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OctaFX.Com - Copper weakens as China demand worry persists

SINGAPORE (Reuters) - London copper edged lower on Monday as persistent concerns about sluggish demand in China took the momentum out of a three-day rally, but optimism on the global economy after upbeat U.S. jobs data is likely to cushion the price slide.

 

Copper rallied about 2 percent on Friday, after better-than-expected U.S. labor market data boosted confidence in the recovery of the world's largest economy, and Greece's success with a debt swap deal eased fears about euro zone debt crisis for the time being.

 

But the dim prospects of copper consumption in China, as reflected in multi-year high stockpiles in warehouses monitored by the Shanghai Futures Exchange, kept investors wary.

 

"Theoretically we are in the peak consumption season but it doesn't feel like it this year," said a Shanghai-based physical copper trader, "Factories are not in any rush to stockpile the material, as the overall economic situation has weakened."

 

Prices below 58,000 yuan a tonne have attracted buying, but the current level was not at all attractive, he added.

 

China, the world's top consumer of raw materials including copper, has cut its 2012 growth target to an eight-year low of 7.5 percent, dampening hopes that its appetite for these materials would continue to expand rapidly.

Three-month copper on the London Metal Exchange lost 0.3 percent to $8,461 a tonne by 0300 GMT, reversing course after three sessions of consecutive rise.

 

The most-traded June copper contract on the Shanghai Futures Exchange edged up 0.3 percent to 60,700 yuan ($9,600)a tonne.

Mar 12, 2012 03:17

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Yen rises after no surprises from BOJ

 

TOKYO (Reuters) - The yen rose against the dollar and other major currencies on Tuesday after the Bank of Japan refrained from taking drastic easing steps after a two-day policy meeting.

 

The dollar fell to around 82.10 yen from around 82.35 yen following the BOJ's decision.

 

While few expected fresh easing, market players were nervous after the central bank surprised the market by boosting asset purchases last month.

 

Mar 13, 2012 05:32

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Dollar hits 11-month high versus yen, euro slips

 

LONDON (Reuters) - The dollar hit an 11-month high against the yen and hovered near a seven-week high versus a basket of currencies on Tuesday, backed by expectations that a U.S. economic revival will keep the Federal Reserve from resorting to fresh stimulus.

 

The dollar recouped knee-jerk losses against the yen made after the Bank of Japan stopped short of taking aggressive easing steps on Tuesday. That wrongfooted investors who had bet on a repeat of the central bank's surprise easing last month.

 

The greenback is being supported by signs of improvement in the world's biggest economy. Data last Friday showed February was the third straight month to record a gain of more than 200,000 jobs.

 

The dollar index <.DXY> stood at 80.008, not far from a high of 80.132 struck on Monday, its highest in seven weeks.

 

Analysts say that with the Fed unlikely to be in a hurry to announce fresh measures, given that its $400 billion stimulus program known as Operation Twist, is in play, the focus would be on retail sales for February.

 

Retail sales are expected to reflect solid car and gasoline sales and are likely to push the dollar higher, especially against the yen.

 

"There is an upside risk to U.S. retail sales data, given the underperformance seen last month. That should give reasonable support to the dollar against the yen," said Steve Barrow, head of G10 currency research at Standard Bank.

 

The dollar rose to 82.795 yen on trading platform EBS after stop loss buy orders were triggered above Friday's high of 82.65. Traders reported option structures at 83.00 which were attracting protective dollar sell orders.

 

A break above 83.00 would expose resistance at 83.11 yen, the 76.4 percent retracement of the dollar's decline from April to a record low in October last year. The yen's losses have gathered pace since the surprise BoJ easing and there were some expectations it might have acted again on Tuesday.

 

"Speculators were positioning for more aggressive easing from the BOJ and so far those expectations have been disappointed," said Lee Hardman, currency strategist at BTM-UFJ.

 

"We expect the dollar to outperform generally but against the yen it looks to have come too far in the short-term."

 

Dealers said a widening in the spread between two-year U.S. government bond yields and their Japanese equivalents was helping to support dollar/yen.

The premium in favor of U.S. yields was last at 21.4 basis points, the highest since August 2011. The spread is closely correlated with dollar/yen.

 

LIFE AFTER GREECE

The dollar's strength saw the euro ease and move closer towards a one-month low struck on Monday. The common currency is still smarting from fears the European debt crisis could worsen, despite Greece's success in securing a debt-cutting swap deal.

 

The euro was down at 0.3 percent on the day at $1.3115, not far from a one-month low of $1.3079. Technical support for the euro is at its daily Ichimoku cloud top at $1.3087 and the 55-day moving average around $1.3081.

 

Westpac strategists said they have entered a short euro/dollar trade. They have sold euros at $1.3180 and would look to sell more into a rally to $1.3350.

 

The currency's outlook remains shaky given that the euro zone economy is slipping into recession, in contrast with a brightening picture in the United States.

 

While the euro is supported by relief after Greece successfully swapped most of its privately-held bonds and cut its debt by more than 100 billion euros, many market players are concerned that other peripheral countries like Portugal may suffer a similar fate.

 

The Australian dollar bounced back after hitting a seven-week low of $1.0475 on Monday, to trade at $1.0528. While its latest rebound could open the way for a test of resistance around $1.0670, the currency is for now stalling at $1.0545, capped by its 55-day moving average around $1.0555.

 

Mar 13, 2012 11:41

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Dollar stronger across the board, hits 11-mth high vs yen

 

TOKYO (Reuters) - The dollar hit an 11-month high against the yen and 1-month high on the euro on Wednesday, extending its gains after a modest brightening of the Federal Reserve's economic forecasts nudged traders to downplay expectations of further monetary easing.

 

U.S. 2-year Treasury yields hit a 7-1/2-month high after solid retail sales data, making the dollar less attractive as a funding currency for carry trades. Tokyo exporters were also reluctant to sell it now, expecting more strength, traders said.

 

These factors saw the dollar hit a session high at 83.32 yen, its highest level since mid-April, with most traders expecting a short correction soon, before refocusing on last year's high at 85.53 yen.

 

"The move in the yields was essential for the dollar rally to continue," said Sumino Kamei, senior currency analyst at the Bank of Tokyo-Mitsubishi UFJ in Tokyo.

 

Recent easing steps by the Bank of Japan, the country's trading deficit amid surging demand for fossil fuels in the wake of the nuclear crisis have also helped the dollar rise a staggering 9 percent on the yen since the beginning of February.

 

"We are getting to a point where people will be looking for a trigger to take profits on this rise. There aren't many scheduled events that could prop it further, while risks -- most notably elevated oil prices -- loom large."

But investors said that a pullback in the dollar would likely be limited to the mid-82 area with the previous high of 82.65 lending support. Longer term, they were mostly bullish, with Barclays Capital raising its three month target to 88 yen.

 

The U.S. unit gained also against all other currencies, with its index hitting a 7-1/2-week high of 80.42 <.DXY>.

 

Hot on the heels of Friday's encouraging U.S. jobs report, a strong 1.1 percent rise in retail sales provided fresh evidence of improvement in the world's largest economy.

 

Acknowledging this trend, the Fed slightly upgraded its outlook, expecting "moderate" growth over coming quarters and a gradual decline in the unemployment rate, although it said the jobless rate "remains elevated.

 

"There is nothing for risky assets not to love about the Fed stance; either the economic outlook will continue to improve, or the Fed will take action to inject more liquidity into markets," said Julia Coronado, BNP Paribas chief economist for North America.

