|
The euro was in limbo Tuesday morning in New York, as traders waited on pins and needles for a crucial vote in the Slovakian parliament on approval for an expanded sovereign debt bailout funds.
The vote, which was expected to be announced earlier this morning, is being delayed by political infighting. Still, Greece is now likely to get an 8 billion installment of its rescue plan after getting approval from a troika of lenders that were in Athens inspecting the nation's efforts to get its fiscal house in order. The euro was steady near $1.36 versus the dollar, unable to build on its gains from the previous session. A week ago, the the euro was at a 9-month low of $1.3144. Weak U.K. manufacturing data helped the euro sustain its weekly gains versus the sterling. The euro was stable at GBP 0.87 after U.K. manufacturing output posted its weakest annual growth rate for 18 months in August. The euro was also in a stalemate versus the yen, hovering near Y104.30 after gains in the previous few sessions. The Eurozone debt crisis has reached a systemic dimension and must be tackled decisively, European Central Bank President Jean-Claude Trichet said Tuesday. In a hearing on the European Systemic Risk Board, or ESRB, before the Committee on Economic and Monetary Affairs of the European Parliament, Trichet urged national governments to act together swiftly as further delays may aggravate the situation. The dollar was generally stronger on Friday, bolstered by its safe haven appeal amid evidence of economic weakness on both sides of the Atlantic. Traders weighed a disturbing jobs report from the U.S, where anemic private sector job growth was offset by a drop in government jobs.
Figures released Friday by the Labor Department showed that there were no new jobs created for the month, while the unemployment rate held steady at 9.1 percent. Still, concerns that problems in Europe far outweigh the hurdles facing the U.S. economy helped the dollar extend its weekly gains versus the slumping euro. The dollar rose a 3-week high of $1.4184 versus the euro, having wobbled around these levels for the past few months. There was little movement versus the sterling, with dollar holding near $1.62. Same with the yen, leaving the buck just above last month's record low of Y75.93. The buck spiked higher to C$0.9845 versus Canada's petro-linked loonie as the price of oil tumbled on demand concerns. The day's big winner was the Swiss franc, with soared in early dealing before leveling off on talk of intervention from Swiss authorities. The dollar dropped to CHF 0.7720 but improved to CHF 0.7870 going into the long weekend. U.S. markets are closed Monday for Labor Day. Lifted by rising energy prices, Euro zone producer price inflation accelerated in July as expected. However, core inflation stabilised, after slowing in the preceding few months, easing the concern over the underlying price pressure in the economy. Producer prices grew at a pace of 6.1 percent in July from a year ago, data from Eurostat showed Friday. The increase was bigger than the 5.9 percent rise logged for June. The annual increase matched economists' expectations. Euro Slides Closer To Parity With Swiss Franc
The euro continued its downward spiral against the Swiss franc on Tuesday, as frightened investors flocked to safer assets amid mounting concerns about the health of the global economy. Focus has turned to the Federal Reserve for the reaction of U.S. policy makers to the bloodletting on Wall Street over the past few sessions. Economists predict that U.S. interest rates will be held at effectively zero, but the markets will be listening intently for clues about a potential third round of quantitative easing. Meanwhile in Europe, markets remain rattled by an escalating debt crisis that threatens to eventually cost Germany and France its AAA ratings. While the European powerhouses are fiscally sound, exposure to the debt of Italy and Spain are making them a riskier bet. S&P downgraded U.S. debt last Friday, sparking a global sell-off of stocks and resource commodities. The euro was steady near $1.4250 versus the dollar ahead of the Fed's interest rate decision at around 2 pm ET. The pair has wobbled near that level for the past few months. The euro dropped to a new record low of CHF 1.0530 against the Swiss franc, and appears bound for parity unless Italy and Spain make meaningful structural reforms. Choppy dealing left the euro little changed near GBP 0.8740 versus the sterling. U.K. house prices increased in July amid record low interest rates. Germany's exports declined more than expected in June, data from the Federal Statistical Office showed Tuesday. Exports fell by 1.2 percent month-on-month in June, following May's 4.4 percent rise. The expected rate of decline for June was 1 percent. Inflation in China continued its relentless rise in July, climbing to its highest level in three years on the back of spiraling food costs, latest release from the National Bureau of Statistics showed Tuesday. The rate of inflation rose to 6.5 percent in July from 6.4 percent in June. Euro Wavers Despite ECB Rate Hike
