Euro Weakens Against Dollar on Funding Concern

The euro weakened against the dollar and pared an advance versus the yen as concern that European nations face difficulty funding debt damped demand.

Europe’s shared currency fell as yields on Spanish 10-year benchmark bonds and French five-year debt rose at auctions, fueling speculation on credit downgrades. The dollar climbed versus the yen as Bank of Japan officials signaled they’ll keep acting to weaken the currency. The greenback advanced against all its major counterparts except the pound and the Taiwanese dollar as weekly U.S. jobless claims were higher than forecast.

“Auction results over the past two weeks show that European sovereigns are still able to place paper, but until there is underlying economic growth, investors are going to continue to demand steep yield premiums for the peripherals and even for France,” said Greg Anderson, the North American head of Group-of-10 nations currency strategy at Citigroup Inc. in New York. “People are building yen positions in anticipation of further easing next week.”

The euro declined 0.1 percent to .3106 at 9:26 a.m. New York time. The 17-nation currency was up 0.2 percent to 106.81 yen, after earlier rising as much as 0.7 percent. The dollar appreciated 0.3 percent to 81.49 yen.

Source | Forex News Paper | http://forexnewspaper.blogspot.com/2012/04/euro-weakens-against-dollar-on-funding.html

US dollar weakens against Romanian Leu, Thursday, September 25, 2008 1:34:13 PM

The US currency weakened against its Romanian counterpart in late European deals on Thursday. The dollar-Leu pair declined to 2.5001 by about 7:05 am ET, compared to yesterday`s closing value of 2.5029.

Thursday, the Board of the National Bank of Romania decided to maintain its monetary policy rate unchanged at 10.25% per annum. The decision matched economists` expectations.

Source | Forex News | http://forexfx-news.blogspot.com/2008/09/us-dollar-weakens-against-romanian-leu.html

Dollar weakens versus Chilean peso, Thursday, September 25, 2008 3:37:41 PM

During New York trading on Thursday, the US dollar weakened against the Chilean peso. The pair dropped to 537.05 by about 1:15 pm ET from early high of 541.50. Presently, the pair is trading at 537.28 from yesterday`s New York session close of 541.38. The pair had hit a multi-day high of 545.15 yesterday.

Source | Forex News | http://forexfx-news.blogspot.com/2008/09/dollar-weakens-versus-chilean-peso.html

Dollar weakens versus major Latin American currencies, Thursday, September 25, 2008 4:49:55 PM

The US currency weakened against its major Latin American counterparts during New York trading on Thursday after some significant economic reports were released during morning session turned out to be disappointing.

According to a report released today by the US Department of Commerce that new home sales fell 11.5% to a seasonally adjusted annual rate of 460,000 units in August from the upwardly revised July rate of 520,000. The Commerce Department also said that durable goods orders fell 4.5% in August following a downwardly revised 0.8% increase in July.

The Department of Labor released that jobless claims unexpectedly jumped to 493,000 from the previous week`s revised figure of 461,000.

The US dollar dropped against the Brazilian real during New York trading on Thursday. The greenback fell to a 2-day low of 1.8145 versus the real by about 3:25 pm ET from today`s high of 1.8655. The pair that closed yesterday`s deals at 1.8645 is now worth 1.8210.

The Brazilian Census Bureau (IBGE) reported Thursday that unemployment declined to 7.6 percent in August, compared to 8.1 percent in July.

After hitting a 1-week high of 10.8615 by about 8:00 am ET, the US currency lost ground against its Mexican counterpart in New York afternoon deals on Thursday. At about 3:25 pm ET, the pair slipped to 10.6975, compared to Wednesday`s closing value of 10.8500.Currently, the greenback is trading at 10.72 versus the Mexican peso.

During New York trading on Thursday, the US dollar weakened against the Chilean peso. The pair dropped to 537.05 by about 1:15 pm ET from early high of 541.50. Presently, the pair is trading at 537.28 from yesterday`s New York session close of 541.38. The pair had hit a multi-day high of 545.15 yesterday.

