Forex NEWS by RTT in partnership with InstaForex

[IFX Darika]

The dollar that fell to 92.12 against the yen at 1:25 am ET Thursday rose sharply around 1:45 am ET. As of now, the dollar-yen pair is trading at a 3-day high of 92.98 with 93.2 seen as the next target level.

Meanwhile, the dollar also extended its Asian session's uptrend against the currencies of Europe, Switzerland and U.K. At present, the dollar is worth 1.4346 per euro, 1.5920 against the pound and 1.0333 against the franc.

[IFX Svetlana]

IEA Keeps 2010 Global Oil Demand Unchanged.

Friday, the International Energy Agency kept its global oil demand forecast for the current year unchanged from its previous forecast in December. The estimate for the previous year was also kept unchanged.

In its latest Oil Market Report, the Paris-based IEA said oil demand would be 86.3 mb/day in 2010, up from 84.9 mb/day estimated for 2009. The agency said growth is driven by non-OECD countries, most notably in Asia. Oil demand recovery in the OECD will likely remain sluggish, despite the recent cold weather, it added.

Moreover, the report showed that crude oil prices surged to 15-month highs in early January on very cold winter weather in much of the northern hemisphere and escalating geopolitical tensions in key oil producing countries. At their peak, prices had jumped by around $10-12/bbl from December lows. Prices have since eased, last trading in a $78-80/bbl range.

OPEC-12 crude output rose 75 kb/day to 29.1 mb/day in December, resulting in effective spare capacity of 5.4 mb/day. Further, the agency said global supply rose 270 kb/day in December to 86.2 mb/day, on both higher OPEC and non-OPEC output.

[IFX Svetlana]

Euro Mixed Against Majors Amid German PPI.

The German PPI for December was released at 2:00 am ET. Amid the report, the euro showed mixed trading against other major currencies. While the euro gained against the franc, it fell against the dollar and the yen. Against the pound, the euro was little changed.

As of now, the euro is worth 1.4203 against the greenback, 129.43 versus the yen, 1.4744 versus the Swiss franc and 0.8709 versus the pound.

[IFX Darika]

The United Kingdom is scheduled to release public sector finance and money supply data on Thursday. The Flash Purchasing Managers' Index reports for major Eurozone economies are also due.

At 3:00 am ET, the Swiss central bank is scheduled to release money supply data for December. M3 money supply had increased 7.6% annually in November.

The release of the Flash Purchasing Managers' Index reports for major Eurozone economies is set to start at 3.00 am ET. The first one expected to hit the wires is the Flash French PMI for both manufacturing and service sectors. The manufacturing PMI is forecast to remain unchanged at 54.7 in January, while the services PMI is expected to rise to 59 from 58.7.

Thereafter, Flash German PMI data is due at 3.30am ET. Economists expect manufacturing PMI to climb to 52.9 from 52.7, while the services PMI is seen at 53, up from 52.7.

In the meantime, the Statistics Denmark is expected to release consumer sentiment data for January. The index is seen at minus 0.8, up from minus 3.6 in the preceding month.

Consumer sentiment data is also due from the Dutch statistical office, along with unemployment figures. Economists expect the jobless rate to edge up to 5.4% in the October to December period.

At 4:00 am ET, Eurozone's PMI report is also due. The manufacturing PMI is expected to stand at 51.9 compared to 51.6 in December, while the services PMI is forecast to rise to 53.8 from 53.7.

The U.K.'s money supply data is due from the Bank of England at 4:30 am ET. M4 money supply is forecast to rise by 8.9% on a yearly basis and by 0.9% on a monthly basis. The U.K.'s public finance report is also due at the same time. Public sector net cash requirement is seen at GBP 25.5 billion compared to GBP 14.7 billion in November.

Afterwards at 6:00 am ET, the Confederation of British Industry is set to release January's Distributive Trade Survey results.

[IFX Darika]

The dollar remained mixed versus other major currencies Thursday morning in New York, holding yesterday's gains versus the euro and yen while ceded a bit of ground against the sterling and loonie.

Traders were looking ahead to key data on the jobs situation and manufacturing sector, following Wednesday's decision by the Federal Reserve to maintain its key lending rate near zero.

The Labor Department is due to release its customary jobless claims report for the week ended January 23rd at 8:30 AM ET. Economists expect a decline in claims to 450,000. Lingering weakness in the jobs market compelled the Fed to reiterate it will keep rates at record low levels for an extended period yesterday.

The Commerce Department is set to release its durable goods orders report, which gives the value of orders placed for goods designed to last for more than 3 years, at 8:30 AM ET. Economists look forward to a 2% increase in durable goods orders for December.

