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Extending morning deal's downtrend, the Mexican peso weakened against its US counterpart during New York afternoon trading on Monday. At present, the peso is trading near a 26-day low of 13.9755 versus the greenback, compared to Friday's North American session close of 13.3398. The next downside target level for the Mexican currency is seen at 14.20. The peso plummeted on concern that the outbreak of the swine flu will deepen the country's economic slump.
The flu outbreak may slow dollar flows from tourism and curb consumer spending at restaurants, theaters and other venues where crowds gather. Suspected deaths in Mexico have risen to 103 from the 81 announced earlier, Health Minister Jose Cordova said yesterday.
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News are provided by InstaForex in partnership with RTT.
The euro showed mixed trading against its major counterparts after a preliminary report from the German statistical office showed that consumer price annual inflation rose to 0.7% in April from 0.5% recorded in March. While, the euro gained slightly against the pound it moved sideways against the rest of majors. As of now, the euro is trading at 0.8916 against the pound, 1.3076 against the greenback and 126.26 versus the yen.
On a monthly basis, the consumer price index, or CPI, was flat. Economists had forecast the CPI to climb 0.8% annually and 0.1% month-on-month.
The harmonized index of consumer prices, or HICP, climbed 0.7% year-on-year after rising 0.4% in March, while the consensus forecast was for a 0.8% increase. Compared to March, the HICP was flat.
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News are provided by InstaForex in partnership with RTT.
The German government is expected to slash its economic forecasts for 2009, reports said Wednesday, citing sources close to the government.
Gross domestic product, or GDP, is expected to decline 6% in 2009, the worst contraction since the World War II. The forecast was cut from a 2.25% fall predicted in January. Economy Minister Karl-Theodor zu Guttenberg will announce the latest set of forecasts at 7.00am ET.
Last week, a group of German economic think tanks jointly lowered their forecast for the biggest Eurozone economy. They now expect Germany to contract 6% in 2009, quicker than a 2.25% fall estimated previously. For 2010, the forecast group does not expect a dramatic recovery. GDP should decline 0.5%. Unemployment was forecast to rise to an average of 3.7 million this year and to 4.7 million next year.
In March, seasonally adjusted unemployed persons in Germany rose 69,000, bigger than 50,000 increased in February.
The International Monetary Fund forecasts the German economy to contract 5.6% in 2009 and 1% in 2010. Meanwhile, the Commmerzbank expects Germany to shrink 6%-7% this year.
On April 27, European Central Bank Governing Council member Axel Weber told German newspaper Franfurter Allgemeine that the German economy is unlikely to grow before the second half of the next year.
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The Monster Employment Index for the U.S, which measures online job availability in the country, increased to 120 in April from 118 in March, the online job-advertising agency Monster Inc. said Thursday. The rise in the index indicates that there was a slight increase in online job opportunities. However, on a yearly basis, the index was down 31% in April.
Jesse Harriott, senior vice president and chief knowledge officer at Monster Worldwide said, "April's rise in online recruitment activity was in line with seasonal expectations and suggests that the pace of slowdown in the U.S. labor market is moderating."
During the month, protection service occupations showed the largest monthly gain. Accommodation and food service as also the art and entertainment industries showed an increase in online job demand in April. Transportation and warehousing industries also showed a strong rise in online job opportunities.
Meanwhile, online job recruitment activity in the mining and extraction sector fell further in April, reflecting the impact of the current recession on commodity demand, which lowered business expansion. Legal, architecture and engineering occupations also experienced declines in online job opportunities in April.
Region-wise, 19 out of the top 28 major U.S metros recorded gains in online recruitment activity in April.
The Monster Employment Index is a broad and comprehensive monthly analysis of U.S. online job demand conducted by Monster Worldwide, Inc, with data being collected since October 2003.
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Thursday, the Irish Exporters Association, or IEA, said the country's exports in the first quarter fell 9.6% year-on-year hit by global economic downturn. The association warned that unemployment in the sector would increase substantially if the government does not provide additional stimulus for the sector.
Total exports for the first quarter stood at EUR 33.78 billion, down from EUR 37.38 billion in the same period last year. The association forecasts exports to fall 13% in 2009, with a loss of export revenue worth EUR 20.2 billion and direct job losses of some 91,000.