The dollar, which closed yesterday`s New York session at 2158.00 against the Colombian peso, dropped to 2077.50 in New York afternoon session today.

Source | Forex News | http://forexfx-news.blogspot.com/2008/09/dollar-weakens-versus-major-latin.html

Dollar Weakens to Year Low as U.S. Economic Contraction Slows

The dollar declined to the lowest level this year against six major U.S. trading partners after a report showed the U.S. economy shrank less than economists forecast, reducing the demand for the greenback as a refuge.
The Swedish krona advanced against the euro to the strongest level since December after a government report showed the economic contraction in the Scandinavian country slowed in the second quarter. The U.S. currency headed for a fifth month of declines against the pound, its longest run in five years, after a U.K. survey showed consumer confidence held at the highest level since April 2008.
“The typical pattern is that good economic news is bad for the dollar,” said Win Thin, a senior currency strategist at Brown Brothers Harriman & Co. in New York. “Equities are marching up. We had a better than expected GDP, which set the stage for all this.”
The dollar fell 1.4 percent 1.4271 per euro as of 12:29 p.m. in New York, from .4075 yesterday, and was at 94.58 yen from 95.56 yen. The Japanese currency weakened 0.3 percent to 134.95 per euro.
The Dollar Index, which the ICE futures exchange uses to track the currency against counterparts including the yen, pound and Swedish krona, touched 78.22, the lowest since Dec. 18.
The dollar’s decline versus the yen accelerated after running into stops, or pre-set orders, to sell the greenback, above 95 yen, according to Shaun Osborne, a currency strategist at TD Securities Inc. in Toronto.
‘Some Restraint’
U.S. gross domestic product contracted at a less-than- projected 1 percent annual rate after shrinking 6.4 percent in the prior three months, the most in 27 years, Commerce Department figures showed. Inventories dropped at a record 1.1 billion annual pace, after a 3.9 billion decline.
“The inventories data shows stunning drawdowns in both Q1 and Q2,” wrote Alan Ruskin, head of international currency strategy in North America at RBS Securities Inc. in Greenwich, Connecticut. “This bodes very well for H2 GDP data since the change in the change of inventories should be very positive. Obviously there will be some restraint to this trade because of month-end flows, but I expect players will buy risk trades again early next week.”
The Swedish krona touched 10.3 per euro, the strongest since Dec. 1 after Statistics Sweden said the country’s gross domestic product contracted an annual, work-day adjusted 6.2 percent, from a decline of 6.5 percent in the previous quarter.
The krona has gained 4.8 percent against the euro this month and 5.6 percent against the dollar. It is the second best performer among the 16 major currencies after the Canadian dollar, which rose 7.6 percent against the dollar in July.
‘Ahead of Fundamentals’
Canada’s dollar traded at C.081 against the greenback, near the strongest since October, even after a government report showed the nation’s economy shrank a more-than-forecast 0.5 percent in May. The currency, known as loonie, touched C.075 on July 28, the strongest level since Oct. 3.
“There’s disconnection between market optimism and numbers on the ground,” said Steven Englander, chief U.S. currency strategist at Barclays Plc in New York. “The Canadian dollars running ahead of fundamentals. We had some pretty nasty number out of Canada recently.”
The Canadian currency will decline to C.13 in a month, according to Barclays.
Sterling gained 0.4 percent to .6557 after GfK NOP said that an index of consumer sentiment in the U.K. was unchanged in July at minus 25. The reading is up from minus 39 a year earlier, adding to signs that the U.K.’s worst slump in a generation is easing. The currency was up 0.5 percent in July.
Implied Volatility
The Polish zloty advanced a record 8 percent this month to 2.93 per euro, as the country posted the only positive first- quarter growth rate among European Union’s 10 eastern members. The currency was the biggest gainer among 26 emerging-market counterparts tracked.
The dollar dropped against 14 of 16 most actively traded currencies this month, losing 1 percent against the euro. The yen gained 1.2 percent versus the dollar and 0.2 percent against the European currency.
The euro-dollar exchange rate swung less than 3 cents above and below .40 this month. Implied volatility on seven major currencies against the dollar dropped to 12.73 today, the lowest since October, indicating traders expect less price frustration in the foreign-exchange market in coming months.
Moving Sideways
“We are moving to sideways until September when gradual improvement in macro data adds to fresh momentum for dollar shorts,” said Mike Moran, a senior currency strategist at Standard Chartered in New York. A short position is a bet a currency will decline.
Investors should buy the U.S. currency against the yen, with a target above 105 per dollar, as Japan’s trade and investment flows deteriorates, Goldman Sachs Group Inc. said today in an e-mailed note.
The yen is the most overvalued currencies in the Group of 10 major currencies, and “neutral” market positioning allows investors to add more bets against the Japanese currency, according to Goldman. Trade and investment flows to Japan have turned from a surplus of 6 percent of its GDP, to a deficit of 5 percent of the economy, according to Goldman.

