Yen Slides to 7-Month Low on U.S. Growth Outlook - General

HYM 2012.02.23 04:58 #21

Yen Slides to 7-Month Low on U.S. Growth Outlook; Pound Weakens

2012-02-22 14:27:24.635 GMT

By Keith Jenkins and Allison Bennett

Feb. 22 (Bloomberg) -- The yen weakened to a seven-month low against the dollar amid speculation U.S. growth is gathering strength, damping demand for the Asian nation’s currency

The yen slid for a fifth day versus the greenback as the extra yield offered by two-year Treasuries over similar-maturity Japanese bonds increased to a six-month high. The pound weakened after Bank of England minutes showed two policy makers voted for a larger increase in asset purchases than the amount finally agreed. The Australian dollar declined after Foreign Minister Kevin Rudd resigned, potentially paving the way for a leadership battle.

“It’s a combination of more easing from the Bank of Japan and a better outlook in the U.S.,” said Charles St-Arnaud, a foreign-exchange strategist at Nomura Holdings Inc. in New Yo

“We have seen the U.S. two-year yield gradually increasing over the past few weeks and that has been helping the move in dollar- yen

The yen dropped 0.6 percent to 80.22 per dollar at 9:25 a.m. New York time, after falling to 80.38, the weakest level since July 12. Japan’s currency slid 0.6 percent to 106.16 per euro, after sliding to 106.33 yen, the lowest since Nov. 14. The euro was little changed at $1.3235

The spread between U.S. and Japanese two-year notes expanded to 19.05 basis points yesterday, the most since Aug. 1, according to closing-market data compiled by Bloomberg. The difference was 18.6 basis points today.

Asset Purchases

The Bank of Japan on Feb. 14 unexpectedly expanded its asset-purchase program to 30 trillion yen ($374 billion) from 20 trillion, with 19 trillion yen set aside for government bonds.

The central bank also said it will target 1 percent inflation “for the time being.” Consumer prices fell at a 0.2 percent annual rate in December, government data sho

BOJ Governor Masaaki Shirakawa told Japanese lawmakers today that policy makers set a price target to show the central bank’s resolve and it will take further steps to end deflation

“With the U.S. economy rehabilitating, the trend in yields is up and there may be more upside” to the dollar against the yen, said Lauren Rosborough, a senior foreign-exchange strategist at Societe Generale SA in London. “When domestic investors in Japan can see an improving yield offshore, then they would be looking to sell out of yen and buy the doll

The Dollar Index, which tracks the U.S. currency against those of six major trading partners, climbed 0.2 percent to

79.263 after dropping 0.4 percent in the previous two days.

Sales of previously owned homes in the U.S. rose 1.1 percent in January to a 4.66 million annual rate, the highest level since May 2010, according to a Bloomberg News survey before the National Association of Realtors’ report today

Forecast Changes

UBS AG raised its forecasts for the dollar versus the yen, according to an e-mailed report.

“We now target a move to 85 by the end of this year and 90 by the end of 2013,” analysts including Mansoor Mohi-uddin in Singapore wrote in the note. Previous projections were 80 yen and 85 yen respectively, according to the repor

The median estimate of 49 strategists is 80 yen for the fourth quarter of 2012. The forecast has been stable since Oct.

28.

The yen has depreciated 6.6 percent in the past three months, the biggest decline among 10 developed nation peers tracked by Bloomberg Correlation Weighted Indexes. The dollar weakened 2.2 percent, and the euro dropped 4.4 percent.

Fitch Cuts Greece

The euro held gains against the yen after Fitch Ratings cut Greece’s credit rating to C from CCC. A default by the nation is likely in the near term, the ratings company said in a statement today

The 17-nation currency has strengthened over the past week after European Union finance ministers awarded 130 billion euros

($172 billion) in aid to Greece and reached an accord for greater debt relief from investor representatives.

Sterling fell versus all of its 16 major peers and gilts gained as the minutes revealed Adam Posen and David Miles wanted a 75 billion-pound ($117.8 billion) boost in quantitative easing, instead of the 50 billion pounds supported by the other seven policy makers.

“The minutes are a dovish surprise,” said Lee Hardman, a foreign-exchange strategist at Bank of Tokyo-Mitsubishi UFJ Lt

in London. “The market was moving to reduce the scope for further quantitative easing, which was supporting the pound, and that’s now being seen as incorrect because two members voted for bigger bond purchases. We see further downside for the poun

Sterling declined 0.7 percent to 84.50 pence per euro after falling to 84.51 pence, the weakest level since Dec. 13. The U.K. currency slid 0.8 percent to $1.5657.

