Having traded strongly against the dollar in the early session, the euro surrendered gains in the afternoon session, pulling the price down sharply to close a $1.4873. Initially, the greenback hit a fresh 14-month low versus the euro after the Beijing-based Financial News revived concern over the status of the dollar, stating that China should raise the amount of yen and euros held in its foreign-exchange reserves.However, the dollar pared its losses after the author of the report said that it was purely a “personal view”.In addition, the issue of diversification has been a topic for quite a while and the impact of the news was short-lived.
Posts Tagged ‘Speculation’
The dollar is recovering losses against euro on speculation that the Fed may signal a tightening of monetary policy
Posted by admin on October 27th, 2009
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Pound continued to climb against the aussie yesterday as confidence in the UK economy improved
Posted by admin on October 22nd, 2009
A broadly stronger pound hit a two-week high against the aussie, briefly rising over 1.8000, as confidence in the UK economy gained momentum.Sterling jumped following the minutes from the Bank of England’s latest policy meeting, which dampened expectations of an extension to quantitative easing. The minutes appeared to move the balance of market expectations to the possibility of a pause of the government’s asset purchase scheme in November, reversing recent speculation. In addition, the aussie dollar found its strength undermined as commodity prices, most notably oil, turned lower, discouraging investors from the higher-yielding currency.
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.
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.
Bearish sentiment towards the pound prevailed yesterday, but the sterling is rallying strongly against the euro today
Posted by admin on October 15th, 2009
The pound relinquished early gains against the single currency, closing marginally down at 1.0704 as rising risk appetite benefited the euro. Sterling initially rose against the single currency yesterday after data showed a smaller than expected rise in the number of UK jobless claiming benefits, and the overall unemployment rate unexpectedly held at 7.9%. This data prompted investors to further pare back some of the heavy bets built up against sterling in recent weeks, which have pushed the price to multi-month lows. In addition, some analysts have said that speculation over an extension of quantitative easing could be overdone, and that the pound / euro price could have correction potential.
Sterling picked up from early lows to post marginal gains against the euro yesterday
Posted by admin on October 14th, 2009
The pound reversed its three-day slide against the euro as a surprise dip in a German economic sentiment index offset weak UK inflation data.In early trading, sterling was undermined by a declining inflation rate, which prompted further speculation that interest rates could be on hold at 0.5% until 2011 and sent the UK currency to a six-month low of 1.0628. The Consumer Prices Index (CPI) dropped to an annual rate of 1.1% in September from 1.6% in August. Meanwhile, the Retail Prices Index (RPI) inflation measure, which includes mortgage interest payments and housing costs, fell, to -1.4% from -1.3%.
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.
Investors were cautious yesterday ahead of an ECB rate decision, but the euro has rebounded this morning
Posted by admin on October 8th, 2009
The euro relinquished some of its recent gains against the greenback yesterday, with investors on the defensive ahead of the ECB rate decision today. A broadly stronger dollar was the currency of choice yesterday as investors trimmed “riskier” positions in favour of the haven currency as equities slipped into the red, easing risk appetite.The dollar also benefited after a US official said raising interest rates would not derail the US economic recovery. “Even if we were to start immediately, much time would pass before incremental increases could be considered tight or even neutral policy.Additionally analysts noted that the greenback was being supported by speculation that the dollar’s decline may have been too fast to sustain.In trading this morning, the greenback has come under pressure after Australian employment data reinforced demand for higher-yielding assets. The ECB are widely expected to announce today at 12:45BST that interest rates in the eurozone will remain at a record low of 1.0%, though the tone of the accompanying statement is likely to reflect growing optimism over the state of economic recovery in the region.
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.
Stong servies data and rallying equities were unable to buoy a weak pound yesterday, enabling the dollar to creep up
Posted by admin on October 6th, 2009
The pound continued to edge downward, undermined by speculation ahead of the MPC meeting later this week. Data revealed that Britain’s services sector grew more strongly than expected in September, expanding at its fastest rate for two years, quelling fears over the UK recovery following weak PMI data in the manufacturing and construction industries last week. However, the data failed to buoy confidence in the pound significantly with investors remaining wary of taking positions in UK assets ahead of the MPC statement this week. Additionally, business activity in the US non-manufacturing sector expanded in September, against market expectations of standstill, which supported dollar buying.
A strong kiwi dollar shrugged off weak data from the US to post gains against sterling on Friday
Posted by admin on October 5th, 2009
Sterling relinquished gains against the kiwi dollar on Friday, as concerns mounted over the strength of the global recovery, with the price closing the week at 2.2269. Following the release of worse-than-expected jobs data in the US, risk adverse investors bought into dollar and yen havens on Friday, weakening the higher-yielding, ‘risky’ assets. However, the kiwi rebounded strongly in afternoon trading, as investors turned bearish in their sentiment towards the US recovery. The weak employment data added to concerns that the US recovery is struggling to take hold, and, after an initially flurry of dollar buying, many investors opted against the relative ‘safety’ of US assets.
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.
An easing of risk appetite has strengthened the dollar
Posted by admin on October 2nd, 2009
A broadly stronger pound eventually relinquished its gains against the dollar yesterday, to close the day down 0.15% at $1.5955.The British currency initially edged higher after the IMF said that UK gross domestic product will expand 0.9 percent next year, from a July prediction of 0.2 percent, as the housing market slump eases and exports increase.However, the pound fell back in the afternoon, weighed down on speculation that money authorities would express some form of support for the US currency at the G7 meeting.Additionally data showed that the UK manufacturing PMI unexpectedly fell in September for the second consecutive month, which hampered sterling’s progress.In the US, both unemployment claims and manufacturing data posted below forecasts, which eased risk appetite and pulled the pound back below the 1.60 resistance level.The dollar is trading higher today as investors take up defensive positions as they await US non-farm employment data released at 13:30BST, which will give the market short-term direction.
Euro advanced yesterday but its progress has been halted today in the wake of dovish euro speculation
Posted by admin on October 1st, 2009
The euro pushed higher against the dollar yesterday in choppy trading, even as disappointing US economic data weakened stocks.The single currency made strong gains yesterday morning, supported by the results of the ECB cash tender offer. The volume of bids was lower than expected, which implied that financial conditions in the eurozone were improving and there may be less need for the ECB to inject money into the market. Additionally, German unemployment fell again in September and even after seasonal adjustments, the number of jobless fell by 12,000, resulting in an overall dip in the unemployment rate to 8.2%, which buoyed demand for the single currency.
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Broad dollar weakness and an increase in demand for sterling has pushed the price back near $1.63
Sterling achieved a three-week high of 1.6297 against the dollar yesterday, supported by upbeat comments about the UK economy. The pound jumped nearly three cents, or 1.8%, against the dollar on speculation that policy makers will pause their asset-purchase programme next month as the economy shows signs of recovering from the recession. The Financial Times cited Bank of England Markets Director Paul Fisher as saying that the asset purchases scheme may be paused to give the central bank the option “of doing more later.” Analysts suggested that it appeared that the Bank of England was letting it be known in more forceful terms that it is not talking the pound down any longer.
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