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Gold Advances in New York as Weaker Dollar Spurs Investor Demand
2012-02-13 13:09:52.454 GMT
By Nicholas Larkin and Phoebe Sedgman
Feb. 13 (Bloomberg) -- Gold rose in New York as a weaker dollar spurred demand for the metal as an alternative investment.
The euro climbed against the dollar after Greek Prime Minister Lucas Papademos won approval from parliament for austerity measures needed to receive a second aid package. Hedge funds and other money managers increased bets that U.S. futures will gain by 8.6 percent in the week ended Feb. 7, Commodity Futures Trading Commission data show.
“It’s the weakness in the dollar,” Bernard Sin, head of currency and metal trading at bullion refiner MKS Finance SA in Geneva, said today by phone. “It creates a bit of demand for gold. On any dips, physical buying might come in and support the mar
Gold for April delivery advanced 0.5 percent to $1,733.50 an ounce by 7:59 a.m. on the Comex in New York. Prices fell 0.9 percent last week. Bullion for immediate delivery was 0.5 percent higher at $1,731.23 in London.
The metal gained for an 11th consecutive year in 2011 as investors sought to diversify from equities and some currencies.
Gold reached a record $1,923.70 in September, and holdings in bullion-backed exchange-traded products are 0.2 percent below December’s all-time high. Assets were little changed at 2,387.9 metric tons on Feb. 10, data compiled by Bloomberg show
Limited Uses
Still, investors should avoid gold because the metal’s uses are limited and it lacks the potential of farmland or companies to produce new wealth, Warren Buffett, the billionaire chairman of Berkshire Hathaway Inc., said last week in an adaptation of his annual letter to shareholders on Fortune magazine’s websit
Euro-area finance ministers will convene in Brussels Feb.
15 for an extraordinary meeting that was set after they declined to ratify a 130 billion-euro ($172 billion) bailout package for Greece in a special session on Feb. 9. Frustrated after two years of missed budget targets, the European authorities demanded Greek officials put verbal commitments into law and the legislation was passed earlier today.
“Greece has passed the austerity measures, and investors are now willing to send capital flow back into the euro,” said David Lennox, an analyst at Fat Prophets in Sydne
Silver for March delivery rose 0.7 percent to $33.855 an ounce. It’s the best-performing precious metal this year, up 21 percent, and ETP holdings at 17,703.6 tons are the highest since May, data compiled by Bloomberg show
Palladium, Platinum Rise
Palladium for March delivery advanced 0.1 percent to
$703.75 an ounce after reaching a four-month high of $718.65 on Feb. 9. Assets held in ETPs, which came to 55.37 tons on Feb.
10, are up 6.8 percent this year, beating gains in other precious-metals holdings.
Platinum for April delivery was up 0.5 percent at $1,667.80 an ounce after reaching a three-month high of $1,674 on Feb. 9.
Impala Platinum Holdings Ltd. said it’s working with its largest labor union to rehire dismissed employees and start output at South Africa’s Rustenburg mine after it was closed by an illegal strike. The stoppage is costing the market abo
3,000 ounces of metal a day, according to Royal Bank of Scotland Group Plc.
For Related News and Information:
Top commodity reports: CTOP
Top metal and mining stories: METT
Collector-coin prices: CCEX
Commodity arbitrage calculator: CARC
--With assistance from Glenys Sim in Singapore. Editors: Sharon Lindores, Dan Weeks
Canadian Dollar Strengthens to Almost Four-Month High Versus Yen
2012-02-14 13:20:22.156 GMT
By Austen Sherman
Feb. 14 (Bloomberg) -- Canada’s dollar advanced to its strongest level in almost four months versus the Japanese yen after the country’s central bank unexpectedly increased its stimulus program for the first time since Octobe
The currency gained on the majority of its most-traded peers after the Bank of Japan increased its program by 10 trillion yen (C$128 billion) to a total of 30 trillion yen.