Australia’s dollar fell 0.4 percent to $1.0618

Rudd, the former prime minister who was ousted by Gillard as leader in 2010, announced during a trip to Washington that he was quitting as foreign minister. His resignation follows speculation about a challenge for the leadership of the governing Labor Party and opens the door for Rudd to contest the post of prime minister again.

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HYM 2012.02.23 04:59 #22

U.S. Stocks Decline Amid Disappointing Global Economic Reports

2012-02-22 19:20:22.89 GMT

By Rita Nazareth

Feb. 22 (Bloomberg) -- U.S. stocks fell, a day after the Standard & Poor’s 500 Index failed to hold at an almost four- year high, as sales of previously owned houses missed estimates and data from Europe and China spurred economic concern.

Stocks pared losses after Greece’s finance minister said yesterday’s approval of a bailout means the nation is tied to the euro area. Toll Brothers Inc. and KB Home dropped more than

2.7 percent to pace a slump in homebuilders. Dell Inc. sank 6.1 percent as its sales forecast missed estimates. Financial shares had the biggest decline in the S&P 500 among 10 groups, falling

1.1 percent. Gannett Co., the owner of 82 newspapers including USA Today, surged 4.4 percent as it will boost its dividend.

The S&P 500 retreated 0.1 percent to 1,360.89 at 2:19 p.m.

New York time, paring an earlier loss of as much as 0.5 percent.

The Dow Jones Industrial Average declined 1.25 points, or less than 0.1 percent, to 12,964.44 after the 30-stock gauge rose above 13,000 yesterday for the first time since 2008.

“You can ride this, but you’ve got to be very careful and sit near the exit,” David Darst, the New York-based chief investment strategist at Morgan Stanley Smith Barney, said in a telephone interview. His firm has $1.6 trillion in client assets. “Most of the economies are slowing. Earnings will be slowing. The market is overbought on a short-term basis.”

Stocks fell as purchases of previously owned homes climbed to a 4.57 million annual rate, less than forecast, data from National Association of Realtors showed. European services and manufacturing output unexpectedly shrank in February. China’s manufacturing may shrink for a fourth month, according to data from HSBC Holdings Plc and Markit. Fitch Ratings lowered Greece’s credit rating and said a default is highly likely.

Trimming Losses

Equities pared losses as Greek Finance Minister Evangelos Venizelos said yesterday’s decision by euro area finance ministers to approve a second rescue package for the country bound Greece to the euro and the euro area. Greece sealed a 130 billion-euro ($170 billion) bailout package by agreeing yesterday to austerity measures while reducing its bond principal by 53.5 percent as investors swap into new securities with longer maturities and lower coupons.

The S&P 500 yesterday failed to hold above its April 2011 peak of 1,363.61, which was the highest level since June 2008.

The index has rallied 3.6 percent in February and is poised for a third straight month of gains, the longest streak in a year.

The monthly gain has extended this year’s advance to 8.2 percent amid higher-than-estimated U.S. economic data and profits and expectations Europe will tame its crisis.

‘Trifecta’

“We have a trifecta of worrisome news,” Alan Gayle, a senior strategist at RidgeWorth Capital Management in Richmond, Virginia, which oversees about $47 billion, said in a telephone interview. “The softness in economic data suggests that global momentum remains muted. We have slower earnings growth and the market is facing some technical resistance.”

A gauge of homebuilders in S&P indexes dropped 2 percent.

Toll Brothers declined 2.7 percent to $23.06. The largest U.S.

luxury-home builder reported an unexpected first-quarter loss.

KB Home decreased 3.7 percent to $11.32.

Dell tumbled 6.1 percent to $17.10. Sluggish sales have raised concerns about Dell’s comeback plan, which has relied on streamlining operations to boost earnings. After an almost 25 percent gain in Dell’s shares this year, some investors may have been overly optimistic about the company’s ability to turn around its operations, said Brian Marshall, an analyst at ISI Group Inc. in San Francisco.

Financial shares dropped, following losses in European lenders. The KBW Bank Index declined 1.8 percent. Citigroup Inc.

dropped 2.7 percent to $32.46. Regions Financial Corp. erased

2.9 percent to $5.81.

