Dollar selling in the market was stepped up with investors moving into the pound as the MPC minutes proved more positive than expected. The pound climbed over 1.66, posting a two and half cent gain against the dollar as the minutes from the Bank of England’s October monetary policy meeting struck a less dovish tone than recent comments suggested. Analysts said the most important story within the release was the fact that in the September meeting, governor Mervyn King thought an expansion of the central bank’s quantitative easing programme could be justified. But there was no mention of that in this latest meeting.
Posts Tagged ‘Interest Rates’
Sterling made substantial ground on the dollar yesterday as the BoE showed no sign of loosening montary policy further
Posted by admin on October 22nd, 2009
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Bank of Canada left interest rates at the same level
Posted by admin on October 21st, 2009
Bank of Canada today adopted a decision to leave the refinancing rate unchanged at 0.25%.The latest indicators show the beginning of the withdrawal of the world economy from deep recession. State of the world economy and the general trends in the financial markets have been somewhat more favorable projections, which were listed in the July report on monetary policy the Bank of Canada.Given the current interest rate factors in Canada can not remain at current levels until the end of the second quarter of 2010 for the achievement of targeted inflation .
The British pound traded with a positive attitude
Posted by admin on October 21st, 2009
The British pound traded with a positive attitude and has already reached sessional maximum near $ 1.6430 – support the currency has a general weakening of the U.S. dollar, as well as the comments of the Bank of England Governor Mervyn King that “at some point, interest rates return to normal levels. King also noted that now rates are at extremely low levels, and is not yet known how long this situation will persist. Now couple pound / dollar was at $ 1.6429 otmekte – Offer near the level of $ 1.6425 until restrain upward movement pair.
Improving global economic sentiment continues to raise demand for kiwi assets, boosting the NZ currency vs the pound
Posted by admin on October 20th, 2009
The kiwi advanced over three and a half cents (1.6%) against the pound yesterday as investors showed renewed enthusiasm for risky assets. Rising commodity-prices and stronger-than-expected corporate earnings in the US have contributed to continued demand for higher-yielding currencies. In addition, investors are now pricing in that New Zealand’s central bank is likely to drop its monetary- easing bias at its meeting next week as economic data point to improvement. Although there has been speculation that the RBNZ has expressed concern that the strength of the kiwi is frustrating economic recovery, strong data has investors questioning whether the central bank can keep interest rates on hold until the middle of next year.
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.
Euro pushes higher but finds strong resistence at $1.50
Posted by admin on October 20th, 2009
The single currency resumed its climb against the dollar in trading yesterday, supported by rising confidence in the global recovery, closing the day up 0.4%.The euro hovered just below the psychologically important 1.50 level as the US dollar remained under selling pressure on expectations that US interest rates will remain pinned at record lows well into 2010. The single currency also found support as some investors speculated finance ministers from the 16-nation region meeting in Luxembourg would focus on the currency’s strength. The dollar came under further pressure as the continued confidence over the prospects of a global economic recovery were reaffirmed as the Dow Jones opened up over 10,000, keeping haven demand for the dollar in check. Late in the afternoon, the Fed added to the greenback’s woes after stating that it has been testing its reverse repurchase agreement tool but is not about to use it, suggesting that US monetary policy is not set to tighten just yet.
The single currency continues to strengthen against the dollar, posting a fresh 14-month high
Posted by admin on October 15th, 2009
The dollar slid further against the euro yesterday as solid results from JP Morgan Chase and rising equities stoked optimism about an improving global economy.The euro extended its rally, hitting a fourteen-month high of 1.4943 against the greenback, boosted after data showed an acceleration in eurozone industrial output. Industrial production in eurozone rose for the fourth straight month in August, providing further evidence that the area’s economy is on track to post its first rise in gross domestic product in the third quarter since the first quarter of 2008. Pressure on the dollar was also added as every major stock market in Europe rose after New York-based bank JP Morgan Chase announced strong third-quarter earnings, adding to risk appetite.
Sterling is making strong headway against a weakened dollar, advancing towards 1.62
Posted by admin on October 15th, 2009
Sterling made strong gains in early trading yesterday following better-than-expected employment data, but the price pulled back to close up 0.4% at $1.5980. The number of UK jobless claiming unemployment benefit rose by 20.8K in September, less than the forecast figure of 25.1K, and the smallest rise since May 2008, enabling the pound to post an intra-week high of $1.6022. The greenback also suffered from comments made on Tuesday evening from Fed Vice Chairman Donald Kohn, which supported speculation that the dollar downtrend will be broad and continuous for some time to come.However, the dollar trimmed its losses in the afternoon following a drop in sales figures.
