Watch the Oil

 

Technorati Tags: Economy, Oil, Relax, Fun, Humor, fvarga

USD and the Yen

USD is still strongly loosing against the Yen.

It starts to worry the BoJ.

Here are the rates at 10:30pm (GMT+8). Have a look:

EURUSD	1.519
USDJPY	104.185
GBPUSD	1.9847
USDCAD	0.9772
USDCHF	1.0461
EURCHF	1.5891
EURGBP	0.7654
EURJPY	158.257
USDTWD	30.9645
AUDUSD	0.9377
NZDUSD	0.8043
USDSGD	1.3931
EURTWX	47.0351

 

Technorati Tags: Forex Market, USD, JPY, Currencies, Forex, fvarga

Forex Rates - Feb. 29 2008 - 06:00 (GMT+8)

EURUSD	1.5204
USDJPY	105.34
GBPUSD	1.9904
USDCAD	0.9753
USDCHF	1.0508
EURCHF	1.5976
EURGBP	0.7638
EURJPY	160.1588
USDTWD	30.76
AUDUSD	0.9486
NZDUSD	0.8148
USDSGD	1.3946
EURTWD	46.7675

 

Technorati Tags: Economy, Forex, Currencies, Rates, fvarga

USD Spirals to Fresh All-Time Lows

The US data being released continue to bode poorly for the economic outlook, and consequently, for the dollar - which remains mired in a downward spiral across the board.

The greenback’s losses against the euro accelerated after breaching the 1.50-level yesterday plunging further to near 1.52 and slumping to a new 24-year versus the Australian dollar around 0.95.

Burgeoning fears of an imminent recession and the increased scope for additional aggressive monetary policy easing from the FOMC have given traders the greenlight to dump dollars - plunging to new all-time lows against the euro and Swiss franc.

The reports released today showed no revision in Q4 GDP, unchanged at 0.6% while core PCE prices also held steady for the quarter at 2.7%.

However, weekly jobless claims jumped higher to 373k, versus 349k from a week earlier - highlighting continued weakness in the US labor market and shifting focus to next week’s jobs data. Consensus estimates call for the February unemployment rate to creep back up to 5.0% while non-farm payrolls are forecasted to reverse last month’s 17k contraction, instead improving by 35k.

Economic data slated for release tomorrow will see January PCE, personal consumption, personal income, February Chicago PMI and the February University of Michigan sentiment survey.

The Fed’s preferred gauge on inflation, the personal consumption expenditures (PCE) price index is likely to remain buoyed in January, highlighting the predicament facing the FOMC in maneuvering monetary policy.

Meanwhile, Chicago PMI in February is expected to fall below the key 50-level, dropping to 49.7 from 51.5 in January. The University of Michigan sentiment survey is forecasted to fall to 70.0 in February versus 78.4 a month earlier.

However, the risk for a sharper decline remains given the unexpected plunge to 5-year lows in the Conference Board’s consumer confidence survey earlier in the week.

Technorati Tags: Economy, Forex, USA, fvarga

Market Headlines - Feb. 28 2008 -

$       US Fed Chairman Bernanke reiterated that the Fed “will act in a timely manner as needed to support growth and to provide adequate insurance against downside risks” but he noted that recent price increases present upside risks to the Fed’s inflation projections

$       US new home sales fell to an annualized pace of 588k in January versus 605k in December (initially 604k); median prices fell 15.1%YoY in January, the largest annual decline on record

$       US durable goods orders fell 5.3%MoM in January versus a downwardly revised gain of 4.4%MoM in December (initially +5.0%)

€       ECB’s Weber said that current market expectations for ECB interest rate cuts underestimate inflation risks; “these expectations do not drive the monetary policy view of a central bank which is committed to price stability”

€       ECB’s Bini Smaghi said “it is difficult to keep the projections the ECB published in December”; signaling revisions to next week’s staff projections that reflect weaker growth and higher inflation in 2008

€       Eurozone M3 money supply growth slowed to an average annual pace of 11.8% in the three months through January versus 12.1% in the three months through December

€       French producer prices rose at a faster pace of +0.5%MoM in January versus +0.1%MoM in December (initially +0.2%)

€       French INSEE consumer confidence fell to -35 in February from -34 in January

