Better-than-expected GDP figures in the US caused risk appetite to surge across the board enabling the kiwi to post gains of over a cent against the pound.The solid GDP figure in the US renewed optimism about recovery in the global economy, prompting investors to buy higher-yielding currencies. The kiwi, which has suffered recently on a rise in risk aversion, was able to reverse losses as the positive data encouraged investors to buy up riskier assets. However, in trading this morning, the pound is recouping losses, pushing the price back near 2.27 as market participants return their thoughts to the RBNZ’s rate statement on Wednesday where they indicated that interest rates would not be raised for some time.
Posts Tagged ‘Risk Aversion’
Kiwi strenghtened broadly yesterday, but the pound has stemmed its losses in trading this morning
Posted by admin on October 30th, 2009
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Down with the dollar
Posted by admin on October 21st, 2009
March 5 index value of the dollar against six other major currencies touched 89.11, its highest point this year. Since then, however, there is a steady falling dollar. Tuesday, October 20, for example, the dollar fell to 75.24, which was the lowest point in more than a year.This is hardly a sign of collapse, and do not necessarily cause for concern. American exporters whose goods become more competitive abroad, quite pleased with the weak dollar. Domestic producers also benefit from the fact that competing imported goods become more expensive. European tourists, who can now buy more for their euro during shopping tours in the U.S., also benefited.
Kiwi halted its climb yesterday, as demand for higher-yeilding currencies weakened
Posted by admin on October 8th, 2009
Sterling reversed a three-day decline against the kiwi, posting marginal gains following a rise in risk aversion, closing the day at 2.1682. It was a choppy session for sterling, which initially dropped to a low of 2.1476 in early trading, as a lack of major economic data gave support to the higher-yielding currency. However, having dipped, the pound rebounded strongly, regaining over two cents as global equities backed off to trade in the red. Weak European stocks were followed in by the US markets, easing risk appetite and allowing the UK currency to stabilize in the afternoon, consolidating its position above 2.1650.
A rise in risk aversion weighed on the pound on Friday, supporting dollar gains
Posted by admin on October 5th, 2009
The pound slid against the dollar on Friday, completing its third straight weekly decline, as demand for the haven currency found support from weak US employment data.In early trading, risk appetite was down, with investors taking up defensive positions ahead of an expected rise in US unemployment figures. However with weak data already priced into the market, the pound avoided a further sell off after data confirmed an increase in jobless figures that brought overall unemployment in the US to 9.8%. The data did trigger a sharp fall in major stock indices, with traders concerned that the global recovery is struggling to find momentum.
Sterling lost ground against the euro on Friday, and has dipped below 1.09 in trading this morning
Posted by admin on October 5th, 2009
Sterling gave back recent gains against the euro on Friday, losing 0.3% as risk aversion weighed heavily on the fragile UK currency. Sterling struggled in the morning as investor’s booked profits after the pound’s gains against the euro on Thursday, but trade was initially range bound ahead of US payrolls data. The pound also failed to gain traction after a Nationwide housing market survey showed prices were steady on the year in September, the first time since March that prices have not fallen on a year-on-year basis. In the afternoon, US payrolls data disappointed expectations, justifying the rise in risk aversion in the market and sending global equities spiralling further downward. Indeed, the FTSE 100 went back below the psychological 5000 level, which was particularly damaging for the pound In trading this morning the price has continued to climb in the single currency’s favour, though sterling may find support should UK services meet expectations and reveal a stronger month on month figure at 09:30BST.
The kiwi was weaker in trading yesterday following some concerning US economic data
Posted by admin on October 2nd, 2009
The pound made gains yesterday, taking support from a revised IMF report and an easing of risk activity to close the day at 2.2316 up 0.7%. Rising risk aversion enabled the pound to advance over a cent against the kiwi yesterday, with investors retreating into haven currencies. US employment claims rose last week, posting a figure well above forecast, dulling hopes of a swift recovery in the US, but supported gains for the UK currency. The negative data led to a sharp retreat in equity markets which prompted investors to sell the higher-yielding currencies.
Weak US data sapped demand for the aussie yesterday, enabling the pound to gain
Posted by admin on October 2nd, 2009
The pound rebounded strongly yesterday, gaining over two cents, or 1.3%, as a sharp rise in risk aversion in the market, dulled demand for the ‘riskier’ currency. Both unemployment claims in the US and manufacturing data posted worse-than-expected figures, raising slight concerns over the rate of recovery in the world’s largest economy, and weakening demand for the higher yielding aussie. The negative US data was reflected in global stocks, which also took a steep downturn, with major indices loosing around two percent, which further reduced dollar selling, enabling the GBP/AUD price to rise.
The euro slid sharply against the dollar yesterday, weighed down by a rise in risk aversion
Posted by admin on October 2nd, 2009
The dollar rallied against the single currency yesterday after a run of disappointing manufacturing data left investors unwilling to take on risk.The single currency took a sharp downward turn, weighed down by comments from a top European official who expressed concern about the value of the euro. He said that European finance ministers would discuss the single currency’s recent appreciation at the G7 meeting this weekend. Waning risk appetite amid a mixed batch of US economic data also prompted investors to seek the perceived safety of the greenback. Data yesterday showed US initial jobless claims rose in the latest week, a reminder that the labour market is far from stable.