 

Mar 14, 2012 07:03

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Australian Dollar Falls Without Regard to Rising Inflation Expectation

 

The Australian Dollar dismissed rising expectations for consumer inflation as overall risk appetite continued to deteriorate, pushing the currency downward.

 

THE TAKEAWAY: Aussie Consumer Inflation Expectation Rose to 2.7% from 2.5% > Market Risk Aversion in the Face of Slowing Chinese Growth Poor for Aussie Dollar > AUDUSD Continued to Fall

 

 

 

 

 

Data released by the Melbourne Institute of Applied Economic and Social Research showed that Australian inflation expectations rose this month. The country’s consumers expected price levels to rise to 2.7 percent for the month of March, up from 2.5 percent during February.

 

The Australian Dollar has been trending downwards this month as overarching risk appetite has moved traders away from the Aussie. Recent negative growth estimates in China have tempered appetites for the currency. China is Australia’s largest consumer of mining and construction exports, and slower Chinese economic growth equates to a decline in demand for Aussie goods. Contracting demand for Australian exports would hurt to country’s manufacturing and mining sectors, and the Australian dollar would suffer as a result.

 

The inflation estimates have hovered in between the 2.4 percent to 2.8 percent range for the last five months, and March’s figure certainly continues the pattern. Markets appeared unaffected by the data, and the AUDUSD continued its slow trend downward.

 

Mar 15, 2012 01:24

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LME copper slips on firmer dollar, Shanghai rises

 

SINGAPORE (Reuters) - London copper futures edged lower on Friday, hurt by a firmer dollar, after rising more than 1 percent in the previous session on a tighter global supply outlook.

 

FUNDAMENTALS

* Three-month copper on the London Metal Exchange dropped $22 to $8,543 a tonne by 0119 GMT. But the metal is up marginally for the week so far, its third gain in four weeks.

 

* The most-traded June copper contract on the Shanghai Futures Exchange gained 0.7 percent to 60,850 yuan ($9,600) a tonne, chasing Thursday's gains in London.

 

* Freeport McMoran Copper & Gold Inc said first-quarter copper output would be down by about 10 percent because of labor-related problems at its Grasberg mine in Indonesia which will not return to full production until the second quarter.

 

* LME copper has risen more than 12 percent so far this year, benefitting, like other risk assets, from increased liquidity across markets as central banks around the world ease credit curbs to spur economic growth.

 

* Copper's price gain comes despite a shaky outlook for demand from top consumer China. Premier Wen Jiabao said on Wednesday China must embrace slower growth and bolder political reform to keep its economy from faltering, and also dampened hopes for any near-term relaxation of curbs in the property sector.

 

* Aurubis , Europe's biggest copper producer, is confident of strong copper demand from China this year despite forecasts of slower growth in the country.

 

* RUSAL Plc <0486.HK>, the world's largest aluminum company, is expected to pick a new chairman on Friday to steady a ship still rocking from the parting shot fired by Viktor Vekselberg, who said it was in "deep crisis".

 

* For the top stories in metals and other news, click , or

MARKETS NEWS

 

* The dollar rose against a basket of currencies <.DXY>, with the greenback's upward momentum seen intact amid a brightening U.S. outlook.

* The S&P 500 closed above 1,400 for the first time since the 2008 financial crisis on Thursday as stocks resumed the upward climb that has produced a steady stream of gains this year. <.N>

 

* U.S. crude futures rose on Friday, after dropping for two straight sessions, as robust economic data in the world's top oil consumer countered news that the United States and Britain were preparing a release from strategic oil stocks this year.

 

Mar 16, 2012 02:56

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OctaFX.Com - EUR/USD Classical Technical Report

 

 

 

 

 

 

 

 

 

 

 

EUR/USD: The market has been well supported on the latest dip towards key support at 1.2975 and the subsequent bounce back above 1.3100 delays bearish prospects and opens the door for additional consolidation over the coming days. The key levels to watch above and below come in by 1.3300 and 1.2975 respectively and a break and close above or below will be required for clearer directional bias. In the interim we remain sidelined.

 

 

Mar 19 2012 ,

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[OctaFX_Farid]

 

Euro, shares dip as growth worries revive

 

LONDON (Reuters) -The euro dipped to just below recent highs and European stocks fell on Tuesday amid concern about the scale of China's growth slowdown, while investors eyed crucial talks between Italy's government and unions on labor reforms.

Prime Minister Mario Monti's meeting with union bosses could make or break his brief tenure as head of a government struggling to pay down massive debts and find ways to revive an economy in which factory output has fallen sharply.

Ahead of the meeting, equity investors were trimming positions after shares rose to eight-month peaks on signs of a recovery in the giant U.S. economy and after big improvements in corporate balance sheets.

"Strategically, I am bullish on equities," Neil Dwane, chief investment officer for Europe at Allianz Global Investors/RCM, said.

"The thing is that they have rallied quite a long way, so it's harder to be as confident when you think: have we solved any of the economic issues?"

The FTSE Eurofirst 300 <.FTEU3> was down 0.5 percent at 1,099.71 points after snapping a four-session winning streak on Monday that saw it touch levels last seen in July.

Traders' growing nervousness about the outlook could be seen in the Euro STOXX 50 volatility index <.V2TX>, a key gauge of sentiment, which jumped 4.3 percent after three days of falls. The higher the volatility index, the lower the investor appetite to take on more risk.

RECOVERY HOPES IN THE BALANCE

Meanwhile U.S. Treasury yields, which have risen sharply in the past week on the improved U.S. economic outlook and reduced expectations of further monetary easing in the near term, also dipped on Tuesday but the fall was expected to be short lived.

"I think that movement (in U.S. Treasury yields)...is definitely a confirmation that the market is switching much more in terms of its mentality towards a recovery mentality," Graham Neilson, chief investment strategist at Cairn Capital said.

"I think yields are going to go higher from here as well."

The 10-year U.S. Treasury yield, which moves inversely to price, stood at 2.35 percent after rising as high as 2.392 percent on Monday, its highest level since late October.

 

German government bond yields followed Treasuries and dipped slightly as investors were lured back into the market after 10-year yields broke last week above 2 percent, the upper end of the year's trading range to that point.

Among the weaker euro zone economies, Italian bonds rose on wariness about the labor talks, and 10-year yields were last up 4.2 bps at 4.88 percent.

The equivalent Spanish yield was up 4 bps at 5.21 percent after ratings agency Moody's said Spain's fiscal outlook remained challenging despite recently softened deficit targets.

Commodities were broadly weaker, with base and precious metals both edging down after the worries about a sharp slowdown in China grew when BHP Billiton , the world's biggest miner, noted signs of "flattening" iron ore demand there.

Earlier this month China cut its 2012 growth target to an eight-year low of 7.5 percent, fuelling caution about demand for natural resources and heightening fears the euro zone crisis would hit global growth.

 

Mar 20, 2012

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Dollar gains broadly as growth currencies slip

 

 

LONDON (Reuters) -The dollar index climbed against a basket of currencies on Tuesday, helped by higher U.S. Treasury yields, while growth-linked currencies came under pressure from concerns China's demand for raw materials could be slowing.

Global miner BHP Billiton said it saw signs growth in iron ore demand was flattening in China, Australia's single biggest export market, pushing the Australian dollar more than 1 percent lower on the day to $1.0488.

