Forex Daily Digest's Blog – November 2009 Archive (19)

The USD fell against other major currencies, falling back from gains made last week, after the United Arab Emirates offered emergency assistance to banks in Dubai, calming market fears about an ominous debt default. The USD pared some losses after one of two flagship firms behind Dubai's rapid growth said it had asked for three listed Islamic bonds to be suspended from the Nasdaq Dubai until it could inform the market fully about the outlook for the bonds.



European Central Bank… Continue

The USD and the JPY lost some of their gains but remained higher against major rivals at the end of the week, benefiting from their safe-haven status in the face of mounting concerns over the potential financial fallout from Dubai's debt problems. The selling occurred as investor sentiment fell in the wake of news that Dubai World, the Gulf emirate's main conglomerate, asked creditors for a six-month stay on debt repayments of $59 billion.



Gold fell in New York and London as gains in… Continue

The USD lost ground against major pairs, which allowed the EUR to again obtain more than $1.50 as overall economic sentiment rebounded and the U.S. Federal Reserve showed no misgivings about the U.S. dollar’s decline. The broadly weaker USD also broke parity with the Swiss franc for the first time since July 2008. Gold climbed to a record in London and New York on a further drop by the USD and on a report that India may buy more bullion for its central-bank reserves.



China's… Continue

The USD experienced its biggest fall in two weeks against major counterparts, after a Federal Reserve official's call to extend some of the central bank's stimulus measures suggested interest rates will remain low indefinitely. James Bullard, president of the Federal Reserve Bank of St. Louis, made the comments. He'll have a vote on the Fed panel charged with setting policy on U.S. interest rates next year. A broad-based stock rally continued Monday afternoon following rate-related comments… Continue

U.S. dollar forecasters are predicting that the world’s reserve currency will continue to fall even after the Fed starts to raise interest rates, which policy makers believe is still an “extended period” away. Standard Chartered Plc, Aletti Gestielle SGR, HSBC Holdings Plc and Scotia Capital Inc. say the USD will depreciate as much as 7.1 percent against the EUR. About $12 trillion of fiscal and monetary stimulus, the world’s lowest borrowing costs and a record $4 trillion of government bond… Continue

The USD advanced, heading to its first weekly gain in three weeks against higher-yielding currencies in Australia, New Zealand and the U.K. as a week's worth of official commentary and economic data has dampened expectations of a strong rebound from the U.S. recession. Thin trading and lack of major economic data in Europe and the United States, analysts looked at possible steps being considered by emerging-market countries that would further dampen hopes for stronger growth in less developed… Continue

The JPY and USD strengthened against the EUR as Asian and European stock markets fell, discouraging demand for higher-yielding assets. The JPY increased against all of its 16 most-traded counterparts as equities weakened. The NZD was headed for the worst performance against the USD in the past month among major currencies as the nation’s main opposition party ended its support for the central bank’s priority of containing inflation. New Zealand’s main opposition Labor Party will no longer… Continue

The USD came off lows early after government reports showed U.S. consumer prices rose more than expected last month while construction of new homes fell sharply last month. The consumer price index has fallen 0.2% in the past year. The core CPI - which excludes food and energy prices in order to get a better look at underlying inflation - increased 0.2% in October, led by higher prices for cars and trucks, due in part to the unwinding of the government's cash-for-clunkers deal.



In… Continue

The USD ground versus the EUR and high-yielding commodity currencies as equity markets weakened around the world, indicating a retreat in appetite for risk among investors. The USD lost some of its earlier gains against the JPY and EUR after data showed smaller than expected gains in producer prices last month, adding to the view that U.S. interest rates will stay low for some time yet.



Wholesale prices rose less than expected in October as the weak economy keeps inflation pressures… Continue

The USD remained under pressure today, after the government reported U.S. retail sales rose more than expected in October. The dollar also fell against most of its major counterparts as Japan’s better-than-anticipated economic growth forecast in the third quarter encouraged demand for higher yielding assets.



