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OctaFX.Com - Dollar rises to 3-week high against euro
Dollar rises to 3-week high against euro on fears about Europe's debt crisis
NEW YORK (AP) -- Growing fears about Europe's debt crisis pushed the dollar to a three-week high against the euro Thursday. The euro also fell against the Swiss franc, dropping below a ceiling set by the Swiss National Bank last year.
The yield on Spain's benchmark 10-year bond jumped to 5.74 percent Thursday, its highest point since November. A month ago, the rate was below 4.9 percent. Rising yields are a sign that investors are less confident in the country's finances.
The higher the yield on a country's bonds, the more expensive it becomes to borrow money. Greece, Portugal and Ireland needed a bailout after their borrowing rates rose above 7 percent.
Concerns about Spain's finances rose this week after weak demand at its bond auction Wednesday.
The euro fell to $1.3057 in afternoon trading Thursday from $1.3139 late Wednesday. The euro fell as low as $1.3034, its lowest point since March 15.
The Swiss franc briefly rose against the euro Thursday above the 1.20 level that the Swiss National Bank capped it at in September. The Swiss franc is considered a safe-haven currency and tends to rise when traders are worried about the global economy. Last year, the Swiss franc rose so much that the SNB said it would spend whatever it would take to stop the euro from falling below 1.20 francs. On Thursday, it fell to 1.1993 francs before quickly moved recovering.
The SNB wants to limit the franc's strength to protect Swiss companies. Last year, exporters were hurt as the value of the franc increased. A strong franc hurts exporters by making their goods more expensive for foreign buyers.
In other trading, the dollar rose to 0.9206 Swiss franc from 0.9161 Swiss franc. The British pound fell to $1.5820 from $1.5889.
The dollar fell to 82.35 Japanese yen from 82.58 yen and to 99.37 Canadian cents from 99.64 Canadian cents.
Apr 05, 2012 15:46
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OctaFX.Com -Euro dips, bonds rise on euro zone worries
NEW YORK (Reuters) -
The euro hit a three-week low against the dollar and bonds edged higher on Thursday as Spain's debt burden fueled worries about further problems for euro zone economies and curtailed investors' appetite for riskier assets.
Global stocks dipped, while energy and gold prices climbed.
A poor Spanish bond auction on Wednesday added to worries that the impact of the European Central Bank's one trillion euro injection of cheap three-year funds into the banking system may be coming to an abrupt halt.
Spanish 10-year government bond yields rose as high as 5.86 percent on Thursday, dragging Italian rates in their wake as investors fled to the relative safety of German and U.S. debt.
The moves follow two days of losses in stocks and other markets following the release Tuesday of minutes from the last Federal Reserve meeting, which suggested the Fed was less keen to launch further economic stimulus.
"The whole European situation seems to be reheating ... and there is more safe-haven type buying," said Sean Murphy, a Treasuries trader at Societe Generale in New York.
The worries added a safety bid for bonds, with the benchmark 10-year U.S. Treasury note up 13/32, with the yield at 2.1752 percent.
Against the dollar, the euro was down 0.7 percent at$1.3052, having hit a three-week low of $1.3038. It also hit its lowest in four weeks against the yen at 106.86 yen before recovering slightly to trade at 107.23 yen, down 1 percent.
Spain's cost of borrowing on markets over 10 years jumped 30 basis points on Wednesday after borrowing costs rose at its bond auction. The yield premium over German benchmarks is now 411 basis points, its highest since late November before the ECB flooded the market with three-year funds.
STOCKS DIP, COMMODITIES GAIN
The MSCI world equity index (.MIWD00000PUS) was last down 0.2 percent, while U.S. stocks were also slightly lower.
Traders cautioned that some of the moves may be exaggerated by thin trading ahead of an extended Easter weekend, and while global stock markets lost more than 1 percent of their value on Wednesday, they remain up almost 10 percent this year.