"The (U.S.) dollar looks better bid against the euro and the yen. Interest rate expectations do seem to be gaining a bit more traction on the currency," said Daragh Maher, currency strategist at HSBC.

"But it strikes me the move in the Australian dollar may be a bit overdone. I would think it's a good idea to buy Aussie on these dips."

The dollar index <.DXY> rose 0.3 percent to 79.692, recovering from a one-week low hit the previous day. Analysts said much of the greenback's recent surge was due to improving U.S. data and a modest brightening of the U.S. Federal Reserve's economic outlook in its latest policy statement.

That spurred a rise in U.S. Treasury yields as investors scaled back expectations of further quantitative easing in the near term, and prompted some speculation the Fed may tighten monetary policy earlier than it had pledged.

The 10-year U.S. Treasury yield rose to as high as 2.392 percent on Monday, its highest level since late October. The two-year Treasury yield was last trading at roughly 0.367 percent, in sight of last week's peak of 0.414 percent which was the highest since late July.

But some strategists said the move in the greenback and U.S. Treasury yields could soon run out of steam.

"The recent dollar rally has been based on unrealistic expectations for U.S. rates and I don't think it is well founded," said Adam Cole, global head of FX strategy at RBC Capital Markets.

"The market is priced for rate hikes much earlier than the FOMC (Federal Open Market Committee) has indicated."

ITALY TALKS EYED

The euro eased 0.3 percent to $1.3196, slipping away from a one-week high near $1.3266 hit on Monday and below support from the 100-day moving average around $1.3199.

Some investors were cautious about pushing the shared currency higher ahead of talks between Italy's government and unions on reforms seen as key to turning around the euro zone's third largest economy and paying down massive debts.

There have been some signs of stabilization in the euro zone sovereign bond market this year, with the 10-year Italian government bond yield spread over German Bunds standing at 286 basis points on Tuesday, down from 535 basis points on January 9.

But concerns remained that Portugal may eventually need to restructure its debt like Greece, prompting another flare up in the crisis, while Italy is potentially a far bigger worry.

Moves in the dollar versus the yen picked up in European trade after a quiet Asian session when Japanese financial markets were closed for a national holiday.

 

 

Mar 20, 2012 09:17

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Copper falls on China demand concerns, dollar strength

 

LONDON (Reuters) - Copper fell on Tuesday as the dollar strengthened and equities markets retreated and after BHP Billiton , the world's biggest miner, raised concerns about the possibility of a sharp slowdown in iron ore demand from top metals consumer China.

Three-month copper on the London Metal Exchange was $8,408 per ton in official rings from a close of $8,570 on Monday. It was down more than 2 percent after U.S. housing data, before recouping some of those losses.

U.S. housing starts fell last month, but permits for future construction jumped to their highest level since October 2008, according to a government report that showed steady improvement in the housing market.

"There is a big difference between permits being awarded, and building taking place, but the housing data should be notionally positive," Citi analyst David Wilson said.

"There are still concerns that China is slowing and not consuming as much copper, that's definitely been an issue," he added.

The metal, used extensively in construction, hit its highest in two weeks at $8,690 on Friday and is up more than 12 percent this year, but has struggled to breach that level.

"It's choppy within a range. It's partly dollar strength, but also I suspect a rather more cautious commentary from BHP," BNP Paribas analyst Stephen Briggs said.

"There is a slowing trend in China...moving increasingly away from the growth model that they have had, which may be a little less metals intensive. This is not new, but recognition by big mining companies would have had an effect."

Australian iron ore miners, key beneficiaries of China's modern-day industrial revolution, signaled on Tuesday demand growth was finally slowing in response to Beijing's moves to cool its economy.

BHP Billiton said it was seeing signs of "flattening" iron ore demand from China, though for now it was pushing ahead with ambitious plans to expand production.

Official Chinese data last week showed home prices fell in February from January for a fifth consecutive month, and the government reaffirmed its commitment to measures to control the property market to cool speculation.

China accounts for 40 percent of global refined copper demand. Copper is used mostly in building construction and power.

Demand in the world's biggest copper consumer has not picked up after the Lunar New Year holiday in late January, prompting importers to delay some term shipments, traders have said.

The dollar rose against a basket of currencies, supported by safe-haven demand as risk sentiment soured, partly because of concerns that a slowdown in China could hit global growth. <.DXY>

Gains in the dollar can pressure dollar-denominated commodities by making them more expensive for consumers using other currencies.

European stocks fell on the scale of China's growth slowdown, and investors eyed talks between Italy's government and unions on reforms seen key to turning around the euro zone's third-largest economy.

Nickel, used in steelmaking, was $18,825 in rings from $19,050 at Monday's close. It is the worst performing base metal in the complex so far this year, and is up around 1.6 percent, compared with copper's 12 percent rise.

"Exchange inventories have risen over 8 percent and Chinese premiums remain weak," RBC Base Metals said about nickel in a research note. "That said, a move below $18,000 will begin to see a supply-side response."

 

Zinc, used to galvanize steel, was untraded in rings, but bid at $2,041 from $2,079.

Tin, also untraded, was bid at $23,200 from $23,595, lead was bid at $2,062 from $2,108. Aluminum was $2,239 in rings from $2,275.

 

LME aluminum stocks are near record highs at more than 5 million ton, but most of the metal is locked up in financing deals and not available for sale.

The large stockpile, and the economic slowdown in Europe, has hurt aluminum prices, spurring global producers such as Rio Tinto , Alcoa and Norsk Hydro , to cut production.

Metal Prices at 1337 GMT Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T

Metal Last Change Pct Move End 2010 Ytd Pct

move

COMEX Cu 382.80 -7.90 -2.02 444.70 -13.92

LME Alum 2243.00 -32.00 -1.41 2470.00 -9.19

LME Cu 8400.00 -170.00 -1.98 9600.00 -12.50

LME Lead 2057.00 -51.00 -2.42 2550.00 -19.33

LME Nickel 18806.00 -244.00 -1.28 24750.00 -24.02

LME Tin 23251.00 -344.00 -1.46 26900.00 -13.57

LME Zinc 2036.25 -42.75 -2.06 2454.00 -17.02

SHFE Alu 16265.00 -10.00 -0.06 16840.00 -3.41

SHFE Cu* 60350.00 50.00 +0.08 71850.00 -16.01

SHFE Zin 15885.00 10.00 +0.06 19475.00 -18.43 ** Benchmark month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07

 

 

 

Mar 20, 2012 10:13

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China growth worries weigh on stocks, boost Treasuries

 

NEW YORK (Reuters) - Renewed concerns about China's economic growth weighed on global stocks on Tuesday, giving a boost to safe-haven U.S. government bonds and the dollar.

 

U.S. crude oil prices dropped nearly 2 percent as increased supply from Saudi Arabia and a return to pre-war exports from Libya eased pressure on the market.

Concerns about the scale of China's economic slowdown resurfaced as BHP Billiton , the world's largest miner, said it was seeing signs of "flattening" iron ore demand from the country.

 

U.S. stock indexes traded more than half a percentage point lower after a rally on Monday drove the S&P 500 to a level less than 10 percent shy of its 2007 all-time high.

"It seems like a market that probably just needs to take a rest, but I wouldn't be surprised (if) we rally into the day," said Jack Ablin, chief investment officer at Harris Private Bank in Chicago.

 

"It is now a focus back on the fundamentals on the economy and those news items aren't quite as daunting. It's really just fine tuning."