Crude oil, Canada’s biggest export, also rose
“The Canadian dollar is a marginal, yet relevant outperformer,” said Jack Spitz, managing director of foreign exchange at National Bank of Canada in Toronto. “The biggest move has been in the yen on the back of the Japanese decision to add more quantitative easi
The currency rose 0.7 percent to 78.13 yen at 8:15 a.m. in Toronto, after strengthening to as much as 78.31 yen, the most since Nov. 1. The Canadian dollar was little changed against its U.S. counterpart at 99.98 cents per U.S. dollar.
For Related News and Information:
Foreign exchange information platform: FXIP Foreign exchange forecasts: FXFC Top currency stories: TOP FX Top Canada news: TOPC Canada Economy Surveys: ECFC CA Q Statistics Calendar: ECO CA Canadian Bond Prices: PXCA
Oil Rises From Two-Day Low as China Pledges Help on Europe Debt
2012-02-15 07:09:03.125 GMT
By Ben Sharples and Ann Koh
Feb. 15 (Bloomberg) -- Oil rose after China pledged to help resolve Europe’s debt crisis, easing concern that economic growth will slow and curb fuel demand. Brent crude may advance to $120 a barrel, according to Goldman Sachs Group Inc
Crude futures in New York increased as much as 1 percent, rebounding from a two-day low. China will invest in Europe’s bailout funds, the nation’s central bank governor Zhou Xiaochuan said in Beijing. European Union finance ministers will today prod Greece to deliver budget cuts in exchange for a second aid package. The world’s oil market is increasingly vulnerable to rising prices as spare production capacity declines, Goldman Sachs sa
“OPEC spare capacity is approaching dangerously low levels, just as world economic growth is beginning to strengthen,” David Greely, head of energy research at Goldman Sachs in New York, said in the report dated yesterday. Measures by the European Central Bank and Greece “have substantially reduced the risk of a systemic financial event in Europe,” he s
Oil for March delivery rose as much as $1.02 to $101.76 a barrel in electronic trading on the New York Mercantile Exchange and was at $101.62 at 3:05 p.m. Singapore time. It fell 17 cents to $100.74 yesterday, the lowest close since Feb. 10. Prices are
21 percent higher the past year.
Brent oil for April settlement gained 79 cents to $118.14 a barrel on the ICE Futures Europe exchange. The European benchmark contract’s premium to New York-traded West Texas Intermediate for the same month was at $16.17, compared wit
$17.42 yesterday.
Global Crude Stockpiles
Spare capacity at the Organization of Petroleum Exporting Countries is down 26 percent since March to 4.685 million barrels a day in January, according to data compiled by Bloomberg. That’s the lowest level since November 2008
Global crude stockpiles are increasing more slowly than the five-year average, Greely said. Inventories held by the 34 nations in the Organization of Economic Cooperation and Development climbed by 11.4 million barrels in January, less than the five-year average increase of 43.2 million, according to preliminary data in the International Energy Agency’s Monthly Oil Market report
Zhou’s remarks in China echoed comments by Premier Wen Jiabao yesterday and sparked optimism Europe will overcome a debt crisis that threatens renewed market turmoil. EU finance ministers will hold a teleconference today to urge Greece to do more to clinch an aid package worth 130 billion euros ($17
billion) and about 100 billion euros of debt relief from private bondholders. The nation’s two biggest political parties will provide written commitments to austerity pledges, a government official in Athens said
Oil ‘Well Bi
Oil “remains relatively well bid as if the market is optimistic that something will occur in Europe,” said Jonathan Barratt, chief executive of Barratt’s Bulletin, a commodity markets newsletter in Sydney, who forecasts New York crude may rise to $104 a barrel if it breaks through technical resistance at $102.
New York prices fluctuated earlier after reports showed a rise in stockpiles and a slump in gasoline demand in the U.S., the world’s biggest oil user
Crude stockpiles climbed 2.9 million barrels last week, the American Petroleum Institute said. An Energy Department report today is forecast to show a gain of 1.5 million barrels, according to a Bloomberg News survey of analysts.
