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During early European deals on Monday, the British pound showed mixed trading against other currencies. While the pound fell to new multi-day lows against the dollar and the yen, it recovered from a new multi-month low against the franc and an 11-day low against the euro.
The U.K. revised first quarter GDP report released at 4:30 am ET weakened the pound against all majors. But the pound recouped its losses against the euro and the franc shortly.
The U.K. economy expanded 0.3% sequentially in the first quarter, the Office for National Statistics showed. The first quarter growth figure was unchanged from the estimate published in May, but smaller than the 0.4% growth seen in the fourth quarter of 2009.
The pound declined to an 11-day low of 1.4951 against the US dollar at 4:35 am ET Monday. Since then, the pound-dollar pair has been moving sideways and is currently worth 1.4970. If the pound weakens further, it may likely target the 1.488 level. At last week's close, the pair was quoted at 1.5071.
The pound that strengthened against the yen in early Asian deals on Monday pared its gains in the latter part of the session and extended its slide in early European trading. The pound-yen pair that closed last week's trading at 133.58 fell to a 5-day low of 132.62 by about 5:00 am ET. On the downside, 131.3 is seen as the next support level for the UK currency. The pair is currently worth 132.80.
The British pound that fell to a new multi-month low of 1.5839 against the Swiss franc at 2:40 am ET Monday recovered thereafter. As of now, the pound-franc pair is worth 1.5980, up from last week's close of 1.5909. If the pound advances further, it may target the 1.606 level.
The pound rose against the euro after touching an 11-day low of 0.8421 at 4:35 am ET Monday. The euro-pound pair is presently trading near last week's close of 0.8394. The next upside target level for the pound is seen at 0.8335.
Looking ahead, finance ministers from the 16 euro area countries are scheduled to begin a meeting today, where stress tests being conducted on the region's lenders are likely to be high on the agenda.
Also, traders will be looking to second quarter company earnings report this week for clues about the strength of the U.S. economy.
News are provided by InstaForex.
The euro held steady near a two-month high against the dollar on Wednesday, with high-yielding currencies such as the Australian dollar supported by a seemingly significant improvement in risk appetite.
The dollar could come under more pressure, especially against higher-yielding currencies, in reaction to robust U.S. corporate earnings.
Intel Corp (INTC.O) reported results above expectations and gave an upbeat sales outlook, pushing S&P futures higher SPv1 .SPX. [ID:nN12197658]
Traders said funds were increasingly moving out of cash and low-yielding U.S. Treasuries to buy euro and growth-related currencies. Helping drive sentiment was a strong start to the U.S. corporate earnings season and easing concerns about euro zone's sovereign debt and the financial sector.
The euro EUR= was little changed from late U.S. trading on Tuesday at $1.2710. It hit a two-month peak of $1.2739 EUR=EBS on Tuesday, brushing aside a Moody's downgrade of Portugal's sovereign rating by two notches.
Instead, investors chose to pay more heed to the strong response to a six-month treasury bill tender by Greece. The debt-laden country sold 1.625 billion euros ($2.03 billion) of T-bills at a better rate than it pays to borrow under a European Union/International Monetary rescue fund. For more see [ID:nATH005574].
"What we are seeing is that cash is being put back to work with all the negative news surrounding the euro zone receding," said Greg Gibbs, currency strategist at RBS, Sydney.
"Some of the risk premium that was being attached to the euro zone is being taken off. The downgrade of Portugal was very much expected and I think we could see the euro rise a bit more from here."
Chartwise, resistance is seen at $1.2767, the target of an A-B-C wave sequence starting from the euro's four-year low of $1.1876, with the C-wave starting at $1.2152.
The next target comes in at $1.2780, which is a 50 percent retracement of its fall from mid-April to the June low.
The euro rose 0.3 percent against the yen to 113.18 yen, hovering near a three-week high of 113.29 yen EURJPY=R hit earlier.
The yen JPY= was broadly under pressure and retreated against the dollar, which rose 0.3 percent to 88.96 yen, with talk of stop-loss bids above 89.25 yen.
The yen, considered to be a safe-haven investment, is usually sold off when risk appetite improves.
The dollar index .DXY was almost unchanged at 83.619, having broken trendline support. New support is seen around 83.15, the 38.2 percent retracement of the the index's November to June rally.