The Dow Jones industrial average (DJI:DJI) was down 66.41 points, or 0.50 percent, at 13,172.72. The Standard & Poor's 500 Index <.SPX> was down 6.54 points, or 0.46 percent, at 1,403.21. The Nasdaq Composite Index (NAS:COMP) was down 20.25 points, or 0.66 percent, at 3,058.07.

The S&P 500 has gained more than 11 percent so far this year as a steady flow of strong U.S. economic data encouraged stock investors. Tuesday's U.S. housing data was mixed, however, with housing starts falling in February, but permits for future construction jumping to the highest level since October 2008.

World stocks measured by the MSCI All-Country World Index <.MIWD00000PUS> dropped 0.76 percent, after closing on Monday near levels last seen in late July.

In Europe, the FTSEurofirst 300 index <.FTEU3> fell 0.9 percent as autos and miners were hit by worries of a Chinese economic slowdown.

 

"Stocks are being driven down on reports of major discounts amongst the luxury good car brands in China and comments about weak iron ore demand," said Richard Batty, strategist at Standard Life Investments, with $248.37 billion of assets under management.

 

The dollar rose 0.1 percent against a basket of major trading-partner currencies, according to the U.S. Dollar Index <.DXY>, as Chinese economic worries weighed on growth-related currencies.

The euro, however, was stable against the greenback at $1.3233.

U.S. crude oil prices dropped 1.6 percent to $106.78 a barrel, also pressured by the strength of the dollar, which makes the commodity more expensive to non-U.S. investors.

 

Benchmark 10-year Treasury notes were trading 1/32 higher in price to yield 2.37 percent, down from 2.38 percent late Monday, while 30-year bonds gained 11/32 to yield 3.46 percent, down from 3.48 percent. hitting a 2-1/2 week high of 79.739.

 

Mar 20, 2012 10:42

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Dollar rises as growth-linked currencies slip

 

NEW YORK (Reuters) - The dollar gained against the euro and yen in quiet trade on Tuesday, while the Australian dollar tumbled on central bank hints of more room to ease and fears about China's growth.

Global miner BHP Billiton said it saw signs that growth in iron ore demand was flattening in China, Australia's single biggest export market, pushing the Australian dollar down more than 1 percent.

 

The Aussie was also undermined by minutes from Australia's central bank, which were deemed as dovish as they suggested that the bank has ample room to ease policy should conditions worsen.

 

Against the U.S. dollar, the Australian dollar slid to $1.0492, down 1.1 percent for the day, while the New Zealand dollar slumped 1.3 percent to 0.8158.

Key technical support for the Australian dollar lies at the 200-day simple moving average of $1.0401 while the 100-day SMA lies at $1.0370. Resistance is seen near $1.064.

 

"In my opinion, there has been a bit of an overreaction to the BHP Billiton news because while it painted a bearish picture, it was not all that bad," said Brad Bechtel, managing director at Faros Trading in Stamford, Connecticut. "It nevertheless put the Australian dollar on its back foot."

 

Most currency activity was in the crosses, with investors covering short positions in the euro while selling the Aussie, Kiwi and Canadian dollar, he said.

"Euro/dollar is sidelined today and those trying to sell into rallies should continue to be frustrated as the currency pair remains stuck in a range," he said. "Having said that, news flow out of Europe should become more neutral-to-positive and that could take the euro higher."

 

A recent surge in U.S. Treasury yields is likely behind the sudden breakdown in the correlation between the Australia dollar and U.S. dollar and the S&P 500 stock index, according to David Rodriguez, quantitative strategist at DailyFX in New York.

The currency pair is trading near the middle of its year-to-date range while the S&P 500 index had recent hit its highest since the global financial crisis in 2008.

"The clear disconnect suggests the correlation may have broken down," Rodriguez said. ""Yet the Aussie dollar continues to offer a substantial yield advantage to its U.S. namesake, and this may ultimately be the most important driver of AUDUSD moves for the foreseeable future."

 

Mar 20, 2012 10:42

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Euro gains versus yen, steady against dollar

 

 

 

NEW YORK (Reuters) - The euro reached a near five-month high versus the yen and held steady against the dollar on Wednesday as the Greek bailout appeared to progress, prompting some investors to pare back bets against the single currency.

 

Many analysts said the approval had been seen as a formality but signs the Greek bailout was on track boosted the euro zone common currency.

Further gains could be capped if a stronger dollar trend driven by higher Treasury yields reasserts itself. The euro could run out of steam above $1.33, especially if euro zone purchasing managers surveys on Thursday come in weak.

The euro rose to an almost two-week high of $1.3284, according to Reuters data, after Greece's lawmakers approved the country's second bailout deal, as expected. It was last little changed at $1.3224.

"Greek parliamentary support for the new 130-billion-euro bailout package is encouraging"," said Camilla Sutton, chief currency strategist at Scotia Capital in Toronto. "Tomorrow's PMIs will be important, as recent data has pointed to some stability in several European economies and the PMI will help confirm this, which would be positive for the euro."

Technical analysts said the euro rally was likely to run out of steam around $1.33, just above the 61.8 percent retracement of its late February to mid-March fall.

 

"There has been an easing in general concerns about euro zone liquidity and the creditworthiness of euro zone banks, plus euro short positions can carry on being unwound," said Adrian Schmidt, currency strategist at Lloyds in London.

He saw potential for the euro to rise towards $1.35 against the dollar, around the top of its recent range, although short-term resistance at $1.3320 may prove too high a hurdle if Thursday's preliminary PMI data comes in weak.

Investors remained wary of the risk of another flare-up in the euro zone debt crisis. Greece got its first batch of bailout payments this week, but the Italian government looked set to clash with unions over employment law reforms.

A firmer dollar, due to fading expectations of more monetary easing by the U.S. Federal Reserve after a modest brightening of its economic outlook, may also hamper the euro.

 

Ten-year U.S. Treasury yields were last trading around 2.3393 percent, within sight of a near five-month high touched this week.

U.S. housing data, due at 10 a.m. EDT (1400 GMT), could boost the dollar if it adds to expectations that growth in the world's largest economy is picking up.

 

WEAK YEN, UK BUDGET

Rising U.S. yields and monetary easing from the Bank of Japan last month have boosted the dollar, particularly against the yen. The greenback rose 0.4 percent to 84.02 yen, just shy of an 11-month high touched last week.

During the Asian session Japanese exporters were seen selling the dollar ahead of the end of their financial year on March 31, but market players said there was good demand to buy the greenback on dips.

The euro also hit a near five-month peak of 111.43 yen, according to Reuters data, nearing resistance around the peak hit on October 31, when Japanese authorities last intervened in the market. It was last at 111.07, up 0.3 percent.

 

Mar 21, 2012 12:19

OctaFX.Com News Updates

 

 

 

[OctaFX_Farid]

 

FOREX: Pound Aiming Higher Against Euro, Yen on BOE Minutes Result

 

 

 

LONDON (Reuters) - Copper rose on Wednesday after sharp falls in the previous session as the dollar pared gains after disappointing U.S. housing data, although evidence of slower growth in China's demand for commodities restrained gains.

Three-month copper on the London Metal Exchange closed at $8,455 from a close of $8,430 on Tuesday, when it fell to its lowest since March 9 at $8,383 a tonne.

Copper has risen more than 11 percent this year, but prices have struggled to rise further since they hit the year's peaks above $8,750 early last month.

