Posts Tagged yen
Commodity-Linked Currencies Suffer Huge Losses
Posted by Tetyana Matychak in Currency, Favourites on June 7th, 2010
The weaker-than-expected U.S. employment report helped trigger a flight-to-safety rally in the Dollar while driving investors out of commodity-linked currencies. Aversion to risk weakened U.S. equity and global commodity markets, helping to drive up demand for the lower-yielding Japanese Yen. All three major commodity-linked currencies – Australian Dollar, New Zealand Dollar and Canadian Dollar – suffered huge losses, leading to speculation that this trend is likely to continue next week.
The U.S. Dollar Index made a new high for the year, boosted by the sharp sell-offs in the Euro, British Pound and the commodity-linked currencies. Gains were limited slightly by the rise in the lower-yielding Japanese Yen.
The initial catalyst behind the U.S. Dollar’s rise on Friday was the news that Hungary is in the midst of a fiscal crisis of its own. This news caught many traders by surprise because most were focused on the upcoming U.S. Jobs Data Report. After the first thrust to the upside, gains were extended when the government reported that the number of jobs created during May fell far below the consensus.
Economist estimates were for an increase of about 513,000 new jobs. The U.S. Labor Department reported an actual increase of 431,000. This news was bearish in itself, but the traders were really surprised when the internals of the report showed that of the 431,000 new positions, 411,000 jobs were created by the U.S. government. This figure was primarily made up of short-term census workers. Read the rest of this entry »
Greek uncertainty hurts euro
Posted by Tetyana Matychak in Currency on April 27th, 2010
Confusion about the timing and amount of emergency aid for Greece prompted investors to sell the euro on Monday as markets worried whether the euro zone country will manage to avert a debt default.
The euro dipped briefly below $1.33, falling against the greenback for the seventh trading session in the last eight. It also hit a three-month low against sterling on investor concern about potential conditions attached to a loan for Greece.
The Federal Reserve’s policy meeting this week drew renewed attention to when the U.S. central bank will likely begin raising interest rates. The dollar rose above 94 yen as investors bet the Fed would raise rates before year end, well ahead of any move by the Bank of Japan.
Confusion over aid for debt-stricken Greece arose on Monday after German Chancellor Angela Merkel said the euro zone member, which on Friday had requested emergency aid, must commit to further savings measures and show it can return to a sustainable economic path before Germany can approve aid.
Greece had tried to reassure investors over the weekend that the 45 billion euros ($60.5 billion) in aid from the European Union and the International Monetary Fund would arrive in time to avert the euro zone’s first sovereign default. Read the rest of this entry »
US Dollar Likely to Continue Upward Swing This Week
Posted by Tetyana Matychak in Currency on December 21st, 2009
The dollar is likely to extend gains in the upcoming week, continuing to draw support from growing signs of a stable U.S. recovery as well as a Federal Reserve plan to wind down most of its emergency lending early next year.
Both factors have pushed the market’s U.S. interest rate expectations forward despite pronouncements from the Fed that it will keep interest rates low for an extended period.
The rate futures market Friday has priced in at least one quarter-point rate increase by the beginning of the second half next year. A few months ago, futures traders had factored in Fed tightening late in 2010.
“We see the U.S. economy continuing to recover and monetary policy settings starting to move back to normal,” said Nick Bennenbroek, head of FX strategy at Wells Fargo in New York.
“Although our economics team does not expect actual rate tightening to take place until late in 2010, the withdrawal of non-conventional measures could start tipping the scales in the dollar’s favor,” he added. Read the rest of this entry »
Euro Advances Against Yen, Dollar on Signs of Economic Recovery
Posted by Tetyana Matychak in Currency, Favourites on November 2nd, 2009
The euro rose against the yen and the dollar as signs the global economy is recovering trimmed demand for the relative safety of the U.S. and Japanese currencies.
The Australian dollar climbed against all 16 most-traded currencies as Treasurer Wayne Swan said economic growth will be faster than expected and a government report showed house price increases accelerated. Japan’s currency earlier rose to the strongest level in three weeks against the dollar and the euro after New York-based CIT Group Inc. filed for bankruptcy.
