Euro climbs to 16-day high against British pound
(RTTNews) - Wednesday, the European currency climbed to a 16-day high against the British pound. On the other hand, the euro slipped to a 6-day low versus the Swiss franc, while gained slightly from an early Asian session's new multi-month low against the yen and a new multi-week low versus the dollar.
The German Federal Statistical Office announced today that the producer price index or PPI rose 4.3% year-over-year in December, slower than the 5.3% recorded in the previous month. Economists had predicted an increase of 4.2%. On a monthly basis, the PPI dropped 1% in December, after falling 1.5% in November. Economists were looking for a decline of 1.2%.
The European currency gained ground against the US dollar after hitting a new multi-week low of 1.2848 during early Asian deals on Wednesday. The euro-dollar pair thus climbed to 1.3019 at 10:15 pm ET, compared to 1.2907 hit late New York Tuesday. Thereafter, the pair reversed its direction and is now worth 1.2935.
Against the British pound, the euro traded higher during Wednesday's early deals. At 4:30 am ET, the euro-pound pair reached a 16-day high of 0.9414, compared to Tuesday's closing value of 0.9269. If the pair gains further, 0.963 is seen as the next target level.
Bank of England policymakers stood divided while deciding to reduce the bank rate by 50 basis points to a record low in January, the minutes of the session revealed today. The minutes showed that the Monetary Policy Committee voted 8-1 on the 50 basis point reduction on January 8. The well-known dove of the rate setting body, David Blanchflower sought a 100 basis point reduction. Economists were expecting a unanimous vote.
In January's session, the MPC decided to reduce Bank Rate to 1.5% from 2%. This is the lowest rate since the central bank was established in 1694.
The Office for National Statistics or ONS reported today that the UK claimant count rate rose to 3.6% of the workforce in December from 3.3% in November. Economists were expecting the rate to rise to 3.5%.
UK's Office for National Statistics said today that the public sector net borrowing was GBP 14.9 billion in December 2008. This was GBP 7.5 billion higher net borrowing than in the previous year. Economists had expected the public sector to borrow GBP 10.5 billion.
The single currency that closed Tuesday's North American session at 1.4798 against the Swiss franc touched a 6-day low of 1.4742 at 5:00 am ET Wednesday. The next downside target level for the pair is seen around 1.472.
Against the Japanese yen, the euro declined to a new multi-month low of 115.32 during today's early Asian deals. Thereafter, the euro-yen pair reversed its direction and reached 117.22 before pulling back again. The pair is currently quoted at 116.16.
Japan's Cabinet office revealed today in a final report that the leading index declined to 81.3 in November from 85.2 in October. The November reading was revised down from the initial 81.5. A year ago, the leading index was at 94.2. Economists were looking a reading of 81.4 for November.
Across the Atlantic, the Energy Information Administration is scheduled to release its weekly petroleum inventory report at 10:30 AM ET today. The oil inventory report for the week ended January 9th showed that crude oil stockpiles rose by 1.2 million barrels to 326.6 million barrels. Crude oil inventories continued to be the above the upper limit of the average range.
The National Association of Homebuilders' is scheduled to release the results of their survey on homebuilders' confidence. Builder confidence remained at a record low in December, with the housing market index holding at its November lows of 9, as buyers feared to move forward and builders found it impossible to compete with the cut-rate product that is continually flooding the market from mounting foreclosures.
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Published: 2009-01-20 21:46:00
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The Israeli shekel lost ground against the US dollar in early New York trading on Wednesday. The shekel slipped to a 6-week low of 3.9528 against the greenback by 8:35 am ET. On the downside, the shekel may find support near the 4.0 level. The dollar-shekel pair that was worth 3.886 at Tuesday's close is currently trading at 3.9227.
Investors continued to weigh as Standard & Poor's reaffirmed its "stable" outlook on Israel's credit rating yesterday, saying the 22-day Gaza conflict would only have a short-term impact on the economy. S&P, however, noted that the conflict is expected to widen the country's fiscal deficit this year and next year. S&P has an A/A-1 rating on Israel's foreign currency debt and AA-/A-1+ on its local debt. The S&P also said that Israel's fiscal deficit would expand to 6% of gross domestic product in 2009 and 3% in 2010.