Other major U.S. corporates to report quarterly earnings this week include JPMorgan Chase & Co (JPM.N) and Bank of America Corp (BAC.N). [ID:nN07172590]
Some traders expressed doubts about whether the improvement in risk appetite would last, saying it could worsen again if U.S. banks' quarterly earnings come in weak.
Akira Hoshino, chief manager for the Bank of Tokyo-Mitsubishi UFJ's foreign exchange trading department, reckons U.S. economic indicators such as the Philadelphia Fed's business activity index due later in the week could be key.
"Markets have pulled back up after having tried to factor in pretty far in advance an economic slowdown and deflation," Hoshino said, adding that such concerns could come to the fore again.
Sterling rose 0.3 percent to $1.5218 GBP=D4. Earlier in the session, it scaled a two-month peak of $1.5245 after data on Tuesday showed quarterly consumer price inflation remained above the Bank of England's 2 percent target rate. [ID:nLDE66C10Y]
The Australian dollar hit a three-week high of $0.8851, though it later slipped a tad to around $0.8827 AUD=D4 on light profit-taking, with resistance at the June high of $0.8860, and also at levels near $0.8880 to $0.8885.
The 100-day moving average and 61.8 percent retracement of its April 12 to May 25 slide are near such levels. (Additional reporting by Anirban Nag and Reuters FX analyst Krishna Kumar in Sydney, Reuters FX analyst Rick Lloyd in Singapore, Hideyuki Sano in Tokyo; Editing by Joseph Radford)
The dollar continued to decline Thursday morning as improving growth prospects in Asia and Europe made counterparts in those regions more attractive.
At the same time, a recent string of troubling economic data from the US has fueled concerns that the domestic recovery is petering out.
Yesterday's disappointing retail sales report confirmed that consumers are anxious amid lingering problems in the labor and housing markets.
JP Morgan Chase has joined the growing line of companies to have reported better than expected earnings results this week, propping up stock futures and generating risk appetite.
Higher-yielding currencies like the euro tend to benefit from increased capacity for risk.
The dollar dropped to a fresh 2-month low versus the euro, extending its big July losses. The buck slipped to 1.2825, moving a full ten cents from June's 4-year high of 1.1805.
The eurozone economy is likely to grow at a "moderate and uneven" pace while inflationary pressures in the 16-nation bloc remain contained, the European Central Bank says.
In its latest monthly bulletin, the ECB said the risks to the euro area's economic outlook are "broadly balanced, in an environment of high uncertainty."
There was no relief for the dollar against the sterling. The buck fell to 1.5363, its lowest since late April.
Against the yen, the dollar pulled back to 87.84. Late in June, the dollar hit a 2010 low of 86.95.
The Bank of Japan has sharply revised up its fiscal 2010 growth forecast for the country's economy, citing the acceleration of growth in emerging economies.
A plethora of key economic data will keep traders on their toes throughout Thursday's session.
At 8:30 am ET, the Labor Department will release its weekly jobless claims report, with economists forecasting a modest drop in claims to 450,000 in the recent reporting week from the 454,000 for the previous week.
The Labor Department is also due to release its producer price index for June at 8:30 am ET. The recent dip in oil prices is expected to act as a drag on the headline number, with economists expecting a 0.1% drop in the producer price index. At the same time, the core producer price index is likely to show 0.1% growth.
News are provided by InstaForex.
The International Monetary Fund on Tuesday said it reached in an agreement with Afghanistan on a new three-year economic program that could be supported by US$125 million financial aid.
"The main goals of the program are to move Afghanistan towards financial sustainability, ensure that the money spent is well used, and build capacity for policy implementation," said Masood Ahmed, IMF Director of the Middle East and Central Asia Department said. The program will complement the broader development agenda that bilateral and multilateral partners will be supporting and will include a package of technical assistance from the IMF, he added.
Enrique Gelbard, IMF mission chief for Afghanistan said despite serious constraints, Afghanistan has been making progress under its economic program. Growth has been strong, inflation has been controlled, and tax collection has grown significantly since 2009.
He noted that Afghanistan government is committed to consolidating these achievements under its new program, which contains policies to keep inflation low, strengthen banking supervision and regulation, achieve sustained increases in fiscal revenues, ensure transparency in the mining sector, and improve efficiency in the budget process and public spending while protecting the poor.