The Dow Jones industrial average (DJI:^DJI - News) was down 45.75 points, or 0.35 percent, at 13,029.00. The Standard & Poor's 500 Index (MXP:^GSPC - News) was down 3.54 points, or 0.25 percent, at 1,395.42. The Nasdaq Composite Index (NAS:^COMP) was up 6.84 points, or 0.22 percent, at 3,074.93.
For U.S. stocks, offsetting some concern about the euro zone was data showing the number of Americans lining up for new jobless benefits fell to the lowest in nearly four years last week.
Analysts said the claims data and a report on private-sector jobs earlier this week may bode well for the U.S. government's widely watched monthly employment report, which is due Friday.
The U.S. outlook was in sharp contrast with Europe where separate reports showed German industrial output fell more than expected in February and British factory output suffered its biggest monthly fall in almost a year
Spain's IBEX 35 index (MCE:^IBEX - News) touched a 7-month low as concerns mounted about Spain's ability to meet its budget targets, while Europe's FTSEurofirst 300 index (.FTEU3) ended up 0.1 percent.
Banking stocks, many of which have large exposure to the region's lower-rated sovereign debt, edged lower.
UniCredit (CRDI.MI) and Commerzbank (CBKG.DE), which both have exposure to euro zone peripheral debt, were also hard hit, down 3.1 percent and 1.9 percent respectively.
Bucking the softer global trend, non-banking financial sector firms led Chinese shares to their biggest single-day gain since early February, after Premier Wen Jiabao said the monopoly formed by the country's big banks needed to be broken to get money flowing to cash-starved companies.
GOLD, ENERGY CLIMB
Spot gold was up 0.6 percent at $1,628.34 an ounce. Weaker prices tempted some buyers but gains were capped by a stronger dollar and fading hopes of a fresh round of U.S. stimulus.
Market watchers said some hedge funds might have reduced gold holdings due to stronger U.S. economic data and easing of fears about European debt.
"A lot of the gold trade by hedge funds was specifically tied to a new round of Fed stimulus," said Jeffrey Sica, chief investment officer of SICA Wealth Management with more than $1 billion in assets.
In the other market, U.S. crude was up $1.62 at $103.09 per barrel, while Brent crude was up $1.13 at $123.47.
Apr 05, 2012 15:53
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http://theforexeye.com/images/octafx_newsupdates.pngOctaFX.Com -Dollar drops as payrolls data keep Fed action aliveNEW YORK (Reuters) - The U.S. dollar dropped broadly on Friday in thin holiday trade after disappointing U.S. jobs market data kept the prospect of more Federal Reserve monetary policy support alive.The dollar fell against the euro for the first time in five days after data showed U.S. payrolls rose far less than expected in March.The report offset sentiment earlier in the week that followed the release of Fed minutes from its last policy meeting that had market participants downplaying expectations of adding more monetary stimulus."Clearly a disappointing (payrolls) number. Across the board it's kind of an underwhelming number," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington.The euro hit a high of $1.3112 after the report, rebounding from a three week low of $1.3033 reached n Thursday. It last traded at $1.3094, up 0.2 percent.The dollar fell as low as 81.29 and last traded at 81.56, down 0.9 percent on the day, according to Reuters data."At the very least it will keep the door open to additional policy easing more so than before the number was released. In that respect it's definitely a negative for the dollar," Esiner said. "The extent of dollar losses is going to depend on how the market views this number, as an outlier or maybe evidence that the jobs growth is stalling."Apr 06, 2012 06:33OctaFX.Com News Updates
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OctaFX.Com -Japanese Yen Surges against U.S. Dollar Following Dismal Jobs Report
Over the past few weeks, concerns arose over a potentially disappointing March jobs report for the U.S. economy in light of warm weather and impending seasonal adjustments. Those concerns were vindicated on Friday, reigniting a plummet in yields supporting the U.S. Dollar.
European Session Summary
Data was sparse in the overnight alongside quiet trading conditions, as most major European equity markets were closed on Friday due to a religious holiday over the weekend. U.S. equity markets were closed as well for the holiday, but one of the most important releases for the U.S. economy was released regardless; and the nonfarm payrolls report for March sparked immense volatility.