“Global data still suggest that the economy is on the mend,” said Minoru Shioiri, chief manager of foreign exchange trading at Mitsubishi UFJ Securities Co. “The underlying need to invest in higher-yielding currencies through carry trades remains intact.”
The euro earlier fell to 131.01 yen, the least since Oct. 9, before trading at 132.91 as of 7:34 a.m. in London from 132.61 in New York on Oct. 30. The yen was little changed at 90.12 per dollar, after touching 89.20, the strongest level since Oct. 14.
Japan’s currency slid to 81.47 per Australian dollar from 81.05 last week, after rising to 79.47, the most since Oct. 8. Australia’s currency fetched 90.42 U.S. cents from 89.97 cents. New Zealand’s dollar was at 72.02 U.S. cents from 71.81 cents last week. Read the rest of this entry »
Stocks, Oil, Metals Drop on Economy Concern; Yen, Dollar Gain
Posted by Tetyana Matychak in Favourites, Fund Markets on July 6th, 2009
Stocks fell, pushing the MSCI World Index lower for a third day, and oil and industrial metals retreated on concern the global economic recovery is faltering.
The MSCI World Index of 23 developed countries slipped 0.8 percent at 10:15 a.m. in London, extending its decline since reaching a high for the year on June 2 to more than 6 percent. Germany’s DAX Index retreated, bringing its drop from its 2009 high to 10 percent, the common definition of a correction. Nickel decreased for a third day on the London Metal Exchange, while oil slumped to its lowest level in five weeks. The yen rose against all 16 most-traded currencies tracked by Bloomberg.
Stocks tumbled, with Standard & Poor’s 500 Index futures declining by 0.9 percent, before the U.S. earnings season begins with Alcoa Inc.’s results on July 8. Profits at S&P 500 companies dropped last quarter and will also contract in the three months ending in September, extending the stretch of declines to a record nine quarters, according to analysts’ estimates compiled by Bloomberg. The Institute for Supply Management’s index today may show U.S. service industries contracted for a ninth straight month in June.
“The reassessment of the global economic outlook is likely to continue this week,” a team of Citigroup Inc. strategists, including Todd Elmer in New York, wrote in a research report today. “As a result, an extension of the recent bout of risk aversion may lie in store.” Read the rest of this entry »
Stocks Retreat Before U.S. Jobs Report as Yen, Dollar Advance
Posted by Tetyana Matychak in Currency, Favourites on July 2nd, 2009
European stocks and U.S. index futures fell while the yen and the dollar rose on speculation a report today will show that America’s unemployment rate climbed to the highest level since 1983.
The MSCI World Index of 23 developed countries slipped 0.6 percent at 9:21 a.m. in London, while Standard & Poor’s 500 Index futures slipped 0.5 percent. The yen and the dollar strengthened 0.3 percent against the euro.
The U.S. jobless rate may have risen to 9.6 percent last month, economists surveyed by Bloomberg News said before today’s Labor Department report. That increase would suggest the $12.8 trillion pledged by the U.S. government and the Federal Reserve is doing little to shore up the labor market. The European Central Bank probably will keep borrowing costs at a record low to battle the recession, while Sweden’s Riksbank unexpectedly cut its benchmark rate to 0.25 percent today.
“People have become a little bit too optimistic,” Philippe Gijsels, a senior structured equity strategist at Fortis Global Markets in Brussels told Bloomberg Television. “People will be disappointed. Gradually over the summer and into the autumn we will move lower,” he said. Read the rest of this entry »
Dollar Weakens; Stocks Rebound
Posted by Tetyana Matychak in Favourites, Investing on June 24th, 2009
The dollar weakened on concern that the Federal Reserve will signal it has no intention of raising interest rates with the global economy in its worst recession since World War II. Metals rose, buoying emerging-market stocks.
The U.S. currency lost 0.2 percent against the euro at 9:50 a.m. in London, 1 percent versus the Norwegian krone and 0.9 percent compared with the New Zealand dollar. Copper led an advance in industrial metals. The MSCI Emerging Markets Index rose 1.9 percent, the biggest increase in two weeks, and the Dow Jones Stoxx 600 Index of European shares rebounded from its worst two-day decline since April.
