Forex News (from InstaForex) - page 4

[IFXSvetlana]

Euro climbs to 4-day high against dollar and yen.

(RTTNews) - During early deals on Monday, the European currency climbed to a 4-day high against the US dollar and the Japanese yen. On the other hand, the euro edged down versus the British pound and the Swiss franc.

Against the US dollar, the European currency gained ground after hitting a low of 1.3128 during early Asian deals on Monday. At 12:20 am ET, the euro-dollar pair climbed to a 4-day high of 1.3128, compared to 1.3170 hit late New York Thursday. The next upside target level for the pair is seen around 1.373.

The European currency that closed Thursday's North American session at 0.8994 against the British pound hit a 4-day high of 0.9007 during Monday's early Asian trading. Thereafter, the euro-pound pair reversed its direction and is currently trading at 0.8979 with 0.872 seen as the next target level.

Against the Swiss franc, the single currency edged down during Monday's early deals. At 2:45 am ET, the euro-franc pair slipped to 1.5208, compared to Thursday's closing value of 1.5221. If the pair falls further, 1.499 is seen as the next target level.

The 16-nation currency that closed Thursday's New York deals at 132.26 against the Japanese yen rose to a 4-day high of 132.66 at 2:20 am ET Monday. On the upside, 134.5 is seen as the next target level.

A report released by the Bank of Japan showed that Japan's corporate goods prices index or the producer price index fell 0.2% month-over-month in March. However, the decline was not as worse as the 0.5% drop in the previous month, although it was in line with expectations. Producer prices have been seeing a declining trend since September 2008.

Annually, producer prices fell 2.2% following a revised 1.6% drop in February. The decline was bigger than the 1.8% drop expected by economists. Meanwhile exports and import prices were down 3.2% and 17.2%, respectively in March compared to the year-ago period.

There are no important economic reports scheduled to be released today from Europe and North America.

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[IFXDarika]

The European currency has been extending Tuesday's Asian session downtrend against its UK counterpart during early European deals also. The euro thus slipped to its lowest point since March 06, 2009 against the pound. At about 5:20 am ET, the euro-pound pair hit as low as 0.8928, compared to Monday's closing value of 0.9001. If the Euro drops further, 0.886 is seen as the next likely support level.

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[IFXSvetlana]

Pakistan Rupee Declines To 6-day Low Against Dollar.

(RTTNews) - In early deals on Tuesday, the Pakistan rupee slipped to its lowest level in almost 6-days against the dollar as investors sold the local currency on an interest rate cut by the State Bank of Pakistan.

Yesterday, the State Bank of Pakistan lowered its key interest rate by 100 basis points to 14% to boost the economy. The discount rate was kept on hold at 15% in January after tightening the monetary policy by 500 basis points in 2008.

State Bank of Pakistan Governor, Syed Salim Raza said the decision to reduce the key policy rate has been taken on the basis of assessment that inflation will continue to decline.

He pointed out that the annual consumer price inflation has declined to 19.1% in March from a high of 25.3% in August. "Although the projected average CPI inflation for FY09 is around 21%, expected inflation of around 14% for Q4-FY09 and 8% for FY10 illustrates a positive outlook."

In March, the World Bank agreed to provide US$500 million interest-free loan to Pakistan to help the country to address economic crisis. This follows US$7.6 billion fund from the International Monetary Fund in November 2008.

Last week, the IMF said Pakistan that it was premature to reduce interest rates at this stage. But, the IMF saw the need to re-assess interest rates down the road in order to stimulate a pick-up in economic activity.

The Pakistan rupee dropped to a 6-day low of 80.74 against the dollar today. If the Pakistan currency weakens further, it may likely target the 80.96 level. At yesterday's North American session close, the dollar-rupee pair was quoted at 80.60.

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[IFXDarika]

President Barack Obama Monday sought the Congress' backing for a proposed USD100 billion U.S. loan for the expansion of an International Monetary Fund (IMF) emergency fund by USD 500 billion, reports say.

The USD100 billion is part of the plan agreed at this month's Group of 20 summit in London to triple IMF resources to a total of $750 billion to help the Fund respond to crises in emerging market economies as a result of the global financial crisis and economic downturn.