The API collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the Energy Department for its weekly survey.
Gasoline Demand
Motor fuel demand slid to the lowest level since MasterCard Inc.’s SpendingPulse report started in July 2004. U.S. drivers bought 8.01 million barrels of gasoline a day in the seven days ended Feb. 10, down 3.1 percent from a week earlier, the report showed. Gasoline use over the previous four weeks was 5.3 percent below the 2011 period, the 47th consecutive decline in that measure
The U.S. accounts for about 21 percent of the world’s oil use and the EU consumes about 16 percent of the world’s oil demand, according to BP Plc’s Statistical Review of World Ener
For Related News and Information:
Top energy, oil stories: ETOP and OTOP News on oil inventories: TNI OIL INV News on oil markets: NI OILMARKET News on OPEC: NI OPEC Global energy statistics: ENST OLD Oil markets menu: OIL
--Editors: Paul Gordon, Mike Anderson
Euro Falls to 3-Week Low Before Germany-Italy Meet, Bond Sales
2012-02-16 06:51:54.732 GMT
By Kristine Aquino and Candice Zachariahs
Feb. 16 (Bloomberg) -- The euro dropped to a three-week low before German and Italian leaders meet tomorrow ahead of a finance ministers’ gathering next week to decide on a second bailout package for Greece
The 17-nation currency slid for a second day versus the yen before Spain and France sell debt amid concern a delay in Greek aid will increase borrowing costs for the region. The dollar strengthened as Asian stocks fell and Moody’s Investors Service said it’s reviewing banks including UBS AG and Credit Suisse Group AG for possible downgrades. Australia’s currency climbed versus its New Zealand counterpart after a report showed the larger nation’s unemployment rate unexpectedly decli
“The Greek situation is in the ‘too hard’ basket and my target for euro before the end of February is $1.25,” said Kurt Magnus, executive director of currency sales in Sydney at Nomura Holdings Inc. “The market has lost faith, and it’s evident that there’s no conviction in being long risk in the equity market or long euro.” A long position is a bet an asset value wi
The shared currency lost 0.4 percent to $1.3014 as of 6:41 a.m. in London after earlier sliding to $1.3008, the lowest level since Jan. 25. The euro weakened 0.4 percent to 102.07 yen. The dollar was little changed at 78.44 yen.
The MSCI Asia Pacific Index of stocks slumped 1.1 percent.
Merkel, Monti Meet
German Chancellor Angela Merkel will travel to Rome tomorrow for talks with Italian Prime Minister Mario Monti, her spokesman Steffen Seibert said yesterday in Berlin. The leaders will hold a joint press conference after the meeting.
France and Spain are scheduled to auction as much as 14.3 billion euros ($18.6 billion) in bonds today, three days after Moody’s cut the ratings of six European nations including Spain and revised its credit outlook on France to “negativ
France plans to sell as much as 8.5 billion euros in two-, three-and five-year bonds, while Spain aims to sell a maximum of
4 billion euros in securities maturing in January and July 2015 and October 2019. France is also auctioning as much as 1.8 billion euros of index-linked bonds. The Netherlands will offer
$2 billion in debt due 2017.
While “further considerations are necessary regarding the specific mechanisms to strengthen the surveillance of program implementation,” Europe is set to make “all the necessary decisions” on 130 billion euros in aid for Greece at a Feb. 20 meeting, Luxembourg Prime Minister Jean-Claude Juncker said in an e-mailed statement after chairing a conference call of euro- area finance ministers yester
Worst Performer
The euro has depreciated 1 percent in the past week, the worst performance among the 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The dollar was the biggest gainer, having added 1.3 percent.
