DJ Midday Forex: Dollar Mixed, Cross Flows Favor Euro
LONDON (Dow Jones)--The dollar is mixed against other major currencies midday Monday in Europe, with cross-related flows favoring the euro and trimming recent yen gains.
The euro is making steady progress above $1.27 in what traders describe as a cautious market, as Monday marks the fifth anniversary of the 9/11 terrorist attacks.
The yen slipped in Tokyo after Japanese July machinery orders fell an unexpectedly large 16.7%, against an expected decline of 5.3%. The Japanese unit weakened above Y149.00 by midday in Europe, up over 100 sen on the day, while dollar/yen climbed back above $117.00. Sterling came under pressure after subdued producer price index data eased inflation worries and chipped away at the pound's interest rate prop that has supported the unit of late.
U.K. August Output PPI was flat on the month against the Dow Jones Newswires forecast of a 0.2% increase, while input PPI fell 1.2% on the month, the largest monthly fall since December 2004.
Euro/sterling rose to a fresh three-week high of 0.6817 shortly after the data, while cable gave back early gains to trade around the day's lows of $1.8650.
However, despite the overall weaker start for the dollar many technical analysts are expecting the U.S. unit to strengthen in the sessions ahead, with the exception of dollar/yen.
BNP Paribas expects the latter to be kept under pressure as Asian currency flexibility is likely to be addressed as this weekend's Group of Seven meeting in Singapore. The bank has targets of Y114.05 for dollar/yen and Y147.30 for the euro/yen cross.
As for euro/dollar, the bank says the breach of trendline support at 1.2695 seen Friday favors the downside and it would sell upticks to $1.2730 with a stop at $1.2780, targeting $1.2570.
By 1000 GMT, the dollar was at Y117.23, up from Y116.93 late Friday in New York, according to EBS. The euro was at $1.2725, up from $1.2672, and at Y149.05, up from Y148.20. The dollar was trading at CHF1.2400 from CHF1.2475, while sterling was fetching $1.8665 versus $1.8652.
With no major U.S. data scheduled for release Monday, dealers are focusing on a news conference featuring European Central Bank President Jean Claude Trichet at the regular bi-monthly Group of 10 meeting, at around 1100 GMT.
The U.S. session offers speeches from Federal Reserve members Cathy Minehan (1200 GMT), Donald Kohn (1515 GMT) and William Poole (1630 GMT).
Tuesday, September 12, 2006
Forex Trading guide
Currency Trading guide
By Mansi Gupta
Currency trading or forex (foreign exchange) as the name suggests refers to the act of exchanging the legal tender of one country for another. "In finance the exchange rate between two currencies specifies how much one currency is worth in terms of the other". For instance an exchange of 200 Japanese yen to dollar indicate that 120 yen is worth the same as 1USD. Exchange rate is also called as foreign currency rate.
Currency trading is a very ancient phenomenon. Its existence can be traced back to time before money and Internet were discovered. The custom of currency trading began with the bartering system i.e. our ancestors commenced trading of goods against other goods. This bartering system was quite incompetent and needed lot of negotiation and investigation to be able to strike a deal. In the years that followed the important metals such gold, silver and bronze were standardized and graded to make easy the exchange of merchandise. The grounds for these mediums of exchange were acceptance by the general public and realistic variables such as durability and storage. As the middle age came, a variety of paper exchange started taking place and that became quite popular as an exchange medium.
Time passed by and the simple bartering system evolved into a complex and huge industry of foreign or currency exchange. Though with the use of money and banks the system developed to a large extent but it is still developing with the aid of Internet.
Currency exchange is not a simple task. It requires enormous time, market knowledge, ability to study the current market and predict its future course and also immense self-control. But the currency exchange market is extremely volatile and fast. There is no guarantee either of profit or of loss. To be successful in this market a trader has to take into consideration technical and fundamental data and make an informed decision on behalf of his observation of forex futures trading market sentiment and market expectations. Proper planning in timing a trade correctly is perhaps the most crucial factor in successful currency trading. However yet there are times when a trader misses the mark i.e. when his timing will be off.
Besides timing factor being rightly handled, patience of a trader is also quite essential. Perseverance is one of the essential characteristics of a trader. He or she might not be academically qualified enough but must have the potential to stand for a good time in the market. It is only after spending a good amount of time that you understand the intricacies of the market and start accruing some gains.
You should not hesitate to take the help of an experienced trader whom you know and trust. It is very difficult to survive in this currency trade market without the help of qualified professionals. So in the beginning it is better for any naïve trader to take the help of professionals.
If you are not incurring gains for a long time and do not hope that in near future, stop for sometime. This will give you mental peace and entitles you to get out at certain points on trade.
At the end of the day don't forget that in the market of currency exchange, experience is the biggest teacher of all.
About the Author
Mansi gupta recommends you visit http://www.forexreader.com/trading/index.html for more information on Currency Trading.
Article Source: http://articles.simplysearch4it.com/article/30901.html
By Mansi Gupta
Currency trading or forex (foreign exchange) as the name suggests refers to the act of exchanging the legal tender of one country for another. "In finance the exchange rate between two currencies specifies how much one currency is worth in terms of the other". For instance an exchange of 200 Japanese yen to dollar indicate that 120 yen is worth the same as 1USD. Exchange rate is also called as foreign currency rate.
