Analitics
Greenback Pares Gains as Stocks Rise
* The dollar pared earlier gains as the US equity market reversed earlier losses on Thursday. The Conference Board US leading economic indicators index climbed for a sixth straight month in September while the US jobless situation deteriorated slightly and US home prices unexpectedly fell. The S&P 500 index, reversing earlier losses, gained 11.51 to 1,092.91. The yen was pressured by Japan’s weak exports. Sterling was little changed on flat UK retail sales. The Australian and Canadian dollars declined modestly as commodity prices consolidated previous strong gains.
Source: Hans Nilsson
22.10.2009
Greenback Declines Despite Falling Stocks
* The dollar fell on Wednesday despite a late selloff on Wall Street. The Federal Reserve’s Beige Book showed weak consumer spending during late summer and early fall. However, “many sectors” of the economy either stabilized or improved modestly the last six weeks. The pickups, though, often were from “depressed” levels of activity, the Fed said. The S&P 500 index, reversing earlier gains in the late selloff, fell 9.66 to 1,081.40. The yen declined modestly. Toyota and Honda said they move production oversea as the high yen makes Japanese produced cars uncompetitive. The euro climbed above the 1.50-handle for the first time in 14 months. The Australian dollar rose as Australia’s leading economic index advanced. The Canadian dollar recovered some of yesterday’s sharp declines. Strong gains in the CRB index also supported the commodity currencies. The Swiss franc rose against the dollar and the EUR/CHF is back in the 1.51 area where the Swiss National Bank earlier intervened to weaken the franc.
Source: Hans Nilsson
21.10.2009
USD/CAD Surges as BOC Worries
* The dollar rose on Tuesday as risk sentiment declined. US housing starts increased less than forecast and producer prices unexpectedly fell, increasing worries about the economic recovery and deflationary fears. US stocks consolidated gains and the S&P 500 index fell 6.85 to 1,091.06. The yen declined modestly. The euro reversed earlier gains after touching the 1.50-handle resistance. Sterling was pressured by the UK’s record budget deficit. The overbought Australian dollar fell despite hawkish comments by the Reserve Bank of Australia.
Source: Hans Nilsson
20.10.2009
Aussie at 14-Month High
* The dollar fell versus its counterparts on Monday as risk appetite rose and stocks hit new cyclical highs. The Federal Reserve Bank of New York said it is assessing reversed repos to drain liquidity from the financial system is not a sign of an imminent rise in interest rates. US home builder confidence unexpectedly declined in October. The S&P 500 index rose 10.23 points to 1097.91 on earnings optimism and the indication from the NY Fed that liquidly will keep flowing from the central bank for the foreseeable future. After the close, Apple computer reported better-than-expected earnings. The yen rose on reports of an improving economic outlook in Japan. The euro advanced. Sterling climbed on increasing risk appetite and rising UK house prices after being pressured on news saying Bank of England Monetary Policy Committee member Adam Posen might support expanding quantitative easing policy. The Canadian dollar was supported by higher oil prices ahead of Tuesday’s Bank of Canada interest-rate decision meeting. The BOC is expected to maintain its key interest rate at 0.25%.
Source: Hans Nilsson
19.10.2009
Dollar May Gain on Stock Correction
* The dollar rose against most major currencies on Friday as risk appetite moderated and stocks fell. US industrial production rose strongly, but consumer sentiment declined modestly. The S&P 500 index fell 8.88 points to 1,087.68 on disappointing earnings announcements from Bank of America and GE. The yen fell for a second day. The euro declined for the first time this week; eurozone exports dropped the most in seven months and EU officials expressed concerns over the euro’s strength and the dollar’s weakness. Sterling gained for a second day against the dollar and in cross trades, supported by speculation the Bank of England may pause its quantitative easing policy. The overbought Australian and Canadian dollars fell despite higher commodity prices.
