November 30th, 2007
The dollar rallied against a basket of major currencies on Friday and was on track for its biggest weekly gain in more than a year as investors bet that more U.S. interest rate cuts would prevent a recession.Global stock markets also advanced, after Federal Reserve Chairman Ben Bernanke hinted late on Thursday that the central bank may cut rates further to help the economy weather a resurgence of financial market turmoil.
The dollar index, which measures the greenback against six major currencies, rose 0.5 percent to 75.973 < .DXY>. On the week, it was up 1.2 percent, on track for its best weekly gain since at least September 2006. Read more from Reuters.
Posted in Forex News | Comments Off
November 30th, 2007
The pound fell for the first month in three against the dollar as signs the economy is slowing prompted investors to add to bets on an interest-rate cut.The U.K. currency also had its biggest monthly drop in 3 1/2 years versus the yen as investors sold higher-yielding assets funded with cheap loans from Japan. Data this past week indicated the decade-long housing boom is sputtering, while Bank of England Governor Mervyn King yesterday signaled the highest rates among the Group of Seven nations may have to fall. The FTSE 100 Index of stocks slipped for the first month since August.
“Risk appetite is not what it was earlier in the year,'’ said Jeremy Stretch, a senior market strategist at Rabobank Groep in London. “The data continue to underline a decelerating economy'’ and the pound may fall to $1.90 within a year. Read more from Bloomberg.
Posted in Forex News | Comments Off
November 30th, 2007
The yen and Swiss franc headed for their biggest weekly drops in more than two years versus the dollar as global stocks rallied and investors bought higher- yielding assets with funds borrowed in Japan and Switzerland.The dollar was poised for its largest weekly gain since August versus the euro after Federal Reserve Chairman Ben S. Bernanke yesterday signaled he may lower interest rates to bolster growth, reducing the market’s concerns about a U.S. recession. A government report today showed the Fed’s preferred inflation gauge held below the 2 percent “comfort-zone'’ during October. Read more from Bloomberg.
Posted in Forex News | No Comments »
November 29th, 2007
The dollar rose broadly on Thursday as investors bet that the perceived likelihood of more U.S. interest rate cuts will help avoid a U.S. recession.Lower rates typically make dollar-denominated securities less attractive and reduce demand for the dollars to buy them. However, given concerns about problems with the U.S. housing market and credit markets, signs the Fed will continue to act to help the U.S. economy should attract investment inflows. Read more from Reuters.
Posted in Forex News | Comments Off
November 29th, 2007
The dollar rose Thursday against the euro on a stronger-than expected U.S. economic report and a decline in consumer confidence in France, one of Europe’s largest economies.The dollar also was bolstered by a report from the Commerce Department that the U.S. economy grew at a 4.9 percent pace from July through September. That was the strongest performance in four years, but was not expected to continue through the current quarter amid the continuing housing slump and credit crunch. Read more from MSN.
Posted in Forex News | Comments Off
November 29th, 2007
The euro, trading near a record high, is unlikely to replace the dollar as the world’s dominant reserve currency because the eurozone’s financial markets remain fragmented, Bank of America Corp. said.Europe’s single currency is used by 13 nations in the region though the U.K., the second biggest economy, has so far rejected it and other countries are excluded from it. The currency’s gains, up 11 percent this year versus the dollar, has led French President Nicolas Sarkozy and Italian Prime Minister Romano Prodi to express concern about its strength. Read more from Bloomberg.
Posted in Forex News | Comments Off
November 29th, 2007
The dollar rose against the euro and pound after Goldman Sachs Group Inc. said the U.S. currency’s decline is coming to an end.The dollar also gained after China Investment Corp., the $200 billion sovereign wealth fund, signaled it may invest in finance companies hurt by loan defaults. A report today showed U.S. economic growth surged in the third quarter.
“There is too much pessimism priced into the U.S.,'’ said Jeremy Stretch, a senior market strategist at Rabobank Groep in London. “We’re not seeing anything that points to the U.S. heading for a recession. Equities are doing well and that’s spurred some renewed appetite for the dollar.'’ Read more from Bloomberg.
Posted in Forex News | Comments Off
November 28th, 2007
The euro fell by the most in two weeks against the dollar as a decline in German consumer confidence weakened the case for higher interest rates in the single-currency region.The euro dropped against 13 of the 16 most-active currencies after the GfK AG index slipped more than expected to the lowest since January 2006. The European Central Bank was forced to shelve a planned interest-rate increase in September after the U.S. housing slump pushed up the cost of credit globally, threatening to curb economic expansion.(Read more from Bloomberg)
Posted in Forex News | Comments Off
November 28th, 2007
The U.K. pound rose against the euro and the yen as a recovery in global stocks prompted investors to buy higher-yielding assets funded with loans from Japan.The pound also erased an earlier decline against the dollar. The yen dropped against 14 of the 16 most-active currencies as the gains in stocks prompted investors to resume so-called carry trades.
“We’ve seen a return of risk appetite, which has been primarily driven by the positive returns in stock markets,'’ said Lee Hardman, a currency strategist at Bank of Tokyo-Mitsubishi Ltd. in London. “The pound tends to perform well when risk appetite picks up.'’(Read more from Bloomberg)
Posted in Forex News | Comments Off
November 28th, 2007
Federal Reserve Vice Chairman Donald Kohn, in remarks the markets viewed as signaling a possible December rate cut, said the central bank needs to be “nimble” in its monetary policy because economic uncertainty is unusually high.
In a speech to the Council on Foreign Relations in New York, Kohn said renewed financial market turbulence of recent weeks “partly reversed some of the improvement” of the last two months. He warned that “should the elevated turbulence persist, it would increase the possibility of further tightening in financial conditions for households and businesses.”Read more from CNBC.com
Posted in Forex News | Comments Off
