shot up to 9.8% versus 9.2% from a year earlier.
The next batch of US data are slated for release on Thursday, including weekly jobless claims, leading indicators, and the Philadelphia Fed manufacturing survey. Weekly jobless claims are seen easing slightly to 433k, down from 450k, while July leading indicators are estimated to worsen to -0.2% from -0.1%. The Philadelphia Fed manufacturing survey is expected to improve to -14.0, from -16.3 from July.
Tuesday, August 19, 2008
USA Housing Starts
Relevance: Tends to move markets on release
Release schedule : 8:30 AM (EST); monthly, two or three weeks after the reporting month
Source of report : U.S. Census Bureau
Web Address : www.census.gov
Address of release : www.census.gov/const/www/newresconstindex.html
Friday, August 15, 2008
Euro Down
Euro Trades Near 5 1/2-Month Low Versus Dollar as GDP Shrinks
Aug. 14 (Bloomberg) -- The euro traded near a 5 1/2-month low against the dollar after a report showed Europe's economy contracted for the first time since the 15-nation currency was introduced almost a decade ago.
Aug. 14 (Bloomberg) -- The euro traded near a 5 1/2-month low against the dollar after a report showed Europe's economy contracted for the first time since the 15-nation currency was introduced almost a decade ago.
Saturday, August 9, 2008
Euro Falls
Euro Falls the Most in 8 Years on Reduced Bets for Higher Rate
Aug. 8 (Bloomberg) -- The euro fell the most in almost eight years against the dollar as traders pared bets the European Central Bank will raise interest rates as the economy slows.
Aug. 8 (Bloomberg) -- The euro fell the most in almost eight years against the dollar as traders pared bets the European Central Bank will raise interest rates as the economy slows.
Wednesday, August 6, 2008
Forex News: FOMC @ 2.00%
FOMC Unchanged, USD Holds Gains
by Korman Tam
8/5/2008 3:35:00 PM
The FOMC, as expected, left interest rates unchanged at 2.0% when it announced its decision earlier in the session. The accompanying statement offered a neutral bias, reiterating high uncertainty over the inflation outlook, continued softening in the labor markets and considerable stress on the financial markets. The Fed expects tight credit conditions, the ongoing housing contraction, and elevated energy prices to weigh on economic growth over the coming quarters. Balancing its view on growth, the Fed acknowledged "upside risks to inflation are also of significant concern to the committee".
Although the greenback relinquished some of its overnight gains against the majors following the Fed policy announcement, it remained at 11-month highs against the Canadian dollar around 1.0450. The breaches of key levels recently, particularly 0.95 versus the Aussie, 1.0330 against the Canadian dollar and above 1.05 to the Swissie, mark a shift in sentiment with markets rewarding the greenback on a combination of sharp declines in oil and commodity prices and increasing uncertainty over the growth prospects of overseas economies. The euro's inability to hold above its 1-year ascending trendline and subsequent breach of the 1.55-level paves the way for an imminent test of the 1.5300-1.5350 region, which marks the neckline support for a triple top formation.
US data released this morning included a better than expected non-manufacturing ISM at 49.5 for July and improving from 48.2 a month earlier. This corresponds with softer figures from the Eurozone and UK, which printed at 48.3 and 47.4, respectively. With crude oil extending losses beneath the $120-handle, losing another $2.24 per barrel in the Tuesday session, and economic fundamentals across the Atlantic deteriorating more rapidly than expected, we look for the dollar to extend its gains further in the months ahead amid heightened anticipation for policy easing from the RBA, BoE, and ECB.
by Korman Tam
8/5/2008 3:35:00 PM
The FOMC, as expected, left interest rates unchanged at 2.0% when it announced its decision earlier in the session. The accompanying statement offered a neutral bias, reiterating high uncertainty over the inflation outlook, continued softening in the labor markets and considerable stress on the financial markets. The Fed expects tight credit conditions, the ongoing housing contraction, and elevated energy prices to weigh on economic growth over the coming quarters. Balancing its view on growth, the Fed acknowledged "upside risks to inflation are also of significant concern to the committee".