£       The UK preliminary GDP estimate for Q4 was unrevised at +0.6%QoQ; private consumption spending rose at a slower pace of +0.2%QoQ in Q4 versus +0.9%QoQ in Q3 (initially +1.1%)

£       UK index of services rose at a slower 3m/ 3m pace of +0.6% in December versus +0.9% in September; output growth in business services and finance was +0.5%, which was the lowest since July 2004

Technorati Tags: Economy, Forex, Stock Market, fvarga

Asian Currencies

Thursday morning in Asia, the dollar plummeted to fresh lows against most of its Southeast Asian counterparts. While the dollar slumped to a new record low against the Chinese yuan, it reached new multi-year lows versus the Singapore dollar and Malaysian ringgit.

Against the Hong Kong dollar and the South Korean won, the dollar fell to 3-month and 1 ½ -month lows respectively. Meanwhile, the dollar declined to a 13-day low versus the Thai Baht.

But the dollar traded slightly higher against the Indonesian rupiah and the Philippine peso during this time. The dollar fell to an 8-day low versus the Indian rupee in early deals, but rebounded shortly.

The dollar plunged against the other world currencies as testimony from Fed Chair Ben Bernake fueled expectations that the central back would further slash interest rates. Federal Reserve Chairman Ben Bernanke delivered his semi-annual testimony before Congress yesterday, appearing at a time when the economy is undergoing a significant slowdown and when inflation is rising to its highest rates since the early 1980s.

The US currency slipped to a fresh multi-year low against the Singapore dollar in early Asian trading on Thursday. The pair fell below the 1.40 level in early European deals yesterday and touched a low of 1.3934 by about 8:20 pm ET. The pair, which closed yesterday’s New York session at 1.3968, is now worth 1.3952.

During early Asian trading on Thursday, the US currency trended lower versus the Hong Kong dollar. At about 8:10 pm ET, the pair hit a low of 7.7801, compared to yesterday’s close of 7.7852. This set a new multi-month low for the greenback. The pair then reversed its direction and is now trading at 7.7836.

The risk of higher global inflation, a slowdown in the US economy and measures to cool the Chinese Mainland’s economic growth will have a negative impact on the Hong Kong economy, Financial Secretary John Tsang said in his presentation of the 2008-09 Budget to the Legislative Council yesterday. Tsang was also concerned that globalization will bring in stiffer competition from emerging regional economies in the external front.

Earlier yesterday, the government said that Hong Kong’s economy grew 6.7% year-over-year in the fourth quarter of the year 2007, following a 6.3% increase in the third quarter. The seasonally adjusted real GDP increased 1.6% sequentially in the fourth quarter. In the year 2007 as a whole, the economy expanded 6.3%.

Against the South Korean Won, the dollar dropped during early Asian deals on Thursday. The pair reached a 1 ½ -month low of 935.95 at about 7:35 pm ET, compared to 941.10 hit late yesterday in New York. As of now, the pair is trading at 937.70.

Data released from South Korea showed that manufacturer’s confidence gained significantly for the month of March. The Bank of Korea said that the Business Survey Index for manufactures rose to 90 points for March, the first rise in six months. Last month, the BSI stood at 84 points. However, on a seasonally adjusted basis, the BSI for manufacturers remained flat for March, the report said.

Additionally, South Korea’s current account deficit increased to an eleven-year high in January. The deficit widened to $2.6 billion last month, compared to a gap of $428.1 million in January of 2007.

In early Asian deals on Thursday, the dollar plunged to a fresh record low against the Chinese Yuan. The dollar-yuan pair that closed yesterday’s New York session at 7.1435 reached a low of 7.1160 by about 9:15 pm ET, breaking the 7.12 mark for the first time. The People’s Bank of China has set today’s central parity rate for the dollar-yuan pair at a record low of 7.1209.

The Chinese government has approved price increases for a number of basic necessities to give relief to manufacturers and wholesalers, amid rising costs. Production prices climbed 6.1% in January, from a year earlier, marking the fastest rate in three years.

China’s first quarter GDP growth is seen at 10.6% with CPI growth at 6.9%, the State Information Center projected, according to a published report in the China Securities Journal.