The unexpected fall in home resales in the United States, the world's largest economy, underscored the many hurdles for the broader economic recovery.

Demand from top consumer China has been slow to pick up after the Lunar New Year, raising worries that prices could retreat sharply. Imports of refined copper into China had soared to a record of 406,937 tonnes in December from a year earlier, but inflows have slowed since then.

China's inflows of refined copper rose 12 percent month-on-month in February although they were below December's record.

But China's apparent demand for refined copper slumped 12.5 percent in February as imports slowed and stockpiles held at the Shanghai Futures exchange grew, Reuters calculations based on official Chinese data showed.

"China is the most important player for the copper market as it accounts for 40 percent of global consumption. Fundamentally, it's not balanced at the moment because we don't have the drive from China," said Andrey Kryuchenkov, an analyst at VTB.

"For sustained gains for copper from here, you will need China to drive this market higher. If not, copper is likely to be stuck in its current range for a while longer."

The metal has traded in a range between around $8,200 and $8,700 since early March.

The dollar trimmed earlier gains against a basket of currencies, putting pressure on base metals. A weaker dollar makes commodities priced in the U.S. unit less expensive for holders of other currencies.

 

HIGH CHINESE INVENTORIES

High base metals inventories in China remain a key concern among market participants, even though copper and aluminum stocks at LME warehouses have been declining, Standard Chartered said in a note.

"Rising inventory levels in China suggest that the domestic market remained in surplus in the past week. Although this is negative for metals prices, a seasonal improvement in metals demand going into Q2 should support base metals prices," Standard Chartered said.

"Yet the upside should be limited by a lack of confidence and lacklustre demand in H2."

Stockpiles of the metal in Shanghai's free trade zone have been climbing, two Shanghai-based sources said, further adding to worries about demand.

Bonded stockpiles are expected to hit the 600,000-650,000 tonne mark by the end of the month, they said. This is close to record highs seen this time last year and up from 285,000-300,000 tonnes in mid-January.

In contrast, copper stocks held in LME-registered warehouses have been declining since late last year. The latest numbers showed a 2,500 tonne outflow on Tuesday, bringing inventories to their lowest levels since mid-July 2009 at 258,325 tonnes.

The global market for refined copper is seen in a 101,000 tonne deficit this year, according to a median estimate of analysts polled by Reuters. The 2011 deficit was 358,000 tonnes, in line with 2010, the International Copper Study Group (ICSG) said on Wednesday.

Lead closed at $2,044 a tonne from Tuesday's close of $2,013, and zinc at $2,020 from $2,036.

Aluminum closed at $2,209.5 a tonne from $2,245, and nickel at $18,805 from $19,050. Tin ended at $23,000 per tonne from Tuesday's close of $23,420.

 

Mar 21, 2012 12:19

OctaFX.Com News Updates

 

 

[OctaFX_Farid]

 

Japanese Yen Gains as Export Data Outperforms Forecasts

 

 

The Japanese Yen rose as the country’s exporting sector performed better than expected, weighing on the likelihood of near-term BOJ currency intervention.

 

THE TAKEAWAY: Merchandise Trade Balance rose to ¥ 32.9 Billion from -¥ 1476.9 Billion > Traders Bought Yen as the Chance for Further BOJ Inflationary Action in the FX Market Diminished > USDJPY Fell

 

 

 

Data released by the Ministry of Finance and the Customs Office showed that the merchandise trade balance in February rose to 32.9 billion Yenfrom -1476.9 billion Yen. The figure surpassed the -120 billion Yen deficit that analysts expected. Additionally, trade exports fell only 2.7 percent on the year, beating the 6.5 percent drop forecasted and improving upon the 9.3 percent decline the prior year.

 

The figures painted a rosier than expected picture of an export-dominated Japanese economy and jumped on bears who forecasted a larger drop in the country’s export sector. Though the data did not go as far as suggesting a warming exports industry, they did show the market that Japanese exporters were not faring as poorly as analysts thought. As exports performed better than expected, the likelihood declined that the Bank of Japan would infuse currency markets with more Yen anytime in the near future. As a result, traders positioned themselves closer to the Yen. In the minutes after the release, USDJPY fell from 83.440 to as low as 83.140.[/b]

 

Mar 22, 2012 00:49

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[OctaFX_Farid]

 

 

EUR/USD Classical Technical Report 03.22

 

 

 

EUR/USD: The market has been well supported on the latest dip towards key support at 1.2975 and the subsequent bounce back above 1.3100 delays bearish prospects and opens the door for additional consolidation over the coming days. The key levels to watch above and below come in by 1.3315 and 1.2975 respectively and a break and close above or below will be required for clearer directional bias. In the interim we remain sidelined.

 

Mar 22, 2012 00:49

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OctaFX is proud to offer top-notch service level to its customers. Please stay tuned for the news and updates from OctaFX!

[OctaFX_Farid]

 

 

USD Rises but Mounting Global Risks Keeps FX Pressured

 

 

 

With the U.S. dollar and the Japanese Yen being the best performing currencies this morning, it is clear that mounting risks in the financial markets has raised the level of fear. A series of negative economic reports overnight from China, the Eurozone and the U.K. was compounded by softer data from Canada. Retail sales rose 0.5 percent in January, which a marked an improvement from flat growth in December but was a major a disappointment compared to the market's 1.8 percent forecast. Excluding auto purchases, sales declined by 0.5 percent.

 

The U.S. only country that continues to print good news. Jobless claims dropped to its lowest level since February 2008. Weekly claims fell 5k to 348k after a downward revision to the prior's week report. The level of jobless claims is consistent with continued job growth in the U.S. economy and as long as claims remain below 375k on a weekly basis, there is no reason for the Fed to be overly concerned. The recovery is still "frustratingly slow" according to Bernanke but currency traders are satisfied that the U.S. economy is improving at all. U.S. leading indicators will be released later this morning and with claims falling and stocks rising, we expect another positive report.

The U.S. dollar is outperforming every major currency except for the Yen because better than expected U.S. data and risk aversion is a win win for the dollar. The string of weaker economic economic data outside of the U.S. has made America look a shining star to investors. Fed President Bullard's comment about the higher risk of inflation this year also helped to lift the greenback.

 

 

If bad news begets more bad news abroad, we could see greater demand for dollars. The Chinese government has officially come to terms with slower growth and while their economy may be able to handle it, the Australian and New Zealand economies may not. If Chinese demand pulls back more than it has already, the Reserve Bank of Australia may have to lower interest rates over the next few months and this risk has drive the Australian dollar sharply lower. At the same time, the Eurozone is suffering from weaker domestic and external demand. The sharp decline in the PMI reports flashes signs of a technical recession in the Eurozone. 48 hours ago, we penned a report talking about how the dollar can't lose because even if the U.S. recovery loses momentum, the outlook for other countries is even worse. In Europe, the rise in Italian and Spanish 10 year bond yields raises fresh concerns about the funding capacity of the Eurozone’s #3 and #4 economies. If the EUR/USD will have a very tough time recovering if European bond yields continue to rise.

 

Mar 22, 2012 00:49

OctaFX.Com News Updates

 

 

[OctaFX_Farid]

 

Australian Dollar Sold as Dovish RBA Cuts Hopes for Future Rate Hike

 

LONDON (Reuters) - World stocks hit their lowest in over a week on Thursday and Wall Street was set open in the red as manufacturing slumps in China and the euro zone fuelled global growth concerns.

