The Forex Daily Digest - September 29, 2009
The USD lost some of its gains yesterday after the U.S. equities markets began trading in the positive. The Dow Jones Industrial Average actually finished higher by more than 124 points. Over the past few months, the U.S. dollar has moved in the opposite direction as stocks. The USD is considered a currency that holds value in uncertain times. Then as the position has brightened, investors have sold their dollars to buy more volatile but higher-yielding currencies.
The JPY hit its highest level in eight months against the USD on speculation Japan’s new government will allow its currency to appreciate. The U.S. dollar fell below 89 yen for the first time since February after Finance Minister Hiroshisa Fujii said the JPY’s moves aren’t excessive. Fujii said the increase of the JPY's against the USD wasn't "abnormal" in relation to currency trends. Meantime, the Japanese Prime Minister, Yukio Hatoyama, said that the yen’s increase was hurting small firms in Japan.
The President of the World Bank, Robert Zoellick, said the USD’s dominance as the world’s main reserve currency will be challenged as the financial crisis reshapes the global economy. He outlined ways he sees the balance of power in the global economy shifting after the financial crisis. He believes that China and probably India will rise in influence and the U.S.’s economic might may be lessened as the international system is “overhauled before our eyes.”
The EUR posted little reaction to the outcome Sunday’s elections is Germany. The USD appreciated the most against the EUR in almost four weeks after European Central Bank President Jean-Claude Trichet said it’s “extremely important” to have a strong dollar.
The CAD gained for the first time in four days as global equities advanced, increasing the appeal of currencies tied to economic growth. The loonie averaged about C$1.31, or 76 U.S. cents, over 20 years. It is up 11 percent this year, after dropping a record 18 percent last year. The Cad fell two percent fell over five days ended Sept. 25th, its first decline in a month, as crude oil dropped more than $6 a barrel. Crude is Canada’s largest export.
Bank of Canada Governor Mark Carney said that the Canadian economy is recovering from its first recession since 1992, and repeated that ``persistent strength'' in the currency could offset the improvement in growth and keep inflation below its target.
The AUD and NZD fell as futures signaled a drop in Japanese and Australian stocks, damping demand for higher-yielding assets. Reserve Bank of Australia governor Glenn Stevens said that Australia's mid-term prospects are good as the economy emerges from the global economic downturn, and has again signaled that interest will rise. He told the Senate Economics References Committee yesterday, "I have maintained throughout that Australia's medium-term prospects remained good and that we should not lose confidence."
On the economic calendar today, watch for the Case-Shiller Housing Price Index for July. Analysts are expecting it to come in at -14.20% after a -15.44% last month. The September Consumer Confidence report is also on the calendar for release today and is expected to move from 54.1 last month to 57.0 this month.
On the earnings calendar Jabil Circuit, Nike, Micron Technology, Sealy Corp, Worthington Industries and Walgreen are all scheduled to release their quarterly numbers today.
Happy Trading,
James Dicks
The JPY hit its highest level in eight months against the USD on speculation Japan’s new government will allow its currency to appreciate. The U.S. dollar fell below 89 yen for the first time since February after Finance Minister Hiroshisa Fujii said the JPY’s moves aren’t excessive. Fujii said the increase of the JPY's against the USD wasn't "abnormal" in relation to currency trends. Meantime, the Japanese Prime Minister, Yukio Hatoyama, said that the yen’s increase was hurting small firms in Japan.
The President of the World Bank, Robert Zoellick, said the USD’s dominance as the world’s main reserve currency will be challenged as the financial crisis reshapes the global economy. He outlined ways he sees the balance of power in the global economy shifting after the financial crisis. He believes that China and probably India will rise in influence and the U.S.’s economic might may be lessened as the international system is “overhauled before our eyes.”
The EUR posted little reaction to the outcome Sunday’s elections is Germany. The USD appreciated the most against the EUR in almost four weeks after European Central Bank President Jean-Claude Trichet said it’s “extremely important” to have a strong dollar.
The CAD gained for the first time in four days as global equities advanced, increasing the appeal of currencies tied to economic growth. The loonie averaged about C$1.31, or 76 U.S. cents, over 20 years. It is up 11 percent this year, after dropping a record 18 percent last year. The Cad fell two percent fell over five days ended Sept. 25th, its first decline in a month, as crude oil dropped more than $6 a barrel. Crude is Canada’s largest export.
Bank of Canada Governor Mark Carney said that the Canadian economy is recovering from its first recession since 1992, and repeated that ``persistent strength'' in the currency could offset the improvement in growth and keep inflation below its target.
The AUD and NZD fell as futures signaled a drop in Japanese and Australian stocks, damping demand for higher-yielding assets. Reserve Bank of Australia governor Glenn Stevens said that Australia's mid-term prospects are good as the economy emerges from the global economic downturn, and has again signaled that interest will rise. He told the Senate Economics References Committee yesterday, "I have maintained throughout that Australia's medium-term prospects remained good and that we should not lose confidence."
On the economic calendar today, watch for the Case-Shiller Housing Price Index for July. Analysts are expecting it to come in at -14.20% after a -15.44% last month. The September Consumer Confidence report is also on the calendar for release today and is expected to move from 54.1 last month to 57.0 this month.
On the earnings calendar Jabil Circuit, Nike, Micron Technology, Sealy Corp, Worthington Industries and Walgreen are all scheduled to release their quarterly numbers today.
Happy Trading,
James Dicks
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