The euro steadied after steep early losses versus the dollar on Thursday, as European Central BankPresident Jean-Claude Trichet indicated that today's modest interest rate hike may be the start of a tightening cycle. In remarks that some will take to mean the ECB intends to further lift rates in the coming months, Trichet said interest rates remain "low" amid rising consumer prices. Surprising nobody, the ECB increased the benchmark interest rate by 25 basis points to 1.5 percent. The hike was signaled last month by Trichet, who said the ECB was strongly vigilant in its mandate to provide price stability. While the interest rate between the euro zone and U.S. is likely to widen, economic and fiscal problems on Europe's periphery continue to make the euro a risky bet. The euro slipped to $1.4220 in the aftermath of the rate decision, but was holding at $1.4270 during Trichet's somewhat hawkish press conference. In economic news from the U.S., employment in the U.S. private sector increased by much more than expected in the month of June, according to a report released by payroll processor ADP, with the data easing some of the recent concerns about the strength of the labor market. The report showed that private sector employment increased by 157,000 jobs in June following an increase of 36,000 jobs in May. The euro steadied near Y116.10 versus the yen after losing ground in the previous session, but fell further to GBP 0.8910 against the sterling. The Bank of England left its key interest rate unchanged at a historic low again as expected and maintained the size of the quantitative easing at GBP 200 billion. At the end of two-day rate setting meeting, the Monetary Policy Committee led by Governor Mervyn King decided to retain the interest rate at 0.5 percent. A slight rebound took the euro to CHF 1.21 versus the Swiss franc, helping the euro stay away from a recent record low near CHF 1.18. Euro Relents Versus Dollar As Greece Weighs
The euro paused versus the dollar Monday morning, staying near a monthly peak amid concerns the U.S. economic recovery has stalled. The Greek debt debacle remains unresolved, putting a cap on the euro's recent gains. While European officials and the International Monetary Fund have downplayed the threat of a Greek default, markets remain unconvinced that it can be avoided. Greece has promised severe austerity cuts in return for financial aid. The euro touched a monthly peak of $1.4657 before leveling off near $1.4620. Solid gains took the euro to a new monthly high of GBP 0.8930. About five weeks ago the euro touched above 0.90 -- hitting its highest since early 2010. Choppy dealing left the euro at CHF 1.2230 versus the Swiss franc - not far from last weeks's record low CHF1.2050. In economic news, Euro area producer price inflation eased slightly in April, data from Eurostat showed. The total industry producer prices on the domestic market excluding construction rose 6.7 percent year-on-year in April, slower than March's revised 6.8 percent increase. Investor confidence in eurozone declined for the third consecutive month in June. The Sentix investor sentiment index, an indicator of confidence around 900 investors, decreased to 3.5 from 10.9 points in May. Economists were expecting a reading of 9.2 points. Focus will turn back the U.S. later today. At 3:45 pm ET, Federal Reserve Chairman Ben Bernanke is scheduled to speak to the International Monetary Conference in Atlanta. Additionally, Dallas Federal Reserve President Richard Fisher will speak at a Market News International seminar in New York at 5:30 pm ET. Euro Weakens As Sovereign Debt Demons Resurface