Source | Forex News | http://forexnews-4all.blogspot.com/2009/07/dollar-weakens-to-year-low-as-us.html

Euro Weakens as Investors Sell to Buy Higher-Yield Assets

The euro fell to a two-year low versus the dollar and weakened against all of its 16 most-traded peers as traders used the shared currency to fund purchases of higher-yielding assets.

The 17-nation currency dropped to the weakest on record versus Australia’s dollar five days after the European Central Bank cut its key interest rate to an all-time low 0.75 percent. Sweden’s krona reached its strongest against the euro since 2000 as industrial production fell less than forecast, and Mexico’s peso gained versus the dollar on bets Europe’s crisis will ease.

“The euro is now the main funding currency, and everyone wants to be short euro,” said Sebastian Galy, a senior foreign- exchange strategist at Societe Generale SA in New York. “The dollar is no longer the main funding currency.” A short position is a wager a currency will decline in value.

The euro depreciated as much as 0.6 percent to .2235, the lowest since July 2010, before trading at .2255 at 1:36 p.m. New York time, down 0.5 percent. The common currency declined 0.6 percent to 97.38 yen and touched 97.23 yen, the weakest since June 5. The yen gained 0.1 percent to 79.47 per dollar.

Australia’s dollar climbed 0.5 percent to A.2002 per euro and touched A.1988. The Aussie was little changed at .0209 and slipped 0.1 percent to 81.12 yen.
Investors sell currencies of nations with low borrowing costs to purchase those with higher yields in the carry trade. Japan’s yen and the U.S. dollar are traditional funding currencies because the nation’s central banks are holding interest rates at almost zero. The Reserve of Australia’s cash rate target is 3.5 percent.

Source | Forex News Paper | http://forexnewspaper.blogspot.com/2012/07/euro-weakens-as-investors-sell-to-buy.html

