The dollar snapped four days of gains against the euro as the US economy returned to growth in the three months through September, officially exiting recession.The US government’s advance estimate showed gross domestic product grew at an annualised rate of 3.5% in the third quarter, the first rise since the second quarter of 2008, which beat expectations for a reading of 3.3%. The data reduced the safe-haven appeal of the greenback, encouraging investors to sell their dollar holdings in favour of growth-linked currencies, enabling the euro to climb over a cent on the day.
Posts Tagged ‘Economy’
Euro clawed back recent losses as investors moved into the “riskier” currency
Posted by admin on October 30th, 2009
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Index of confidence in the euro-zone economy grew more than expected in October
Posted by admin on October 29th, 2009
Index of confidence in the euro-zone economy (Euro-Zone Economic Confidence) for October was 86.2 points, reports the European Commission. Value index surpassed expectations of analysts projected an increase to 84.4 points. Recall that a month earlier figure stood at 82.8 points.The index of consumer confidence (Euro-Zone Consumer Confidence) for October increased to -19 points to -18 points in the forecast -17 points.The index of confidence in the business community (Business Climate Indicator) was -1.78 points for October at the previous value of -2.07 points and prognosis of -1.90 points.
Pound edges higher against a stronger dollar, which found support from weak consumer sentiment
Posted by admin on October 28th, 2009
Sterling closed up against the dollar yesterday, but slipped back nearly a cent from its intra-day high after a survey showed that consumer confidence in the US disappointed market expectations. In early trading, the markets continued to take the pound higher with analysts noting that long term investors and Asian reserve managers were attracted by sterling’s one-week low. This trend was maintained as the UK CBI retail sales index advanced to a balance of +8 in October from a balance of +3 in September, the largest advance since June 2007, beating forecasts.
Sterling made gains against the aussie as the price of gold fell back
Posted by admin on October 27th, 2009
The pound posted gains against the aussie yesterday, reversing its steep fall at the end of last week as investors cashed profits, closing up 0.8% at 1.7822. The aussie was broadly weaker in trading yesterday as investors took the opportunity to take profits following sharp gains made on Friday.The price of gold also continued to fall yesterday, discouraging investment in the commodity linked currency. Gold quoted around 1053/oz yesterday, though probably due more to profit taking than lack of strength.In trading this morning, the aussie is slightly up on the day, though investors are likely to remain wary ahead of sales data in the UK and a consumer confidence survey in the USIn addition, investors may well caution against long positions ahead of Thursday when the US 3 rd quarter GDP figure is released. The economy is forecast to have grown by 3.3% in the quarter, though if it undershoots this target it could trigger a wave of selling in riskier currencies.
The index of national activity in the United States overcame the bar recession
Posted by admin on October 27th, 2009
According to the report of the Federal Reserve Bank of Chicago, the indicator of economic activity in the U.S. rose in September and overcame a critical point, which indicates a recession.Note that the index of national activity is calculated on the basis of 85 different economic indicators.The average value of the index of activity for the three-month period from July to September rose to a negative value of -0.63 compared with -0.96 in the previous period, from June to August. For the first time since January 2008, the average value of the index broke the level of -0.70, indicating a recession in the economy.As noted by the FBI in Chicago, for the last four recessions in the U.S.
Sterling halted its recent rally and is slipping back sharply against the kiwi as UK GDP figure disappoints
Posted by admin on October 26th, 2009
The pound was broadly sold on Friday following a weak GDP figure, losing three cents to the kiwi dollar, to close back down at 2.1607. Data revealed that Britain’s economy has now shrunk for six quarters after it contracted by 0.4% in the most recent quarter, the longest period of contraction since records began in 1955. Analysts have now renewed their discussion over the possibility of the Bank of England retaining, or even extending, its £175 billion QE programme, which would compound sterling’s weakness. The news also confirmed that the BoE are likely to keep the benchmark interest rate at a record low of 0.5% firmly into 2010, lessening the appeal of sterling assets.
Aussie made significant gains at the end of last week and is continuing to advance this morning
Posted by admin on October 26th, 2009
In trading on Friday, the pound slipped back from two-week highs around the 1.8000 level against the aussie as a weak GDP figure dulled demand for the UK currency. A report showed that the UK failed to exit the recession in the third quarter of this year, giving the central bank more reason to keep enacting emergency measures to spur growth. The data showed that the UK contracted by a further 0.4%, disappointing expectations of a 0.2% expansion and firmly halting the pound’s progress. Where as in Australia interest rates have already been raised on the back of growing confidence in the economy, the UK may now be considering further loosening its monetary policies as recovery struggles to take hold.