Wal-Mart

Wal-Mart Stores Inc. fell the most in the Dow, slumping 2.1 percent to $58.79. The shares retreated 3.9 percent yesterday after the world’s largest retailer reported fourth-quarter profit that trailed analysts’ estimates.

Gannett surged 4.4 percent to $15.65. The company said it will raise its quarterly dividend to 20 cents a share from 8 cents. The publisher’s goal is to return more than $1 billion to shareholders by 2015, the company said.

Intuit Inc. gained 6.6 percent to $61.34. The seller of TurboTax software for filing with the Internal Revenue Service boosted its full-year earnings forecast.

Energy shares added 0.5 percent for the biggest increase among 10 groups in the S&P 500. Nabors Industries Ltd. climbed

8.6 percent, the most in the S&P 500, to $22.10. The world’s largest land-drilling contractor reported fourth-quarter sales and earnings that exceeded analysts’ estimates.

Transportation Shares

A two-week retreat in the Dow Jones Transportation Average may signal a warning for the rally that has added $1.35 trillion to American equity values this year, according to analysts who use charts to predict markets.

The gauge has fallen 3.8 percent since Feb. 3, a period in which the Dow Jones Industrial Average climbed 0.8 percent and reached the highest level since May 2008. The transportation average is viewed by some analysts as a leading indicator because truckers, airlines and couriers may be the first to experience the effects of an economic slowdown.

“This market does seem to be overdue for a pullback,”

Chuck Carlson, chief executive officer at Horizon Investment Services LLC in Hammond, Indiana, said in a phone interview.

Horizon oversees $150 million and uses the relationship between the industrial and transportation gauges to determine how much cash to hold. A divergence “doesn’t always necessarily signal a change in the major trend, but it can foreshadow a bit of a correction,” he said.

Hedging Costs

Futures traders are pricing in the biggest increase in U.S.

equity hedging costs since 2010 after the S&P 500 rose within 2 points of erasing last year’s slump.

April futures on the Chicago Board Options Exchange Volatility Index closed at 25.15 yesterday, or 6.96 points higher than the level of the gauge, according to data compiled by Bloomberg. The gap widened to 7.02 points on Feb. 17. The last time two-month futures were that high in relation to the index known as the VIX was July 2010.

The S&P 500 has surged 24 percent since Oct. 3 on optimism Europe will resolve the debt crisis. Now, traders are increasing hedges to protect against losses, according to Dominic Salvino, a specialist on the CBOE floor for Group One Trading.

“The consensus bet is that we’re going to have turmoil or some levels of higher volatility in the future,” Liam Dalton, who oversees about $1.8 billion as chief executive officer of Axiom Capital Management Inc. in New York, said in a telephone interview yesterday. “If you were to talk about a breakdown in cooperation in Europe, it would affect everything. If the sentiment goes negative, then you can get these periods of increased volatility.”

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HYM 2012.02.24 05:30 #23

Gold Rises to Three-Month High as Dollar Weakens; Silver Gains

2012-02-23 14:52:02.133 GMT

By Debarati Roy

Feb. 23 (Bloomberg) -- Gold climbed to a three-month high in New York as the dollar weakened, spurring demand for the precious metal as an alternative investment. Silver jumped to a 15-week high.

The dollar dropped against a basket of currencies as a report showed German business confidence rose to the highest level in seven months in February and a separate report said the number of Americans filing first-time claims for unemployment insurance payments last week held at a four-year low.

“Strong economic numbers out of the U.S. and Germany are pushing the dollar down and helping gold,” Michael A. Gayed, the chief investment strategist who helps oversee $150 million at New York-based Pension Partners LLC, said in a telephone interview. “Some investors expect inflationary pressure as the U.S. economy improv

Gold futures for April delivery gained 0.2 percent to

$1,774.30 an ounce at 9:45 a.m. on the Comex in New York.

Earlier, it touched $1,786.50, the highest for a most-active contract since Nov. 15.

Silver futures for May delivery advanced 1.1 percent to

$34.70 an ounce, after climbing to $35.055, the highest since Nov. 9.