The U.S. currency advanced versus most major counterparts as Moody’s said it may lower UBS, Credit Suisse and Morgan Stanley’s ratings by as many as three levels. Goldman Sachs Group Inc., Deutsche Bank AG, JPMorgan Chase & Co. and Citigroup Inc. are among companies that may be downgraded by two grades, the ratings company said, adding that the “guidance is indicative on
Moody’s ratings warnings “keep the focus on the big issues out there facing credit markets and banks,” said Jim Vrondas, a manager at the online foreign-exchange dealer OzForex Ltd. in Sydney. “It does add to the uncertainty around Europe at the moment and though it’s not totally unexpected, it does seem to be on a massive scale. We will see the U.S. dollar relatively well supported on
Labor Market Improvement
The so-called Aussie dollar climbed by the most in a week against New Zealand’s currency after Australia’s statistics bureau said the jobless rate dropped to 5.1 percent in January as payrolls climbed by 46,300. That was better than the median economist estimate in a Bloomberg News survey, which called for an unemployment rate of 5.3 percent and a 10,000-job increas
“The Australian dollar rose very sharply after the jobs release,” said Andrew Salter, a strategist at Australia & New Zealand Banking Group Ltd. in Sydney. “The Reserve Bank is going to follow the unemployment rate most closely in its monetary policy deliberations,” so a rate cut in March will now depend on the events unfolding in Europe, he s
Traders are betting on a 40 percent chance the RBA will lower its benchmark rate on March 6 from 4.25 percent, according to a Credit Suisse Group AG index based on swaps. The probability of a cut was 56 percent yesterday.
The Australian dollar rose 0.5 percent to NZ$1.2907, the biggest one-day advance since Feb. 7.
For Related News and Information:
Stories on currencies: NI FRX
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Foreign-Exchange Information Portal: FXIP
--Editors: Naoto Hosoda, Jonathan Annells.
U.S. Stocks Rise as Economic Reports Outweigh Greece Concerns
2012-02-16 15:08:12.218 GMT
By Rita Nazareth
Feb. 16 (Bloomberg) -- U.S. stocks advanced, following a two-day decline in the Standard & Poor’s 500 Index, as better- than-estimated housing, manufacturing and jobless claims data outweighed concern about a Greek debt default
The S&P 500 rose 0.3 percent to 1,346.74 at 10:06 a.m. New York time. The Dow Jones Industrial Average added 56.76 points, or 0.4 percent, to 12,837.71 today.
Global stocks fell as Europe’s creditor countries struggled to bridge divisions over a rescue of Greece yesterday, delaying a decision on 130 billion euros ($170 billion) of aid until Feb
20. Ratings for global banks may be cut as global lenders face risks of rising funding costs amid Europe’s woes, Moody’s sai
Equity futures pared losses after a report showing that builders broke ground on more homes than forecast in January, helped by warmer weather and adding to signs the U.S.
residential real estate market is stabilizing. Claims for jobless benefits dropped last week to the lowest level in four years, showing the U.S. job market is on the mend. The Federal Reserve Bank of Philadelphia’s general economic index increased to 10.2 in February from 7.3 last month
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Euro Strengthens on Optimism Greece Agreement Will Be Reached
2012-02-17 13:01:27.939 GMT
By Allison Bennett
Feb. 17 (Bloomberg) -- The euro strengthened versus the dollar on optimism European officials will agree to provide Greece with funding for a second bailout package.
The 17-nation currency rose to a two-month high versus the yen after Italian Prime Minister Mario Monti, German Chancellor Angela Merkel and Greek Prime Minister Lucas Papademos expressed optimism that an “agreement on Greece” can be reached at a Brussels meeting of euro-area finance ministers on Feb. 2
Norway’s krone and South Korea’s won led gains versus the dollar as global equity markets advance
“It’s simply a reversal of an overly pessimistic view on the euro zone from earlier in the week, so there is upside for the euro and there is a recovery in the stability trade,” said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co. in New York. “There’s become a clear case of buying the dips in the market’s ment
The euro rose 0.6 percent to 104.33, at 7:50 a.m. in New York, the strongest level since Dec. 9. The shared currency rallied 0.2 percent to $1.3162, earlier touching $1.3175. The dollar rose 0.4 percent to 79.24 yen, the strongest since Oct.