Although the greenback relinquished some of its overnight gains against the majors following the Fed policy announcement, it remained at 11-month highs against the Canadian dollar around 1.0450. The breaches of key levels recently, particularly 0.95 versus the Aussie, 1.0330 against the Canadian dollar and above 1.05 to the Swissie, mark a shift in sentiment with markets rewarding the greenback on a combination of sharp declines in oil and commodity prices and increasing uncertainty over the growth prospects of overseas economies. The euro's inability to hold above its 1-year ascending trendline and subsequent breach of the 1.55-level paves the way for an imminent test of the 1.5300-1.5350 region, which marks the neckline support for a triple top formation.
US data released this morning included a better than expected non-manufacturing ISM at 49.5 for July and improving from 48.2 a month earlier. This corresponds with softer figures from the Eurozone and UK, which printed at 48.3 and 47.4, respectively. With crude oil extending losses beneath the $120-handle, losing another $2.24 per barrel in the Tuesday session, and economic fundamentals across the Atlantic deteriorating more rapidly than expected, we look for the dollar to extend its gains further in the months ahead amid heightened anticipation for policy easing from the RBA, BoE, and ECB.
Saturday, August 2, 2008
The Dollar
USD Edges Higher Following Jobs
by Korman Tam
8/1/2008 2:19:00 PM
The US economic reports released in the Friday session offered a mixed bag of data, providing traders with conflicting signals and whipsawing the major currency pairs around. The dollar initially rallied sharply upon the release of the July non-farm payrolls reading, which bested consensus estimates for deterioration to -75k from -62k in June, instead revealing an improved jobs loss of 51k. The payrolls figure bolstered the greenback to its highest level since late June against the euro to test its one-year trendline support at 1.5518. However, the jobs report was not entirely rosy given the larger than expected reading in the July unemployment rate - which edged up to its highest level in 4-years at 5.7%, higher than calls for an increase to 5.6% from 5.5% in May. Meanwhile, manufacturing ISM in July beat estimates for a contraction, holding firm at the key 50-level and drifting marginally from the June reading of 50.2.
The greenback retreated sharply away from a year-long ascending support line against the euro near the 1.5520-region amid rebounds in crude oil and spot gold. Moreover, the dollar touched key levels against the Loonie and Swissie around the 1.03 and 1.05 handles, respectively, but failed to garner enough momentum to breach the aforementioned resistance levels. The current outlook continues to favor a stronger dollar stemming from the rapid deterioration in economic fundamentals across the Atlantic and tempered expectations for monetary policy tightening from both the ECB and BoE. However, failure to breach those key levels against the euro, Canadian dollar and Swiss franc will likely result in further consolidation in the major currencies, with movements largely dictated by price action in both crude oil and spot gold.
by Korman Tam
8/1/2008 2:19:00 PM
The US economic reports released in the Friday session offered a mixed bag of data, providing traders with conflicting signals and whipsawing the major currency pairs around. The dollar initially rallied sharply upon the release of the July non-farm payrolls reading, which bested consensus estimates for deterioration to -75k from -62k in June, instead revealing an improved jobs loss of 51k. The payrolls figure bolstered the greenback to its highest level since late June against the euro to test its one-year trendline support at 1.5518. However, the jobs report was not entirely rosy given the larger than expected reading in the July unemployment rate - which edged up to its highest level in 4-years at 5.7%, higher than calls for an increase to 5.6% from 5.5% in May. Meanwhile, manufacturing ISM in July beat estimates for a contraction, holding firm at the key 50-level and drifting marginally from the June reading of 50.2.
The greenback retreated sharply away from a year-long ascending support line against the euro near the 1.5520-region amid rebounds in crude oil and spot gold. Moreover, the dollar touched key levels against the Loonie and Swissie around the 1.03 and 1.05 handles, respectively, but failed to garner enough momentum to breach the aforementioned resistance levels. The current outlook continues to favor a stronger dollar stemming from the rapid deterioration in economic fundamentals across the Atlantic and tempered expectations for monetary policy tightening from both the ECB and BoE. However, failure to breach those key levels against the euro, Canadian dollar and Swiss franc will likely result in further consolidation in the major currencies, with movements largely dictated by price action in both crude oil and spot gold.
