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British Pound Recovers From Recent Lows Against Major Rivals
The British currency recovered from early morning session's lows against major currencies during New York afternoon trading on Tuesday.
UK's Office for National Statistics report released on Tuesday showed a 2.5% monthly decline in the August industrial production, reversing a 0.5% rise in July. Economists were expecting the monthly industrial production growth to slow to 0.2% in August. The industrial production index stood at 85.9, the weakest since September 1987.
At the same time, with decreases in all 13 sub sectors, manufacturing output slipped 1.9% on a monthly basis in August, which was the biggest drop since January.
After touching 8-day lows of 0.9277 against the euro and 1.6297 versus the Swiss franc by about 7:30 am ET, the pound reversed its direction in afternoon deals today. Currently, the pound is trading near 1.6341 against the franc and 0.9254 versus the euro, compared to yesterday's close of 1.6455 and 0.9195, respectively.
Against its Japanese counterpart, the sterling dropped to a new multi-day low of 141.00 at about 9:40 am ET. Thereafter, the pair slightly moved up and presently worth 141.38.
The British pound tumbled to 1.5880 versus the US dollar at about 7:30 am ET from European session's multi-day high of 1.6050 today. Thereafter, the pair reversed its direction and as of now worth 1.5919.
Published: 2009-10-06 08:41:00
Financial professionals hold the view that the U.S. economy remains in a recession, despite signs of stability in recent months, a survey said Tuesday. The survey was conducted amongst attendees of the 2009 annual conference of the Association for Financial Professionals on October 5.
Around 20% of respondents assessed that the recession will end before of the year, while 69% expect the recession to continue well into 2010. Nearly 22% expect company payrolls to shrink further, while just 14% anticipate their organization to resume hiring over the next six months.
Only 21% of financial professionals said their organization will increase capital spending in the months ahead. Majority of survey respondents expect to either maintain or further cut capital spending over the coming six months.
News are provided by InstaForex.
UK Sept. Output Prices Rise Unexpectedly.
Friday, the Office for National Statistics said UK's output prices rose 0.4% in September from the previous year, reversing a fall of 0.3% in August. Consensus forecast was for a 0.1% fall.
Reflecting price rises in petroleum and other manufactured products, output prices climbed 0.5% month-on-month, larger than the 0.3% increase seen in August and 0.1% expected by economists.
The input price index for materials and fuels purchased by manufacturing industry fell 6.5% annually in September, following a 7.7% drop in August. On a monthly basis, input prices slipped 0.5% in September. Economists were expecting an annual 6.8% fall and a monthly drop of 0.8%.
News are provided by InstaForex.
Euro Eases From 14-month High Against Dollar.
In European deals on Thursday, the euro eased from a 14-month high against the dollar amid a report that showed Euro-zone's annual CPI fell in September. The euro also plummeted to a 6-day low against the pound and an 8-day low against the franc.
But the euro strengthened to a fresh 3-week high against the yen due to across the board weakening of the latter.
The Eurostat said in a final report that Eurozone's consumer price index or CPI dropped 0.3% year-on-year in September, after falling 0.2% in August. The statistical office confirmed its preliminary estimate for inflation.
The core inflation, which excludes food and energy prices, remained at 1.2% in September, slower than the 1.3% growth the previous month.
On a monthly basis, the CPI remained unchanged in September, while core inflation stood at 0.2%.
The euro, which closed yesterday's trading at 0.9346 against the pound slipped to a 6-day low of 0.9196 in early deals on Thursday. The next downside target level for the euro-pound pair is seen at 0.908.
The pound rose on speculation the Bank of England policy makers may pause their asset-purchase program in the near future as the economy shows signs of recovering from the recession.
In an interview to the Financial Times newspaper, Paul Fisher, Bank of England's executive director for markets said he feels more confident now that the asset purchase programme is having the scale and speed of impact that was hoped for when the programme was started.
"But we are still only seven months into the programme from when it started with the first purchases, so it is still very early days," he told the newspaper. According to him, the increase in unemployment is still "pretty dreadful". But it is just not as bad as it could have been, given a 6% fall in output. And that may be one of the aspects of the asset purchase scheme working, he said.
During early trading on Thursday, the euro declined to an 8-day low of 1.5131 against the Swiss franc. This may be compared to Wednesday's close of 1.5150. If the euro-franc pair drops further, it may test support around the 1.509 level.
The franc advanced as Switzerland's ZEW economic expectations index continued to rise in October. The economic expectations index for Switzerland increased to 65 in October from 58 points in the previous month, results of a survey conducted by the Centre for European Economic Research and Credit Suisse revealed today.