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--With assistance from Claudia Carpenter in London. Editors:

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HYM 2012.02.27 04:38 #24

Canada Dollar Holds Above Par as Volatility Sinks to 4-Year Low

2012-02-24 13:25:54.779 GMT

By Chris Fournier

Feb. 24 (Bloomberg) -- Canada’s dollar remained stronger than parity with its U.S. counterpart as improved appetite for risk drove equities higher and a measure of implied volatility fell to the lowest level in more than four years

The Canadian currency underperformed a majority of its most-traded counterparts today as crude oil, the nation’s largest export, dropped from the highest since May. The dollars of Canada and the U.S. were among the bottom four performers of the 16 so-called major currencies. Bank of Canada Governor Mark Carney is due to give a speech today in New York

“The U.S. dollar is generally weak and that tends to drag the Canadian dollar down on the crosses as well,” said Adam Cole, global head of foreign-exchange strategy at Royal Bank of Canada’s RBC Capital Markets unit in London. “To the extent that low volatility and Canadian dollar strength reflect better appetite for risk, then” low volatility is helping the loonie remain above parity, Cole

The loonie, as currency is known for the image of the aquatic bird on the C$1 coin, fell 0.1 percent to 99.89 cents per U.S. dollar at 8:24 a.m. in Toronto. It has traded stronger than one-for-one with the greenback every day this month. One Canadian dollar buys $1.0010 U.S. cents.

Futures on the Standard & Poor’s 500 Index advanced 0.2 percent

Implied volatility for one-month options on the Canadian dollar versus the greenback declined to 7.20 percent, the lowest level on an intraday basis since July 2007. It was as high as

15.6 percent in September. Implied volatility, which traders quote and use to set option prices, signals the expected pace of swings in the underlying currency. It averaged about 10 percent over the past decade.

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HYM 2012.02.27 04:57 #25

Oil Caps Longest Rally in Two Years on Iranian Supply Concern

2012-02-24 20:02:32.394 GMT

By Mark Shenk

Feb. 24 (Bloomberg) -- Oil capped its longest rally since January 2010 as escalating tension with Iran threatens supplies and on signs of a global economic recovery.

Futures advanced above $109 a barrel for the first time in nine months as sanctions against the Persian Gulf nation make it more difficult to sell oil. Iran dismissed UN atomic inspectors’

concerns that nuclear-weapon work is occurring, a document acquired by Bloomberg News showed. American, French and South Korean consumer confidence gained, reports showed today.

“Everyone is looking at $110 oil,” said Stephen Schork, president of the Schork Group in Villanova, Pennsylvania. “The tension between Iran and the West has risen to an incredible level. We’re trading on fear that this will deteriorate into a new war in the Middle East.”

Crude oil for April delivery rose $1.94, or 1.8 percent, to

$109.77 a barrel on the New York Mercantile Exchange, the highest settlement since May 3. The front-month contract increased 6.3 percent this week. Crude’s seven-day advance was the longest since the period ended Jan. 6, 2010.

Brent oil for April settlement gained $1.42, or 1.1 percent, to $125.04 a barrel on the London-based ICE Futures Europe exchange. Earlier, it touched a nine-month high of

$125.55 a barrel.

Iran “dismissed the agency’s concerns” about its nuclear program, the International Atomic Energy Agency said today in the 11-page restricted document. The Persian Gulf nation tripled its quarterly rate of producing 20 percent-enriched uranium, the according to the report from the IAEA, the United Nations’

nuclear arm.

Nuclear Program

While Iran has said its nuclear program is for civilian purposes, the U.S. and its allies have alleged Iran is developing the capacity to produce nuclear weapons. Iran, the second-biggest producer in the Organization of Petroleum Exporting Countries, pumped about 3.5 million barrels of oil a day last month, according to Bloomberg News data.

Turkiye Halk Bankasi AS, the Turkish bank that handles payments for Iranian oil, may stop processing transactions for supplies to Turkey starting in July, according to an official at Tupras Turkiye Petrol Rafinerileri AS, which operates four plants. Tupras won’t be able to use the bank after June 30 without a U.S. waiver, the official said yesterday.

“There’s an undercurrent of fear about the Iranian nuclear situation and what that will mean for global supplies as people scramble to replace Iranian barrels,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut.

The U.S. has offered to help India, which also uses Halk for payments to Iran, get alternative oil supplies, according to three people with knowledge of the matter.

Financial Sanctions

U.S. sanctions against financial institutions that deal with Iran take effect at the end of June, while the European Union plans to ban imports of Iranian oil from the beginning of July. Swift, the global bank-transfer service, said last week it is prepared to impose sanctions against Iranian financial institutions once the EU sets out implementation rules.

