The Forex Daily Digest – August 28, 2009
The USD fell against major counterparts, as stocks -- partly helped by a successful auction of Treasury bonds -- staged a come-back in afternoon trade, leading traders to dump some safe-haven positions in low- yielding currencies.
Asian markets advanced today after stocks on Wall Street rebounded to end higher, with Japanese shares on the advance ahead of weekend general elections that are widely expected to bring the opposition to power. Also in news from Asia, the Bank of China, China's number three lender, said its second-quarter profit rose more than 20% from the first quarter, and noted loan growth surged during the first half in keeping with the central government's economic stimulus goals.
The CAD strengthened the most in two weeks against the USD, reversing an earlier decline as crude oil and stocks erased losses and rose. The loonie gained earlier after profit before one-time items at the Royal Bank of Canada, Toronto-Dominion Bank and National Bank of Canada exceeded the median estimates of analysts in separate Bloomberg surveys. The banks are the country’s first-, second- and sixth-largest commercial lenders, respectively.
The NZD is set to complete a seven-week gain, the longest rally since 2007, as rising Asian stocks sustained demand for higher-yielding assets. The kiwi and the AUD found buyers after crude oil, the nation’s fourth most-valuable commodity export, climbed 2.2 percent, ending two days of losses.
Oil prices settled more than one dollar higher, reversing directions several times toward the end of a volatile trading week. U.S. crude for October delivery jumped $1.06 to settle at $72.49 a barrel. Oil prices had risen nearly 10% this week, but it wasn't a steady climb. In fact, it's been a choppy summer for crude, with prices jumping 15% since Memorial Day.
The Federal Reserve’s balance sheet expanded for a third straight week, the longest streak since April, as the central bank’s holdings of Treasuries and mortgage-related securities increased. Fed Chairman Bernanke has flooded the banking system with reserves, providing billions in financing and liquidity for banks and the commercial paper and asset-backed securities markets.
French President Nicolas Sarkozy said this week that the increase of emerging economies such as China and Russia will prevent the USD from remaining the world's only reserve currency. He said that the political and economic reality of a “multi-polar world will have to find sooner or later a translation on the monetary level."
Economic report scheduled for release today includes Personal Income and Spending for July and revised Michigan Consumer Sentiment report for August.
Friday is always the slowest earnings day but on the calendar today is Tiffany & Co., Bank of Nova Scotia, China Unicom Limited, PetroChina Company Limited, and Star Cruises Ltd.
Have a great weekend and I’ll see you back here on Monday morning.
Happy Trading,
James Dicks
Asian markets advanced today after stocks on Wall Street rebounded to end higher, with Japanese shares on the advance ahead of weekend general elections that are widely expected to bring the opposition to power. Also in news from Asia, the Bank of China, China's number three lender, said its second-quarter profit rose more than 20% from the first quarter, and noted loan growth surged during the first half in keeping with the central government's economic stimulus goals.
The CAD strengthened the most in two weeks against the USD, reversing an earlier decline as crude oil and stocks erased losses and rose. The loonie gained earlier after profit before one-time items at the Royal Bank of Canada, Toronto-Dominion Bank and National Bank of Canada exceeded the median estimates of analysts in separate Bloomberg surveys. The banks are the country’s first-, second- and sixth-largest commercial lenders, respectively.
The NZD is set to complete a seven-week gain, the longest rally since 2007, as rising Asian stocks sustained demand for higher-yielding assets. The kiwi and the AUD found buyers after crude oil, the nation’s fourth most-valuable commodity export, climbed 2.2 percent, ending two days of losses.
Oil prices settled more than one dollar higher, reversing directions several times toward the end of a volatile trading week. U.S. crude for October delivery jumped $1.06 to settle at $72.49 a barrel. Oil prices had risen nearly 10% this week, but it wasn't a steady climb. In fact, it's been a choppy summer for crude, with prices jumping 15% since Memorial Day.
The Federal Reserve’s balance sheet expanded for a third straight week, the longest streak since April, as the central bank’s holdings of Treasuries and mortgage-related securities increased. Fed Chairman Bernanke has flooded the banking system with reserves, providing billions in financing and liquidity for banks and the commercial paper and asset-backed securities markets.
French President Nicolas Sarkozy said this week that the increase of emerging economies such as China and Russia will prevent the USD from remaining the world's only reserve currency. He said that the political and economic reality of a “multi-polar world will have to find sooner or later a translation on the monetary level."
Economic report scheduled for release today includes Personal Income and Spending for July and revised Michigan Consumer Sentiment report for August.
Friday is always the slowest earnings day but on the calendar today is Tiffany & Co., Bank of Nova Scotia, China Unicom Limited, PetroChina Company Limited, and Star Cruises Ltd.
Have a great weekend and I’ll see you back here on Monday morning.
Happy Trading,
James Dicks
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