Forex Daily Digest's Blog – January 2010 Archive (16)

The USD increased to a fresh six-month high, pushed forward by data that showed the U.S. economy grew at a faster-than-expected pace in the final quarter of the year and consumer confidence rose this month. The gains came after the Commerce Department reported that real gross domestic product grew at a 5.7% seasonally-adjusted annual rate in the final three months of the year, posting the best quarterly growth since late 2003.



The CAD traded near the lowest level since December… Continue

The USD increased to the highest since July against the EUR, as investors around the globe signaled approval of the Federal Reserve's more upbeat outlook for the U.S. economy. The dollar rose against the euro yesterday after the Federal Reserve upgraded its economic outlook and reaffirmed it will end a $1.25 trillion program to buy mortgage-backed securities.



Kansas City Fed President Thomas Hoenig dissented from a reiteration of a pledge to keep borrowing costs at record lows for an… Continue

The GBP rose against the USD after an official from the Bank of England suggested that the British economy may have grown more in the fourth quarter than was initially estimated. Andrew Sentance, a member of the Bank of England's monetary-policy committee, said it will be difficult to keep inflation on target given the GBP’s depreciation against other major currencies. The USD stabilized against major currency pairs, touching its highest level in more than a month, on reports that China wanted… Continue

The USD increased to its highest in more than a month on news that China wanted to limit bank lending and that Japan's debt rating is in jeopardy, drawing investors to the relative safe-haven of the USD. The USD also experienced gains after the U.S. Case-Shiller home price index fell 0.2% in November compared with October on a not seasonally adjusted basis, underlining risks to the U.S. recovery. The USD also increased following news reports that President Obama will propose a spending freeze… Continue

The USD fell against the EUR, ending six days of advances, over concern that a U.S. proposal to restrain trading by financial institutions will discourage investors from buying assets in the world’s largest economy. The USD dropped from the strongest level since July against the EUR. The JPY headed for a second weekly gain against its 16 major counterparts as stocks fell around the world, boosting demand for the currency as a refuge.



The GBP fell against the EUR after a report showed… Continue

The USD reached a five-month high against the EUR and gained on other currencies amid continuing sovereign-debt worries in the euro zone and additional signs that the region's recovery seems to be losing momentum. Gold rallied, setting the pace of gains in other precious metals including platinum, after its biggest drop in a month lured buyers and the dollar’s rally paused. Palladium reached a 19-month high.



One analyst said that the USD is currently up sharply on risk aversion due… Continue

The USD gained after data showed mild inflation and an increase in future housing permits. The EUR dropped to a five-month low against the USD as fears that Chinese efforts to restrain lending led investors to avoid risky assets and concerns about Greece's budget problems sent kept pressure on the EUR.



International Monetary Fund Managing Director Dominique Strauss-Kahn said the euro region will survive the turmoil caused by Greece’s credit downgrade, a day after finance chiefs… Continue

The EUR lost ground as German investor sentiment deteriorated while relentless concern over Greece’s finances kept the pressure on the currency. Against the USD, the EUR dropped below its 200-day moving average around $1.4285. It also fell to a one-month low against the JPY and a four-month low against sterling after Kraft Foods agreed to buy Britain's Cadbury Plc, increasing demand for GBPs.



The CAD fell as the nation’s central bank promised to leave the benchmark interest rate at a… Continue

Financial markets in the U.S. are closed today for the observance of the Martin Luther King day holiday. Investors will closely watch U.S. earnings this week, with financial services heavyweights Bank of America and Morgan Stanley expected to report on Wednesday, and results from Goldman Sachs due on Thursday. The USD and JPY fell in subdued Asian trading today, giving up earlier gains as investors delayed trading actively with the New York stock market closed for the… Continue

The USD headed for a second weekly decline on speculation the Federal Reserve will keep interest rates near zero to aid the U.S. economic recovery. The USD gained against the EUR amid worries about Greece's fiscal situation and refuted rumors that German Chancellor Angela Merkel was preparing to resign. The dollar held onto those gains and others against major currencies as reports showed inflation was tame and an index on regional manufacturing improved.



Meantime, German Chancellor… Continue

The dollar gained a little ground on the euro and other major currencies in volatile trading Thursday after U.S. economic reports let some of the air out of hopes the largest global economy would continue to recover smoothly. Analysts noted news reports that William Dudley, president of the Federal Reserve Bank of New York, said the target interest rate as set by the Federal Open Market Committee could remain unchanged for up to two years.



The European Central Bank left official… Continue

The U.S. dollar held to minor losses against a basket of its rivals after the Federal Reserve's report on regional economic conditions said conditions were improving modestly, and the U.S. Treasury said the government ran a budget deficit of $91.8 billion in December. The dollar index traded at 77 versus 76.84 just ahead of the release, for a loss of about 0.2% for the day. The USD fell against the EUR, GBP and the CAD but gained against the JPY.



The Fed's Beige Book was released… Continue

The USD rose against higher- yielding currencies on speculation the global economy recovery may be slowing, spurring demand for the safety of the dollar. The USD gained the most against South Africa’s rand, the Norwegian krone and the South Korean won after an official at China’s sovereign wealth fund said he saw an end to the dollar’s recent decline. The AUD weakened for the first time in three days after a government report showed home- loan approvals declined more than economists… Continue

The USD dropped to a three-week low versus the EUR and fell to its weakest point since October versus the CAD, as signs the global recovery is gaining pace boosted demand for higher-yielding and commodity currencies. The AUD rose to the highest in a month versus the USD after a Chinese government report showed exports climbed for the first time in 14 months and imports reached record highs. South Korea’s won rose for a seventh day, its longest winning streak in three months, on speculation… Continue

The USD turned higher against the EUR, boosted by some technical buying. The U.S. stock markets and oil declined while Treasuries rallied after American employers unexpectedly eliminated jobs last month, spurring concern the economic recovery will weaken. The U.S. Dollar Index, a six-currency gauge of the strength of the USD, fell 0.5 percent after a U.S. payrolls report showed 85,000 jobs were lost in December. Some investors buy gold to hedge against a decline in the U.S.… Continue

The USD traded higher against most major rivals this morning, helped by remarks from Japan's new finance minister indicating a desire for a weaker JPY. Reluctance by traders to make big bets ahead of the release of December U.S. employment data last week helped relieve pressure on the dollar, after minutes of the last Federal Reserve meeting showed policy makers continue to expect a slow recovery with little threat of inflation pressure.



Japanese Finance Minister Naoto Kan said that… Continue