The downbeat data triggered flows back into safe-haven assets that boosted German government debt, while it also sent the euro lower and left the common currency looking vulnerable to further losses.

 

The HSBC flash Purchasing Managers' Index, the earliest indicator of China's industrial activity, fell to 48.1 in March from February's four-month high of 49.6.

The euro zone's leading economies Germany and France both reported an unexpected contraction in manufacturing activity. [nL9E7J203Z], sending Markit's Composite PMI for the region down to 48.7 in March from 49.3 in February.

Anything below 50 is viewed as a contraction.

 

"When you get numbers like this out of the euro zone it definitely puts the growth outlook into question and points to a mild recession," said Niels Christensen, currency strategist at Nordea in Copenhagen.

 

"There should be a widening of rate differentials in favor of the dollar, so a lower euro/dollar will be the result".

 

MSCI's main world equity index <.MIWD00000PUS> fell 0.4 percent to its lowest in eight days after hitting its highest level since August earlier in the week.

U.S. stock index futures <.NDc1> pointed to losses of 0.5-0.6 percent at the Wall Street open.

 

Recent comments by the U.S. Federal Reserve have cut expectations of further quantitative easing, or asset buying. Previous rounds of QE had supported risky assets.

 

"Everyone was so focused on Greece and the debt crisis is still on everyone's mind, but attention is focusing back on to fundamentals," said DZ Bank rate strategist Michael Leister.

 

"The PMIs alone don't make for such a big story but they fit into the bigger picture risk-off theme that we're seeing."

 

European stocks <.FTEU3> weakened for a fourth straight session, heading for their longest negative run in four months. They fell 1 percent to 10-day lows and emerging stocks <.MSCIEF> fell 0.4 percent to two-week lows.

The euro dropped 0.4 percent against the dollar to $1.3162 and 1 percent against the yen to 109.

The dollar lost 0.7 percent to 82.79 yen although it gained 0.2 percent against a basket of major currencies <.DXY>.

Brent crude oil was down 0.5 percent at $123.55 a barrel.

 

 

 

Mar 06, 2012 04:09

OctaFX.Com News Updates

 

 

[OctaFX_Farid]

 

Stocks slip on growth worries, bonds rise

 

 

 

NEW YORK (Reuters) - World stocks drifted lower on Friday, pulled down by a decline in U.S. home sales as concerns about global growth cooled enthusiasm.

Commodity prices ticked higher on the belief the prior day's sell-off in risk assets was overdone.

 

The Commerce Department said sales of new single-family homes slipped 1.6 percent in February to a seasonally adjusted 313,000-unit annual rate. January's sales pace was revised down to 318,000 units from the previously reported 321,000 units.

U.S. government debt prices rose for the fourth day in a row, reversing more of last week's losses, as concerns about the economic picture in China and Europe competed with improved U.S. employment for investors' attention.

The benchmark 10-year U.S. Treasury note was up 18/32 in price to yield 2.21 percent.

 

Wall Street opened mixed, but then fell on the U.S. home sales. European and global stock indices were lower.

The belief that equity markets have gained to much in too short a time has dampened investor sentiment. The benchmark S&P 500, on track for its first weekly decline in six weeks, has gained more than 10 percent so far this year and almost 30 percent since its October lows.

 

"We are all looking for a correction in the markets and that is what we are getting at the moment," said Frank Lesh, a futures analyst and broker at FuturePath Trading LLC in Chicago.

"It's not a deep and serious correction, but we were a bit overbought and we could just move sideways to slightly lower to correct that, and it appears that is what we are doing."

The Dow Jones industrial average (DJI:DJI) was down 11.24 points, or 0.09 percent, at 13,034.90. The Standard & Poor's 500 Index (MXP:SPX) was down 1.68 points, or 0.12 percent, at 1,391.10. The Nasdaq Composite Index (NAS:COMP) was down 13.33 points, or 0.44 percent, at 3,049.99.

 

The MSCI world equity index <.MIWD00000PUS> was off 0.1 percent, while a measure of top European stocks <.FTEU3> lost 0.8 percent and emerging markets <.MSCIEF> fell 0.5 percent.

The dollar has been supported by an improving U.S. economic landscape that contrasts with the euro zone, where most economies are either teetering on the brink of or in recession.

The euro was up 0.37 percent at $1.3245, and the U.S. Dollar Index <.DXY> down 0.36 percent at 79.448.

The relationship between risk appetite and the dollar has become more complicated, according to Chris Fernandes, vice president, senior foreign exchange adviser for the capital markets division at Bank of the West in San Ramon, California.

 

"Whereas in the past the dollar would tend to fall as risk appetite was rising, the dollar is now benefiting from pro-risk developments, as U.S. economic data has generally bested expectations recently," he said.

Brent oil was up $1.84 at $124.98 a barrel, underpinned by worries that military conflict with Iran will hit supplies and create an oil price spike.

U.S. light sweet crude oil rose $1.30 to $106.65 a barrel. The Reuters/Jefferies CRB Index <.CRB> of leading commodity prices was up 0.6 percent at 314.04.

 

Mar 23, 2012 10:29

OctaFX.Com News Updates

 

 

 

[OctaFX_Farid]

 

Euro hits 3-week high vs dollar; Aussie steadies

 

 

 

NEW YORK (Reuters) -NEW YORK (Reuters) - The euro rose to a three-week high against the dollar on Friday after three straight days of losses while the Australian dollar stabilized from its recent plunge as concerns over a slowdown in China and the euro zone eased slightly.

 

Despite the dollar's weakness it remains supported by an improving economic landscape in the United States that contrasts starkly with other countries across the Atlantic that are teetering on the brink of recession or actually in one.

New U.S. home sales data on Friday backed the view the housing sector is on a stable path to recovery.

"This could probably be position-squaring in euro/dollar after the selling we had seen the last few days," said Brian Kim, currency strategist, at Royal Bank of Scotland in Stamford, Connecticut.

 

"There has really been no bad news out of Europe overnight, so people I think are just preparing for next week's European finance ministers' meeting where they will discuss increasing the euro zone bailout fund."

Overall, worries about faltering global growth in the euro zone and China, which had hit stocks and riskier currencies a day earlier, eased off slightly, tempering demand for safer bets such as the dollar and the yen.

The relationship between risk appetite and the dollar has become more complicated, according to Chris Fernandes, vice president, senior foreign exchange advisor for the capital markets division, at Bank of the West in San Ramon, California.

"Whereas in the past the dollar would tend to fall as risk appetite was rising, the dollar is now benefiting from pro-risk developments, as U.S. economic data has generally bested expectations recently," he said.

The recent dollar rally, however, has been tempered by the prospect of the Federal Reserve launching a third round of quantitative easing, which is still on +the table, said Fernandes, who helps oversee almost $10 billion in assets under management.

If the Fed unleashes a third round of quantitative easing, that would be negative for the dollar, as it is tantamount to printing money and dilutes its value.

The greenback has gained 7 percent against the yen since the start of this year. The euro has jumped 9.6 percent versus the Japanese currency, with gains picking up after the Bank of Japan surprisingly eased policy by announcing more quantitative easing in February.

The euro last traded at $1.3264, up 0.5 percent, retreating from a three-week high of $1.3293 hit earlier in the global session, but up from Thursday's low of $1.3133. It is on track for a second consecutive weekly gain.