John Whelan, Chief Executive of the IEA said, "The knock-on effect of job losses on this scale on the economy, however, is much greater as each export job supports two other jobs in the community."
Merchandise exports showed a decline of 3.4% in the first quarter, while exports of services fell 18%.
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UK Manufacturers Expect Pace of Decline In Output To Slow: CBI Survey
Wednesday, the latest monthly Industrial Trends survey from the Confederation of British Industry showed that 17% of the 575 firms surveyed expect the output volume to increase over the next three months, while 34% anticipate a fall. However, the resulting balance of minus 17% was a marked improvement on the previous month's balance of minus 32%.
Thus, firms expect the pace of decline in output to slow significantly in the next quarter, indicating that they believe the toughest phase of the recession may be behind them.
Ian McCafferty, the CBI's Chief Economic Adviser said, "After scaling back production very sharply at the beginning of the year, manufacturers can see a glimmer at the end of the tunnel. They still expect manufacturing activity to fall, but at a much slower rate over the next few months."
The survey found that a balance of 56% reported a below normal order books in May. The CBI said export order books remained below par this month despite the relative weakness of sterling.
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In early European deals on Thursday, the dollar slipped to new multi-month lows against its European and Swiss counterparts as fresh concerns about the strength of global recovery resurfaced.
Yesterday, the Federal Reserve lowered its forecast of U.S. economic growth for the next three years. Minutes from its April meeting showed the Fed projected the world's biggest economy to contract by up to 2 percent this year with the unemployment rate rising to as high as 9.6 percent.
They also showed that Fed policymakers had considered buying more securities to spur recovery, a move that would inject more dollars into the market.
At the April meeting the FOMC voted unanimously to keep the target range between 0 and 0.25 percent. In the accompanying statement the FOMC noted that "the economy has continued to contract, though the pace of contraction appears to be somewhat slower."
"Although the economic outlook has improved modestly since the March meeting, partly reflecting some easing of financial market conditions, economic activity is likely to remain weak for a time," the statement read.
Once again, the FOMC said that interest rates will remain exceptionally low for some time, adding that they will "employ all available tools to promote economic recovery and to preserve price stability."
A disappointing 2009 outlook from Hewlett-Packard, the world's biggest PC maker, also fanned concerns about corporate profits in a slowing economy.
The dollar, which closed yesterday's trading at 1.1003 against the Swiss franc, fell to a new multi-month low of 1.0962 during early deals on Thursday. The next downside target level for the U.S. currency is seen at 1.07.
In early trading on Thursday, the dollar weakened to 1.3840 against the euro. This set the lowest point for the dollar since January 05. On the downside, 1.40 is seen as the next target level for the dollar. At Wednesday's close, the euro-dollar pair was quoted at 1.3781.
At 4:55 am ET Thursday, the dollar spiked up to 1.5518 against the pound, moving from a new multi-month low of 1.5819 hit in early Asian deals today. If the dollar gains further, it may likely target the 1.535 level. The pound-dollar pair was worth 1.5755 at Wednesday's close.
The pound plummeted after the Standard & Poor's revised the outlook on the U.K. to negative from stable. The rating agency affirmed 'AAA' long-term and 'A-1+' short-term sovereign credit ratings.
Standard & Poor's credit analyst David Beers said, "We have revised the outlook on the U.K. to negative due to our view that, even assuming additional fiscal tightening, the net general government debt burden could approach 100% of GDP and remain near that level in the medium term."
Rating outlooks assess the potential direction of a rating, typically over a period of up to two years.
In economic news, U.K.'s retail sales rose 0.9% in April from the previous month, larger than the expected increase of 0.5%. On a yearly basis, sales grew 2.6%, while economists were looking for a 2.4% rise.
Against the Japanese yen, the dollar is presently trading at 94.97, up from a new multi-month low of 94.31 hit at 9:25 pm ET Wednesday. The next upside target level for the dollar-yen pair is seen at 95.5.
An index measuring tertiary industrial activity in Japan fell a seasonally adjusted 4.0 percent in March compared to the previous month, the Ministry of Economy, Trade and Industry said today, posting a score of 100.8.