Obama made the request Monday in several letters to two Democrats: House of Representatives speaker Nancy Pelosi and Senate Majority leader Harry Reid; and Republican House leader John Boehner and Senate Minority leader Mitch McConnell.

"Our proposal to increase U.S. participation in the NAB by up to USD 100 billion as part of an overall increase of 500 billion dollars was warmly endorsed by the G20 Leaders," the letters said.

The president pointed out the funding does not represent a budgetary expenditure or any increase in the deficit since it effectively represents an exchange of assets.

The transfer funds to the IMF under the program, known as an expansion of the New Arrangements to Borrow (NAB) will allow member-countries to provide credit to the IMF to deal with crises that may threaten the stability of the global financial system. In turn the donor nations would receive interest bearing assets in return, backed up by IMF resources including gold stocks.

Obama said countries were looking to the U.S. to deliver on its G-20 commitment, which could spur other governments to contribute to the IMF.

Noting that the NAB was "woefully inadequate" to deal with the severe economic and financial crisis, Obama said the deteriorating conditions threaten to worsen the recessions in the emerging economies and could cause currencies to collapse.

Asserting that rapid progress is essential to the restoration of confidence in the global economy and financial system so that the global economy can emerge from recession to recovery and to sustained growth, Obama appealed for help to deliver on the U.S. commitment by supporting inclusion of the NAB and related IMF proposals in the most timely legislative vehicle that will enable the United States to act quickly.

He said an enlargement of the NAB facility would allow for increased participation by emerging market economies, in particular China and India. Beijing has already indicated that it plans to contribute USD 40 billion to the IMF through a bond issued to its central bank by the Fund.

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[IFXDarika]

Wednesday, UK's Chancellor of Exchequer Alistair Darling is set to announce his second budget statement at 7.30am ET.

According to the findings of the Operational Efficiency Programme released by the HM Treasury on Tuesday, there is a scope for GBP 15 billion of efficiency savings. In its pre-budget report, the government had increased the target for the current spending review period to GBP 35 billion savings.

Economists expect government borrowings in the range of GBP 150 billion to GBP 175 billion. This would lift borrowings to 12% of GDP for each of the coming two years.

Darling is also expected to downwardly revise the GDP forecast for the British economy.

At 3.30am ET, Dutch consumer confidence is due. Consumer confidence is forecast to rise to minus 33 in April from minus 34 last month.

Thereafter, the Bank of England minutes and the UK labor market statistics are due at 4.30am ET. At the end of two-day rate setting meeting, the Monetary Policy Committee of the BoE held the interest rate at historical low of 0.5%. A preliminary M4 money supply report is expected at the same time. After rising 1.4% in February, M4 money supply is expected to increase 1.2% on a monthly basis in March.

The number of people claiming jobless benefits in the UK is expected to increase 116,000 in March after reporting a record monthly increase in February. The claimant count rate is seen at 4.6%, up from 4.3% in February. Meanwhile, the ILO jobless rate for three months to February is forecast to increase to 6.7% from 6.5%.

In the meantime, the Office for National Statistics is also scheduled to issue UK's Public Sector Finance data. The public sector net cash requirement is seen at GBP 18 billion in March compared to GBP 4.4 billion in February.

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[IFXSvetlana]

Singapore Dollar Shows Mixed Trading Against Majors.

(RTTNews) - Thursday in Asia, the Singapore dollar showed mixed trading against its major counterparts. While the Singapore dollar rose against the US and Hong Kong dollars, it pared recent gains against the euro and the pound.

In economic news, consumer prices in Singapore rose 1.6% year-on-year in March, slowing from a 1.9% increase in February, the Department of Statistics said today. However, the rise in consumer prices matched economists' expectations.

Month-on-month, consumer prices fell 0.4% in March, following a 0.5% drop in the previous month. On a seasonally adjusted basis, consumer prices were flat in March compared to the preceding month.

The Singapore dollar climbed to 1.5047 against the U.S. currency during Asian deals on Thursday. The near term resistance level for the Singapore dollar is seen at 1.497. The pair was worth 1.5073 at yesterday's close.

In Asian trading on Thursday, the Singapore dollar gained against the Hong Kong currency. At about 1:30 am ET, the pair reached 5.1504, up from Wednesday's close of 5.1416. If the Singapore dollar edges up further, it may test near term resistance around the 5.178 level.