31.
For Related News and Information:
Stories on currencies: NI FRX
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--With assistance from Jeffrey Donovan in Brussels. Editor:
Kenneth Pringle
Oil Set for Biggest 2012 Weekly Gain on U.S. Economy, Greek Aid
2012-02-17 19:03:01.234 GMT
By Mark Shenk
Feb. 17 (Bloomberg) -- Oil climbed in New York, heading for the biggest weekly gain this year, as signs of an improving U.S.
economy and progress on a bailout for Greece bolstered the outlook for fuel demand. Brent touched an eight-month high.
West Texas Intermediate crude rose as much as 1.2 percent today and is up 4.7 percent this week. The index of U.S. leading indicators advanced in January for a fourth month. Germany expressed confidence that euro-area governments will agree on a
130 billion-euro ($171 billion) rescue for Greece within days, while seeking to keep a bond swap of the nation’s debt on track.
“We’ve had a strong week and there’s strong upward momentum,” said Addison Armstrong, director of market research at Tradition Energy in Stamford, Connecticut. “The headlines are what’s driving this market and if they point to a better economy, prices will rise. It looks like a Greek deal is going to finally get done.”
Oil for March delivery rose $1.02, or 1 percent, to $103.33 a barrel at 1:37 p.m. on the New York Mercantile Exchange. The contract reached $103.57, the highest level since Jan. 5.
Futures are headed for the biggest weekly gain since Dec. 23.
Brent oil for April settlement dropped 54 cents, or 0.5 percent, to $119.57 a barrel on the London-based ICE Futures Europe exchange. The contract touched $120.70, the highest level since June 15.
WTI is “approaching $103.74, the high from early January, which is a tempting target,” said Tom Bentz, a director with BNP Paribas Prime Brokerage Inc. in New York. “Brent is retreating after taking out its old highs.”
Leading Indicators
The Conference Board’s gauge of the outlook for the next three to six months climbed 0.4 percent after a revised 0.5 percent gain in December that was more than initially reported, the New York-based group said today. The median forecast of economists surveyed by Bloomberg News called for an increase of
0.5 percent.
Applications for unemployment insurance payments in the U.S. dropped 13,000 in the week ended Feb. 11 to 348,000, the Labor Department said yesterday. The Commerce Department reported yesterday that U.S. builders broke ground on more homes than forecast in January and the Federal Reserve Bank of Philadelphia’s general economic index rose this month.
“The U.S. economy is in better shape than had been feared,” Eugen Weinberg, the head of commodities research at Commerzbank AG in Frankfurt, who predicts Brent crude will slide toward $110 a barrel by the end of the year. “The current price action is a liquidity and investment-driven rally on the back of U.S. economic sentiment and improving equity markets, fueled further by fears of possible supply cutbacks.”
Conference Call
German Chancellor Angela Merkel, Italian Prime Minister Mario Monti and Greek Prime Minister Lucas Papademos discussed efforts to secure a second Greek bailout and are confident that euro-area finance ministers will “find a solution for open questions” on Feb. 20, Steffen Seibert, Merkel’s chief spokesman, said in a statement. The leaders held a conference call around noon today, Seibert said in the e-mailed statement.
The European debt crisis that began in Greece has spread to Ireland, Portugal, Italy and Spain.
U.S. fuel demand dropped to the lowest level for January in
17 years, the American Petroleum Institute said. Total deliveries of petroleum products, a measure of demand, fell 5.7 percent to 18 million barrels a day last month from January 2011, the industry-funded group said today in a report.