Currency trading is a very ancient phenomenon. Its existence can be traced back to time before money and Internet were discovered. The custom of currency trading began with the bartering system i.e. our ancestors commenced trading of goods against other goods. This bartering system was quite incompetent and needed lot of negotiation and investigation to be able to strike a deal. In the years that followed the important metals such gold, silver and bronze were standardized and graded to make easy the exchange of merchandise. The grounds for these mediums of exchange were acceptance by the general public and realistic variables such as durability and storage. As the middle age came, a variety of paper exchange started taking place and that became quite popular as an exchange medium.
Time passed by and the simple bartering system evolved into a complex and huge industry of foreign or currency exchange. Though with the use of money and banks the system developed to a large extent but it is still developing with the aid of Internet.
Currency exchange is not a simple task. It requires enormous time, market knowledge, ability to study the current market and predict its future course and also immense self-control. But the currency exchange market is extremely volatile and fast. There is no guarantee either of profit or of loss. To be successful in this market a trader has to take into consideration technical and fundamental data and make an informed decision on behalf of his observation of forex futures trading market sentiment and market expectations. Proper planning in timing a trade correctly is perhaps the most crucial factor in successful currency trading. However yet there are times when a trader misses the mark i.e. when his timing will be off.
Besides timing factor being rightly handled, patience of a trader is also quite essential. Perseverance is one of the essential characteristics of a trader. He or she might not be academically qualified enough but must have the potential to stand for a good time in the market. It is only after spending a good amount of time that you understand the intricacies of the market and start accruing some gains.
You should not hesitate to take the help of an experienced trader whom you know and trust. It is very difficult to survive in this currency trade market without the help of qualified professionals. So in the beginning it is better for any naïve trader to take the help of professionals.
If you are not incurring gains for a long time and do not hope that in near future, stop for sometime. This will give you mental peace and entitles you to get out at certain points on trade.
At the end of the day don't forget that in the market of currency exchange, experience is the biggest teacher of all.
About the Author
Mansi gupta recommends you visit http://www.forexreader.com/trading/index.html for more information on Currency Trading.
Article Source: http://articles.simplysearch4it.com/article/30901.html
Wednesday, September 06, 2006
FOREX: Ringgit Lower Against US Dollar
September 06, 2006
FOREX: Ringgit Lower Against US Dollar
KUALA LUMPUR, Sept 6 (Bernama) -- The ringgit ended lower against the US dollar Wednesday as the greenback regained strength in overseas markets ahead of the release of key US data that will provide direction for the country's economy, analysts said.
Market players were awaiting the data from the Institute for Supply Management's survey on services sector for August and the release of Federal Reserve's Beige Book, they said.
Analysts said the market was relatively quiet as players decided to "wait and see the outcome."
At 5 pm, the ringgit fell to 3.6475/6525 against the greenback from 3.6400/6450 posted Tuesday.
The ringgit was lower against the Singapore dollar at 2.3265/3312 from 2.3249/3279 Tuesday. It was higher against the yen at 3.1328/1376 from 3.1469/1518 previously.
Against the British pound, the local currency strengthened to 6.8920/9036 from 6.9117/9208. It was weaker against the euro at 4.6757/6825 from 4.6747/6813.
FOREX: Ringgit Lower Against US Dollar
KUALA LUMPUR, Sept 6 (Bernama) -- The ringgit ended lower against the US dollar Wednesday as the greenback regained strength in overseas markets ahead of the release of key US data that will provide direction for the country's economy, analysts said.
Market players were awaiting the data from the Institute for Supply Management's survey on services sector for August and the release of Federal Reserve's Beige Book, they said.
Analysts said the market was relatively quiet as players decided to "wait and see the outcome."
At 5 pm, the ringgit fell to 3.6475/6525 against the greenback from 3.6400/6450 posted Tuesday.
The ringgit was lower against the Singapore dollar at 2.3265/3312 from 2.3249/3279 Tuesday. It was higher against the yen at 3.1328/1376 from 3.1469/1518 previously.
Against the British pound, the local currency strengthened to 6.8920/9036 from 6.9117/9208. It was weaker against the euro at 4.6757/6825 from 4.6747/6813.
Forex news:US dollar mixed
AFX News Limited
Forex - US dollar mixed Sydney morning amid concerns of slowing EU growth
09.05.2006, 10:34 PM
SYDNEY (XFN-ASIA) - The US dollar was trading mixed against major currencies, rising against the euro on concerns about slowing growth in Europe but weaker against the yen, dealers said.
They said the yen is maintaining its strength ahead of the Bank of Japan possibly providing views on inflation on Friday.
At 11.15 am, Sydney (0015 GMT) the US dollar was trading up 1.2819 eur from 1.2812 in late New York trade while the yen was at 116.37 usd from 115.93.
Traders said the market has been largely focusing on what will come next with eurozone and US interest rates.
National Australia Bank currency strategists said higher eurozone rates will tend to bolster the single currency by making certain types of investments more attractive.
Meanwhile, they noted that while the US Federal Reserve paused its two year rate-raising cycle in August the European Central Bank last week appeared to indicate it will raise eurozone rates at its next meeting after leaving them unchanged this month.
'The hurdle for the euro is that a few further ECB rate hikes are already priced in and the speculative community is very long the currency,' the NAB strategists said.
'That's why we remain reluctant to target eur/usd above 1.3000 eur in the absence of say forecasting a hard landing in US growth.'
They noted that overnight St. Louis Fed President William Poole, a non-voting Fed member, played down the risk of a hard landing in the US, led by housing.
'We might have some weakness in certain sections of the country, but I think we're just not going to have a housing crash that's nationwide,' Poole said.