The euro weakened against the dollar after reaching a 14-month high of 1.4969 at 2:10 am ET Thursday. Presently, the euro-dollar pair is trading at 1.4913, down from yesterday's close of 1.4930. The near term support for the pair is seen at 1.487.
In early deals on Thursday, the euro surged up to a new 3-week high of 134.32 against the yen. On the upside, 135.5 is seen as the next target level for the European currency. At yesterday's close, the euro-yen pair was quoted at 133.50.
The Bank of Japan upgraded its economic assessment for the second consecutive month, the latest Monthly Report of Recent Economic and Financial Developments showed today.
The BoJ said the Japan economy has started to pick up compared to its last month's view that economic conditions are showing signs of recovery. Looking forward, the central bank said economic conditions are likely to improve gradually. Last month, the BoJ said economic conditions are likely to start improving in the near future.
In the upcoming North American session, the U.S. consumer price index for September, weekly jobless claims report for the week ended October 10th and the results of the New York Federal Reserve's empire state manufacturing survey for October are scheduled for release.
The results of the Philadelphia Federal Reserve's manufacturing survey are due out at 10:00 am ET.
News are provided by InstaForex.
Swiss Franc Eases From Recent Highs Against Euro
The Swiss currency eased from early morning session's multi-day high of 1.5127 against the euro during New York mid-day trading on Thursday. As of now, the franc is trading near 1.5148 versus the euro, compared to yesterday's close of 1.5152.
The dollar touched a fresh yearly low versus the euro on Tuesday, even after European Central Bank President Jean-Claude Trichet and finance ministers of the sixteen Eurozone countries expressed "worries" about forex movements and voiced support for a strong U.S. dollar.
Its been a brutal stretch for the dollar of late, particularly against the euro. Amid expectations that the interest rate gap between the US and other industrialized nations will widen rapidly once the economic recovery takes hold, the dollar has fallen almost 25 cents from its 2009 highs against the euro, set back in March.
Late Monday night, the dollar dropped to 1.4993, its lowest level in more than fourteen months. The pair was little changed from that mark approaching 8 am ET.
The dollar barely budged versus most other majors ahead of data on US housing starts and producer prices. The Bank of Canada's interest rate decision may also be in focus.
While most economists expect the BoC to maintain its current overnight call rate, Australia, another resource-based economy, surprisingly hiked its key interest rate earlier this month.
Earnings news will also garner attention as participants continue to look for signs that corporations are able to grow revenues.
The dollar was stuck in the mud versus the loonie ahead of the BoC decision, inching slightly higher to C$1.0320. A surprise from central bankers in Ottawa could drive the dollar to parity with the loonie.
Against the sterling the dollar extended its 6-week low, touching 1.6446. With the loss, the buck moved further away from last week's 5-month high near 1.5700.
Choppy trading kept the dollar above the 90 mark versus the yen. Speculation that Japanese officials may intervene to weaken the yen has helped the dollar rebound after testing a 1995 low of 87.08.
Japan's leading index stood at 83.2 in August, down from the initial estimate of 83.3, the Cabinet Office reported Tuesday. However, the leading index improved for the sixth month in a row. In July, the reading was 82.5.
News are provided by InstaForex.
Japan's Vehicle Production Drops Further In September.
Japan's vehicle production dropped 21.6% in September from a year earlier to 830,140 units, the Japan Automobile Manufacturers Association said Thursday. This represents the 12th consecutive month of decline in production.
At the same time, motorcycle production slipped 61% on a yearly basis to 45,646 units, reflecting the 25th consecutive month of decline.
Domestic sales of automobiles stood at 477,818 vehicles, up 0.2% from last year. However, exports dropped 35.7% to 396,163 units. Moreover, factory shipments of motorcycles stood at 40,512 units, down 28.4% from last year. Exports of motorcycles dipped 65.5% to 30,406 units.
For the first half of the fiscal year 2009, automobile production fell 33.5%, while motorcycle production declined 47.7% during the same period.
News are provided by InstaForex.
Thursday, the International Monetary Fund raised Asia's economic outlook saying that the region is rapidly rebounding from the depth of the global crisis.
In its latest regional economic outlook, the Washington-based IMF said it expects Asia's gross domestic product to grow 2.8% this year and by 5.8% next year. In May, the lender had forecast Asia's growth to decelerate to 1.3% in 2009 before rebounding to 4.3% in 2010. The new forecasts are short of the 6.7% average growth recorded over the past decade.