Fuel Consumption
“The U.S. economy is looking pretty strong and a lot of people are looking for demand to trend along higher, but that has yet to happen,” said Tim Evans, an energy analyst at Citi Futures Perspective in New York. “Consumer preferences changed when gasoline prices surged in 2008 and automakers responded by making more efficient vehicles. Gasoline is still expensive and consumers would rather spend their money on something else.”
Oil may rise next week on concern that shipments will be disrupted by tension between Iran and the West over the country’s nuclear program, a Bloomberg News survey showed.
Fifteen of 37 analysts, or 41 percent, forecast oil will climb through Feb. 24. Twelve respondents, or 32 percent, predicted prices will decline and 10 said there will be little change.
Daily volumes in Brent crude call options above the market price have risen above 25,000 on four days during the past two weeks in New York, signaling an increase in bets on a possible price rally.
Electronic trading volume on the Nymex was 538,788 contracts as of 1:39 p.m. in New York. Volume totaled 660,975 yesterday. Open interest was 1.48 million contracts.
For Related News and Information:
Top energy, oil stories: ETOP and OTOP News on oil inventories: TNI OIL INV News on oil markets: NI OILMARKET News on OPEC: NI OPEC Global energy statistics: ENST OLD Oil markets menu: OIL
--With assistance from Grant Smith in London. Editors: Richard Stubbe, Charlotte Porter
Pound Gains Versus Dollar After House-Price Report; Gilts Fall
2012-02-20 12:58:36.564 GMT
By Emma Charlton
Feb. 20 (Bloomberg) -- The pound strengthened for a fourth day against the dollar after an industry report showed U.K.
house prices increased in February, adding to signs the economy is recovering.
Sterling appreciated to a three-month high versus the yen amid speculation minutes of the central bank’s February meeting to be released this week will show less support for additional bond purchases. Gilts dropped for a third day as European officials moved toward agreement on a 130 billion-euro ($172.
billion) financial aid package for Greece, reducing demand for safer securities.
“There is a little bit of momentum gathering behind the notion that there may not be any more quantitative easing
said Jane Foley, a senior currency strategist at Rabobank International in London. “The BOE is on pause in that regard and that’s giving some support to sterlin
The pound climbed 0.2 percent to $1.5862 at 12:57 p.m.
London time, after rising 0.5 percent last week. Sterling advanced 0.1 percent to 126.04 yen after reaching 126.84 yen, the strongest since Oct. 31. The U.K. currency fell 0.8 percent to 83.67 pence per euro.
House Prices
Asking prices for London homes rose toward a record in February, helping push national values up the most in almost a decade, Rightmove Plc said. Prices in England and Wales climbed
4.1 percent on the month, the most since April 2002. A separate report from the Council of Mortgage Lenders showed U.K. gross mortgage lending fell 14 percent in January from December. The figure is still up 10 percent from a year earlier.
The pound gained 0.2 percent over the past week, according to Bloomberg Correlation-Weighted Indexes, which track 10 developed-nation currencies. The currency has weakened 1.2 percent this year.
Bank of England officials increased their target for bond purchases by 50 billion pounds to 325 billion pounds on Feb. 9.
The nine-member Monetary Policy Committee also held its key interest rate at a record-low 0.5 percent.
The central bank will release minutes of this month’s meeting on Feb. 22. Policy makers voted unanimously to raise the asset purchase target to 275 billion pounds from 200 billion pounds in October
Greece Bailout
Gilts extended last week’s decline as European finance ministers prepared to meet in Brussels to seek agreement on Greece’s bailout. Talks on the nation’s second aid package in two years will aim to reconcile demands made on Greek politicians, a debt swap among private creditors and the role of the European Central Ba
The yield on the 10-year gilt climbed three basis points to
2.22 percent. The 3.75 percent bond due in September 2021 fell 0.3, or 3 pounds per 1,000-pound face amount, to 113.115.
Gilts have handed investors a 2.1 percent loss this year, according to indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies. German government bonds dropped 0.5 percent.