The agreement reached with the Afghanistan authorities is subject to approval by IMF management and the Executive Board. Consideration of the program by the Executive Board is expected in late August.
News are provided by InstaForex.
The People's Bank of China and the Monetary Authority of Singapore on Friday agreed to a bilateral currency swap arrangement.
The swap arrangement will provide Chinese Yuan liquidity of up to CNY 150 billion and Singapore dollar liquidity of up to S$30 billion. The agreement has a maturity of three years and can be extended by agreement between the two sides.
The agreement intended to promote trade and direct investment for economic development between two nations, was announced at the 7th Joint Council for Bilateral Cooperation Meeting held in Beijing. "The bilateral currency swap arrangement is a key pillar of co-operation between the PBoC and the MAS to strengthen regional economic resilience and financial stability," MAS said in a statement.
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Tuesday during early European deals, the yen plummeted to fresh multi-week lows against the currencies of Australia, New Zealand and Europe as a rise in European stocks reduced demand for the safe-haven Japanese currency.
Meanwhile, the yen plunged to a 12-day low against the Canadian dollar.
European stocks soared in early deals on strong results from UBS and Deutsche Bank. Germany's DAX rose 0.3% in early deals, France's CAC 40 index climbed 0.75% and U.K.'s FTSE 10 index gained 0.6%.
However, Tokyo stocks ended almost flat today as the market awaited a series of earnings reports from Japanese companies this week.
After drifting in and out of negative territory, the 225-issue Nikkei Stock Average finished 6.81 points, or 0.07 percent, lower from Monday at 9,496.85.
Swiss banking giant UBS AG reversed to a profit in its second quarter, helped by excellent performance of its Investment Bank business. The segment also benefited by a gain on its own debt. At the same time, the company noted that withdrawals from its wealth management business slowed.
UBS said that it made a profit of CHF 2.005 billion or US$1.911 billion compared to a loss of CHF 1.402 billion in the year-ago period, although it trailed the previous quarter's profit of CHF 2.202 billion.
German financial services firm Deutsche Bank reported a higher profit for the second quarter, helped by a sharp decline in provision for credit losses and strong revenue growth in its Global Transaction Banking and Asset Management businesses.
Net income attributable to Deutsche Bank shareholders was EUR 1.16 billion, or about US$1.51 billion, compared with EUR 1.09 billion in the prior-year quarter. Earnings per share were EUR 1.75 versus EUR 1.64 a year earlier.
An encouraging German GfK consumer confidence report released today also lifted investors sentiment.
German consumer climate is set to improve in August, as employment prospects brightened, results of a key survey showed. The consumer confidence index logged 3.9 for August, up from a revised 3.6 in July, a monthly survey from GfK Group showed. That was in contrast to an expected fall to 3.5.
The yen declined against the Australian dollar during early European session on Tuesday. As of now, the yen is trading near a 5-week low of 79.11 against the aussie, compared to 78.46 hit late New York Monday. On the downside, 80.9 is seen as the next target level for the Japanese currency.
During early European deals on Tuesday, the yen slipped against the New Zealand dollar. The kiwi-yen pair that closed yesterday's trading at 63.79 is now worth 64.25. This set the lowest level for the yen since June 23. If the yen weakens further, it may likely target the 65.4 level.
The yen plunged against the Canadian dollar in early European deals on Tuesday. As of now, the yen is trading at a 12-day low of 84.96 against the loonie and the next downside target level for the yen is seen at 86.5. At yesterday's close, the loonie-yen pair was quoted at 84.22.
At 4:35 am ET Tuesday, the yen slumped to near an 8-week low of 113.73 against the euro. At present, the yen is worth 113.65 against the euro with 114.2 seen as the next downside target level. The euro-yen pair closed yesterday's trading at 112.90.
The yen declined against the currencies of US and UK during early European deals on Tuesday. Currently, the yen is worth 135.20 against the pound and 87.40 against the dollar, compared to yesterday's close of 134.59 and 86.88, respectively. If the yen drops further, it may likely target 87.7 against the dollar and 135.6 against the pound.
Looking ahead, the U.S. consumer confidence for July and the S&P/Case-Shiller home price index for May have been slated for release in the New York morning.
News are provided by InstaForex.