Dollar Weakens to Year Low on Signs Global Recession May End

The dollar declined to the lowest level this year against six major U.S. trading partners as optimism that a global recovery is near reduced demand for the greenback as a refuge.
The Swedish krona advanced against the euro to the strongest level since November after a government report yesterday showed the contraction in the Scandinavian country slowed last quarter. Federal Reserve Chairman Ben S. Bernanke told Congress last month that policy makers will maintain a “highly accommodative” monetary policy for an extended period.
“It’s clear that the economy is recovering,” said Adam Boyton, a strategist in New York at Deutsche Bank AG, the world’s largest currency trader. “Ben Bernanke is making it clear that although he has an exit strategy, he’s not going to use it any time soon. That’s probably been a small negative for the dollar.”
The dollar fell 1.6 percent last month to .4257 per euro in New York, from .4033 on June 30. The U.S. currency fell 1.7 percent to 94.68 yen, from 96.36 yen a month earlier. The Japanese currency gained 0.2 percent this month to 134.99 per euro, the first advance in three months.
The Dollar Index, which the ICE futures exchange uses to track the currency against counterparts including the yen, pound and Swedish krona, touched 78.22 yesterday, the lowest since Dec. 18. The index dropped 2.3 percent in July.
The dollar declined 1.3 percent versus the euro yesterday, the biggest loss in a month, as a report showing the U.S. economy shrank less than economists forecast added to signs the global recession may be ending, encouraging investors to buy higher-yielding assets overseas.
‘Some Restraint’
U.S. gross domestic product contracted at a less-than- projected 1 percent annual rate after shrinking a revised 6.4 percent in the prior three months, the most in 27 years, the Commerce Department said. Inventories dropped at a record 1.1 billion annual pace, after a 3.9 billion decline.
“The inventories data shows stunning drawdowns in both Q1 and Q2,” wrote Alan Ruskin, head of international currency strategy in North America at RBS Securities Inc. in Greenwich, Connecticut. “This bodes very well for H2 GDP data since the change of inventories should be very positive. Obviously there will be some restraint to this trade because of month-end flows, but I expect players will buy risk trades again early next week.”
‘Signs of Stabilization’
Bernanke told the House Financial Services Committee on July 21 that while the economy is showing “tentative signs of stabilization,” the central bank intends to keep interest rates low. The Fed’s benchmark target rate for overnight loans has been set at a range of zero and 0.25 percent since December.
A government report next week will probably show the U.S. lost 325,000 jobs in July, after reducing 467,000 the previous month, according to the median forecast of 56 economists surveyed by News. The report is due Aug. 7.
The Dow Jones Industrial Average index advanced 8.6 percent in July, the biggest monthly gain since 2002.
The Canadian dollar was the best performer among the major currencies, rising 7.9 percent versus the greenback, as stock gains and higher crude oil prices burnished the appeal of currencies linked to growth.
Canada’s currency touched C.075 against the greenback on July 28, the strongest level since Oct. 3, as crude oil reached a barrel. Commodities, such as oil and gold, account for more than half of Canada’s exports. The currency ended the month at C.078 after a government report showed the nation’s economy shrank a more-than-forecast 0.5 percent in May.
‘Ahead of Fundamentals’
“There’s a disconnect between market optimism and numbers on the ground,” said Steven Englander, chief U.S. currency strategist at Barclays Plc in New York. “The Canadian dollar is running ahead of fundamentals. We had some pretty nasty number out of Canada recently.”
The Canadian currency will decline to C.13 in a month, according to Barclays.
The Swedish krona touched 10.237 per euro yesterday, the strongest since Dec. 1, after Statistics Sweden said the country’s gross domestic product contracted an annual, work-day adjusted 6.2 percent, from a decline of 6.5 percent in the previous quarter.
The krona gained 5.4 percent against the euro last month and 7.1 percent against the dollar. It was the second best performer among the 16 major currencies after the Canadian dollar, which rose 6 percent against the euro in July.
Moving Sideways
The euro-dollar exchange rate swung less than 3 cents above and below .40 in July. Implied volatility on seven major currencies against the dollar dropped to 12.73 yesterday, the lowest since October, indicating traders expect less price fluctuation in the foreign-exchange market in coming months.
“We are moving sideways until September when gradual improvement in macro data adds to fresh momentum for dollar shorts,” said Mike Moran, a senior currency strategist at Standard Chartered in New York. A short position is a bet a currency will decline.
Investors should buy the U.S. currency against the yen, with a target above 105 per dollar, as Japan’s trade and investment flows deteriorates, Goldman Sachs Group Inc. said yesterday in an e-mailed note.
The yen is the most overvalued currency in the Group of 10 major currencies, and “neutral” market positioning allows investors to add more bets against the Japanese currency, according to Goldman. Trade and investment flows to Japan have turned from a surplus of 6 percent of its GDP, to a deficit of 5 percent of the economy, according to Goldman.
“We could be getting closer to the tipping point for the yen,” Mark Tan, a Goldman analyst in New York wrote.

Source | Forex News | http://forexnews-4all.blogspot.com/2009/08/dollar-weakens-to-year-low-on-signs.html