"The primary driver of Asia's recovery has been a progressive return towards normalcy following the abrupt collapse in global trade and finance at the end of 2008," the IMF report said. According to the report, the other key driver of Asia's recovery has been the region's rapid and forceful policy response.
"The "green shoots" of recovery appear more firmly rooted in Asia than in other regions," the report said. "Now Asia is leading as the world pulls out of recession."
While raising its world economic outlook on October 1, the IMF said the world economy is expected to grow 3.1% next year, more than the 2.5% growth forecast in July. The lender expects the Japanese economy to contract 5.4% this year and to grow by 1.7% next year. Australia's growth is forecast to touch 0.7% this year and 2% next year. New Zealand's economy is predicted to shrink 2.2% in 2009 and to expand by 2.2% next year.
China is likely to log the fastest growth in the region, 8.5% this year and 9% in 2010. India is set to follow, with growth projected at 5.4% in 2009 and at 6.4% next year. Meanwhile, South Korea's economy is predicted to shrink 1% before expanding by 3.6% next year.
At the same time, the IMF today revised its outlook for Singapore to show a 4.3% expansion in 2010 after a 1.7%contraction this year. In its world economic outlook, the organization had forecast Singapore GDP to rise 4.1% in 2010 after falling 3.3% this year.
The IMF said Asian policymakers consequently face two major challenges - to maintain policy stimulus until the recovery becomes self-sustaining and to devise a way to return to sustained, rapid growth in a new global environment. It also said Asia will need to be willing to live with smaller current account surpluses and more flexible exchange rate management. Moreover, it said output in the large G7 economies is forecast to grow by 1.3% next year, recouping only half the contraction estimated for 2009, because private demand in these countries remains constrained by the legacy of the crisis.
Asia's V-shaped recovery may be the sharpest on record and may turn into a square-root-shaped recovery soon, DBS Bank economist David Carbon said in a note on Wednesday. "That is, a sharp drop, a sharp rise, and then a palpable turn sideways." The DBS economist expects growth to be back to "normal" for most of the countries in the region by the first quarter of 2010.
Carbon also expects key central banks in the region to hike rates in the first quarter. The bank forecasts India to hike rates as early as January and South Korea in the first quarter. China is expected to start pushing rates up in the second quarter as well as allow its currency to appreciate against the U. S. dollar.
Earlier in the month, Australia became the first G-20 central bank to raise key interest rate after the global financial crisis. India's central bank became the second in the group to start exiting from an easy monetary policy, though it retained key interest rates.
News are provided by InstaForex.
The dollar surged ahead versus the euro Tuesday morning in New York as the Federal Reserve prepared to meet amid growing anxiety that the economic growth seen over the summer may not be sustainable without continued support measures.
With the US consumer still on edge as unemployment approaches 10 percent, many analysts are pointing out that while the third quarter figures on the economy are somewhat encouraging, organic growth is unlikely until the jobs situation improves.
The safe haven dollar has managed recover versus the euro over the past week, prompting the rally in global equities to run out of steam.
The dollar jumped to a monthly high of 1.4623, rising more than a penny even as traders considered news that the European Commission expects the euro area economy to emerge from recession in the second half of 2009.
However, the economy is set to contract 4% for 2009 as a whole.
Joaquin Almunia, Commissioner for Economic and Monetary Affairs said, "The EU economy is coming out of recession. This owes much to the ambitious measures taken by governments, central banks and the EU that have not only prevented a systemic meltdown but have kick-started the recovery. However, the road ahead is a challenging one."
The dollar firmed up a bit versus the yen, moving back above the 90 mark. The pair has been choppy over the past few weeks, with the buck finding a measure of support after testing a 1995 low in October.
Meanwhile, the dollar was steady versus its Australian counterpart even after the RBA raised its interest rate for the second straight session. The dollar rose to .8920 versus the aussie, but leveled off to .8965 approaching 8 am ET.
In October, Australia became the first G-20 member nation to hike its benchmark interest rate since the onset of the financial crisis in late 2008.
The dollar hit a weekly high versus the sterling, rising to 1.6260 before hitting resistance. On a longer term basis, the pair has been moving between 1.5700 and 1.6700 for months.
All eyes will be on Washington, DC tomorrow as the Fed wraps up its latest policy meeting. While Ben Bernanke and company are universally expected to maintain the key interest rate near zero, traders will be paying close attention to the accompanying statement, looking to see whether rates will be left alone "for some time to come," as the central bank has recently assured.
Looking at today's economic calendar, the government is releasing September factory orders at 10 am ET. Economists are looking for a September gain of 1 percent.