Source: Hans Nilsson
16.10.2009
Sterling Surges on Possible Quantitative Easing Pause
* The dollar traded mixed on Thursday, sharply lower versus the pound and markedly higher against the yen. US consumer-price inflation rose slightly more than expected while initial jobless claims fell to the lowest level since January. The S&P 500 index rose 4.54 points to 1,096.56 on good earning announcements. The yen fell as investors covered short GBP/JPY positions. The euro pared overnight gains, pressured by falling eurozone consumer-price inflation. A new yearly high in crude oil prices did not boost the Canadian dollar. The oversold USD/CAD rallied after touching a 14-month low at the 1.02 handle, supported by weaker-than-expected Canadian manufacturing sales and fear of a Bank of Canada intervention. The Australian dollar was supported by Reserve Bank of Australia Governor Glenn Stevens’ comment that the RBA can’t be too timid in raising interest rates.
Source: Hans Nilsson
15.10.2009
Dollar Drops as Dow Tops 10,000
* The dollar fell versus its rivals on Wednesday as better-than-estimated corporate earnings and economic data lifted investor risk appetite. The Dow Jones 30 index closed above 10,000 for the first time in over a year and the S&P 500 index rose 18.83 points to 1092.02. The dollar index dropped to the lowest level since August 2008, breaking the 76-area support. Some Federal Reserve policy makers said expanding the Fed’s $1.25 trillion mortgage-backed securities purchase program may help revive the economy, according to minutes of the Federal Open Market Committee’s September 22-23 meeting released today. Better-than-expected Chinese trade data, relatively upbeat US retail sales, rising eurozone industrial production, and improving UK labor-market conditions signaled the global economy is on the mend. The Bank of Japan maintained its key interest rate at 0.10%, as forecast. The BOJ said “Japan's economy has started to pick up” but warned that “the outlook is attended by a significant level of uncertainty stemming mainly from developments in overseas economies and global financial markets.”
Source: Hans Nilsson
14.10.2009
GBP/USD Support Held
* The dollar fell versus most major currencies on Tuesday. The dollar index was at a 14-month low and below the 76-handle despite the S&P 500 index declining 3.00 points to 1,073.19. Intel reported strong results after the stock market was closed. The yen rose modestly ahead of the Bank of Japan’s interest rate decision. The BOJ is expected to maintain its key rate at 0.10%. Investors are anxious to see whether the BOJ is considering changing its bond purchasing plan. The euro rose despite a modest decline in European investor sentiment. The Australian and Canadian dollars advanced, adding to recent strong gains as commodity prices climbed.
Source: Hans Nilsson
13.10.2009
Dollar Rises Despite Stock Gains
* The dollar rose on Friday, supported by Federal Reserve Chairman Ben Bernanke’s comment last night that the Fed will tighten monetary policy “when the economic outlook improves sufficiently.” This is not a big surprise to the financial markets; however, in conjunction with White House economic adviser Larry Summers’ support for the dollar, it helped the US currency today. Summers said “any idea that nations can devalue their way to prosperity is one that economic experience very much belies.” US stocks rose. The S&P 500 was up 6.01 points to 1,071.49. The euro was pressured by weak German exports. Sterling fell for the week. The Australian dollar consolidated strong weekly gains. The Canadian dollar added to weekly gains as Canada’s employment rose for a second consecutive month and the unemployment rate unexpectedly declined.
Source: Hans Nilsson
09.10.2009
Safe to Short Dollar?
* The dollar fell on Thursday as better-than-expected initial jobless claims indicated the US economy is slowly improving. The Bank of England and European Central Bank kept the benchmark interest rates at 0.50% and 1.00%, respectively, showing no signs of changing their monetary policies anytime soon. ECB President Jean- Claude Trichet, warning against excessive currency moves, stressed that “excess volatility and disorderly movements in exchange rates have adverse implications for economic and financial stability” and “a strong dollar is extremely important in the given circumstances.” However, US officials were silent. The S&P 500 index rose 7.90 points to 1,065.48. The USD/JPY fell; however, remaining above the 88 support. The euro rose to the highest level in two weeks. Sterling advanced on improving risk sentiment. The Australian dollar rallied to a 14-month high as Australia’s unemployment rate declined for the first time in five months. The Canadian dollar gained as commodity prices advanced.
Source: Hans Nilsson
08.10.2009
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