That was sharply lower than analyst expectations that had called for a 1.5 percent monthly decline following the revised 1.3 percent monthly easing in February.
Investors are now likely to focus on the North American session, in which the U.S. leading indicator for April, Philadelphia Federal Reserve's manufacturing survey data for May and the weekly jobless claims report for the week ended May 16 are expected.
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Euro Drops To 4-day Low Against Swiss Franc.
(RTTNews) - In early deals on Monday, the euro plunged to a 4-day low against the Swiss franc as the European stocks turned negative after a gauge of German business confidence rose less than economists estimated in May. The euro also weakened against the dollar, while eased from a 13-day high against the yen.
European stocks reversed gains and turned negative in early trade today, losing ground for the third session in a row, but volumes were expected to be thin with UK markets closed for a holiday.
At 3:38 am ET, the FTSEurofirst 300 .FTEU3 index of top European shares was down 0.4 percent at 852.53 points after rising as high as 858.26 earlier in the session.
A survey conducted by the Munich-based Ifo Institute for Economic Research showed that German business confidence improved to 84.2 in May from 83.7 in April. But the indicator stood below the expected reading of 85.
Meanwhile, current assessment unexpectedly fell to 82.5 from a revised reading of 83.5 in April. Economists were looking for a reading of 84.5.
The expectations index stood at 85.9 in May, up from 83.9 in April. The expected reading was 85.4.
The euro, which closed last week's trading at 1.5198 against the Swiss franc dropped to a 4-day low of 1.5164 during early deals on Monday. If the euro-franc pair drops further, it may test support around the 1.502 level.
In early trading on Monday, the euro weakened against the dollar. At 4:05 am ET, the euro-dollar pair touched 1.3960, down from Friday's close of 1.4002. The next likely target level for the pair is seen at 1.383.
The euro eased against the yen after hitting a 13-day high of 133.44 at 1:20 am ET Monday. Currently, the euro-yen pair is trading near Friday's close of 132.76 with 132.1 seen as the next target level.
Economic recovery in Japan and the rest of the world would be mild as removing excesses accumulated over the past several years will take considerable time, the Bank of Japan Governor Masaaki Shirakawa said today. Separately, the central bank raised its economic assessment.
"Considering the fact that the current economic downturn has occurred during the process of the adjustment of various excesses that had accumulated worldwide over the past several years, it is very likely that the severe economic conditions will continue for some time, and the recovery thereafter will inevitably be mild and attended by high uncertainty," Shirakawa said in a speech in Kanazawa.
Shirakawa's remarks coincided with the release of BoJ's latest Economic and Financial Developments Report, in which the central bank upgraded its economic assessment, to match the view expressed last week along with the monetary policy decision to maintain the uncollateralized overnight call rate at 0.1%.
The central bank said economic conditions in Japan have been deteriorating, but exports and productions are beginning to level out. Last month, the central bank assessed significant deterioration in economic activity.
During early deals on Monday, the euro bounced between 0.8803 and 0.8824 against the pound. The next downside and upside target levels for the euro-pound pair are seen around 0.877 and 0.884, respectively. At last week's close, the pair was quoted at 0.8804.
The U.S. markets are closed today for Memorial Day.
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Monday, German Ifo business confidence survey is the only major report due from the European economies.
At 2.00am ET, the Statistics Estonia is scheduled to release the foreign trade data for March. The trade deficit stood at EEK 1.1 billion in February, smaller than the EEK 1.57 billion deficit in January.
At 3.00am ET, a slew of statistical reports are due. Hungarian retail sales are forecast to drop 3.5% annually in March, larger than the 3.2% decline seen in February. Meanwhile, Czech consumer confidence and Spanish PPI are also due.
At 4.00am ET, a monthly business confidence survey is due from the Munich-based Ifo Institute for Economic Research. German business confidence is seen at 84.9 in May, up from 83.7 in April. Meanwhile, the expectations index is forecast to rise to 85.4 from 83.9 and current assessment to improve to 84.5 from 83.6.
The Hungarian Central Bank is set to announce the interest rate decision at 8.00am ET. The central bank is widely expected to hold the base rate at 9.5%.