Sydney 11.15 am (0015 GMT)
US dollar
yen 116.37
sfr 1.2340
Euro
usd 1.2819
stg 0.6767
yen 148.89
sfr 1.5816
Sterling
usd 1.8944
yen 220.05
sfr 2.3370
Australian dollar
usd 0.7707
stg 0.4068
yen 89.535
New Zealand dollar
usd 0.6479
Forex - US dollar mixed Sydney morning amid concerns of slowing EU growth
09.05.2006, 10:34 PM
SYDNEY (XFN-ASIA) - The US dollar was trading mixed against major currencies, rising against the euro on concerns about slowing growth in Europe but weaker against the yen, dealers said.
They said the yen is maintaining its strength ahead of the Bank of Japan possibly providing views on inflation on Friday.
At 11.15 am, Sydney (0015 GMT) the US dollar was trading up 1.2819 eur from 1.2812 in late New York trade while the yen was at 116.37 usd from 115.93.
Traders said the market has been largely focusing on what will come next with eurozone and US interest rates.
National Australia Bank currency strategists said higher eurozone rates will tend to bolster the single currency by making certain types of investments more attractive.
Meanwhile, they noted that while the US Federal Reserve paused its two year rate-raising cycle in August the European Central Bank last week appeared to indicate it will raise eurozone rates at its next meeting after leaving them unchanged this month.
'The hurdle for the euro is that a few further ECB rate hikes are already priced in and the speculative community is very long the currency,' the NAB strategists said.
'That's why we remain reluctant to target eur/usd above 1.3000 eur in the absence of say forecasting a hard landing in US growth.'
They noted that overnight St. Louis Fed President William Poole, a non-voting Fed member, played down the risk of a hard landing in the US, led by housing.
'We might have some weakness in certain sections of the country, but I think we're just not going to have a housing crash that's nationwide,' Poole said.
Sydney 11.15 am (0015 GMT)
US dollar
yen 116.37
sfr 1.2340
Euro
usd 1.2819
stg 0.6767
yen 148.89
sfr 1.5816
Sterling
usd 1.8944
yen 220.05
sfr 2.3370
Australian dollar
usd 0.7707
stg 0.4068
yen 89.535
New Zealand dollar
usd 0.6479
Friday, July 14, 2006
AFX News Limited
Forex - Dollar firms in late Asia trade;yen surrenders brief gains from BoJ hike
07.14.2006, 05:13 AM
SINGAPORE (XFN-ASIA) - The US dollar was broadly firmer in late Asian trade as the Bank of Japan's widely expected decision to raise interest rates provided no lasting support for the yen, aside from a brief spike after the news was announced.
The dollar eased below Y115.50 straight after the central bank announced its decision to hike rates for the first time in almost six years, from Y115.71 before the verdict was out.
It subsequently recovered to around Y115.85 and was carried through Y116.00 in late dealings.
In a unanimous vote, the BOJ's nine policy board members voted to end its zero rate policy and raise the target for the overnight call rate to 'around 0.25%,' and to raise the official discount rate, the upper limit on overnight rates that commercial banks charge each other, to 0.4% from 0.1%.
But the central bank said that it will keep interest rates at 'very low' levels for the time being, implying that it would not rush the second increase.
'There was little in today's BOJ decision to change market expectations on the BOJ rate outlook,' UBS AG said in a daily note.
The yen remained heavy even after the BOJ later upgraded its view of the economy in its monthly report for July, saying the economy is 'expanding moderately' instead of the previous 'recovering steadily.'
FX dealers noted that the yen had already been under pressure before the BOJ announcement, as jitters over geopolitical risks and high oil prices battered sentiment and sparked demand for safe-haven instruments. Players were also wary about taking new yen positions because of Monday's holiday in Japan.
'The implications are that monetary policy is not directing the yen at the moment,' UBS said. 'The bias recently has been for the yen to weaken, and there is no clear catalyst of a much stronger yen for now.'
Looking ahead, dealers said the dollar-yen will continue to be supported from around Y115.00 while on the topsidethe pair may face some difficulty clearing Y116.70/80.
Singapore 3.50 pm (0750 GMT)Sydney 10.01 am (0001 GMT)
US dollar
yen 115.86 up from 115.42
sfr 1.2329 up from 1.2293
Euro
usd 1.2665 down from 1.2692
stg 0.6887 up from 0.6886
yen 146.79 up from 146.49
sfr 1.5620 up from 1.5602
Sterling
usd 1.8380 down from 1.8435
yen 213.02 up from 212.79
sfr 2.2668 up from 2.2666
Australian dollar
usd 0.7495 down from 0.7531
stg 0.4077 down from 0.4085
yen 86.890 down from 86.905
singapore@xfn.com
bur/mb
Source:http://www.forbes.com/markets/feeds/afx/2006/07/14/afx2878768.html
Forex - Dollar firms in late Asia trade;yen surrenders brief gains from BoJ hike
07.14.2006, 05:13 AM
SINGAPORE (XFN-ASIA) - The US dollar was broadly firmer in late Asian trade as the Bank of Japan's widely expected decision to raise interest rates provided no lasting support for the yen, aside from a brief spike after the news was announced.
The dollar eased below Y115.50 straight after the central bank announced its decision to hike rates for the first time in almost six years, from Y115.71 before the verdict was out.
It subsequently recovered to around Y115.85 and was carried through Y116.00 in late dealings.
In a unanimous vote, the BOJ's nine policy board members voted to end its zero rate policy and raise the target for the overnight call rate to 'around 0.25%,' and to raise the official discount rate, the upper limit on overnight rates that commercial banks charge each other, to 0.4% from 0.1%.