The U.S. economy added 120K jobs in March, exactly half of the revised February figure at 240K. Similarly, the unemployment rate dropped to 8.2 percent from 8.2 percent in March. Many economists and policymakers have been discussing the potential claw back in this month’s jobs report considering that the winter months were unseasonably warm across much of the United States. Why does weather affect NFPs? Warmer conditions are conducive to work outside, in particular construction projects, and work in that sector has surged in recent months.
Where does this leave the U.S. economy? The Federal Reserve’s minutes from their March 13 policy meeting indicated that officials are leaning away from another round of easing due to the progress the U.S. economy has made. In the intermeeting period, Federal Reserve Chairman Ben Bernanke noted that more stimulus could be warranted should the labor market continue to struggle. On the other hand, New York Fed President William Dudley has stated that a moderation in jobs growth is to be expected, given the favorable weather conditions the past few months.
Is there scope for more easing now? It depends. On one hand, officials are concerned with the lack of progress made by the labor market and are willing to extend efforts to foster growth. On the other, it’s clear that a pullback in jobs growth was anticipated, so it might mean that Fed officials hold their ground. With numerous policymakers due to speak next week, most notably Chairman Bernanke on two separate occasions, speculation on the third installment of quantitative easing will increase once again.
Overall, the Japanese Yen was the best performing major currency, gaining 0.99 percent against the U.S. Dollar. The Euro and the commodity currencies were hit the hardest by the jobs report, with the Canadian Dollar leading losses, depreciating by 0.28 percent. But for the Yen, however, all of the other majors were trading within 1/3 of a percent against the U.S. Dollar.
Apr 06, 2012 13:45
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OctaFX.Com - Dollar falls after US jobs report
Dollar falls against euro, pound, yen after US jobs report
NEW YORK (AP) -- The dollar fell against most major currencies in light trading Friday following a weak U.S. jobs report.
The Labor Department said the U.S. economy added 120,000 jobs in March, down from more than 200,000 in each of the previous three months. Economists expected 210,000 jobs to be added last month.
The unemployment rate fell to 8.2 percent, the lowest since January 2009, but that was mainly due to more people giving up on finding work.
The euro was trading at $1.3095 late Friday $1.3060 late Thursday.
Currency trading is light because many traders are off for Good Friday. The U.S. stock market is closed and U.S. government bond trading closed at noon Eastern.
In other trading, the British pound rose to $1.5885 from $1.5828. The dollar fell to 81.59 Japanese yen from 82.36 yen and to 0.9172 Swiss franc from 0.9201 Swiss franc.
The dollar rose to 99.71 Canadian cent from 99.38 Canadian cents.
Apr 06, 2012 16:46
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OctaFx - EUR/USD Classical Technical Report 04.11
EUR/USD: The latest round of setbacks have stalled ahead of some key multi-week support by 1.3000 and from here, we still can not rule out risks for a shorter-term bounce back towards the 1.3200-1.3300 area, before considering bearish resumption. Ultimately, any rallies towards 1.3300 should be very well capped, while a break and close back under 1.3000, would accelerate declines.
Apr 11, 2012 06:12
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OctaFX.Com -Dollar extends gains vs. yen, hits session high
NEW YORK (Reuters) - The dollar extended gains against the yen on Wednesday, bouncing from a six-week low hit earlier in the global session.
The dollar hit a high of 81.09 yen and last traded at 81.06, up 0.5 percent on the day, according to Reuters data.
In the overnight session the dollar dropped to 80.57, its lowest since February 29.
Apr 11, 2012 06:29
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OctaFX.Com - Gold pauses after rally, focus on euro zone
LONDON (Reuters) - Gold steadied on Wednesday, after rising for four days straight, as the intensifying euro zone debt crisis threatened to undermine the euro and offset any potential safe-haven demand for the metal.
The euro rose on Wednesday but has come under pressure in the past week as the debt crisis has reignited. The focus is now on Spain, where the head of the central bank said on Tuesday commercial banks would need more capital if the economy continues to deteriorate.