A key level of resistance for the currency pair is $1.33 and a break of that level would likely move it up towards $1.3500.

"I believe we may be in for a bit of range-trading right now in the major currency pairs, with the EUR/USD moving between $1.3000-1.3500, and the USD/JPY having a bit more upside, looking at 82.00-85.00," said Bank of the West's Fernandes.

The greenback was down 0.2 percent at 82.34 yen.

 

 

Euro zone finance ministers are moving closer to agreeing a combined rescue fund of around 700 billion euros ($924 billion) in Copenhagen next week and anything higher would probably be too ambitious, euro zone diplomats said on Friday.

A larger euro zone rescue fund would go a long way toward reassuring markets a viable firewall is in place should Portugal, Italy or Spain continue to struggle.

"I am still favoring a stronger EUR, but we may not see this come to fruition until the second half of this year," said Bank of the West's Fernandes.

The Australian dollar, meanwhile, was up 0.6 percent at US$1.0454 after hitting a two-month low of US$1.0336 the previous session.

 

Mar 23, 2012 11:49

OctaFX.Com News Updates

 

 

 

[OctaFX_Farid]

 

 

Euro zone seeks middle ground on rescue fund size

 

 

BRUSSELS (Reuters) - Euro zone finance ministers are moving closer to agreeing a combined rescue fund of around 700 billion euros ($924 billion) in Copenhagen next week and anything higher would probably be too ambitious, euro zone diplomats said on Friday.

The EU's top economic official, Olli Rehn, is pushing for a big fund capable of bailing out indebted euro zone countries such as Italy and Spain, should they be cut off from the markets, despite resistance in Germany, the bloc's paymaster.

So far, Germany has refused to countenance any combination of the various rescue funds.

In a final push to press Berlin and others to go further, the European Commission circulated a document to member states this week in Brussels, proposing an increase to as much as 940 billion euros.

But three diplomats said that was unrealistic, as the European Central Bank has already injected 1 trillion euros in stimulus to banks, and EU governments have committed to tough economic reform and fiscal discipline to calm financial markets.

"Officials are moving towards the middle ground of giving the combined fund a lending capacity of 700 billion," said one euro zone diplomat who had seen the Commission report that was also obtained by Reuters.

Finance ministers and central bankers will discuss the size of a bailout firewall in Copenhagen next Friday. That would likely be made up of the European Financial Stability Facility (EFSF) that had been due to be wound up next year, and the European Stability Mechanism (ESM) permanent fund that was set to replace it.

The 440 billion euro EFSF and the 500 billion euro ESM now have a combined lending ceiling of 500 billion euros, which means that in the 12 months from July, when they will co-exist, they would not be able to lend beyond that limit.

Last week, senior euro zone officials told Reuters that the 17-nation currency area is likely to agree on a combined fund of almost 700 billion euros in a trade-off between German opposition to more funds and the need to reassure investors.

"The signals we are getting is that Germans are going to come on board," said another diplomat.

 

WHAT BERLIN WANTS

Under the Commission's central proposal, the two funds would be allowed to add up to 940 billion euros, transferring the EFSF's remaining firepower into the ESM.

That means the lending capacity of the ESM would be 740 billion euros, taking out existing emergency loans to Portugal, Greece and Ireland.

"The markets would be most likely to consider the new lending capacity sufficient and the brunt of the stabilization effort would no longer fall on the ECB," the report said.

The Commission hopes that would help motivate other major global powers such as the United States and China to give more funds to the International Monetary Fund to deal with any further fallout from the debt crisis.

Two other proposals sketched out by the EU's executive include one that would allow the EFSF and ESM to operate independently of one another until the EFSF is wound down next year. That would also equate to a joint-lending capacity of 740 billion euros but only until the EFSF is closed.

A third alternative would be to disband the EFSF ahead of 2013, making the ESM responsible for all lending. This model would see total lending capacity at 500 billion euros.

"The question is what Germany might want in return to agreeing to a bigger firewall, be it more austerity from member states, or a German in one of the top posts soon to be vacant in the EU," said a third diplomat.

European governments are jostling for four coveted jobs, including the post of coordinating policy between euro zone finance ministers, known as the president of the Eurogroup.

Germany has put forward its finance minister, Wolfgang Schaeuble, for the influential post, sources told Reuters this month, although that move may also be a negotiating ploy.

 

Mar 22, 2012 00:49

OctaFX.Com News Updates

 

 

[OctaFX_Farid]

 

Euro up versus dollar, yen as Bernanke fans QE hopes

 

 

 

NEW YORK (Reuters) - The euro advanced against the dollar and the yen on Monday as weaker-than-expected U.S. data and Federal Reserve Chairman Ben Bernanke's cautious comments on the job market spurred hopes for more easing ahead, boosting riskier assets.

 

The single currency hit a better than three-week high against the greenback and jumped more than 1 percent against the yen.

Bernanke's warning that the U.S. economy needs to grow faster to get the unemployment rate down boosted hopes early in the session that the bank could yet conduct another round of quantitative easing.

Disappointing home sales data reinforced that outlook later on Monday, with contracts to purchase previously owned U.S. homes unexpectedly falling in February.

 

"All this left the market with the nagging thought that the Fed is not quite done with economic stimulus," said Boris Schlossberg, director of FX Research at GFT in Jersey City, New Jersey. "I think they have not in any way, shape or form eliminated that possibility."

News from Europe also helped the single currency, with German Chancellor Angela Merkel giving veiled approval to an expected increase in the region's financial firewall this week, with finance ministers meeting in Copenhagen on March 30-31.

The euro advanced 0.41 percent to $1.3325 on Monday and touched its highest since March 1. Against the yen the single currency jumped as high as 110.54 yen before more recently trading at 110.37 yen, up 1.01 percent.

The dollar also slid against the Swiss franc, off 0.39 percent to 0.9042 francs.

Still, analysts said the region's debt crisis is far from over. A number of events this week could help clarify how well policymakers are managing those problems, including bond auctions in Italy and Spain's budget on Friday. Italy is seeking to raise up to 7.5 billion euros amid renewed pressure on peripheral euro zone debt.

Worries are also growing about Spain after a government setback in regional elections, making Prime Minister Mariano Rajoy's task of pushing through harsh spending cuts more difficult.

"Really we've made a big stride but we haven't actually solved the problems" in the euro zone, said Camilla Sutton, chief currency strategist at Scotia Capital. The euro could see recurring bouts of selling through the year as those worries persist, she added.

 

DOLLAR FIRMER AGAINST YEN

The dollar advanced against the Japanese currency, gaining 0.62 percent to 82.82 yen.

Traders said they would prefer to buy the dollar and sell the yen, with repatriation inflows ahead of the Japanese fiscal year-end on March 31 unlikely to change the bearish sentiment toward the Japanese currency over the medium term.

"We are expecting the dollar/yen pair to trade in a 80-85 yen range with a risk of an upside break. A lot will depend on whether the economies outside the U.S. also pick up," said Paul Robson, currency strategist at RBS Global Banking.

"As long as the U.S. economy shows signs of outperforming the others, the dollar would be supported."

The growth-linked Australian dollar was up 0.64 percent at $1.0525 after a fall last week.

Mar 22, 2012 00:49

OctaFX.Com News Updates

 

OctaFX is proud to offer top-notch service level to its customers. Please stay tuned for the news and updates from OctaFX!