But the central bank said that it will keep interest rates at 'very low' levels for the time being, implying that it would not rush the second increase.
'There was little in today's BOJ decision to change market expectations on the BOJ rate outlook,' UBS AG said in a daily note.
The yen remained heavy even after the BOJ later upgraded its view of the economy in its monthly report for July, saying the economy is 'expanding moderately' instead of the previous 'recovering steadily.'
FX dealers noted that the yen had already been under pressure before the BOJ announcement, as jitters over geopolitical risks and high oil prices battered sentiment and sparked demand for safe-haven instruments. Players were also wary about taking new yen positions because of Monday's holiday in Japan.
'The implications are that monetary policy is not directing the yen at the moment,' UBS said. 'The bias recently has been for the yen to weaken, and there is no clear catalyst of a much stronger yen for now.'
Looking ahead, dealers said the dollar-yen will continue to be supported from around Y115.00 while on the topsidethe pair may face some difficulty clearing Y116.70/80.
Singapore 3.50 pm (0750 GMT)Sydney 10.01 am (0001 GMT)
US dollar
yen 115.86 up from 115.42
sfr 1.2329 up from 1.2293
Euro
usd 1.2665 down from 1.2692
stg 0.6887 up from 0.6886
yen 146.79 up from 146.49
sfr 1.5620 up from 1.5602
Sterling
usd 1.8380 down from 1.8435
yen 213.02 up from 212.79
sfr 2.2668 up from 2.2666
Australian dollar
usd 0.7495 down from 0.7531
stg 0.4077 down from 0.4085
yen 86.890 down from 86.905
singapore@xfn.com
bur/mb
Source:http://www.forbes.com/markets/feeds/afx/2006/07/14/afx2878768.html
Sunday, April 30, 2006
FOREX-Dollar tumbles hit by views on G7, rates, Iran
FOREX-Dollar tumbles hit by views on G7, rates, Iran
Fri Apr 28, 2006 7:50 PM BST
(Updates with fresh prices, quotes, changes bline)
By Jamie McGeever
NEW YORK, April 28 (Reuters) - The dollar slumped to an 11-month low against the euro on Friday, as selling continued after Federal Reserve chairman Bernanke said on Thursday that the Fed may soon pause in its 21-month campaing to raise interest rates.
Interest rate differentials between the U.S. on the one hand and Europe and Japan on the other have helped to support the U.S. dollar in the past year, but with that prop seen being removed the market was now focusing on factors bearish for the greenback, analysts said.
After last week's meeting of finance ministers from Group of Seven countries some officials have said that currency markets have misinterpreted the G7 statement as a call for a decline in the dollar, but U.S. Treasury Secretary Snow on Friday said the statement, which called for currency appreciation in China and emerging markets in Asia, spoke for itself.
"At another time, Snow's (non) comments might have been more innocuous," said Sophia Drossos, senior currency strategist at Morgan Stanley in New York.
"But in the current environment, where the market perceives the Fed to be nearing an end, they seemed to sanction the market's view that the G7 wants a weaker dollar."
The dollar's slide this week left it on track for its worst monthly performance against major currencies since September 2003, when the G7 finance ministers met in Dubai and called for increased "flexibility" in global currency markets
The dollar did not get much support from U.S. economic data on Friday either, after first quarter GDP data showed robust economic growth but softening inflationary pressures, consumer sentiment, and regional manufacturing activity.
Mid-afternoon in New York, the euro was up 0.8 percent on the day around $1.2625, hovering near the 11-month high of $1.2635 reached earlier in the day.
Sterlingwas up 1.2 percent against the dollar at $1.8230 after touching a 7-month high of $1.8240, while the greenback was mired at a seven-month low against a basket of six major currencies <.DXY>, down 0.7 percent on the day
The dollar was down 0.3 percent against the yen at 113.73 yen, having hit a three-month low of 113.66 yen.
"The ongoing story remains bearish for the dollar," said Charmaine Buskas, FX analyst at Moody's Economy.com in West Chester, Pennsylvania.
For details on the first quarter gross domestic product data, see [ID:nN28265299]; for more on consumer confidence [ID:nNYJ000065] and more on the Chicago purchasing managers index [ID:nN28392548].
The data did little to uproot a near-consensus that the Fed will likely take a break after raising rates by a quarter percentage point in May, after 15 rate rises since June 2004.
"It looks increasingly like the Fed rate hike cycle is coming to an end, and that's been the focus," Buskas said. "... The market is just looking for an excuse to sell the dollar."
The Swiss franc was among the biggest winners against the dollar, shooting up 1.5 percent and supported by safe-haven flows as geopolitical tensions surrounding Iran's bid for a nuclear weapon escalated.
Most European markets are closed Monday for Labor Day, and Japanese financial markets will be closed for a part of next week for the Golden Week holiday.
(Additional reporting by Nick Olivari)
Source:reuters
Fri Apr 28, 2006 7:50 PM BST
(Updates with fresh prices, quotes, changes bline)
By Jamie McGeever
NEW YORK, April 28 (Reuters) - The dollar slumped to an 11-month low against the euro on Friday, as selling continued after Federal Reserve chairman Bernanke said on Thursday that the Fed may soon pause in its 21-month campaing to raise interest rates.
Interest rate differentials between the U.S. on the one hand and Europe and Japan on the other have helped to support the U.S. dollar in the past year, but with that prop seen being removed the market was now focusing on factors bearish for the greenback, analysts said.