News are provided by InstaForex.
European Economics Preview: Eurozone Economy Forecast To Exit Recession.
Quarterly national account data from Germany, France and the Eurozone are due on Friday, headlining a hectic day for European economic news.
At 2:00 am ET, Germany's Federal Statistical Office is set to release third quarter GDP data. On a sequential basis, the economy is forecast to expand 0.8% in the third quarter, compared to the 0.3% growth in the previous quarter. The gross domestic product is expected to contract 4.8% on an annual basis, slower than the 5.9% decrease reported in the last quarter.
In the meantime, the GDP indicator for the month of September is due from Statistics Finland. In August, the GDP indicator had contracted 8.4% on a yearly basis. The statistical office is also slated to release consumer price data for October at the same time. Economists expect consumer prices to fall 0.8% year-on-year, following the 1% decrease in September. Manufacturing new orders data for September is also due at the same time.
At 2:45 am ET, consumer price figures are due from the French statistical office INSEE. The consumer price index is forecast to fall 0.2% annually in October, slower than the 0.4% decline in the previous month. The monthly inflation rate is seen at 0.1%. EU harmonized consumer prices are expected to fall 0.2% on a yearly basis but to rise 0.1% month-on-month in October.
Also due at the same time, is wage growth data from France. The wage growth rate is seen at 0.5% sequentially in the third quarter, after the 0.4% increase in the preceding quarter.
At 2:50 am ET, the French quarterly national accounts report is due. The French economy is tipped to expand 0.6% sequentially in the third quarter, faster than the 0.3% growth in the second quarter. On a yearly basis, the GDP is expected to shrink 1.9% following the 2.8% contraction in the last quarter.
At 3:00 am ET, third quarter's GDP results are due from the Czech Statistical Office. Economists expect the Czech economy to contract 4.7% annually, slower than the 5.5% decrease in the previous quarter. Retail sales figures for September are also due at the same time from the statistical office. Year-on-year, sales are expected to plunge 6%, faster than the 3.5% drop in the previous month.
Simultaneously, consumer price inflation figures are due from Spain's National Institute of Statistics. Economists expect the CPI to fall 0.6% year-on-year in October, compared to September's 1% fall. On a monthly basis, consumer prices are expected to rise 0.7%. Harmonized consumer prices, meanwhile, are forecast to remain unchanged from preliminary estimates at 0.6% annual decline.
Elsewhere, the Hungarian Central Statistical Office is scheduled to issue GDP data for the third quarter. The Hungarian economy is forecast to contract 6.6% annually, after the 7.5% shrinkage in the previous quarter. Also due at the same time from the statistical office, is final industrial production data for September.
Shortly later at 3:15 am ET, Switzerland's Federal Statistical Office is slated to release producer and import price data for October. Producer and import prices are tipped to fall 4.1% year-on-year in October, slower than the 4.9% decrease in the preceding month. The monthly producer and import price inflation rate is seen at 0.1%.
At 3:30 am ET, third quarter GDP results are due from the Netherlands' Central Bureau of Statistics. The Dutch economy is tipped to exit recession by expanding 0.3% sequentially in the third quarter, compared to the 1.1% decrease in the previous month. Year-on-year, the economy is expected to shrink 4.5%. Also due at the same time from the statistical office, are retail sales and trade balance statistics for September.
Meanwhile, the Statistics Sweden is scheduled to issue the third quarter industry capacity rate. The capacity utilization rate stood at 77% in the second quarter.
Half an hour later, gross domestic product data is due from the Italian statistical office ISTAT. The Italian economy is tipped to expand 0.8% sequentially in the third quarter, following the 0.5% decrease in the previous quarter. On a year-over-year basis, the GDP is expected to contract 4.5%, slower than the 6% fall in the second quarter. The Statistics Austria is also expected to release third quarter GDP results at the same time.
At 5:00 am ET, the Eurozone's third quarter GDP figures are due. The Eurozone economy is widely expected to exit recession and is forecast to expand 0.5% sequentially in the third quarter, rebounding from the 0.2% shrinkage in the last quarter. On a yearly basis, the GDP is expected to fall 3.9%, following the 4.8% drop in the second quarter.
Afterwards at 8:00 am ET, consumer price inflation figures are due from the Polish statistical office. The consumer price inflation rate is expected to ease to 3.2% year-on-year in October from 3.4% in September. Simultaneously, money supply data for October is due from the Polish central bank. Month-on-month, M3 money supply is forecast to grow 1.1%, compared to the 0.9% increase in the previous month.
News are provided by InstaForex.