A separate report showing first-time jobless claims in the latest week were in line with economists' expectations also added some dollar support.
The euro fell to around $1.4615
Thursday, February 14, 2008
Forex - Dollar pares losses as trade gap narrows
The dollar pared losses against the euro and yen on Thursday after data showed the U.S. trade gap narrowed by more than expected in December.
A separate report showing first-time jobless claims in the latest week were in line with economists' expectations also added some dollar support.
The euro fell to around $1.4615, still up 0.3 percent from late Wednesday but below $1.4630 before the data. The dollar was flat on the day at 108.27 yen from around 108.13 yen earlier.
A separate report showing first-time jobless claims in the latest week were in line with economists' expectations also added some dollar support.
The euro fell to around $1.4615
Friday, January 25, 2008
Forex - Yen extends decline as stocks rally
The euro climbed nearly 2 percent against the yen on Friday as a rally in global stocks fuelled appetite for riskier trades, putting the low-yielding Japanese currency under pressure.
Gains in high-yielding units such as the New Zealand dollar also underscored improved risk appetite as stocks rose across Europe and Asia, with Japan's benchmark Nikkei .N225 surging more than 4 percent in its biggest one-day gain in about six years.
Stock investors were cheered by a U.S. tax stimulus package, reassuring U.S. jobs data and the prospect of another Federal Reserve rate cut next week, all tending to ease fears that the world's biggest economy will slide into recession.
"You have a combination of dollar weakness and yen weakness with yen making more significant losses against other currencies, which fits in with the events that have unfolded over the last 24 hours," said Steve Barrow, currency strategist at Bear Stearns.
Stock market moves are often regarded as a barometer of risk appetite, and financial markets have calmed down after swinging wildly earlier in the week on an emergency interest rate cut by the Federal Reserve and escalating fears of a U.S. recession.
Gains in high-yielding units such as the New Zealand dollar
Stock investors were cheered by a U.S. tax stimulus package, reassuring U.S. jobs data and the prospect of another Federal Reserve rate cut next week, all tending to ease fears that the world's biggest economy will slide into recession.
"You have a combination of dollar weakness and yen weakness with yen making more significant losses against other currencies, which fits in with the events that have unfolded over the last 24 hours," said Steve Barrow, currency strategist at Bear Stearns.
Stock market moves are often regarded as a barometer of risk appetite, and financial markets have calmed down after swinging wildly earlier in the week on an emergency interest rate cut by the Federal Reserve and escalating fears of a U.S. recession.
Thursday, January 24, 2008
Forex-Euro bounces back as rate cut hopes ease
The euro strengthened against the dollar and yen on Thursday after tough talk on inflation from European Central Bank policymaker Axel Weber dampened expectations of a possible near-term interest rate cut.
The yen retreated on the back of the bounce in the euro and as European stocks extended their rally, after earlier gaining on lingering concerns over the health of the global economy.
"For the time being, the ECB are maintaining a very hawkish line so no signs of any rate cut any time soon," said Chris Turner, head of FX strategy at ING.
"You're then left with sharply lower U.S. rates, stable European rates and with equities doing quite well at the moment ... the market is just going to focus on the dollar bearish story."
Weber said the U.S. Federal Reserve's surprise decision to cut interest rates by 75 basis points this week hasn't shifted the ECB focus on euro zone inflation, dampening mounting expectations that it too will have to cut rates soon.
The euro climbed 0.3 percent to $1.4683 by 1206 GMT and was also up 0.3 percent versus the Japanese currency at 156.60 yen , well above an early low of 154.86 yen.
The dollar was steady against the Japanese currency at 106.65 yen, off early lows.
The yen retreated on the back of the bounce in the euro and as European stocks extended their rally, after earlier gaining on lingering concerns over the health of the global economy.
"For the time being, the ECB are maintaining a very hawkish line so no signs of any rate cut any time soon," said Chris Turner, head of FX strategy at ING.
"You're then left with sharply lower U.S. rates, stable European rates and with equities doing quite well at the moment ... the market is just going to focus on the dollar bearish story."
Weber said the U.S. Federal Reserve's surprise decision to cut interest rates by 75 basis points this week hasn't shifted the ECB focus on euro zone inflation, dampening mounting expectations that it too will have to cut rates soon.
The euro climbed 0.3 percent to $1.4683
The dollar was steady against the Japanese currency at 106.65 yen
Wednesday, January 23, 2008
Forex - Surprise Fed rate cut sparks U.S. dollar sell-off
The dollar tumbled against major currencies except the yen on Tuesday after the Federal Reserve unexpectedly slashed its benchmark overnight lending rate in an attempt to allay market fears of a U.S. recession.
The Fed's emergency move to cut rates by three quarters of a percentage point was precipitated by a global equities rout.
The U.S. central bank's move wiped out the dollar's yield advantage over the euro, with the federal funds rate target now at 3.5 percent and official euro zone interest rates at 4 percent. This put the European currency on track to post its biggest one-day gain against the dollar in two years.