After last week's meeting of finance ministers from Group of Seven countries some officials have said that currency markets have misinterpreted the G7 statement as a call for a decline in the dollar, but U.S. Treasury Secretary Snow on Friday said the statement, which called for currency appreciation in China and emerging markets in Asia, spoke for itself.
"At another time, Snow's (non) comments might have been more innocuous," said Sophia Drossos, senior currency strategist at Morgan Stanley in New York.
"But in the current environment, where the market perceives the Fed to be nearing an end, they seemed to sanction the market's view that the G7 wants a weaker dollar."
The dollar's slide this week left it on track for its worst monthly performance against major currencies since September 2003, when the G7 finance ministers met in Dubai and called for increased "flexibility" in global currency markets
The dollar did not get much support from U.S. economic data on Friday either, after first quarter GDP data showed robust economic growth but softening inflationary pressures, consumer sentiment, and regional manufacturing activity.
Mid-afternoon in New York, the euro was up 0.8 percent on the day around $1.2625
Sterling
The dollar was down 0.3 percent against the yen at 113.73 yen, having hit a three-month low of 113.66 yen.
"The ongoing story remains bearish for the dollar," said Charmaine Buskas, FX analyst at Moody's Economy.com in West Chester, Pennsylvania.
For details on the first quarter gross domestic product data, see [ID:nN28265299]; for more on consumer confidence [ID:nNYJ000065] and more on the Chicago purchasing managers index [ID:nN28392548].
The data did little to uproot a near-consensus that the Fed will likely take a break after raising rates by a quarter percentage point in May, after 15 rate rises since June 2004.
"It looks increasingly like the Fed rate hike cycle is coming to an end, and that's been the focus," Buskas said. "... The market is just looking for an excuse to sell the dollar."
The Swiss franc was among the biggest winners against the dollar, shooting up 1.5 percent and supported by safe-haven flows as geopolitical tensions surrounding Iran's bid for a nuclear weapon escalated.
Most European markets are closed Monday for Labor Day, and Japanese financial markets will be closed for a part of next week for the Golden Week holiday.
(Additional reporting by Nick Olivari)
Source:reuters
Wednesday, March 08, 2006
FOREX-Dollar slips but shrugs off emerging market woes
(Updates prices, adds quote)
By Jamie McGeever
NEW YORK, March 8 (Reuters) - The dollar slipped against major currencies on Wednesday, but held within tight ranges, consolidating the previous session's gains as traders awaited several potentially market-moving events later in the week.
The Bank of Japan may scrap its easy-money policy on Thursday while U.S. trade data could show a further widening of the deficit. The U.S. employment report on Friday is expected to show strong job creation.
Most of the foreign exchange market action on Wednesday was concentrated in emerging market currencies, many of which tumbled as concerns over rising global interest rates sparked moves out of higher-yielding, riskier assets.
"There's been a lot of volatility in emerging markets but in the majors, very little," said Robert Lynch, G10 currency strategist for the Americas at HSBC in New York.
"The dollar's off its highs, but in relative terms it's holding at fairly firm levels. I wouldn't call it offered," Lynch said.
The dollar rallied strongly earlier this week amid growing expectations U.S. interest rates will continue to rise in the coming months.
Ahead of events later in the week, dealers took advantage of a session devoid of U.S. economic data to trim positions and lock in some profits, dealers said.
In late trading on Wednesday, the euro was up 0.3 percent on the day at $1.1922, while sterling was up a touch at $1.7376 .
The dollar was off 0.4 percent against the Swiss franc at 1.3082 francsand down a touch against the yen at 117.83 yen .
BOJ IN FOCUS
But the dollar held relatively close to two-week highs against the Japanese currency touched on Tuesday. Traders were looking to the possible end of the BOJ's policy of quantitative easing, or flooding the monetary system with excess cash.
Investors are divided about whether the central bank will scrap its five-year-old policy on Thursday or next month and, if so, what kind of policy target would follow.
Markets see the BOJ raising rates to 0.25 percent or 0.5 percent by year-end from virtually zero currently, but do not expect much more than that, which would keep the yen among the lowest-yielding currencies in the world.
The BOJ has held interest rates below 0.5 percent since 1995.
Steve Barrow, head of global currency strategy at Bear Stearns, thinks the bias for the dollar against the yen is to the upside no matter what the BOJ does. But given the potential for market volatility, he advised caution.
"We are not going to take a position ahead of the BOJ. Our bias would be to be long of the dollar as we are not sold on the idea that the (BOJ) will do anything tonight given that the debate about an inflation target within the bank might not be fully resolved," Barrow wrote in a research note.
"Alternatively, if the BOJ does move, we suspect it will work hard to ensure that the market sees its actions as pretty benign. It might be a tough job as the market is very nervous about this one, but it might produce a temporary rally in dollar/yen," he added.
On the U.S. data front, the latest snapshots of the U.S. trade deficit and pace of job creation are the big events.
Economists polled by Reuters expect the January trade deficit to have widened to $66.5 billion, which would be the second biggest on record. They also expect a 210,000 rise in non-farm payrolls for February.
Meanwhile, major currencies remained relatively immune to the fluctuations in emerging markets and commodities.
The Brazilian real, Mexican peso , Hungarian forint , Turkish lira and spot gold all tumbled on Wednesday amid concerns of rising interest rates around the world.
The New Zealand dollarhalted its steep decline of late after the Reserve Bank of New Zealand kept rates on hold at 7.25 percent and indicated that there would be no rate cut this year.
The "kiwi" dollar was up 0.6 percent on the day at $0.6520, rebounding from 18-month lows earlier this week.
