The Forex Daily Digest – December 10, 2009
The USD is expected to extend its fall from almost a one-month high against the EUR after a rebound in U.S. stocks revived demand for higher-yielding assets. Meantime, the price of gold advanced, trimming this week’s loss, as a fall in the USD revived investor appetite for the precious metal as an alternative asset.
Economic reports released this morning included the Initial Jobless Claims report. The number of people filing claims for state unemployment benefits rose by 17,000 to a seasonally adjusted 474,000 in the week ending Dec. 5, while the total number of people claiming benefits of any kind exceeded 10 million, a sign of very sluggish hiring. And the U.S. trade deficit narrowed by 7.6% in October to $32.9 billion. Exports rose faster than imports in October. The narrowing of the trade gap was unexpected. Wall Street economists expected a deficit of $37.0 billion.
The CAD gained for a second day against the USD as stocks and crude oil, the nation’s biggest export, rose, burnishing the appeal of currencies tied to growth. The CAD continued its gains as a government report showed Canada posted its first trade surplus in four months in October on rising shipments and higher prices for the nation’s gold and energy. The surplus totaled C$428 million ($407 million), following a revised deficit of C$850 million in September.
The JPY fell against all of its major counterparts. The NZD rose to a one-week high against the USD as Reserve Bank Governor Alan Bollard said he expects to start raising interest rates in the middle of 2010. The AUD advanced for a second day as the nation’s companies added six times more jobs than economists forecast.
In Europe, the GBP increased against the EUR for the first day in three as the Bank of England decided on interest rates and its asset-purchase plan. Sterling also snapped a five-day decline against the USD. The Monetary Policy Committee, led by Governor Mervyn King, kept the benchmark rate at a record low of 0.50 percent and its bond-buying program unchanged at 200 billion pounds ($326 billion). The central bank expanded its asset-purchase plan by 25 billion pounds in November. And the CHF was little changed against the EUR after the central bank said it would halt bond purchases.
ECB President Jean-Claude Trichet said that financial markets have understood the European Central Bank's message that unwinding liquidity support is no signal on interest rates. In newspaper interviews in Belgium, Trichet said benchmark interest rates -- now at 1 percent -- were appropriate and indexing the cost of funds in its last 12-month liquidity operation next week did not imply anything about the future policy path.
On Friday’s economic calendar watch for Import and Export figures for the month of November, November Retail Sales, the December preliminary University of Michigan Consumer Sentiment report and October’s Business Inventories. There are no major earnings scheduled for Friday.
Happy Trading,
James Dicks
Economic reports released this morning included the Initial Jobless Claims report. The number of people filing claims for state unemployment benefits rose by 17,000 to a seasonally adjusted 474,000 in the week ending Dec. 5, while the total number of people claiming benefits of any kind exceeded 10 million, a sign of very sluggish hiring. And the U.S. trade deficit narrowed by 7.6% in October to $32.9 billion. Exports rose faster than imports in October. The narrowing of the trade gap was unexpected. Wall Street economists expected a deficit of $37.0 billion.
The CAD gained for a second day against the USD as stocks and crude oil, the nation’s biggest export, rose, burnishing the appeal of currencies tied to growth. The CAD continued its gains as a government report showed Canada posted its first trade surplus in four months in October on rising shipments and higher prices for the nation’s gold and energy. The surplus totaled C$428 million ($407 million), following a revised deficit of C$850 million in September.
The JPY fell against all of its major counterparts. The NZD rose to a one-week high against the USD as Reserve Bank Governor Alan Bollard said he expects to start raising interest rates in the middle of 2010. The AUD advanced for a second day as the nation’s companies added six times more jobs than economists forecast.
In Europe, the GBP increased against the EUR for the first day in three as the Bank of England decided on interest rates and its asset-purchase plan. Sterling also snapped a five-day decline against the USD. The Monetary Policy Committee, led by Governor Mervyn King, kept the benchmark rate at a record low of 0.50 percent and its bond-buying program unchanged at 200 billion pounds ($326 billion). The central bank expanded its asset-purchase plan by 25 billion pounds in November. And the CHF was little changed against the EUR after the central bank said it would halt bond purchases.
ECB President Jean-Claude Trichet said that financial markets have understood the European Central Bank's message that unwinding liquidity support is no signal on interest rates. In newspaper interviews in Belgium, Trichet said benchmark interest rates -- now at 1 percent -- were appropriate and indexing the cost of funds in its last 12-month liquidity operation next week did not imply anything about the future policy path.
On Friday’s economic calendar watch for Import and Export figures for the month of November, November Retail Sales, the December preliminary University of Michigan Consumer Sentiment report and October’s Business Inventories. There are no major earnings scheduled for Friday.
Happy Trading,
James Dicks
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