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Top Foreign Exchange News: TOP FX
Currency Forecasts: FXFC
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--With assistance from Jennifer Ryan and Keith Jenkins in London. Editors: Nicholas Reynolds, Mark McCord
Euro Falls on Concern Debt Crisis Will Persist After Aid Deal
2012-02-21 13:41:33.964 GMT
By Anchalee Worrachate
Feb. 21 (Bloomberg) -- The euro fell from a three-month high against the yen on concern further political action will be needed to resolve the region’s debt crisis even after Greece won a second international bailout
The 17-nation currency erased gains that came as Luxembourg Prime Minister Jean-Claude Juncker said the rescue deal includes a 53.5 percent writedown for investors in Greek bonds. An analysis by the International Monetary Fund and European officials indicated Greece’s debt may still balloon to 160 percent of its gross domestic product
“I don’t think the market can suddenly become optimistic that this is the end of it,” said Paul Robson, a senior currency strategist at Royal Bank of Scotland Group Plc in London. Further gains for the euro may be limited because “the challenges ahead are very steep,” he
The euro fell 0.2 percent to $1.3223 at 8:39 a.m. New York time after touching $1.3293, the highest level since Feb. 9.
Europe’s currency decreased 0.2 percent to 105.30 yen after earlier rising to 106.01 yen, the most since Nov. 14. The dollar was little changed at 79.65 yen
Australia’s dollar dropped against all of its 16 major peers tracked by Bloomberg after minutes of the Reserve Bank’s Feb. 7 meeting showed policy makers said there is scope to ease monetary policy if neede
Australian View
The board “judged that if demand conditions were to weaken materially, the inflation outlook would provide scope for a further easing in monetary policy,” the minutes said. The central bank unexpectedly held rates at 4.25 percent this month after two quarter-percentage-point reductions late last ye
Australia’s currency fell 0.9 percent to $1.0665. The Aussie dropped 0.6 percent to A$1.2381 per euro and fell 0.8 percent to 85.97 yen
Implied volatility on three-month options for the euro-dollar exchange rate fell today to 11.02 percent, the lowest level since April 21. Implied volatility, which traders quote and use to set option prices, signals the expected pace of swings in the underlying currency.
Euro-area finance ministers awarded 130 billion euros
($173 billion) in aid to Greece and reached an accord for greater debt relief from investor representatives in an exchange offer to tide the nation past a bond redemption next month.
European Central Bank President Mario Draghi called the deal “a very good agreement.” Italian Prime Minister Mario Monti said private bondholders agreed to take a bigger writeoff on their Greek debt after “intense” negotiati
Euro Gains
The euro gained 0.4 percent in the past week, according to Bloomberg Correlation-Weighted Indexes, which track 10 developed-market currencies. The yen weakened 2 percent over the same period, and the dollar slipped 0.3 percent.
Further gains in the euro may be limited as the deal hasn’t changed the structure of the Greece’s debt problem and there’s risk Greece may not be able to deliver what it promised, said Chris Walker, a currency strategy at UBS AG in Lond
“The deal is helping to support the euro in the near term as the outright default appears to have been avoided and short-term uncertainty is removed,” said Walker. “But we remain cautious because several outstanding issues remain unresolved. As has been the case so often throughout this debt crisis, implementation has proven to be a probl
Futures traders have increased bets that the euro will decline against the U.S. dollar, figures from the Washington- based Commodity Futures Trading Commission showed last week.
Euro Net Shorts
The difference in the number of wagers by hedge funds and other large speculators on a drop in the euro compared with those on a gain -- so-called net shorts -- was 148,641 on Feb.
14, compared with 140,593 a week earlier.
The dollar has appreciated 4.6 percent against the yen this month and touched 79.89 yen yesterday, the highest level since Aug. 4, before a report on American housing.
Purchases of existing homes in the U.S. probably rose 0.9 percent to a 4.65 million annual rate, the National Association of Realtors will say tomorrow, according to the median economist estimate in Bloomberg News survey.