U.S. retail sales rose 1.4% in October, more than analysts expected. A large downward revision to September's sales offset the upside surprise. Separately, the New York Federal… Continue

The USD has lost ground, with strategists attributing the modest weakness to market participants taking profits on the dollar's recent bounce. A modest return to risk appetite was seen triggering some weakness in the USD. The EUR was mixed, edging up a bit on the USD but falling against the JPY and the GBP as foreign-exchange traders reacted to data on euro-zone economic growth. The third-quarter data confirmed the 16-nation region that shares the single currency returned to growth after five… Continue

The USD rebounded against the EUR, pulling an index on the dollar away from a new 15-month low, as U.S. equity markets pared some of the strong gains earlier in the session and led traders to reconsider bets on riskier assets. The GBP was the big mover, falling more than 1% versus the dollar as officials talked down the currency and hinted at the possibility of further quantitative easing.



China will probably let the yuan start rising against the dollar in early 2010 after the… Continue

Today is Veterans Day in the United States and a bank holiday. Although the U.S. equities markets are open, the bond markets are closed. Also most city, federal and state courts and offices are closed today in observance of Veterans Day. The Post Office is also closed today.



The USD fell against most major currency rivals except the GBP, facing pressure as traders showed renewed appetite for risk assets and a "carry-trade" strategy centered on selling the dollar. Equity markets were… Continue

The dollar rose from almost a 15- month low against the currencies of major U.S. trading partners as a fall in U.S. stock-index futures slowed demand for higher- yielding assets. Sterling fell against the USD as Fitch Ratings said the U.K.’s credit rating is the most at risk among top-rated nations. The International Monetary Fund said in a report that the USD may still be overvalued as traders use the currency to fund carry trades. The IMF said that the dollar “has moved closer to medium-run… Continue

Gold futures rose, after the U.S. government reported the unemployment rate in October, topped the 10% mark for the first time in 26 years, pressuring stocks and lifting safe-haven demand for the USD against the JPY. The dollar fell against the JPY after the October Nonfarm Payrolls report was released. Analysts said the report was disappointing and boosted risk aversion trade.



The unemployment rate in the U.S. increased to 10.2 percent in October and employers cut more jobs than… Continue

The USD fell against the JPY and the GBP, though the dollar moved up against the EUR ahead of a rate decision in Frankfurt. The GBP gained ground following the Bank of England's decision to expand its quantitative easing program by 25 billion pounds. Some in the market had expected an even bigger expansion of the program that buys up gilts and other assets. Interest rates in the U.K. were kept at a record low of 0.5%. Yesterday, the USD lost some ground against major counterparts after the… Continue

The USD traded lower, pulled down as investors showed renewed appetite for equities and risky assets, although many traders appeared satisfied to stay on the sidelines ahead of the conclusion of the U.S. Federal Reserve's two-day policy meeting. The Fed's policy committee will finish its two-day meeting later today. An announcement with policy makers' outlook for rates and the economy is expected at about 2:15 p.m. (ET) this afternoon. The overwhelming consensus is that the Fed will keep the… Continue

The USD hit a one-month high against a currency basket as investors retreated from risk assets on jitters over banks and braced for central bank meetings in the United States, euro zone and UK. Sterling tumbled to a one-week low against the dollar after the UK Treasury announced a shake-up of British banks, which raised concerns about the financial sector.



Federal Reserve officials meeting this week must weigh improving economic data against the risk, reinforced by a persistently… Continue

The USD gained against major counterparts at the end of last week for the sixth day in the past seven after a government report showed U.S. consumer spending fell in September, threatening the ability of the nation's economy to continue expanding and weighing on equities.



FOREX traders largely ignored a private report showing the Chicago purchasing managers index rose more than expected, to a reading of 54.2 in October from 46.1 in September. Levels over the 50 mark indicate more… Continue