The Singapore dollar weakened against the euro after hitting a high of 1.9557 at 10:20 pm ET Wednesday. Currently, the pair is trading near yesterday's New York session close of 1.9604 with 1.97 seen as the next target level.

The Singapore dollar strengthened to 2.1762 against the pound at 9:35 pm ET Wednesday. Thereafter, the Singapore dollar reversed its direction and the pair is presently quoted at 2.1967. The next downside target level for the Singapore currency is seen at 2.212.

Investors now look forward to the European session, in which the French April business confidence indicator, Euro-zone February current account and industrial new orders, PMI reports from major European economies are expected.

Meanwhile, Hong Kong will announce consumer price numbers for March at 4:30 am ET, with forecasts calling for an increase of 1.2 percent on year - up from the 0.8 percent annual expansion in February.

Across the Atlantic, the US existing home sales for March and the weekly jobless claims report have been slated for release.

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[IFXDarika]

The dollar was mixed versus other major currencies Wednesday morning in New York, holding most of its recent gains versus the euro while coming under modest pressure against the yen. With little first-tier economic data for traders to consider, attention will turn to how equities markets behave amid the release of another flurry of key corporate earnings results.

Boeing, AT&T, Wells Fargo and McDonalds are just out with quarterly earnings. US stock futures continued to point to a lackluster open as traders weighed those results.

In news from the housing sector, mortgage applications in the U.S. rose last week as lower interest rates encouraged refinancing. The Mortgage Bankers Association's index of applications rose 5.3 percent to 1,172.2 in the week ended April 17, from 1,113.2 the week before.

On Tuesday, Treasury Secretary Tim Geithner said that the "vast majority" of U.S. banks have enough capital and hinted that the credit markets may be thawing following their deep freeze.

Geithner will again take center stage this morning, speaking about the recession at 9 am ET.

The dollar was range-bound versus the euro Wednesday morning, clinging to its gains from a recent run-up. The buck hovered between 1.2900 and 1.3000 in early dealing, moving to the lower end of that range approaching 8 am ET. On Monday, the dollar hit a monthly high of 1.2887.

Meanwhile, the dollar was weaker against the sterling this morning as traders reacted to the release of the minutes of the latest Bank of England policy meeting. The dollar slipped to 1.4650, giving back its gains from the previous session and moving back towards last week's multi-month low near 1.5000.

Wednesday, the minutes of the Monetary Policy Committee meeting of the Bank of England held on April 8 and 9 showed that policymakers voted unanimously to hold the Bank Rate at a historical low of 0.5%.

The minutes also revealed that all the nine members of the MPC stood united while deciding to continue with the initial asset purchase plan worth GBP 75 billion.

Also, the jobless rate in the UK was 6.7% for the three months to February 2009, up from revised 6.1% in the previous quarter, the Office for National Statistics said Wednesday. That was in line with economists' expectations.

The dollar eased a bit versus the yen this morning, slipping to 97.73 before finding support near Monday's 3-week low of 97.64. The buck has leveled off since hitting a 3-month high of 101.43 earlier this month.

Export-driven Japan's trade balance for fiscal 2008 suffered its first annual deficit in nearly three decades, data released Wednesday showed. The Ministry of Finance said Japanese exports plunged a record 16.4% to Y71.14 trillion during the fiscal year ended in March.

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[IFXDarika]

Moody's Investors Service Thursday lowered the Latvian government's foreign and local currency ratings to Baa3 from Baa1, giving a negative outlook.

The rating agency said that with the depth and the pace of economic adjustment in Latvia being more severe than anticipated, the government's revenues and budget deficits were being negatively affected, causing budget-related conditions in the IMF stand-by arrangement to be missed.

Moody's noted that the Latvian government's liquidity was under undue stress owing to reduced revenues, problems in the locally owned portion of the banking sector, and limited financing options in the domestic and international markets. Moody's therefore said that the government should identify sufficient budget adjustments to maintain access to the IMF/EU funding.

The firm forecasts the debt/GDP ratio to double to more than 50% of GDP by the end of 2010. Moody's noted that delaying expenditure cuts could damage investor confidence and risk the goal of euro adoption in 2012.