Friday, August 1, 2008
Dollar Falls
Dollar Falls as GDP Trails Forecast, Jobless Claims Increase
July 31 (Bloomberg) -- The dollar fell for the first time in three days against the euro as reports showed the U.S. economy grew less than forecast in the second quarter and initial jobless claims rose last week to a five-year high.
July 31 (Bloomberg) -- The dollar fell for the first time in three days against the euro as reports showed the U.S. economy grew less than forecast in the second quarter and initial jobless claims rose last week to a five-year high.
NON FARM PAYROLL
NON FARM PAYROLL
U.S. employers trimmed jobs from their payrolls in June for the sixth consecutive month, showing continued—albeit relatively mild—weakness in the labor market. Thus far, job losses are still at a rate soft enough to not pull the overall economy into recession. The Labor Department reported a net loss of 62,000 jobs in June, matching the job loss figure for May, which was revised higher from 49,000. The decline in June employment was slightly worse than the consensus forecast for a 60,000 decline, and brought the number of jobs lost by the U.S. economy so far this year to 438,000.
Several key factors are thought to have influenced the July NFP report. They include:
- An increase in the unemployment rate to 5.5%, matching the May level and consensus expectations.
- The decline of 49,000 (0.04%) in NFPs continues a trend of small declines in payrolls consistent with GDP growth near 1.5%.
- Hourly earnings bounced back to a 0.3% gain after a 0.1% increase in April.
- The four-week moving average for unemployment insurance initial claims neared the worrisome 400,000 benchmark, reaching 390,500—the highest level since the four weeks following 2005's Hurricane Katrina.
For week ending July 19, the Labor Department reported that the advance figure for seasonally adjusted initial claims was 406,000, an increase of 34,000 from the previous week's revised figure of 372,000. They also reported a four-week moving average of 382,500, an increase of 4,500 from the previous week's revised average of 378,000.
While the sequence of negative payroll numbers is certainly not good news for consumers, its relatively soft pace should be kept in perspective. Even incremental gains in economic productivity will keep overall growth slightly positive. While the economic picture isn't necessarily inspiring, neither is it cause for panic. Watch for slow growth ahead.
U.S. employers trimmed jobs from their payrolls in June for the sixth consecutive month, showing continued—albeit relatively mild—weakness in the labor market. Thus far, job losses are still at a rate soft enough to not pull the overall economy into recession. The Labor Department reported a net loss of 62,000 jobs in June, matching the job loss figure for May, which was revised higher from 49,000. The decline in June employment was slightly worse than the consensus forecast for a 60,000 decline, and brought the number of jobs lost by the U.S. economy so far this year to 438,000.
Several key factors are thought to have influenced the July NFP report. They include:
- An increase in the unemployment rate to 5.5%, matching the May level and consensus expectations.
- The decline of 49,000 (0.04%) in NFPs continues a trend of small declines in payrolls consistent with GDP growth near 1.5%.
- Hourly earnings bounced back to a 0.3% gain after a 0.1% increase in April.
- The four-week moving average for unemployment insurance initial claims neared the worrisome 400,000 benchmark, reaching 390,500—the highest level since the four weeks following 2005's Hurricane Katrina.
For week ending July 19, the Labor Department reported that the advance figure for seasonally adjusted initial claims was 406,000, an increase of 34,000 from the previous week's revised figure of 372,000. They also reported a four-week moving average of 382,500, an increase of 4,500 from the previous week's revised average of 378,000.
While the sequence of negative payroll numbers is certainly not good news for consumers, its relatively soft pace should be kept in perspective. Even incremental gains in economic productivity will keep overall growth slightly positive. While the economic picture isn't necessarily inspiring, neither is it cause for panic. Watch for slow growth ahead.
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