Published: 2009-01-21 02:00:00
The US dollar edged down against is Canadian counterpart during early deals on Thursday. At 4:15 am ET, the dollar-loonie pair touched a 2-day low of 1.2539, compared to 1.2553 hit late New York Wednesday. The next downside target level for the pair is seen around 1.247.
Published: 2009-01-21 20:22:00
The dollar was steady versus other majors Thursday morning in New York, staying near a 22-year high versus the sterling amid deepening concerns that the global recession has intensified.
With traders expressing little hope that a quick recovery is on the horizon, the dollar and yen have strengthened of late due to increased risk aversion.
Economic data is likely to attract some attention on Thursday, with the Labor Department due to release its weekly jobless claims report, while the Commerce Department is due to release its report on housing starts in the month of December.
The dollar has skyrocketed versus the slumping sterling over the past weeks, culminating in yesterday's 22-year high of 1.3617. The dollar has since leveled off to trade at near 1.3800 Thursday morning.
In economic news from the UK, results of the January 2009 Industrial Trends Survey by the Confederation of British Industry's or CBI showed that manufacturers in the UK expect sharp fall in output over the next three months.
The dollar was stable versus the euro Thursday morning, hovering near 1.3000 after pulling back from a 6-week high of 1.2823. The buck has picked up 10 cents over the past two weeks.
Thursday, the Eurostat said Eurozone's industrial new orders dropped 4.5% month-on-month in November, after falling a revised 5.7% in October. Initially the October decline was reported as 4.7%. Economists had predicted a decline of 5% for November.
The buck consolidated its attempts to recover from yesterday's 13-year low against the yen Thursday morning. The buck held steady near 89 in early dealing, having stabilized since hitting a 1995 low of 87.08 on technical trading.
The Bank of Japan's Board of Governors voted unanimously to keep the overnight call rate unchanged at 0.10 percent, the BOJ said on Thursday at the conclusion of its two-day monetary policy meeting in Tokyo.
The bank also lowered its median view for real GDP in the current fiscal year, now forecasting that it will contract 1.8 percent versus expectations in October for a 0.1 percent expansion. The next fiscal year is expected to see GDP shrink 2 percent, the bank added, versus the 0.6 percent expansion predicted in October.
Published: 2009-01-22 00:16:00
Eurozone private sector activity contracted at a slower pace in January, a closely watched survey revealed Friday.
Reports said citing the Markit Economics that the flash composite purchasing managers' index or PMI for Eurozone rose slightly to 38.5 in January from a record low of 38.2 in December. The increase was surprising as economists were expecting the index to fall to 37.4.
A PMI reading above 50 indicates expansion in the sector, while below 50 suggests contraction. The composite PMI showed an improvement for the fist time in five months, although it logged a below 50 reading.
The PMI for Eurozone's manufacturing sector climbed to 34.5 from 33.9 in December, while the consensus forecast was for the index to decrease to 33.1. Further, the gauge for the service sector went up to 42.5. Economists were expecting the services PMI to drop to 41.5 from December's reading of 42.1.
Also on Friday, the Markit Economics released flash PMI reports for France and Germany. The manufacturing PMI for France climbed to 38.1 from 34.9, while expectations was for the index to decline to 34. Further, the services PMI rose to 42.9 from 40.6. The Markit/CDAF composite PMI rose to 40.8 from 37.6 in December, the first rise in the index since September.
Meanwhile, a sharp contraction observed in German private sector activity. The composite PMI fell to 38 from December's 39.5. That marked the lowest reading on record. The flash PMI for German manufacturing sector stood at its lowest level since records began in 1996. It marked 32 in January down from 32.7.
The index for German services sector was 45.4, down from 46.6 recorded in the previous month. Economists were expecting the manufacturing PMI to record 32 and the services PMI to post 45.7.