“If Swift imposes sanctions on Iran, the country will be squeezed,” Schork said. “There’s a risk they will lash out.”

Israel and the U.S. have said all options are on the table in ensuring Iran doesn’t acquire atomic weapons. The Islamic republic has threatened to block shipments through the Strait of Hormuz, a transit route for about 20 percent of the world’s globally traded crude, if its exports are blocked.

“Iran is a bullish factor that isn’t going away anytime soon,” said Peter Beutel, president of trading advisory company Cameronhanover.com in New Canaan, Connecticut. “We’re waiting for a resolution of some kind, be it negotiations or an attack by Israeli planes.”

Goldman Projection

Goldman Sachs Group Inc. said on Feb. 22 that West Texas Intermediate oil will rise this year, even as the highest U.S.

oil output level in nine years threatens to increase stockpiles.

Sales of new homes in the U.S. slipped 0.9 percent to a

321,000 annual pace in January from a 324,000 rate the prior month that was stronger than previously reported, figures from the Commerce Department showed. The median estimate of 77 economists surveyed by Bloomberg News was 315,000.

The Thomson Reuters/University of Michigan final index of consumer sentiment for February rose to 75.3 from 75 in January.

A measure of French consumer sentiment rose to 82 from 81 last month, national statistics office Insee said today. South Korea’s sentiment index rose to 100 in February from 98.

IMF Warning

Group of 20 finance ministers and central bank governors meet in Mexico City tomorrow after euro-area governments sanctioned a 130 billion-euro ($175 billion) aid package for Greece this week and the International Monetary Fund warned that debt concern could drag the world into another recession.

“Downside risks from a complete macroeconomic meltdown are receding fast,” said Paul Horsnell, London-based head of commodities research at Barclays Plc. “However, geopolitical risks are on the rise, with the escalating tension about Iran manifesting itself in a series of proxy wars.”

Electronic trading volume on the Nymex was 711,515 contracts as of 2:37 p.m. in New York. Volume totaled 739,188 contracts yesterday, 24 percent above the three-month average.

Open interest was 1.46 million contracts.

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--With assistance from Grant Smith in London. Editors: Margot Habiby, Charlotte Porter

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HYM 2012.02.28 04:35 #26

Crude Falls as G-20 Rejects Europe Request, IMF Warns on Economy

2012-02-27 15:09:50.976 GMT

By Moming Zhou

Feb. 27 (Bloomberg) -- Oil fell for the first time in eight days after the Group of 20 nations rebuffed calls from euro countries to increase international lending resources, adding to concern that Europe’s debt crisis will slow the economy

Prices dropped as much as 1.4 percent after International Monetary Fund Managing Director Christine Lagarde warned the world economy is “not out of the danger zone” amid fragile financial systems and rising oil prices. The G-20 said Europe needs to review its financial firewall before any consideration can be given to boosting the IMF’s resourc

“You have the IMF warning about the world economy and the worries about Europe are starting to re-emerging,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “The market went a little too far on the upside and it’s now pulling back a

Oil for April delivery fell 92 cents, or 0.8 percent, to

$108.85 a barrel at 10:06 a.m. on the New York Mercantile Exchange. The contract settled at a nine-month high on Feb. 24.

Prices have increased 10 percent this year.

Brent oil for April settlement declined $1.28, or 1 percent, to $124.19 on the London-based ICE Futures Europe exchange.

Lagarde, in a statement issued in Mexico City today after a meeting of Group of 20 officials, said that G-20 countries “must now strengthen resilience to further shocks that could result from still fragile financial systems, high public and private debt, and higher world oil prices

G-20 Statement

The G-20 rebuffed German-led calls to help Europe fight its debt crisis, saying any decision on outside aid hinges on the euro area delivering more financial firepower within two months.

The group is “alert to the risks of higher oil prices,” t

G-20 said in a statement.

New York crude’s 14-day relative strength index for front- month contracts climbed to 76.9 on Feb. 24, the highest since April, according to data compiled by Bloomberg. A reading abov

70 indicates futures have risen too quickly and further gains aren’t sustainable. Today’s 14-day RSI is about 7

“Obviously the market has gone a little too high too fast,” said Rich Ilczyszyn, chief market strategist and founder of Iitrader.com in Chicago. “Technical indicators, the RSI for example, are pointing to a little bit overboug

Oil has advanced 10 percent this year amid concern that sanctions against Iran’s nuclear program will disrupt crude supplies from the second-biggest producer in the Organization of Petroleum Exporting Countries. Iran has threatened to shut the Strait of Hormuz, a transit route for a fifth of the world’s oil, in response to an embarg

Putin Warning

Russian Prime Minister and presidential candidate Vladimir Putin warned Western leaders against a military strike on Iran.