Source: http://today.reuters.co.uk/investing/financeArticle.aspx?type=usDollarRpt&storyID=2006-03-08T214449Z_01_N08226536_RTRIDST_0_MARKETS-FOREX-UPDATE-9.XML
By Jamie McGeever
NEW YORK, March 8 (Reuters) - The dollar slipped against major currencies on Wednesday, but held within tight ranges, consolidating the previous session's gains as traders awaited several potentially market-moving events later in the week.
The Bank of Japan may scrap its easy-money policy on Thursday while U.S. trade data could show a further widening of the deficit. The U.S. employment report on Friday is expected to show strong job creation.
Most of the foreign exchange market action on Wednesday was concentrated in emerging market currencies, many of which tumbled as concerns over rising global interest rates sparked moves out of higher-yielding, riskier assets.
"There's been a lot of volatility in emerging markets but in the majors, very little," said Robert Lynch, G10 currency strategist for the Americas at HSBC in New York.
"The dollar's off its highs, but in relative terms it's holding at fairly firm levels. I wouldn't call it offered," Lynch said.
The dollar rallied strongly earlier this week amid growing expectations U.S. interest rates will continue to rise in the coming months.
Ahead of events later in the week, dealers took advantage of a session devoid of U.S. economic data to trim positions and lock in some profits, dealers said.
In late trading on Wednesday, the euro was up 0.3 percent on the day at $1.1922
The dollar was off 0.4 percent against the Swiss franc at 1.3082 francs
BOJ IN FOCUS
But the dollar held relatively close to two-week highs against the Japanese currency touched on Tuesday. Traders were looking to the possible end of the BOJ's policy of quantitative easing, or flooding the monetary system with excess cash.
Investors are divided about whether the central bank will scrap its five-year-old policy on Thursday or next month and, if so, what kind of policy target would follow.
Markets see the BOJ raising rates to 0.25 percent or 0.5 percent by year-end from virtually zero currently, but do not expect much more than that, which would keep the yen among the lowest-yielding currencies in the world.
The BOJ has held interest rates below 0.5 percent since 1995.
Steve Barrow, head of global currency strategy at Bear Stearns, thinks the bias for the dollar against the yen is to the upside no matter what the BOJ does. But given the potential for market volatility, he advised caution.
"We are not going to take a position ahead of the BOJ. Our bias would be to be long of the dollar as we are not sold on the idea that the (BOJ) will do anything tonight given that the debate about an inflation target within the bank might not be fully resolved," Barrow wrote in a research note.
"Alternatively, if the BOJ does move, we suspect it will work hard to ensure that the market sees its actions as pretty benign. It might be a tough job as the market is very nervous about this one, but it might produce a temporary rally in dollar/yen," he added.
On the U.S. data front, the latest snapshots of the U.S. trade deficit and pace of job creation are the big events.
Economists polled by Reuters expect the January trade deficit to have widened to $66.5 billion, which would be the second biggest on record. They also expect a 210,000 rise in non-farm payrolls for February.
Meanwhile, major currencies remained relatively immune to the fluctuations in emerging markets and commodities.
The Brazilian real
The New Zealand dollar
The "kiwi" dollar was up 0.6 percent on the day at $0.6520, rebounding from 18-month lows earlier this week.
Source: http://today.reuters.co.uk/investing/financeArticle.aspx?type=usDollarRpt&storyID=2006-03-08T214449Z_01_N08226536_RTRIDST_0_MARKETS-FOREX-UPDATE-9.XML
Tuesday, February 07, 2006
FOREX-Dollar rally stalled by yen as market takes breather
By Veronica Brown
LONDON, Feb 7 (Reuters) - The dollar dropped sharply after nearing a seven-week high against the yen on Tuesday, with the Japanese currency gaining on position adjustment, but fresh gains were seen for the greenback on a positive U.S. interest rate outlook.
Analysts said that the dollar's interest rate-powered strength had given way temporarily to a buyback in the yen, but recent strong U.S. data and upbeat Federal Reserve comments would allow the U.S. currency to resume its rise.
"What we're seeing right now is the market take a bit of a breather. One thing we've seen in the past two days is yen weakness against the crosses and that probably has to do with the fact that the yen sell-off in the past week or so has been the sharper move," Barclays Capital currency strategist Adarsh Sinha said.
"Now we're seeing a pullback in yen weakness. But our view is that you will see further yen weakness ahead," he added.
By 0903 GMT, the dollar was at 118.13 yen , down 0.78 percent on the day -- having hit a seven-week high of 119.39 on Friday.
The euro was down half a percent at a one-week low of 141.72 yen , with traders citing sell-stops as the market approached 142.00. The euro gained slightly against the dollar to $1.1981 having earlier moved closer to Monday's one-month low of $1.1943.
German industrial production data is due at 1100 GMT in an otherwise thin European calendar.
Production is expected to have risen by 0.7 percent in December, after falling 0.3 percent in November.
FED'S FISHER REASSURES
Dollar bulls had taken heart from Dallas Fed President Richard Fisher, who said on Monday he fully expects the Fed to keep control of inflation, encouraging market views that there is more monetary tightening to come.
His comments follow data last week showing upward revisions to job growth and a fall in the unemployment rate to a 4-1/2-year low, reinforcing the outlook for the Fed to keep lifting overnight rates after 14 straight rises to 4.5 percent.
"The market is starting to talk about 4.75 percent and the risk of the Fed perhaps moving to five and even beyond," Barclays' Sinha said.