Published: 2009-01-22 23:20:00
The Canadian dollar spiked higher against its major counterparts on Monday in early trading. The loonie advanced to a 12-day high against the US dollar, 13-day high versus the euro and a weekly high against the Japanese yen. The petro-linked loonie gained despite a drop in oil prices today. The crude oil for March delivery dropped $0.74 or 1.59% to $45.73 in the session.
Traders continued to weigh Friday's report on Canadian inflation. The Statistics Canada report showed that consumer price index dropped 0.7% in December after falling 0.3% in the previous month. Consumer prices rose 1.2% in the 12 months to December 2008, more slowly than the 2.0% increase in November, the report added. It was the smallest increase since January 2007 and reflected a sharp decline in the price of gasoline. Meanwhile the core CPI continued to hold steady at 2.4% for the second month.
The Bank of Canada's monetary policy report released last week showed that the Canadian economy is expected to face a sharp recession and will continue it in three quarters before growth returns in the second half of 2009.
In its update to its Monetary Policy Report, the central bank said it sees a quarter-to-quarter decline of 2.3 per cent in the fourth quarter of 2008, followed by a 4.8 percent drop for the first three months of 2009 and a drop of one percent in second quarter of this year.
However, the bank expects the downturn may be reversed by the third quarter of the year, when it forecasts two percent growth and 3.5 percent expansion in the last three months of the year.
The Canadian dollar advanced to 1.2210 against the US dollar by 4:15 am ET, the highest level since January 14, 2009. If the loonie moves further up, it may likely target near the 1.2155 level. The loonie-buck pair that closed Friday's deals at 1.2336 is currently trading at 1.2226.
Turning to the U.S, the National Association of Realtors is scheduled to release its report on existing home sales for December at 10 AM ET today. Economists estimate existing home sales of 4.40 million for the month.
The Conference Board is also scheduled to release a report on the U.S. leading index for December at the same time. The consensus estimate calls for a 0.3% decline in the leading indicators index for the month.
Against the euro, the Canadian dollar extended its early morning strong rally in early European trading. The loonie soared to near a 2-week high of 1.5811 against the euro by 4:50 am ET, compared to last week's close of 1.6026. On the upside, the Canadian dollar may find resistance near the 1.572 level. The pair is presently trading at 1.5825.
The Canadian currency soared to near a 6-week high of 0.7991 against the Australian dollar by 4:20 am ET and leveled off thereafter. The aussie-loonie pair that closed Friday's deals at 0.8085 is currently trading at 0.7993.
The Canadian dollar climbed a weekly high of 73.03 against the Japanese yen by 4:15 am ET Monday. This may be compared to last week's close of 72.06. As of now, the loonie-yen pair is trading at 72.78 with 73.5 seen as the next target level.
Published: 2009-01-25 21:09:00
Several key economic indicators are scheduled for release at the start of the week.
At 10 am ET, the National Association of Realtors is expected to announce the existing home sales data for December. Economists are looking for a figure of 4.40 million, smaller than November's 4.49 million. The month-on-month decline is forecast at 2% in December, less severe compared with the 8.6% slump in November.
Elsewhere, the Conference Board is expected release the leading economic index for December. The index reading is forecast to fall 0.2% in December, after declining 0.4% in the previous month.
The Federal Reserve Bank of Dallas is set to reveal the results of the Texas Manufacturing Outlook Survey for January at 10.30 am ET. The headline index was down 61% in December.
Published: 2009-01-26 00:20:00
The Canadian dollar staged a sharp spike against its US and Japanese counterpart by about 2:05 am ET Tuesday. The Canadian dollar is now worth 1.2176 against the dollar and a new multi-day high of 73.95 against the yen, compared to Monday's closing values of 1.2229 and 72.91, respectively. The next upside target level for the loonie is seen around the 1.187 level against the dollar and 75.9 level against the Japanese unit.
Published: 2009-01-26 18:53:00
The dollar extended its losses from the previous two sessions versus the euro and sterling amid speculation that its dramatic recent run-up has been way overdone.