An easing of risk appetite weakened the euro yesterday, but it has rallied back over $1.46 so far today
Posted by admin on September 30th, 2009
The single currency hit a two-week low against the greenback yesterday as a rise in risk aversion strengthened demand for the haven currency.The dollar rose for a second day as evidence that economies have yet to shake off the worst effects of the global recession spurred demand for the safety of the U.S. currency. Russia’s central bank cut its main interest rate, signaling that things are not as positive as they appeared previously, and spurring demand for the dollar. The greenback also found support following a disappointing US consumer confidence survey, which cautioned investors in their risk appetite.
Pound Tumbles, Dollar Surges as Risk Aversion Hits Currency Markets (Euro Open)
Posted by admin on September 28th, 2009
The US Dollar surged higher to start the trading week as stocks sold off across Asian exchanges, boosting demand for the safety-linked currency. The British Pound bore the brunt of the greenback’s assault as risk aversion compounded last week’s dovish rhetoric from the Bank of England.Key Overnight Developments• Pound Tumbles Despite BOE Backtracking on King’s Comments• Japanese Yen Surges on Safety Demand as Stocks Plunge in AsiaCritical LevelsThe British Pound and the Euro both suffered sharp losses in overnight trading as stocks tumbled in Asia, driven lower by Friday’s disappointing US economic data, sending the MSCI Asia Pacific regional benchmark index down 1.2% and boosting demand for the safety-linked US Dollar.Asia Session HighlightsThe British Pound raced sharply lower in early trading as currency markets seemingly concluded that the Bank of England suspiciously “protests too much” after the UK Times Online cited unnamed sources at the central bank as saying King was trying to talk down sterling last week.
The pound has reversed recent losses against the aussie, supported by rising risk aversion
Posted by admin on September 28th, 2009
The pound lost another 1.0% to the aussie dollar on Friday to close at 1.8373, as selling pressure remained strong. The aussie dollar reached a twenty-four year high against the pound on Friday, as King’s comments continued to weigh heavily on the pound. On Thursday, the BoE governor made it clear that he was not too concerned about the current weakness of the pound, and that he was in fact in support of its current value in order encourage a rebalance towards an export led economy. The news reaffirmed that interest rates would remain low for some time, which encouraged investors to sell the pound in favour of the high-yielding aussie.
The euro made ground against the dollar on Friday, but has relinquished its gains this morning
Posted by admin on September 28th, 2009
The euro made gains on Friday, following a two day slide, buoyed by improving economic data in the US, and closing at 1.4689. The single currency initially lost ground against the greenback as poor data on US core durable goods orders initiated a slight dollar rally. However, the euro erased early losses after data showed US consumer sentiment improved in September while sales of US homes edged higher in August. Consumer sentiment rose to its highest point since February 2008, supporting a rise in stock indices, which picked up from earlier losses, adding further support to the euro’s rise.
The pound fell below $1.60 on Friday, and rising risk aversion has seen it tumble further this morning
Posted by admin on September 28th, 2009
Confidence in the UK currency remained weak on Friday in the wake of comments made by Mr King and the BoE, with the price sinking below $1.60. Having initially fallen to a four month low of 1.5921 in the early hours of Friday morning, the pound proceeded to consolidate above 1.60, with analysts suggesting that a bullish correction was expected in the wake of Thursday’s plunge. However, bearish sentiment towards the pound soon returned, with traders continuing to dump the British currency on perceptions that the BoE would lag other countries in tightening its loose monetary policies. In the afternoon, a worse-than-expected reading in U.S.
Dollar, Yen up Ahead of the G20 Meeting
Posted by admin on September 25th, 2009
The Dollar snaps a two week decline versus the EUR after disappointing U.S Home Sales data and ahead of the G20 meeting. The USD and JPY are benefiting from the recent surge in risk aversion ahead of the G20 meeting and a concern that the group’s leaders will pose stricter regulations on financial markets. The drop in Oil prices, which began Wednesday, only exacerbated yesterday as equity markets tumbled and the Dollar strengthened, putting pressure on the commodities market.USD – Dollar Rebounds on Return to Risk Aversion The Dollar came roaring back yesterday against its rivals as poor housing data and falling equity markets sapped traders appetite for risk.
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Euro lost ground vs the dollar following an easing in risk appetite
Posted by admin on September 25th, 2009
The greenback continued to rally against the single currency yesterday, buoyed by a rise in risk aversion, to close the day at 1.4660. The dollar was under pressure yesterday after Wednesday night’s Federal Reserve meeting left investors with the message that US interest rates will remain very low for a long time.The euro also made gains against the dollar as the German Ifo Business climate survey rose to its highest level in a year in September, though it did undershoot forecasts of a stronger advance.However, the US dollar turned higher in the afternoon, after a report showed that sales of existing homes in America unexpectedly dropped in August, the first decline in five months.The euro also erased gains after major central banks, including the Fed, announced they were scaling back some emergency lending facilities.These gains were added to as US stocks turned negative in the afternoon, which further eased risk appetite in the market.This morning, the euro has recouped some of its losses after a statement from the G20 encouraged speculators to sell the low-yielding greenback.
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