“Speculation about ongoing low-rate policy by the Fed is a burden to the U.S. dollar,” a team of analysts led by Viola Stork at Helaba Landesbank Hessen Thueringen in Frankfurt wrote in a research note today. There is an “expectation that the Fed is not going to signal any change in its rate policy today,” the report said.
The chances that the U.S. central bank will increase its target interest rate for overnight loans by the end of the year diminished to 40 percent from 50 percent a week ago, based on trading in Fed funds futures. Policy makers’ determination to prop up the world’s biggest economy prompted investors to seek higher returns outside the U.S. The Organization for Economic Cooperation and Development said today the world’s most- industrialized economies will contract 4.1 percent this year and grow 0.7 percent in 2010. Read the rest of this entry »
Yen Strengthens as Stock Declines Boost Demand for Safer Assets
Posted by Tetyana Matychak in Currency, Favourites on June 16th, 2009
The yen rose against higher-yielding currencies and advanced the most in two weeks versus the dollar as stocks declined and the Bank of Japan said the nation’s deepest recession since World War II is easing.
Japan’s currency made the biggest gains against the Australian and New Zealand dollars and the Mexican peso as speculation the global economic crisis is far from over spurred investors to cut holdings of riskier assets. The greenback fell for a second day against the yen on concern the leaders of Brazil, Russia, India and China meeting today will call for less reliance on the dollar as the world’s reserve currency.
“Stocks are falling, indicating risk-aversion among investors,” said Masanobu Ishikawa, general manager of foreign exchange at Tokyo Forex & Ueda Harlow Ltd., Japan’s largest currency broker. “The yen is being bought.”
The yen climbed to 133.46 per euro as of 7:40 a.m. in London from 134.99 yesterday in New York. It earlier rose to 132.74, the strongest level since May 28. The yen advanced 1.5 percent to 96.35 per dollar, the biggest gain since May 29. Japan’s currency rose 1.6 percent to 60.76 against the New Zealand dollar, and strengthened 1.8 percent to 76.44 versus Australia’s currency. Read the rest of this entry »
Hedge funds back into options to bet on dollar/yen
Posted by Tetyana Matychak in Currency on May 22nd, 2009
Hedge funds are dipping their toes back into the dollar/yen options market after months of absence, betting that eventual interest rate tightening by the U.S. Federal Reserve will help the greenback gain against the yen.
Dollar/yen‘s implied volatility, a gauge of how much a currency pair is expected to move over a given period, has come down to levels not seen since before Lehman Brothers collapsed in mid-September, sending global markets into a tailspin.
The decline suggests market stress has eased substantially and investor confidence has risen after the battering dealt by the global financial crisis, but it also implies lessening demand for options to hedge against a further surge in the yen.
“It means investors bruised in the past months have regained enough energy to stretch their arms and legs around, and some are starting to bet for economic recovery for the coming years, thinking the worst of the financial crisis is over,” said a senior options trader at a Japanese bank. Read the rest of this entry »
Dollar Falls to 8-Week Low After Fed Projects Deeper Recession
Posted by Tetyana Matychak in Currency on May 21st, 2009
The dollar traded near an eight-week low against the yen amid speculation the U.S. Federal Reserve will print more cash to boost purchases of assets as it seeks to counter the global slump.
The U.S. currency weakened most against the Taiwan and Canadian dollars after the Fed projected a deeper recession in 2009. New Zealand’s dollar rose for a fourth day after a government report showed immigration growth accelerated. The euro traded near a four-month high against the dollar after a German manufacturing and services survey beat economists’ forecasts.
“The Fed may expand its asset-purchase program, which would increase the supply of greenbacks,” said Yuji Saito, head of the foreign-exchange group in Tokyo at Societe Generale SA, France’s third-largest bank. “This could undermine the value of the dollar and spur investors in the U.S. to put their funds overseas.”
The U.S. currency traded at 94.81 yen as of 8:38 a.m. in London from 94.88 yesterday in New York. It fell to 94.29 earlier, the lowest level since March 20. Japan’s currency strengthened to 130.62 per euro from 130.77. The euro was little changed at $1.3777 from $1.3780 yesterday, when it reached $1.3830, the strongest level since Jan. 5. Read the rest of this entry »
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