But some analysts said further gains for the dollar may be limited in the near term, with no major U.S. economic data until later in the week.
European Central Bank President Jean-Claude Trichet said on Monday the bank was ready to raise interest rates again at any time to keep inflationary pressure in check, backing market expectations for a March rate hike to 2.5 percent.
Foreign buying of U.S. Treasuries at this week's auctions totalling $48 billion should help the dollar, traders said. The first auction of three-year notes will be held later on Tuesday.
Some said Japanese institutional investors may buy some of the revived 30-year bonds, helping the dollar climb further against the yen. Japan's Ministry of Finance sells only a limited amount of such longer-dated bonds.
RATES TO DOMINATE
Traders and analysts said the market would next shift its attention to December data on U.S. trade, due on Friday.
Some market players said the focus was unlikely to shift to the growing U.S. twin trade and budget deficits, as rising U.S. interest rates have helped the United States attract more than enough foreign capital to finance these shortfalls.
"Sentiment for the dollar is so strong at the moment that I don't think the market will start worrying about the deficits," said a trader at a Japanese bank.
Median estimates by analysts point to a widening of the U.S. trade gap to $65 billion in December from November's $64.2 billion. Citibank expects the deficit to blow out to a record $68.5 billion due to a surge in imports.
The United States' reliance on foreign capital has been exacerbated by the steady rise in the U.S. budget deficit, which the government projects will rise to $423 billion in fiscal 2006, up more than $100 billion from the previous year.
Treasury Secretary John Snow will testify before Congress on the budget at 1500 GMT.
LONDON, Feb 7 (Reuters) - The dollar dropped sharply after nearing a seven-week high against the yen on Tuesday, with the Japanese currency gaining on position adjustment, but fresh gains were seen for the greenback on a positive U.S. interest rate outlook.
Analysts said that the dollar's interest rate-powered strength had given way temporarily to a buyback in the yen, but recent strong U.S. data and upbeat Federal Reserve comments would allow the U.S. currency to resume its rise.
"What we're seeing right now is the market take a bit of a breather. One thing we've seen in the past two days is yen weakness against the crosses and that probably has to do with the fact that the yen sell-off in the past week or so has been the sharper move," Barclays Capital currency strategist Adarsh Sinha said.
"Now we're seeing a pullback in yen weakness. But our view is that you will see further yen weakness ahead," he added.
By 0903 GMT, the dollar was at 118.13 yen , down 0.78 percent on the day -- having hit a seven-week high of 119.39 on Friday.
The euro was down half a percent at a one-week low of 141.72 yen , with traders citing sell-stops as the market approached 142.00. The euro gained slightly against the dollar to $1.1981 having earlier moved closer to Monday's one-month low of $1.1943.
German industrial production data is due at 1100 GMT in an otherwise thin European calendar.
Production is expected to have risen by 0.7 percent in December, after falling 0.3 percent in November.
FED'S FISHER REASSURES
Dollar bulls had taken heart from Dallas Fed President Richard Fisher, who said on Monday he fully expects the Fed to keep control of inflation, encouraging market views that there is more monetary tightening to come.
His comments follow data last week showing upward revisions to job growth and a fall in the unemployment rate to a 4-1/2-year low, reinforcing the outlook for the Fed to keep lifting overnight rates after 14 straight rises to 4.5 percent.
"The market is starting to talk about 4.75 percent and the risk of the Fed perhaps moving to five and even beyond," Barclays' Sinha said.
But some analysts said further gains for the dollar may be limited in the near term, with no major U.S. economic data until later in the week.
European Central Bank President Jean-Claude Trichet said on Monday the bank was ready to raise interest rates again at any time to keep inflationary pressure in check, backing market expectations for a March rate hike to 2.5 percent.
Foreign buying of U.S. Treasuries at this week's auctions totalling $48 billion should help the dollar, traders said. The first auction of three-year notes will be held later on Tuesday.
Some said Japanese institutional investors may buy some of the revived 30-year bonds, helping the dollar climb further against the yen. Japan's Ministry of Finance sells only a limited amount of such longer-dated bonds.
RATES TO DOMINATE
Traders and analysts said the market would next shift its attention to December data on U.S. trade, due on Friday.
Some market players said the focus was unlikely to shift to the growing U.S. twin trade and budget deficits, as rising U.S. interest rates have helped the United States attract more than enough foreign capital to finance these shortfalls.
"Sentiment for the dollar is so strong at the moment that I don't think the market will start worrying about the deficits," said a trader at a Japanese bank.
Median estimates by analysts point to a widening of the U.S. trade gap to $65 billion in December from November's $64.2 billion. Citibank expects the deficit to blow out to a record $68.5 billion due to a surge in imports.
The United States' reliance on foreign capital has been exacerbated by the steady rise in the U.S. budget deficit, which the government projects will rise to $423 billion in fiscal 2006, up more than $100 billion from the previous year.
Treasury Secretary John Snow will testify before Congress on the budget at 1500 GMT.
Tuesday, January 17, 2006
FOREX-Dollar advances with US capacity use at 5-yr highBy Kevin Plumberg
NEW YORK, Jan 17 (Reuters) - The dollar climbed on Tuesday, after a report showed U.S. industrial capacity use running at its highest rate in five years, bolstering the case for further Federal Reserve interest rate increases.
Some investors were forced to cover their bets against the U.S. currency after data showed activity at factories, utilities and mines were running at 80.7 percent of full capacity in December from 80.3 percent in November, indicating slack in the economy is narrowing and potential inflation pressures increasing.