The dollar weakened to a new multi-year low against the Malaysian currency in early Asian trading on Thursday. The pair hit a low of 3.2028 at 10:15 pm ET, compared to Wednesday’s close of 3.2030.
Malaysian economy registered a strong growth in the fourth quarter of 2007 driven by robust domestic demand due to strong private consumption and investment activities, the Bank Negara Malaysia said yesterday.

Malaysia’s GDP in real terms grew 7.3% on year in the fourth quarter of 2007, faster than revised 6.6% in the third quarter. A year ago, the economic growth stood at 5.7%. For the whole year, real GDP expanded 6.3%.

The dollar that closed yesterday’s New York session at 32.29 versus the Thai Baht dropped to a 13-day low of 32.01 in early Asian deals on Thursday.

The dollar reached 39.77 against the Indian rupee by about 10:35 pm ET, moving up from an 8-day low of 39.66 hit at about 8:15 pm ET. The dollar-rupee pair closed yesterday’s New York session at 39.6850.

After a brief uptrend, the US currency lost ground versus the Taiwan dollar in today’s early deals. Currently, the pair is worth 30.8870, falling from 30.9160 hit at about 7:00 pm ET. The pair was worth 30.8970 at yesterday’s close.

On the other hand, the dollar strengthened versus its Indonesian and Philippine counterparts during early Asian deals on Thursday. At about 9:10 pm ET, the dollar fetched 9,077 against the rupiah and 40.45 versus the peso, up from yesterday’s close of 9,048 and 40.2750, respectively.

Technorati Tags: Economy, Forex, Asia, Currencies, fvarga

Stock Markets - Feb. 28 2008 - Morning Session (GMT+8)

Dow: 12,694.28 (+0.07%)

Nasdaq: 2,353.78 (+0.37%)

S&P 500: 1,380.02 (-0.09%)

Hong Kong and Japan are declining, and Taipei is progressing.

                      

Technorati Tags: Stock Market, Taiwan, Economy, fvarga

Forex Rates - Feb. 28 2008 at 10:00 (GMT+8)

EURUSD	1.5102
USDJPY	106.375
GBPUSD	1.9828
USDCAD	0.9816
USDCHF	1.0637
EURCHF	1.6064
EURGBP	0.7616
EURJPY	160.6475
USDTWD	30.84
AUDUSD	0.9423
NZDUSD	0.8165
USDSGD	1.3955
EURTWD	46.5746

 

Dollar Slumps To Fresh Record Low Of 7.1160 Against Chinese Yuan.

 

Technorati Tags: Forex, Rates, Currencies, fvarga

Dollar Accelerates its Decline

Fed Report Points to Further Rate Cuts, Dollar Accelerates Its Record Breaking Declines
Since the dollar marked its unfavorable milestones late in the US session yesterday, traders around the world have jumped in to sell the battered currency.

Now at record lows, bulls have quickly lost hope in a possible rebound from an overextended greenback. In fact, looking across the market, we have seen the influences of an unwanted dollar on otherwise sound technical formations among the majors. Momentum in EUR/USD pushed the pair through the closely watched 1.50 level and quickly surpassed 1.51 in the same session.

Those currencies with high yields and hawkish central banks proved especially attractive to those wanting to short the dollar.

NZD/USD rallied to a new multi-decade high of 0.82 while the Australian dollar broke to a new 23 year high. This follow through momentum wasn’t found on sentiment alone, however; Fed Chairman Ben Bernanke’s semiannual testimony before the House Financial Services Committee certainly played its part.

Few major changes were made in the central banker’s outlook for economic activity and Fed policy from last week’s minutes from the January 29-30 FOMC meeting; though his commentary did confirm the outlook for further policy easing. In his testimony, Bernanke said the policy group would be “carefully evaluating incoming information bearing on the economic outlook and will act in a timely manner as needed to support growth and to provide adequate insurance against downside risks.”

And, keeping the pressure on the housing market’s recession, new home sales dropped a greater-than-expected 2.8 percent to a 588,000-annual pace, now the weakest since 1995.

Euro, Backed By Strong Data, Blows Through 1.50 Against The Dollar

While the euro’s advance against the US dollar was generating a broad demand for the currency in most of its liquid pairings, the move also had its fundamental roots as well.