Russia is concerned that there is a “growing threat” of action against Iran that would be “truly catastrophic,” he said in the latest of a series of articles published before Russia’s March 4 elect

“A correction is well overdue,” said Andrey Kryuchenkov, an analyst at VTB Capital in London who predicts that prices will hold at about current levels this week. Oil’s “relentless push higher could only be explained by pure supply-side fe

Hedge funds and other large speculators raised wagers on rising prices by 25,273 contracts in futures and options combined in the week ended Feb. 21, or 11 percent, to 259,162, according to the Commodity Futures Trading Commission’s Commitments of Traders report. Bets increased 26 percent over two weeks, the biggest gain since March

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--With assistance from Grant Smith in London and Sandrine Rastello in Washington. Editors: Richard Stubbe, Charlotte Porter

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HYM 2012.02.29 04:19 #27

Euro Rises Toward 3-Month High Before ECB Loans; Dollar Weakens

2012-02-28 14:40:03.633 GMT

By Catarina Saraiva and Emma Charlton

Feb. 28 (Bloomberg) -- The euro strengthened toward a three-month high against the dollar as the European Central Bank prepared to allot three-year loans tomorrow to improve the liquidity of the region’s banks

The 17-nation currency advanced versus the yen amid speculation cash injected by the ECB’s second long-term refinancing operation will spur demand for euro-area assets even after Standard & Poor’s downgraded Greece to “selective default” yesterday. The dollar weakened on reduced refuge demand before a U.S. report economists said will show consumer confidence in the world’s largest economy improved. The pound rose against the greenback after an index of U.K. retail sales cli

“The markets have treated the Greek headlines as old news and are focusing on the positives of the ECB liquidity injection tomorrow,” said Vassili Serebriakov, a currency strategist at Wells Fargo & Co. in New York. “There’s a general risk-on, equity-market-gains kind of backgro

The euro rose 0.3 percent to $1.3432 at 9:37 a.m. New York time, after rising to $1.3487 on Feb. 24, the highest level since Dec. 5. The shared currency gained 0.1 percent to 108.09 yen. The yen strengthened 0.2 percent to 80.43 per dollar after depreciating to 81.67 yesterday, the weakest since May 31.

After lending euro-region banks a record 489 billion euros

($657 billion) in its first refinancing operation on Dec. 21, the Frankfurt-based ECB tomorrow will probably grant them another 470 billion euros this week, according a Bloomberg News survey.

ECB Operation

Using the operations, banks can borrow from the ECB at around 1 percent and invest the proceeds in higher-yielding securities such as the 10-year Italian government bond, currently yielding 5.34 percent.

“If there is a large take up at the long-term refinancing operation, I would expect the euro to have some further gains, through the $1.35 area,” said Ian Stannard, head of European currency strategy at Morgan Stanley in London. “We think it will fall because we think a lot of the positive news is priced in. The global growth picture will start to deteriorate again, which could start to undermine the eu

Morgan Stanley forecasts the euro will decline to $1.27 by March 31 and to $1.15 by year-end, Stannard said.

The dollar and yen dropped against higher-yielding currencies. The greenback slid 0.8 percent against Norway’s krone, 0.5 percent versus the Mexican peso and 0.4 percent against the South Korean won

The Dollar Index, which IntercontinentalExchange Inc. uses to track the greenback against the currencies of six major U.S.

trading partners, fell 0.2 percent to 78.393. The gauge slid to

78.22 on Feb. 24, the lowest since Dec. 8.

Dollar, Yen

The S&P 500 Index rose 0.1 percent and the Stoxx Europe 600 Index of shares fell 0.1 percent.

The yen rose against the dollar and pared its losses against riskier currencies after a report showed orders for U.S.

durable goods fell in January by the most in three years. The 4 percent drop exceeded a 1 percent decline forecast by economists in a Bloomberg News survey.