The cut, which preceded next week's Federal Open Market Committee monetary policy meeting, was not enough to prevent U.S. stocks from falling when the market reopened after Monday's public holiday. For details see [.N].
"We are skeptical that the rate decision will have a lasting impact in offsetting concerns over economic slowdown," Tom Fitzpatrick, global head of foreign exchange at Citigroup in New York, said in a note to clients. "Lower interest rates do little to address underlying weakness in the U.S. housing sector and broader economy."
In New York late afternoon trade, the euro was up 1.2 percent on the day at $1.4613 after briefly racing to $1.4643. The euro has rebounded from a one-month low against the dollar of around $1.4366, according to Reuters data.
"Under any other Fed this would not be a surprise, but this Fed has been reluctant to cater to market expectations," said Mark Meadows, currency strategist at Tempus Consulting in Washington. "This should support the euro in the short term, however our long-standing view is still that the U.S. economy will rebound and help the dollar gain into the middle of this year."
The Fed's emergency move to cut rates by three quarters of a percentage point was precipitated by a global equities rout.
The U.S. central bank's move wiped out the dollar's yield advantage over the euro, with the federal funds rate target now at 3.5 percent and official euro zone interest rates at 4 percent. This put the European currency on track to post its biggest one-day gain against the dollar in two years.
The cut, which preceded next week's Federal Open Market Committee monetary policy meeting, was not enough to prevent U.S. stocks from falling when the market reopened after Monday's public holiday. For details see [.N].
"We are skeptical that the rate decision will have a lasting impact in offsetting concerns over economic slowdown," Tom Fitzpatrick, global head of foreign exchange at Citigroup in New York, said in a note to clients. "Lower interest rates do little to address underlying weakness in the U.S. housing sector and broader economy."
In New York late afternoon trade, the euro was up 1.2 percent on the day at $1.4613
"Under any other Fed this would not be a surprise, but this Fed has been reluctant to cater to market expectations," said Mark Meadows, currency strategist at Tempus Consulting in Washington. "This should support the euro in the short term, however our long-standing view is still that the U.S. economy will rebound and help the dollar gain into the middle of this year."
Tuesday, January 22, 2008
Forex-Canadian dollar firms as BoC cuts rates
The Canadian dollar firmed against most currencies in volatile trade, after the Bank of Canada cut interest rates a quarter point, compared with some market speculation of a half-point reduction.
However, the currency's gains were limited as the central bank also gave a heavy hint of further loosening to come.
At 14.20 GMT the US dollar was a touch weaker against its Canadian counterpart, at 1.0320 cad from around 1.0345 just before the announcement.
The Canadian dollar was also firming against the euro, pound and yen.
However, the currency's gains were limited as the central bank also gave a heavy hint of further loosening to come.
At 14.20 GMT the US dollar was a touch weaker against its Canadian counterpart, at 1.0320 cad from around 1.0345 just before the announcement.
The Canadian dollar was also firming against the euro, pound and yen.
Monday, January 21, 2008
Forex - Euro Softens on weak German PPI Inflation
The euro softened after the release of the German PPI figures, which having come in below expectations, reminded investors that euro zone interest rates are more likely to fall later this year than rise.
German PPI fell 0.1 pct on the month in December, well below forecasts for a 0.2 pct rise. Although not momentous in itself, the figures echoed comments by European Central Bank member Yves Mersch last week who said that concerns over inflation were overdone.
Those comments then caused a sharp sell-off in the euro, which remains vulnerable to any indications that inflation is easing at a time when growth is slowing markedly.
'The market has to get used to the idea that the ECB may shift from its hawkish stance with an eye on easing policy by the end of the second quarter,' said Gavin Friend at Commerzbank.
'The market may have to wait until the next ECB meeting in order to get a better idea about the future stance of the ECB, considering that several members like Axel Weber and Jean-Claude Trichet are still sounding hawkish,' said Friend.
Until then, the economic data will be watched closely.
Meanwhile, the dollar was somewhat higher, riding on positive momentum from last week when the US government proposed a fiscal plan to support economic growth, although movements may be limited as US markets are closed for Martin Luther King Day.
The 145 bln usd package, unveiled on Friday by US President Bush, will seek to complement interest rate cuts by the Federal Reserve in order to spur consumption and avoid a recession this year. The dollar gained somewhat on the news, although analysts warn that the focus may soon revert to interest rate differentials -- weakening the greenback -- as closer analysis of the fiscal stimulus reveals it may not be sufficient.
'Fiscal help in the 1960s, 1970s and during the 2001 recession showed that there was little impact on personal spending as empirical research showed that much of the rebate was saved or used to pay previous bills rather than leading to any fresh spending,' said an analyst at BNP Paribas (other-otc: BNPQY.PK - news - people ).