Benchmark 10-year Spanish yields touched 6 percent for the first time since early December on Wednesday, having risen by more than two-thirds of a percentage point in the past week alone, while peripheral banking stocks have been pummeled.
Spot gold was last down 0.1 percent on the day at $1,659.00 an ounce by 1:25 p.m. EDT (1525 GMT), while U.S. June futures were down 0.1 percent at $1,659.90 an ounce.
Gold in euros was last down 0.5 percent at 1,261.72 euros an ounce, having touched two-week highs the previous day above 1,271.00 euros.
"The broader macro environment still remains positive. In the near term, the floor will be set by a combination of how strong investment demand is and how responsive the physical market is" Suki Cooper, an analyst at Barclays Capital, said.
Investment in gold has cooled somewhat. Speculators have cut their ownership of U.S. gold futures by more than a quarter since late February, although holdings of the metal in exchange-traded funds remain near record highs above 70 million ounces.
"Gold has found more support recently, but it doesn't have all of the catalysts in place to be driven substantially higher yet," Cooper said.
EURO TIES STRENGTHEN
The correlation between gold and the euro/dollar exchange rate strengthened on Wednesday to reach its most positive since early January, above 65 percent. That means the gold price is more likely to move in tandem with the single European currency than it was just six weeks ago.
"We think gold will be in a range of $1,600 to around $1,690 or $1,700, which is a fairly wide range. But I think it will be difficult for gold to break out of that range," Standard Bank analyst Walter de Wet said.
"What we are seeing is growing interest to buy in the physical market below $1,630. Should we drop below $1,600, the demand will be pretty strong," he said.
Metals consultancy GFMS, a unit of Thomson Reuters, said in its annual outlook for the gold market that a record high price above $2,000 an ounce next year could mark the peak of the precious metal's bull run of more than decade as monetary policy in major economies starts to tighten.
Gold prices for now are likely to drive above $2,000 as concerns over the euro zone debt crisis persist and the idea of more U.S. monetary easing gains support, GFMS Chairman Philip Klapwijk told Reuters.
In Europe, Italian one-year borrowing costs rose for the first time since November at a sale of short-dated paper on Wednesday, reflecting fresh doubts in the market about the more indebted euro zone nations and nerves ahead of a larger three-year sale on Thursday.
On the demand side, Hong Kong's gold exports to China rose 20 percent in February on the month as appetite for the precious metal remains strong in China, which is expected to overtake India as the world's top gold consumer this year.
Some suspected the number could include purchases from the public sector, as the market was largely quiet during a post-Lunar New Year holiday slump in February.
"On the public level, China's central bank will continue to accumulate gold, which is easier than liberalizing their capital account and currency," said Jeremy Friesen, a commodity strategist at Societe Generale, adding that building gold reserves would help China's push to turn the renminbi into a global currency.
Accommodative monetary policy will remain an incentive for private investors to buy into gold, he added.
Silver fell 0.3 percent to $31.69 an ounce, pushing the number of ounces of the metal needed to buy one ounce of gold up to 52.5 from 50 just one week ago, reflecting gold's relative outperformance.
Platinum and palladium eased, with platinum down 0.4 percent at $1,585.74 an ounce and palladium off 0.5 percent at $633.22 an ounce.
Data earlier in the day that showed car sales in China had cooled in March following sharp gains in February weighed on palladium.
Palladium is used mainly in catalytic converters in engines of vehicles powered by gasoline. China is now the world's largest car market and is chiefly gasoline-driven.
Apr 11, 2012 12:06
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OctaFX.Com - Euro Weakens as ECB Monthly Report Warns of Inflation Risk
The ECB’s monthly statement released today largely echoed ECB Chief Draghi’s remarks from April 4th. The central bank mentioned economic recovery but warned of inflation…
THE TAKEAWAY: ECB monthly report sends mixed messages -> Inflation risks seen, but central expects inflation to align itself to forecasts -> Euro drops ahead of release but stabilizes as markets digest
The moderate economic recovery seen recently is subject to downside risks as inflation threatens to devalue the Euro, the European Central Bank’s monthly report for April said today. The statements were in line with ECB chief Draghi’s policy speech earlier in the month.