The euro was weaker across the board on Thursday after a report in a German newspaper brought Europe's sovereign debt crisis back to the forefront. German Finance Minister Wolfgang Schaeuble said that Greece may need to negotiate with creditors, according to Germany's Die Welt newspaper. And with Portugal's rescue terms not officially hammered out, the markets will be focused intently on whether the sovereign debt dilemma take a dangerous new turn. The euro has surged higher in recent days versus the dollar, but gave back some ground this morning in New York, dropping to $1.4364 before steadying near $1.4420. The euro touched a 16-month peak of $1.4519 earlier this week, supported by speculation that theEuropean Central Bank will continue to hike interest rates following April's modest tightening measure. In economic news from the U.S., the Labor Department released a report on Thursday showing that producer prices increased by less than anticipated for the month. The Labor Department said its producer price index rose by 0.7 percent in March following a 1.6 percent increase in February. First-time claims for unemployment ticked up last week, according to a report released by the Department of Labor Thursday. The surprisingly sharp advance took the figure back across the 400,000 mark. The euro touched a 7-week low of CHF 1.2843 versus the Swiss franc, and weekly low of Y119.25versus the yen. Dollar Extends 4-Month Low Versus Euro
The dollar remained weak versus other major currencies on Monday, extending its multi-month lowsagainst the euro and sterling as the price of U.S. crude soared above $106 a barrel. With the Federal Reserve in the difficult position of trying to preserve the recovery while dealing with inflationary pressures, the dollar has been in retreat for the past few weeks. Friday's jobs report raised hopes the U.S. economy is on the mend, but soaring food and energy prices may threaten the recovery. The buck slipped to a 4-month low of $1.4020 versus the euro, having dropped more than 10 cents from early-2011 highs. Renewed concerns about Europe's sovereign debt situation failed to give the dollar a boost. Moody's cut Greece's rating further below junk status on Monday. An indicator of investor sentiment in the Eurozone rose to its highest level in nearly three-and-a-half years in March, latest survey showed Monday. The Sentix investor sentiment index, an indicator of confidence around 900 investors, rose to a new high of 17.07 in March from 16.70 in February. The indicator rose for a third consecutive month. Economists were looking for a score of 17.2. The dollar was on defense against the sterling this morning, staying within a hair of last week's yearly low of $1.6343. The dollar drifted lower to Y82 versus the yen, unable to sustain any movement away from November's 15-year low of Y80.22. Choppy trading left the buck near a recent three-year low three cents below par versus its petro-linkedCanadian counterpart. Looking ahead, the U.S. Federal Reserve is expected to release its monthly consumer credit reportat 3 PM ET. Consumer credit for January is likely to show an increase of $2.5 billion. Revolving credit, which increased for the first time in 28 months in December, is likely to show further improvement in January. Dollar Stable Ahead Of Inflation, Jobless Claims Data
The dollar was steady Thursday morning in New York, as traders paused for the deluge of economic data coming before the opening bell on Wall Street. While jobless claims figures will be paid much attention, plenty of focus will be on consumer price inflation data from the Commerce Department. Fed Chairman Ben Bernanke has insisted that inflation is well under control, but some economists say prices are creeping up and will accelerate higher if the Fed maintains its extremely accommodative monetary policy. The dollar was little changed at $1.3557 versus the euro, and drifted lower to $1.6125 against thesterling. Early losses against the sterling were caused by hawkish comments from a voting member of the Bank of England. Inflationary pressure in the UK is greater than the central bank yesterday projected in its Inflation Report, according to policy maker Andrew Sentance. He said a rise in the interest rate will raise sterling moderately, mitigating global inflationary pressure in the short run, and will also help bring inflation back to the target over the medium term. The buck kept most of its recent gains against the yen, staying near Y85.65. Looking at today's economic calendar from the U.S., the consumer price index for January is scheduled to be released at 8:30 AM ET. The consensus estimates call for a 0.3 percent increase in the consumer price index, while the core consumer price index that excludes food and energy is likely to have risen 0.1 percent. The Labor Department is due to release its customary jobless claims report for the week ended February 12th at 8:30 a.m. ET. Economists expect claims to increase to 410,000. The Conference Board is scheduled to release a report on the U.S. leading index for January at 10.00 a.m. ET. The consensus estimate calls for a 0.2 percent increase in the leading indicators index for the month. |
FX TraderFXEX.NET Archives
October 2011
Categories |
RSS Feed