In the UK, the pound was weaker after yet another housing survey, this time from Rightmove, which said prices fell 0.8 pct on the month in January.
The data reinforces the view that the UK housing market is experiencing a downward correction, and that the Bank of England is likely to cut interest rates at its next policy meeting in February.
Eyes will now turn to the release at 0930 GMT of public finance figures, mortgage approvals data, and money supply.
London 0845 GMT Hong Kong 0500 GMT
US dollar
106.14 yen down from 106.87 yen
1.1041 sfr down from 1.1043 sfr
Euro
1.4516 usd down from 1.4532 usd
154.07 yen down from 155.34 yen
1.6026 sfr down from 1.6059 sfr
0.7446 stg down from 0.7449 stg
Sterling
1.9496 usd down from 1.9513 usd
206.92 yen down from 208.39 yen
2.1521 sfr down from 2.1551 sfr
Australian dollar
0.8714 usd down from 0.8761 usd
0.4467 stg down from 0.4488 stg
92.35 yen down from 93.57 yen
German PPI fell 0.1 pct on the month in December, well below forecasts for a 0.2 pct rise. Although not momentous in itself, the figures echoed comments by European Central Bank member Yves Mersch last week who said that concerns over inflation were overdone.
Those comments then caused a sharp sell-off in the euro, which remains vulnerable to any indications that inflation is easing at a time when growth is slowing markedly.
'The market has to get used to the idea that the ECB may shift from its hawkish stance with an eye on easing policy by the end of the second quarter,' said Gavin Friend at Commerzbank.
'The market may have to wait until the next ECB meeting in order to get a better idea about the future stance of the ECB, considering that several members like Axel Weber and Jean-Claude Trichet are still sounding hawkish,' said Friend.
Until then, the economic data will be watched closely.
Meanwhile, the dollar was somewhat higher, riding on positive momentum from last week when the US government proposed a fiscal plan to support economic growth, although movements may be limited as US markets are closed for Martin Luther King Day.
The 145 bln usd package, unveiled on Friday by US President Bush, will seek to complement interest rate cuts by the Federal Reserve in order to spur consumption and avoid a recession this year. The dollar gained somewhat on the news, although analysts warn that the focus may soon revert to interest rate differentials -- weakening the greenback -- as closer analysis of the fiscal stimulus reveals it may not be sufficient.
'Fiscal help in the 1960s, 1970s and during the 2001 recession showed that there was little impact on personal spending as empirical research showed that much of the rebate was saved or used to pay previous bills rather than leading to any fresh spending,' said an analyst at BNP Paribas (other-otc: BNPQY.PK - news - people ).
In the UK, the pound was weaker after yet another housing survey, this time from Rightmove, which said prices fell 0.8 pct on the month in January.
The data reinforces the view that the UK housing market is experiencing a downward correction, and that the Bank of England is likely to cut interest rates at its next policy meeting in February.
Eyes will now turn to the release at 0930 GMT of public finance figures, mortgage approvals data, and money supply.
London 0845 GMT Hong Kong 0500 GMT
US dollar
106.14 yen down from 106.87 yen
1.1041 sfr down from 1.1043 sfr
Euro
1.4516 usd down from 1.4532 usd
154.07 yen down from 155.34 yen
1.6026 sfr down from 1.6059 sfr
0.7446 stg down from 0.7449 stg
Sterling
1.9496 usd down from 1.9513 usd
206.92 yen down from 208.39 yen
2.1521 sfr down from 2.1551 sfr
Australian dollar
0.8714 usd down from 0.8761 usd
0.4467 stg down from 0.4488 stg
92.35 yen down from 93.57 yen
Sunday, January 20, 2008
Forex reserves rise by USD 5,474 mn
Forex reserves rose USD 5,474 million to touch USD 281,729 million as on Jan. 11, 2008, primarily as a result of increase in foreign currency and assets collections, on a weekly basis.
As per the weekly statistical supplement of the Reserve Bank of India (RBI) released on Jan. 18, 2008, foreign currency and assets moved up USD 5,473 million to USD 272,964 million.
During the same period, the reserve position in the international monetary fund (IMF) increased by USD 1 million to USD 434 million.
However, SDRs (special drawing rights) and gold reserves remained flat at USD 3 million and USD 8,328 million respectively.
Foreign currency assets expressed in USD include the effect of appreciation or depreciation on non-US currencies (such as Euro, Sterling and Yen) held in reserves.
As per the weekly statistical supplement of the Reserve Bank of India (RBI) released on Jan. 18, 2008, foreign currency and assets moved up USD 5,473 million to USD 272,964 million.
During the same period, the reserve position in the international monetary fund (IMF) increased by USD 1 million to USD 434 million.
However, SDRs (special drawing rights) and gold reserves remained flat at USD 3 million and USD 8,328 million respectively.
Foreign currency assets expressed in USD include the effect of appreciation or depreciation on non-US currencies (such as Euro, Sterling and Yen) held in reserves.
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