With traders expressing a glimmer of hope that government intervention can help to shorten the global recession, riskier higher-yielding currencies have seen some renewing buying interest.
Tuesday's trading may be impacted by the release of the Conference Board's report on consumer confidence in the month of January as well as the S&P/Case-Shiller home price indices for November.
On Monday, a report from the National Association of Realtors showed an unexpected increase in existing home sales in the month of December, with some buyers taking advantage of lower home prices.
Looking at Tuesday morning's currency charts, the dollar eased further versus the euro, slipping to a weekly low of 1.3359 before improving to 1.3200. With the retreat, the buck moved away from a 6-week high of 1.2764, set last Thursday.
Tuesday, the European Central Bank said working day and seasonally adjusted current account of the euro area recorded a deficit of EUR 16.0 billion in November. The current account deficit widened from EUR 6 billion deficit recorded in October.
The dollar also stayed under pressure versus the sterling, easing to a weekly low of 1.4242 before stabilizing to trade at 1.4075. The dollar has leveled off since hitting a 23-year high of 1.3501 last week.
The buck continued its run of choppy trading versus the yen, slipping back to 89 after briefly touching above the 90 mark. The dollar has been able to find its footing since hitting a 13-year low of 87.08 on technical trading last week.
The Japanese government is planning to use public money to support companies, which are facing difficulty in surviving in an unfavorable economic condition. Companies that are struggling to raise funds due to credit crunch would be getting benefits of the new plan.
Also Tuesday morning, the buck held steady near 1.2200 versus the loonie after slipping to a nearly 2-week low of 1.2150 on Monday.
Published: 2009-01-26 23:03:00
Wednesday, the latest Inflationary Expectations survey for Sweden showed that inflation and gross domestic product growth expectations in the one and the two-year perspective have tumbled since the previous survey, a report from research agency TNS Prospera revealed.
"Zero-growth and inflation slightly above the "tolerance floor" is the overall assessment for the year to come", the report said.
Decline was also witnessed in the wage increase expectations. That said, the survey found that an economic recovery with its ensuing inflation effects is expected to happen after the next twelve months.
Inflation is seen at 1.1% for the first year and at 1.5% for two years, according to the survey. After stagnation in the first twelve months, the GDP is expected to record 1.1% growth in two years.
In the October survey, inflation was seen at 3.2% for the first year and 2.8% in two years time. GDP was expected to rise 1.8% in the first twelve months and 2.1% in two years.
Further, the survey participants predicted a 0.5% reduction in Riksbank's benchmark, the repo rate within a 3-month horizon to 1.5%. Meanwhile, expectations of money market players were more aggressive. They expect the repo rate to fall to 1.3% in three months time.
With regard to currencies, the EUR and USD rates forecasts are substantially higher, compared to SEK, than were expected last survey, the report said. "The trend is however clear; SEK is believed to strengthen".
TNS Prospera conducts the survey on behalf of Sveriges Riksbank, four times a year, aiming to track inflationary and wage increase expectations in Sweden among labour market parties, purchasing managers and money market players. The survey also maps expectations of future GDP-growth and repo rates, for money market players also the five-year government bond rate, the SEK/EUR and SEK/USD rates.
Thlabore latest survey was carried out between January 12 and 22.
Published: 2009-01-27 19:02:00
Extending previous sessions' downtrend, the Swiss currency slipped to a 5-week low of 1.5181 against the euro by 8:00 am ET Wednesday. The euro-franc pair that was worth 1.4968 at Tuesday's North American close is currently trading at 1.5165. If the franc falls further, it may likely to target near the 1.5205 level.
In economic news, the Swiss KOF Economic Institute revealed today that the Swiss economic barometer continued to decline in January, confirming that the economy is set to contract over the coming months. The index stood at minus 0.87 in January, down from minus 0.45 recorded in December. The reading for December was revised from minus 0.39. The expected reading for January was minus 0.50.
Published: 2009-01-28 00:24:00