U.K.'s sterling surged up to 1.5619 against the US dollar by 1:35 am ET Wednesday, its highest level since February 18 and a further rally may push the pair to stay around the 1.5820 resistance level. The cable is presently quoted at 1.5614.
The pound also edged slightly higher to 137.21 against the yen and challenged yesterday's new multi-week high of 1.6552 against the Swiss franc at this time. The pound is presently quoted at 1.6549 against the alpine unit and 137.12 against the Japanese currency.
News are provided by InstaForex.
Manufacturing activity in the month of July expanded at a slower pace than in the previous month, the Institute for Supply Management revealed in a report on Monday, although the index of activity in the sector fell by less than economists had expected.
The ISM said its manufacturing index fell to a reading of 55.5 in July from 56.2 in June, with a reading above 50 indicating continued growth in the sector. Economists had expected the index to show a more notable decrease to a reading of 54.2.
Norbert J. Ore, chair of the ISM Manufacturing Business Survey Committee, said, "July marks 12 consecutive months of growth in manufacturing, and indications are that demand is still quite strong in 10 of 18 industries."
The slowdown in the pace of growth in the manufacturing sector reflected a deceleration in new orders and production, with the new orders index slipping to 53.5 in July from 58.5 in June and the production index falling to 57.0 from 61.4.
On the other hand, the employment index edged up to 58.6 in July from 57.8 in June, indicating a modest acceleration in the pace of employment growth in the sector. The index indicated the eighth consecutive month of growth in manufacturing employment.
The report also showed a turnaround for inventories, with the inventories index jumping to 50.2 in July from 45.8 in June. With the increase, the index rose above 50 for the first time since March.
With regard to inflation, the ISM said that the prices index edged up to 57.5 in July from 57.0 in June, pointing to the thirteenth consecutive month of price growth.
Paul Dales, U.S. economist at Capital Economics, said that the smaller than expected decrease by the headline manufacturing index is "consistent with a further modest easing in economic activity rather than newfound economic malaise."
"Admittedly, in just three months the index has dropped by 5 points, signaling a sharp slowdown in growth," Dales added. "But the key point is that it is falling from a very high level. Even after July's dip, it is still consistent with annualized GDP growth of around 4%."
On Wednesday, the ISM is scheduled to release a separate report on activity in the service sector, with the index of activity in the sector expected to edge down to 53.0 in July from 53.8 in June.
News are provided by InstaForex.
Japan automobile sales grew at a pace of 15% year-on-year in July to 333,403 units, the Japan Automobile Dealers Association said Monday. In June, sales showed an annual growth of 20.6%. Sale of cars, trucks and buses excluding minicars in July totaled 333,403 units.
Toyota sold 161,444 units, up 19.1% from the prior year. Sales of Honda Motor increased 14.5% to 50,448 units. Nissan recorded only 2.3% increase in sales, now at 50,719. However, overall auto sales are expected ease in the months ahead as the government incentives to boost sales expire at the end of September.
Japan Automobile Manufacturers Association on July 30 said auto production increased 25.9% in June. Domestic sales climbed 17.4% to 448,831 vehicles. Overall auto production in the first half of 2010 surged 45.8%.
News are provided by InstaForex.
The euro pulled back sharply on Tuesday as signs that China's robust economy is cooling off caused a return to risk aversion.
Stocks were lower around the global today ahead of the latest interest rate announcement from the Federal Reserve.
Appetite for risk had been helping the euro rally until this week, when anxiety about the pace of the global economic recovery took hold.
The euro slipped to 1.3073 versus the dollar, down from last week's 3-month peak of 1.3333.
Versus the yen, the euro dropped to a 10-day low of Y112.27.
The single currency also tailed off versus the sterling, dropping to 0.8310 from a 10-day high of 0.8362.
The Conference Board leading economic index for the U.K. rose 0.5% in June from May, following the 0.2% increase in the previous month, the Conference Board said on Tuesday.
This marks the 15th straight month in which the leading index has risen.
Elsewhere, data showed China's July imports grew at the slowest pace since November, missing economists' forecasts.
And property prices in 70 major Chinese cities climbed 10.3 percent from a year earlier in July, the slowest pace for six months
This afternoon, the US monetary policy makers are widely expected to keep the nation's key interest rate near zero percent and signal concerns about deflation and downside risks to economic growth.
News are provided by InstaForex.