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News are provided by InstaForex in partnership with RTT.
During early European deals on Tuesday, the British pound declined to a 4-day low against the US dollar as Britain's top share index fell 0.8 percent in early today with investors nervous after reports that North Korea fired more short range missiles, denting oil and metal prices and pressuring commodity stocks.
The pound also showed weakness against other major currencies. The British currency thus fell from an Asian session's 4-day high against the European currency and the Swiss franc.
By 4:57 am Eastern Time, the FTSE 100 .FTSE was down 36.45 points at 4,328.84 after gaining 0.5 percent on Friday. The index is down 2.1 percent this year, but has gained over 25 percent since touching a six-year trough on March 9.
Against the US dollar, the British pound traded down during early deals on Tuesday. At 5:00 am ET, the pound-dollar pair touched a 4-day low of 1.5781, compared to 1.5911 hit late New York Monday. If the pair falls further, 1.553 is seen as the next target level.
The British currency that closed Monday's North American session at 0.8812 against the European currency reached a 4-day high of 0.8776 at 2:05 am ET Tuesday. Thereafter, the pound reversed its direction and is currently trading at 0.8795 against the euro with 0.892 seen as the next target level.
Germany's gross domestic product posted its sharpest decline since records began in 1970 on weak investment activity and a sharp drop in net exports.
The German economy contracted 3.8% on a sequential basis in the first quarter, the Federal Statistical Office said in a detailed report today. The first-quarter drop in GDP marked an unprecedented fourth successive quarterly contraction for Germany's economy.
In the fourth quarter of 2008, the gross domestic product had slipped 2.2%. Compared with the first quarter of 2008, GDP decreased a price-adjusted 6.7% in the first quarter of 2009, much larger than the 1.7% drop seen in the fourth quarter. When calendar-adjusted, the economic performance went down 6.9%.
Elsewhere, a consumer climate survey by market research firm GfK Group revealed that German consumer sentiment remained unchanged in May amid the economic crisis. The survey's forward-looking overall indicator showed a value of 2.5 points for June, matching May's reading.
Economic expectations improved slightly for the second month in a row. The corresponding indicator showed a reading of minus 28.3 points in May, up 2.9 points from previous month.
UK's sterling lost ground after hitting a 4-day high of 1.7305 against the Swiss franc at 2:05 am ET Tuesday, The pound-franc pair is currently trading at 1.7255, compared to Monday's closing value of 1.7230. The next downside target level for the pair is seen around 1.704.
Switzerland's employment growth slowed in the first quarter and the UBS Consumption indicator declined in April.
The Swiss Federal Statistical Office announced that the employment increased 0.8% year-on-year in the first quarter, slower than the 1.6% in the previous quarter. Economists were looking for a decline of 0.1%.
The employment level stood at 3.957 million in the first quarter, down from 3.963 million in the preceding quarter. Economists had predicted the employment level at 3.92 million.
The UBS said its consumption indicator for Switzerland fell slightly to 0.92 in April from 0.99 in March, resuming the downtrend after a rise in March. The indicator has thus remained below its long-term average of 1.50 for seven months.
The British pound that climbed to 151.20 against the Japanese yen at 2:00 am ET Tuesday weakened thereafter. The pound-yen pair thus dropped to 149.61 at 4:40 am ET. On the downside, 146 is seen as the next target level for the British currency. The pair closed Monday's New York deals at 150.90.
A report released by Japan's Finance Ministry showed that Japan's net external assets as at the end of 2008 were down 9.9% year-over-year at 225.51 trillion yen due to the strengthening yen. The Bank of Japan's corporate service price index report for April showed a 0.2% monthly drop and a 2.4% year-over-year decline. Annually, prices have shown a negative trend since October 2008.
Traders are now likely to focus on the North American session, in which the S&P/Case-Shiller home price index is scheduled for release at 9 am ET. Economists expect an 18.4% year-over-year decline in the 20-city composite house price index for March.
At 10:00 am ET, the Conference Board is scheduled to release its consumer confidence report for May. The survey, which is based on a survey of 5,000 US households, is expected to show that the consumer confidence index rose to 42 in May.
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News are provided by InstaForex in partnership with RTT.