“It’s a surprise and it was much greater than expecte

said Carl Forcheski, a director on the corporate currency-sales desk at Societe Generale SA in New York. “It’s the first real bit of bad news that we’ve had in a while and it could trigger the correction that has been on the overdue si

The Conference Board’s U.S. consumer confidence index climbed to 63 this month from 61.1 in January, according to a Bloomberg News survey

Pound Gains

The dollar has weakened 3.8 percent this year, according to Bloomberg Correlation-Weighted Indexes, which track 10 developed-nation currencies. The yen is the worst performer, falling 8.6 percent, and the euro gained 0.1 percent.

The pound approached a three-week high against the dollar after the Confederation of British Industry said its retail sales gauge rose in February to the highest reading in eight months, boosting speculation the nation will avoid a recession.

The gauge increased to minus 2 from minus 22 the previous month, the London-based business lobby said in a report today. A measure of expected sales for next month was at 2, indicating retailers expect sales to improve in March, the report showed.

The pound rose 0.1 percent to $1.5844, after advancing to

$1.5902 yesterday, the strongest level since Feb. 8. The U.K.

currency weakened 0.1 percent to 84.77 pence per euro.

‘Opportunity to Bu

The U.K. currency has weakened 1.2 percent against the euro since Feb. 21, the day before Bank of England minutes showed two policy makers voted for a larger increase in asset purchases than agreed at this month’s meeting

“The sell-off in sterling following the BOE minutes provides an opportunity to buy it against the euro,” Valentin Marinov and Greg Anderson, senior currency strategists at Citigroup Inc., wrote in a note to client

The strategists recommended investors buy the pound at

84.73 pence per euro, with a target of 82.50 and stop-loss orders at 85.55. A stop-loss is an instruction to exit a trade at a certain level in case a bet goes the wrong way.

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--With assistance from David Goodman in London. Editors: Kenneth Pringle, Dennis Fitzgerald

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HYM 2012.02.29 05:00 #28

Gold Leads Precious Metal Rally on Demand for Dollar Alternative

2012-02-28 19:05:30.873 GMT

By Debarati Roy and Nicholas Larkin

Feb. 28 (Bloomberg) -- Gold advanced to a three-month high and silver posted its biggest gain in eight weeks as investors bought precious metals as an alternative to a weakening dollar.

Platinum and palladium also rose.

The dollar fell for the third time in four sessions against a basket of currencies and the euro rose to a three-month high as the European Central Bank prepares to allot a second round of three-year loans to help the region’s banks tomorrow. The MSCI All-Country World Index of stocks climbed as a gauge of U.S.

consumer confidence jumped to a one-year high.

“The euro is stronger against the dollar and that’s one of the major supportive factors” for gold, Peter Fertig, owner of Quantitative Commodity Research Ltd. in Hainburg, Germany, said by telephone. Higher equities are “also supportive” for commodities, including gold, he said.

Gold futures for April delivery advanced 0.8 percent to settle at $1,788.40 an ounce at 1:30 p.m. on the Comex in New York, after climbing to $1,792.70, the highest level for a most- active contract since Nov. 14.

Prices are up 14 percent this year after a 10 percent increase in 2011, the 11th consecutive annual gain, as investors sought to diversify from equities and some currencies. The dollar index has declined 1.2 percent this month while gold advanced 2.8 percent.

Supporting Gold

“The dollar’s weakness is supporting gold,” Rick Trotman, a senior research analyst at MLV & Co. in New York, said in a telephone interview.

Holdings in exchange-traded products backed by gold extended a climb to a record 2,398.2 tons yesterday, data compiled by Bloomberg show.

NYSE Euronext’s Liffe said it began options trading in gold and silver futures yesterday. The contracts will be available as options on 33.2 ounces of gold and 1,000 ounces of silver, the exchange said in a statement posted on its website.

Silver futures for May delivery rose 4.5 percent to $37.205 an ounce on the Comex, the biggest gain since Jan. 3. Earlier, the metal rose to $37.295, the highest for a most-active contract since Sept. 22. It’s the best-performing precious metal this year, up 32 percent.

“The funds seem to be very actively buying silver today,”

Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago, said in a telephone interview.

On the New York Mercantile Exchange, platinum futures for April delivery rose 0.5 percent to close at $1,723.50 an ounce.

The metal gained 5 percent last week. Palladium futures for June delivery rose 2.1 percent to $722.20 an ounce, the biggest jump in a week.

For Related News and Information:

Top commodity reports: CTOP

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