"That's something that the Fed has signaled it is looking at right now with resources getting stretched in the economy," said Jay Bryson, global economist with Wachovia Corp in Charlotte, North Carolina.
"So all things being equal, this is another reason for the Fed to keep tightening. All that is consistent with a stronger dollar," he said.
The euro slipped 0.4 percent from late Monday to $1.2064
The dollar was up around 0.9 percent to 115.87 yen
The euro jumped 0.5 percent to 139.92 yen
A sell-off in Japanese equities during the Tokyo trading day and higher oil prices contributed to yen weakness, traders said.
The Nikkei share average <.N225> lost 2.8 percent, its largest single-day decline since April 2005, while the Mothers index <.MTHR> for start-up companies fell almost 12 percent after prosecutors raided a well-known Internet firm on Monday.
BOTTLENECKS AND RATES
The capacity utilization data suggests the Fed may have to extend its 18-month interest rate raising campaign that has so far taken rates to 4.25 percent, economists said.
The prospect for higher U.S. rates relative to other large, industrialized economies boosted the dollar last year, partly because it heightened the allure of dollar-denominated deposits.
"Historically, capacity utilization over the 81 level could bring some production bottlenecks into play throughout the economy which could put upward pressure on prices," said Ron Simpson, managing director of global currency analysis with Action Economics in Dobbs Ferry, New York.
U.S. interest rates still offer a better return compared with 2.25 percent in the euro zone and virtually zero in Japan.
Sterling was down a third of a percent against the dollar at $1.7625
While the figures matched economists' forecasts, traders said on-target inflation left open the door to a UK interest rate cut this year.
Earlier in the session, a report from the New York Fed showed regional U.S. manufacturing growth slowed slightly in January but only due to a pullback in inventories. The employment and average work week components both jumped, suggesting inflationary pressures continue to build.
The Fed is widely expected to raise rates for the 14th consecutive time on Jan. 31 but the central bank has said the future path of monetary policy will depend on incoming economic data.
Wednesday's December core inflation data, which is expected to match November's 0.2 percent increase, will undoubtedly draw attention for its impact on expectations for where U.S. interest rates are headed. (Additional reporting by John Parry)
Sunday, January 08, 2006
Forex - US dollar mixed in Sydney morning
Forex - US dollar mixed in Sydney morning, payrolls point to end of rate hikes
01.08.2006, 06:57 PM
SYDNEY (AFX) - The US dollar was trading mixed against the major currency pairs, while selling pressure continued after key payrolls data increased expectations US rate hikes are nearing an end, dealers said. They said the US dollar was sold heavily in overnight trading on Friday as the December non-farm payrolls data was well below the market consensus. However, upward revisions to November's data limited part of the selling. 'Sentiment towards the US dollar remains very negative after Friday's non-farm payrolls report served to maintain expectations that a peak in US official interest rates is near,' National Australia Bank currency strategists said in a market note. 'This dynamic has been driving the US dollar lower at the start of a new year as the speculative community starts to build a net short position,' they said.
At 10:26 am in Sydney (2326 GMT) the euro was firmer at 1.2146 usd from 1.2145 in late New York trading on Friday while the dollar was higher at 114.52 yen from 114.40. Commonwealth Bank market economists said, in a market note, the euro rose to 1.2174 usd from 1.2082 in New York trading following the US payrolls data, while US dollar/yen slumped to a low of 114.22 yen from 116.28. The US non-farm payrolls data for December rose by just 108,000, well short of market expectations of a 200,000 employment increase.
Dealers said the impact of the December outcome was softened from an upward revision of 90,000 to the November non-farm payrolls, while the October data was revised down by 19,000. They said the overall revisions resulted in a total non-farm payrolls growth in 2005 of 2.02 mln compared to total payrolls growth of 2.194 mln in 2004. The NAB currency strategists said given the November revisions, the payrolls data over the past couple of months will see the US Federal Reserve increase cash rates by 25 basis points to 4.50 pct on Jan 31. 'But the odds of a March rate hike remain around 50 pct. If December's outcome is repeated in coming months and we see a slowing in job growth, the Federal Reserve might be done by the time Ben Bernanke takes over,' they said.
Dealers said Federal Reserve Bank of Boston president Cathy Minehan outlined the Federal funds rate is near the bottom end of the neutral rate range, but future decisions will depend on incoming economic data ahead. Also released in the US on Friday were average hourly wages for December, which rose 0.3 pct from a 0.1 pct increase in November, raising the annual rate of wages growth to 3.1 pct which is the biggest increase since 2002.
They said the unemployment rate for December eased to 4.9 pct from 5.0 in November, below the market consensus of a flat outcome. Dealers said the markets will focus on Friday's release of key retail sales and producer price index data for December due on Friday. They added US trade deficit data on Thursday could attract extra attention from traders, with US dollar bears arguing that a peak in interest rates will refocus attention on the record US external deficit. In the euro zone the economic group's unemployment rate for November remained at 8.3 pct and was in-line with market expectations. Dealers said the European Central Bank and Bank of England both meet on Thursday, with no change to official interest rates expected.
They said a market survey on Friday of traders, strategists and investors showed 44 pct recommend selling the US dollar against the euro, up from 28 pct in the previous survey conducted in the prior week. The NAB currency strategists said the euro's strength from the weak US headline payrolls data was lackluster, with 1.2156 usd capping its gain. However, the yen 'was the standout performer on Friday, crashing through option barriers at 115.50 yen on its way to 114.50,' they said. Dealers said the yen is likely to be contained within a tight trading range today due to a national holiday in Japan.
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