Federal Reserve Chairman Ben S. Bernanke said on Jan. 25 he is considering additional asset purchases and that the central bank will keep the benchmark interest rate low through at least late 2014. The Fed purchased $2.3 trillion of Treasury and mortgage-related bonds in two rounds of quantitative easing that ended in June.
For Related News and Information:
Stories on currencies: NI FRX
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--Editors: Dennis Fitzgerald, Kenneth Pringle
Oil Rises to Nine-Month High on Greek Aid Deal, Iran Export Halt
2012-02-21 19:23:30.942 GMT
By Moming Zhou and Mark Shenk
Feb. 21 (Bloomberg) -- Oil increased to a nine-month high after Greece won a second bailout and Iran said it stopped selling crude to France and Britain.
Futures rose as much as 2.7 percent after the euro-area ministers approved 130 billion euros ($173 billion) in aid for Greece by tapping into European Central Bank profits and coaxing investors into providing debt relief, shielding the region from a default. Iran stopped selling oil to the countries yesterday, preempting a European Union ban, an official news website said.
“There’s a lot of relief about the Greek situation in the market and Iran is making a lot of noises,” said Kyle Cooper, director of research at IAF Advisors, a Houston-based energy consulting company. “The Greek agreement has increased optimism about the economy.”
Crude oil for March delivery gained $2.62, or 2.5 percent, to $105.86 a barrel at 2:04 p.m. on the New York Mercantile Exchange. The contract climbed to $106.07, the highest intraday level since May 5. Futures have risen 7.1 percent this year. The March contract expires at the close of floor trading today.
The more actively traded April contract increased $2.69, or
2.6 percent, to $106.29 a barrel on the Nymex. Floor trading was closed yesterday because of the U.S. Presidents Day holiday.
Brent oil for April settlement increased $1.63, or 1.4 percent, to $121.68 a barrel on the London-based ICE Futures Europe exchange.
Greek Economy
Greece will enjoy an economic rebound now that European finance ministers have approved the rescue package, IIF managing director Charles Dallara said in a Bloomberg Television interview in Brussels.
“The Greece news is part of what rallied the market,”
said Tom Bentz, a director with BNP Paribas Prime Brokerage Inc.
in New York. “The market is up after the Iranians cut off supplies to some European countries. We are still sitting on the higher end of the range.”
Brent touched $121.82 today, the highest level since May 5, following Iran’s announcement of the oil export halt. The European Union on Jan. 23 agreed to ban crude imports from Iran starting July 1 to pressure the country over its nuclear program.
Iran “will give its crude oil to new customers instead of French and U.K. companies,” the Shana oil ministry news website reported yesterday, citing Alireza Nikzad Rahbar, a ministry spokesman.
Iran Sanctions
The Iranian decision will have “no impact on Britain’s energy security or supplies,” U.K. Foreign Secretary William Hague said yesterday.
EU nations bought a combined 18 percent of Iran’s exports of crude and condensates, or 452,000 barrels a day, in the first half of 2011, according to the U.S. Energy Department. France purchased 49,000 barrels a day and the U.K. 11,000 barrels.
“The sanctions are making it increasingly difficult for Iran to sell oil,” said Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis. “You are effectively taking Iran out of the global market, to some extent, and that’s a big deal.”
Oil also gained as U.S. equities rose. The Dow Jones Industrial Average topped the 13,000 level for the first time since May 2008, and the Standard & Poor’s 500 Index traded above the highest close since 2008.
Hedge funds and other money managers raised wagers on advancing oil prices by 14 percent in the week ended Feb. 14 to 233,889, according to the Commodity Futures Trading Commission’s Commitments of Traders report. It was the highest level since May 10.
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--With assistance from Ann Koh in Singapore, Ayesha Daya in Dubai, James G. Neuger in Brussels and Ladane Nasseri in Tehran.
Editors: Margot Habiby, Richard Stubbe