[OctaFX_Farid]

 

Dollar falls against euro after Bernanke commentsDollar falls against euro after Bernanke says US job market is still weak

 

 

 

NEW YORK (AP) -- The dollar fell sharply against the euro Monday after Federal Reserve Chairman Ben Bernanke said that the U.S. job market is still weak despite recent signs that it is improving.

 

Traders interpreted Bernanke's comments to mean that the Fed will keep interest rates near zero. Lower interest rates tend to weigh on a currency by reducing the returns investors get from holding it.

 

Bernanke's comments were made during a speech at the National Association for Business Economics.

 

The euro rose to $1.3333 in afternoon trading from $1.3263 late Friday.

The central bank has kept interest rates near zero since cutting them during the financial crisis in December 2008. The Fed keeps rates low in order to help the economy recover.

 

Despite improvements in the job market, Bernanke said that he doesn't expect the unemployment rate to keep falling. Employers added an average of 245,000 jobs a month from December through February. And the unemployment rate was at 8.3 percent in February, down from 9 percent during the same month a year ago.

In other trading, the British pound rose to $1.5926 from $1.5871. The dollar fell to 0.9034 Swiss franc from 0.9086 Swiss franc and to 99.22 Canadian cents from 99.85 Canadian cents.

The dollar rose to 82.77 Japanese yen from 82.49 yen.

 

Mar 26, 2012 15:49

OctaFX.Com News Updates

 

 

 

[OctaFX_Farid]

 

Euro gains versus dollar, yen; Bernanke triggers new quantitative easing talk

 

 

 

NEW YORK (Reuters) - The euro advanced against the dollar and yen for a second straight day on Monday as weaker-than-expected U.S. data and Federal Reserve Chairman Ben Bernanke's cautious comments on the job market spurred expectations for more policy easing.

 

The single currency hit a better than three-week high against the greenback and jumped more than 1 percent against the yen. Still, analysts said the euro zone's debt crisis was far from over and the currency could come under pressure this week.

Bernanke's warning that the U.S. economy needs to grow faster to get unemployment down led investors to take on more risk on hopes the central bank could conduct another round of quantitative easing.

 

Disappointing home sales data reinforced that outlook later on Monday, with contracts to purchase previously owned U.S. homes unexpectedly falling in February.

"All this left the market with the nagging thought that the Fed is not quite done with economic stimulus," said Boris Schlossberg, director of FX Research at GFT in Jersey City, New Jersey. "I think they have not in any way, shape or form eliminated that possibility."

 

News from Europe also helped the single currency, with German Chancellor Angela Merkel giving veiled approval to an expected increase in the region's financial firewall this week, with finance ministers meeting in Copenhagen on March 30-31.

The euro advanced 0.5 percent to $1.3331 on Monday and touched its highest since March 1. Against the yen the single currency jumped as high as 110.54 yen before more recently trading at 110.44 yen, up 1.1 percent.

The dollar also slid against the Swiss franc, off 0.5 percent to 0.9035 francs. The dollar's session trough against the Swiss franc was the lowest since March 2, according to Reuters data

A number of events this week could help clarify how well policymakers are managing problems in the euro zone. They include bond auctions in Italy and Spain's budget on Friday. Italy hopes to raise up to 7.5 billion euros amid renewed pressure on peripheral euro zone debt.

Worries are also growing about Spain after a government setback in regional elections, making Prime Minister Mariano Rajoy's task of pushing through harsh spending cuts more difficult.

 

"Really we've made a big stride but we haven't actually solved the problems" in the euro zone, said Camilla Sutton, chief currency strategist at Scotia Capital. The euro could see recurring bouts of selling through the year as those worries persist, she added.

 

DOLLAR FIRMER AGAINST YEN

The dollar advanced against the Japanese currency, gaining 0.6 percent to 82.81 yen.

Traders said they would prefer to buy the dollar and sell the yen, with repatriation inflows ahead of the Japanese fiscal year-end on March 31 unlikely to change the bearish sentiment toward the Japanese currency over the medium term.

"We are expecting the dollar/yen pair to trade in a 80-85 yen range with a risk of an upside break. A lot will depend on whether the economies outside the U.S. also pick up," said Paul Robson, currency strategist at RBS Global Banking.

"As long as the U.S. economy shows signs of outperforming the others, the dollar would be supported."

The growth-linked Australian dollar was up 0.5 percent at $1.0514, recouping some of last week's 1.2 percent decline.

 

Mar 26, 2012 18:35

OctaFX.Com News Updates

 

 

[OctaFX_Farid]

 

OECD pushes for $1.3 trillion eurozone crisis fund

OECD head urges euro countries to boost crisis fund to $1.3 trillion-plus to aid growth

 

 

 

BRUSSELS (AP) -- The 17 countries that use the euro need to build a €1 trillion ($1.3 trillion) firewall to help the struggling currency union return to growth, the head of the Organization for Economic Cooperation and Development said Tuesday.

Angel Gurria, the secretary-general of the Paris-based international development body, said existing plans for a €500 billion ($664 billion) European rescue fund were not enough to restore market confidence in the eurozone.

 

"The mother of all firewalls should be in place," Gurria he told a news conference in Brussels, where he was flanked by Olli Rehn, the EU's economic affairs commissioner, who has also been pushing for a larger bailout fund.

A permanent bailout fund of at least €1 trillion would give governments the breathing space to focus on kickstarting growth and restoring the competitiveness of their economies, Gurria added.

 

As well as shoring up the financial defenses, the OECD chief pointed to a raft of economic reforms that individual countries should enact. According to the organization's annual report for the eurozone, which was released Tuesday, vulnerable states may need more than €1 trillion in aid over the coming two years and Gurria said eurozone finance ministers should take a decision to boost their bailout funds at their meeting in Copenhagen on Friday.

 

Germany, the bloc's largest economy, signaled on Monday that it would support an increase to around €700 billion ($929 billion), but only until some €200 billion in loans already promised to Greece, Ireland and Portugal have been paid back.

That falls below the recommendation of the International Monetary Fund and the European Commission, the European Union's executive. Both organizations believe a much bigger firewall will keep a lid on the pressure on Italy and Spain, the eurozone's third- and fourth-largest economies, which have a combined debt load of more than €2.5 trillion.

 

"I am of the view that when you are dealing with markets you should overshoot," Gurria said.

Germany's proposal may also not be enough to convince other large non-euro economies, such as China and the U.S., to give the IMF more resources, money that could be used to further protect Europe.

Asked about the chances that Gurria's €1 trillion goal could actually be achieved on Friday, Rehn declined to give a clear answer.

 

"I am confident that we can reach a convincing decision," he said, adding that discussions between euro states were still ongoing.

Countries like Germany fear that easy access to financial support could stop countries from implementing reforms. They also point to the recent stabilization in financial markets. Credit for that has been given to the European Central Bank, which has pumped more than €1 trillion in cheap long-term loans into European banks.

The OECD's Gurria warned of the perils of overconfidence.

"We can still clearly not draw too much comfort from these signs of healing," he said, noting that there had been other brief moments of respite in Europe's two-year-old debt crisis.

 

He warned that funding costs in several euro countries remain unsustainable, and — in what appeared to be a clear reference to Spain — have been creeping up again in recent weeks.

 

Gurria also suggested that the ECB could intervene more aggressively in the bond markets of struggling countries if market pressures resurface — a step that the central bank has been reluctant to take so far.

 

Mar 27, 2012 08:56

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