Tuesday morning saw the release of a few indicators of economic import and fundamental influence.

The January reading of M3 money supply growth cooled less than expected. An 11.5 percent pace of annual growth in the money supply is the second consecutive deceleration; yet this objective inflation reading is still near the 28-year high set back in November.

More hawkish in its inflation support was the German import price index through the same month. Despite the deflationary influence of a record high euro, the inflation report hit a 16-month high 5.2 percent clip attributed largely to a sharp rise in energy prices.

ECB Member Axel Weber remarked in a speech that the market’s consensus expectation for a rate cut from the ECB was underestimating inflation trends. These comments were a clear signal for euro traders, which were holding back from bidding the euro on the forecast that the ECB will have to follow the Fed’s lead, to join the now aggressive rally.

Australian Dollar Joins Its New Zealand Counterpart At Multi-Decade Highs

The commodity bloc leveraged the day’s anti-dollar sentiment. Leveraging speculation of a follow up rate hike from the RBA at their next week, the Conference Board’s December leading economic index rose for a fifth consecutive month.

The Canadian dollar added little distance to its 300 point rally against the greenback over the past two days as Fin Min Jim Flaherty projected the nation’s budget surplus would drop 77 percent in 2008 and shrink to decade low in 2009.

Finally, the New Zealand dollar would perform actually drop against the US currency.

British Pound’s Rally Fades As Anti-Dollar Sentiment Takes Over

The tether between the UK and US economies seems to have kept the British pound from participating in a market-wide, anti-dollar rally.

Indeed, while EURUSD shot another 150 points above yesterday’s close to new record highs, the pound-backed major produced an ugly reversal candle on a failed run to 2.00. Mirroring the sentiment in Fed Chairman Ben Bernanke’s discouraging speech on monetary policy across the pond, the first revision in the British fourth quarter GDP numbers printed a number of disappointing modifications.

Though annual growth held a 2.9 percent pace, fixed capital investment dropped 0.5 percent, imports 1.2 percent and exports 0.5 percent.

Carry Trades Plunge As Risk Aversion Reigns

The economic docket was light for the low yielding Japanese yen and Swiss franc, through their aggressive advances would not have suggested a shortage of scheduled fundamentals.

Instead of economic indicators, traders’ interest in these carry trade favorites came along with a broad pull back in risk appetite.

Growing fears of an economic recession (or worse, stagflation) was a particularly ominous sign for the global economy.

A similar sentiment was measured in equities and the increasingly speculative energy market.

Technorati Tags: Economy, Forex Market, Forex, Rates, fvarga

Euro Powers

The dollar extended its losses further, reaching another record low versus the euro beyond the 1.51-handle to 1.5144 while briefly falling past the 106-level against the yen to 105.97.

Continued weakness in US economic reports and further pricing in of additional FOMC rate cuts prompted the renewed selling in the greenback. Fed Chairman Bernanke again gave a somber assessment of the US economy in his semi-annual Congressional testimony raising market expectations for more policy easing in the coming months.

Bernanke said the “economic situation has become distinctly less favorable”, citing lingering tight credit conditions and a slowing labor market. He expects the housing market deterioration to continue to weigh on the economic in the coming quarters with risks for growth remaining to the downside.

Bernanke said the risks “include the possibilities that the housing market or labor market may deteriorate more than is currently anticipated and that credit conditions may tighten substantially further”.

He said the Fed expects inflation to moderate; suggesting overall PCE will “moderate significantly” in 2008 to between 2.1%-2.4%. Chairman Bernanke’s testimony reiterates the Fed’s focus on stimulating growth and highlights a shift inflation data has taken, moving to a secondary role behind data impacting growth.

The economic reports released today furthered the case for a 50-basis point rate cut to 2.5% when the FOMC meets in March.

Durable goods orders in January plunged by 5.3%, exceeding estimates for a 4.0% drop and sharply reversing from December’s 5.0% increase.

The excluding defense durable goods orders also posted a sharp drop, falling by 4.7% versus calls for a 1.2% fall from a 2.7% increase a month earlier.

New home sales for January also decline by more than forecasts at 588k units, compared with 604k units previously.

Technorati Tags: Economy, Forex, USA, fvarga