Aussie resumes its climb against the pound, but has capped gains this morning
Posted by admin on October 20th, 2009
The aussie dollar continued its upward trend yesterday, pushing on nearly one percent against the pound following bullish words from an RBA official.The Australian dollar rose as a Reserve Bank of Australia official said a move to “more normal” interest rates was appropriate, indicating that the yield gap may widen further.Philip Lowe, assistant governor of the RBA, also mentioned at the conference in Sydney that it was “appropriate” to remove monetary stimulus as the economy improves boosting demand for higher-yielding assets. The Australian currency also traded strongly during the Asian session with demand high as both the Nikkei and Shanghai Composite indices traded strongly.
Pound reached over $1.64 yesterday, but has slipped half a cent in trading this morning
Posted by admin on October 20th, 2009
Having traded in the red during the morning session, the pound rebounded back over $1.64, climbing for the fifth consecutive day and reaching a near one-month high of $1.6422. The pound initially fell against the dollar, relinquishing last week’s gains after the Sunday Times said Bank of England policy maker Adam Posen may support an extension of the central bank’s asset-purchase programme. Posen added that he was “not worried about overshooting inflation right now,” which many analysts have said will become an issue as the economy begins to grow. Last week, following the words of Mr Fisher, the market moved to discount a scenario where it was more likely that asset purchases would be paused.
Data on retail sales have supported the dollar
Posted by admin on October 14th, 2009
The report on retail sales drop in September, which turned out to be weaker than analysts expected has had a positive impact on the dollar, which currently continues to demonstrate the desire to recover some losses . However, dealers noted that interest in selling the U.S. currency is still strong enough to keep her from the more active correction. Currency strategists RBS, meanwhile, see the risks of further dollar decline, given the continuing concerns that the situation in the economy for some time will not allow the Fed to start raising rates.
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Euro advanced against the greenback, buoyed by a relatively upbeat ECB rate statement
Posted by admin on October 9th, 2009
The single currency climbed to a two week high of 1.4815 yesterday as investors continued to sell the dollar to fund riskier trades. The single currency returned to its recent upward trend, initially climbing half a percent, as investors took up dollar selling in the wake of further evidence of global economic recovery. Australian employment data revealed a rise in jobs in September, reinforcing risk appetite and triggering broad dollar selling as its haven appeal weakened. The single currency held its gains in the afternoon after the European Central Bank left interest rates unchanged at a record low 1.0%, as the market expected.
The sterling/euro price closed relatively unchanged yesterday as both the MPC and ECB held rates.
Posted by admin on October 9th, 2009
Sterling was unable to build on Wednesday’s gains, as trading between the pair held steady following a relatively muted market response from the two interest rate statements.Yesterday morning, the pair remained tightly range bound as investors held back from taking positions ahead of the rate statements from the two central banks. Analysts noted that people had taken sterling a lot lower recently and maybe now they were beginning to think that the BoE would not extend quantitative easing At midday it was revealed that the BoE did decide to hold both the interest rate and the asset purchase scheme at their current levels.
Sterling edged up against a broadly weaker dollar ahead of important central bank announcements
Posted by admin on October 8th, 2009
The pound reversed its steady decline against the greenback yesterday as investors relinquished defensive positions ahead of today’s MPC announcement. Cautious investors initially sought safety ahead of the two key central bank meetings today, putting pressure on the UK currency. Additionally, in an interview, Kansas City Federal Reserve President Thomas Hoenig said that the US central bank should start raising interest rates “sooner rather than later,” which buoyed confidence in the US economy. However, the greenback’s gains were limited, with the pound rebounding a cent from its intra-day low as investors felt that the market had gone too short on sterling positions ahead of today’s statements.
The kiwi dollar has risen sharply following a positive business survey and the RBA rate increase
Posted by admin on October 6th, 2009
The kiwi dollar posted a 2.1% gain, a movement of four and half cents, against the pound yesterday in the wake of a strong business confidence survey. During European trading hours the kiwi gained steadily, supported by speculation that Australia would raise their interest rate level. The kiwi was also buoyed by rising risk appetite as global stocks held up despite a weak US employment report on Friday. In late evening though, the kiwi received a solid boost after the respected NZIER survey revealed the first optimistic figure since the fourth quarter of 2006, triggering investor demand for the New Zealand currency.
Selling pressure held firm on the pound yesterday, with the euro price falling below €1.08
Posted by admin on October 6th, 2009
The pound was unable to capitalise on improved services data, eventually losing over half a cent to a broadly stronger euro.The pound initially found some respite as positive data from the services sector bolstered expectations that the economy resumed growth in the third quarter. The purchasing managers’ index for the services sector showed a rise to 55.3 in September, showing improvement from last month and exceeding market expectations. However, sterling quickly relinquished its gains over expectations that the MPC meeting later this week will reaffirm that the UK monetary policy will remain comparatively loose for some time.
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