Meanwhile, the firm forecast the Latvian economy to shrink 12-13% in 2009, which is likely to have a negative effect on incomes, profits and consumption that are unlikely to recover in the near term.

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[IFXSvetlana]

US dollar tumbles to 4-week low against yen; higher versus European majors.

(RTTNews) - During early deals on Monday, the US dollar plunged to a 4-week low against the Japanese yen on concern over the possible damage the economy could suffer due to the outbreak of swine flu in North America. On the other hand, the dollar showed strength against the European currency, the British pound and the Swiss franc. The greenback climbed to a 4-day high against the pound.

Lawrence Summers, director of the White House National Economic Council, in "Fox News Sunday" stated that he suspects that the U.S. economy will continue to decline for some time to come. Summers also said that it was clear that there were going to be sharp declines in employment for quite some time this year.

Treasury Secretary Timothy Geithner said Friday that while it is "too early" to determine that risks have receded in the midst of a severe global economic downturn, there are "some encouraging signs."

Speaking following a meeting in Washington with finance ministers from the largest industrialized countries, Geithner praised the recent international cooperation and said that he has seen the progress since the meeting of the Group of 20 earlier this month.

"There are signs that the pace of deterioration in economic activity and trade flows has eased," Geithner said. "Some measures of spending.outputs.and conditions in some markets have shown modest improvements."

Against the European currency, the US dollar traded higher during early deals on Monday. At 2:15 am ET, the dollar reached a high of 1.3137 against the euro, compared to 1.3239 hit late New York Friday. The euro-dollar pair is currently trading at 1.3179 with 1.28 seen as the next target level.

The US currency that closed Friday's North American session at 1.4665 against the British pound edged higher to 1.4545 at 2:30 am Eastern Time Monday. This set a 4-day high for the dollar. The next upside target level for the greenback is seen around 1.424. The pound-dollar pair is currently quoted at 1.4621.

House prices in the UK fell 0.3% month-on-month in April, by the slowest pace in a year, a report by property consultants Hometrack said Monday. The report said the slower pace of decline in prices reflected a rise in optimism from estate agents due to increased levels of market activity. Year-on-year, house prices were down 10.1% in April.

Against the Swiss franc, the US dollar showed strength during Monday's early deals. At 2:15 am ET, the dollar-franc pair climbed to 1.1472, compared to Friday's closing value of 1.1404. If the pair gains further, 1.152 is seen as the next target level. The US currency is presently trading at 1.1438.

The greenback that closed Friday's New York deals at 97.20 plunged to a 4-week low of 96.54 at 11:55 pm ET. On the downside, 94.4 is seen as the next target level for the US dollar. The dollar-yen pair is now worth 96.63.

At 3:30 am ET, the Italian research institute ISAE is set to release consumer confidence survey results. Consumer confidence is forecast to stay stable at 99.8 in April.

At 4.30am ET, the British Bankers' Association is scheduled to publish the details of house purchase loans approved in March. In February, 28,179 loans were approved in the UK.

With little first-tier economic data to consider today in the North American session, attention will likely turn to the Federal Open Market Committee (FOMC) rate decision on Wednesday.

The Fed is mostly likely to retain its fed funds target rate at the record low of level of 0%-0.25% after holding it at the level in each of its first two meetings of this year. The Fed's focus now is on stabilizing the financial markets and stimulating the economy using quantitative tools and massive expansion of its balance sheet. State Street Global Advisors is of the view that the central bank is most likely to fine-tune the TALF, including a possible expansion into other more impaired credits than expanding its asset purchase program.

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[IFXSvetlana]

Demand For French Manufactured Goods Falls in Q1 - Survey.

(RTTNews) - Global and export demand for French manufactured goods fell in the first quarter of 2009 and it is expected to fall further in the second quarter, but in a less pronounced way, results of the latest quarterly business survey by the INSEE showed Tuesday.

The gauge for total demand fell to minus 60 in the three months to April from minus 52 recorded in the three months to January, while the measure for export demand dropped to minus 60 from minus 54.

The forward looking indicator for the second quarter stood at minus 41, up from minus 44 in the previous quarter, indicating that the pace of decline in new orders is likely to ease.

Further, business leaders surveyed noted that the fall of industrial manpower increased in the first quarter and it is expected to continue over the next three months.

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