RBS: the weakening of the dollar may continue
Posted by admin on October 14th, 2009
According to currency analysts Royal Bank of Scotland, dollar decline may continue against the backdrop of rumors that within a certain time in Fed not be necessary to raise interest rates. Yesterday’s speech Fed Vice Chairman Donald Kohn can be regarded as “absolute suppression of the recent more aggressive comments. The bank believes that the statements of Kona can be interpreted as follows: “Of course, we can raise the stakes and, if necessary, rather quickly, but most likely we do not have such a need arises, at least for some time.” Bank analysts believe that such an attitude in the heart of decision-making at the Fed indicates that the overall downward trend in the U.S.
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The single currency is pushing up towards 1.49 against the dollar as risk appetite firms
Posted by admin on October 14th, 2009
The single currency reached a 14-month high of 1.4874 against the greenback yesterday, advancing over a cent, as investors refocused on the outlook for US interest rates.In early trading, the single currency suffered a setback as the German ZEW Economic Sentiment index dropped to 56.0 from 57.7 in September, its first fall in three months. However, the dip provided a good buying opportunity for a market that remains broadly bearish on the dollar, allowing the euro to push higher. Analysts also noted that the weakness of the dollar was due in part to comments from a Japanese Ministry of Finance official, which reiterated the recent stance to accept the onging strength of the yen.
The pound/US dollar price is slowly rising as investors broadly sell the greenback
Posted by admin on October 14th, 2009
Having made early losses, the pound recovered ground in afternoon trading following positive comments from the BoE Deputy Governor, Charles Bean.The pound initially fell against the dollar after consumer prices last month rose 1.1%, down from 1.6% in August according to the Office for National Statistics, which was below the 1.3% prediction. Prime Minister Gordon Brown also said that government had to ensure that the recovery is not going to be derailed, suggesting that stimulus measures would not be removed anytime soon.However, in the afternoon, the pound rebounded strongly, following the words of Deputy Governor Bean who stated in a speech that the British economy has hit rock bottom and the worst fears of earlier in the year are unfounded. In addition there was a substantial return to dollar selling in the market, spurred by persistent expectations for low US interest rates, and investor appetite for high-yielding currencies.Sterling has continued to edge upwards in trading this morning, though unemployment data, which is released at 09:30BST and is forecast to reveal a higher claimant count, could hamper demand.
Euro posts gains against the US dollar as risk appetite ushers investors into high-yielding currencies
Posted by admin on October 13th, 2009
The single currency recovered some of the losses it incurred on Friday, gaining over half a cent against the greenback as risk appetite in the market strengthened.Rallying equities yesterday, which have been boosted by stronger commodity prices and optimism about the US corporate earnings season, also buoyed support for the euro, allowing it to briefly trade over 1.48. Analysts also noted that while in other nations future policy remains hazy, the single currency benefited from a clearer outlook for monetary policy in the eurozone. Additionally, comments from the president of the St Louis Federal Reserve that the US economy faced risks from rising inflation, stoked speculation that US interest rates might rise sooner than had been expected, but investors remained bold in their exposure to risk, continuing to sell the dollar.
Sterling loses further ground to the dollar on specualtion of a further extension of QE
Posted by admin on October 13th, 2009
Traders continued to sell sterling yesterday, pushing the UK currency down to a five-month low against the dollar, eventually closing at 1.5797. The pound lost ground after an economics and business report forecast that sterling could fall as low as $1.40 against the dollar. The report found that interest rates in the UK were likely to remain at record lows for some time and would remain at just 2.0% until 2014, which would put the country’s yield well behind other major economies. Traders also continued to speculate that the Bank of England might increase the value of its quantitative easing policy beyond the current £175bn, in stark contrast to the prospect of similar special stimulus measures being wound down in other economies.
Factors Influencing the Forex Market
Posted by Tushar Mathur on October 10th, 2009
A lot of people like the participants of the currency markets, economists and experts of the Central bank have been trying to understand and identify, what factors exactly drive the highs and the lows of the Forex market. A lot of experts suggest that predicting the future move or trend of the Forex market is more of an art than a science. That is because even the experts at times have to split their views in relation to the direction of the Forex market.
Technically speaking there are two schools of thoughts or approaches which is primarily used to analyze the Forex market.
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Demand for the kiwi remained strong yesterday, but it has lost ground in the wake of comments from Ben Bernanke
Posted by admin on October 9th, 2009
The pound edged down against the kiwi as rising risk appetite in the market offset the BoE’s decision to hold their monetary policy unchanged. Investors continued to buy into the higher-yielding New Zealand dollar, encouraged by rallying global equity markets and a broadly weaker dollar.In the UK, the BoE kept interest rates at 0.5% and decided against extending the quantitative easing programme as some had feared.However, the decision only gave the pound a muted boost against the kiwi, as investors had already priced the news into the market.In trading this morning, the kiwi has trimmed its gains as investors lock in some profits and as comments from the Fed Chairman suggested that the US may need to tighten monetary policy, spurring a slight return to the US dollar.However analysts have noted that overall market sentiment towards the kiwi is still pretty bullish, and that any upward movement for the pound is likely to be as a result of profit taking, rather than decreasing demand for kiwi assets.
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