The Euro sank ahead of the ECB’s release but stabilized later on as markets digested the mixed messages.
The ECB’s Governing Council said it plans to keep interest rates unchanged, and mentioned that it expects price developments to remain stable. The report mentioned a “moderate recovery” seen in the beginning of 2012, but warned that inflationary risks remain a factor in price action. Inflation fears have returned to the fore in Germany as property prices rise and monetary policy remains too loose.
However, the ECB also said it has the tools to combat inflation in the short and long term. The report pointed out that CPI is expected to stay above 2% this year but in the medium-term will slow to the ECB’s price stability target.
Apr 12, 2012 08:26
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OctaFX.Com - Euro, shares nervous ahead of Italian debt sale
LONDON (Reuters) - The euro dipped against the dollar and European shares inched higher on Thursday as nervousness grew ahead of an Italian debt sale that will gauge whether concerns over Spain are spreading to other debt-laden euro zone nations.
Data on industrial production across the euro area, which is likely to show it contracted by 0.3 percent in February, could also reignite fears that weak growth at a time of government austerity measures is undermining efforts to repair the region's finances.
Ahead of the Italian auction the euro fell to a low of $1.3102 before recovering to be steady at $1.1315, below a one-week high of $1.3158 struck on Wednesday, and within the $1.3030-$1.3165 range trodden in the past week.
"Should the Italian auction disappoint, we could see the euro reverse some of its gains," said Ankita Dudani, G-10 currency strategist at RBS Global Banking, who expects the bond sale to go through without much of a hitch.
Yields on 10-year Italian bonds were down 3.5 basis points to 5.506 percent in early trading, narrowing the spread over the less risky equivalent German bonds to 381 basis points and indicating fixed income investors are less worried about buying the debt.
Spanish 10-year bond yields were 2.7 basis points lower at 5.85 percent, with traders saying a disappointing Italian auction may be just the push needed for the yields to go back to around the 6 percent seen at the start of the week.
The turmoil in Spain's bond market that pushed the yields up has calmed down substantially following comments on Wednesday from European Central Bank executive board member Benoit Coeure, who hinted that the central bank might be willing to buy the debt from the market.
German Bund futures were slightly higher at 139.89, with 10-year cash yields steady at a near-record low 1.69 percent.
Italy's borrowing costs are expected to rise by about a full percentage point from a month ago at its 5 billion euro auction of new three-year bonds later, after the rate it pays for one-year money more than doubled at an auction on Wednesday.
STOCKS RECOVERY EXTENDS
European equity markets were slightly higher ahead of the Italian bond auction, adding to the previous session's tentative recovery following a week-long slide.
The FTSEurofirst 300 index (.FTEU3) of top European shares rose was up 1.83 points, or 0.2 percent, at 1,035.63. The Euro STOXX 50 (.STOXX50E) index of Europe's blue chip companies gained 0.2 percent to 2,389.45, having suffered a 4.5 percent decline over the last five days that all but eradicated the year-to-date gains.
Globally, the MSCI world equity index (.MIWD00000PUS) was up 0.2 percent 322.85 after a good start to the U.S. corporate reporting season lifted Wall Street stocks and a strong Australian employment report encouraged the rebound in Asia.
The U.S. dollar was slightly softer against a basket of currencies (.DXY) following comments by the No. 2 official at the U.S. central bank, Janet Yellen, who said on Wednesday the Federal Reserve's ultra-easy monetary policy was appropriate, given high unemployment and the headwinds facing the economy.
Oil markets were all mostly steady, despite oil sheen spotted near Royal Dutch Shell (RDSa.L) platforms in the central Gulf of Mexico overnight.
Brent crude was up 31 cents at $120.49 a barrel after touching a low of $119.93 in early trade. U.S. oil was up 37 cents at $103.07, adding to $1.68 a barrel gains made on Wednesday.
Apr 12, 2012 08:55
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