The dollar leveled off versus the euro after hitting a fresh 5-month high of 1.3935 last night. Against the yen, the buck was steady at Y90.25, an improvement from a monthly low near Y89 set earlier in the week.

The number of unemployed in Germany rose in January, ending declines in past six consecutive months, as heavy snowfall and freezing temperatures hurt the country's labor market.

The seasonally adjusted number of unemployed increased by 6,000 month-on-month to 3.43 million in January. But, the increase was less than the expected 15,000. The rise in January follows a drop of 3,000 in the previous month.

Eurozone economic sentiment rose for the tenth successive month, a survey conducted by the European Commission showed Thursday. The economic confidence index stood at 95.7 in January, up from a revised reading of 94.1 in the previous month. The expected reading was 92.3.

Meanwhile, retail sales in Japan fell 0.3 percent on year in December, the Ministry of Economy, Trade and Industry said on Thursday. That missed forecasts for a 0.3 percent annual gain after the revised 1.1 percent contraction in November.

The dollar continued to show a lack of direction versus the sterling, easing to 1.6265. The pair has bounced back and forth between 1.6100 and 1.6300 for the past week.

With commodity prices stabilizing this morning, the dollar gave back some of its recent gains versus its Canadian counterpart, slipping a Canadian penny from yesterday's monthly high near C$1.0680.

[IFX Svetlana]

Purchasing Managers' survey results from Eurozone and U.K. mortgage approvals are set to dominate the scene on Monday.

Sweden's manufacturing Purchasing Managers' Index or PMI for January is due at 2:30 am ET. The corresponding index stood at 58.2 in December.

At 2:45 am ET, the French statistical office INSEE is scheduled to release producer price inflation figures for December. The producer price index had risen 4.5% year-on-year in November.

Switzerland's manufacturing PMI for January is due from the SVME Association of Purchasing and Materials Management and Credit Suisse at 3:30 am ET. The index stood at 54.6 in December. PMI data is also due from the Czech Republic.

Elsewhere, the Statistics Denmark is slated to issue retail sales statistics for December. Retail sales were down 0.3% month-on-month in November.

It will be followed by the release of manufacturing PMIs of Italy, France, Germany and the Eurozone. At 3:45 am ET, Italy's Markit/ADACI manufacturing PMI for January is due, with the index forecast to rise to 51.2 from 50.8 in January.

The French Markit/CDAF PMI follows at 3:50 am ET, with the flash reading of the index standing at 54.7.

Germany's manufacturing PMI is due at 3:55 am ET, with the flash reading of the index expected to be confirmed at 53.4. Eurozone's PMI follows at 4:00 am ET, with flash reading of the index expected to be retained at 52.

In the meantime, the Italian statistical office ISTAT is set to release hourly wage data for December. The C2 credit growth indicator is due from Statistics Norway at the same time. The credit growth indicator is tipped to rise 4.6% year-on-year in December.

At 4:30 am ET, the Bank of England is scheduled to issue mortgage approvals statistics for December. Mortgage approvals are forecast to rise to 61,700 from 60,500. Net lending secured on dwelling is expected to increase by GBP 1.6 billion, compared to GBP 1.5 billion last month. Meanwhile, net consumer credit is expected to fall by GBP 0.5 billion, compared to November's GBP 0.4 billion decline. Final money supply data for November is also due from the central bank.

The U.K. Markit/CIPS manufacturing PMI is also due at the same time, with the index tipped to ease to 54 from 54.1.

[IFX Svetlana]

The recovery process in the Eurozone economy is likely to be uneven, European Central Bank President Jean-Claude Trichet said Thursday, after the central bank retained key interest rate at a record low of 1%.

In his introductory statement, Trichet said this outlook remains subject to uncertainty. The outcome of the monetary analysis confirms the assessment of low inflationary pressure over the medium term, he added.

He noted that the the euro area has been benefiting from a turn in the inventory cycle and a recovery in exports, as well as from the significant macroeconomic stimulus under way and the measures adopted to restore the functioning of the financial system.

But, he asserted that these stimuli will unwind over time, while activity is likely to be adversely affected by the ongoing process of balance sheet adjustment in the financial and non-financial sectors, both inside and outside the euro area. Additionally, low capacity utilization rates are likely to dampen investment, and unemployment in the euro area is expected to increase somewhat further, thereby lowering consumption growth.

On prices, the central banker said inflation is expected to be around 1% in the near term and to remain moderate over the policy-relevant horizon. Trichet also said inflation expectations over the medium to longer term remain firmly anchored in line with the Governing Council's aim of keeping inflation rates below, but close to, 2% over the medium term.

He repeatedly urged banks to use the improved funding conditions to strengthen their capital bases further and, where necessary, take full advantage of government support measures for recapitalization.

Further, he pointed out that many euro area countries are faced with large, sharply rising fiscal imbalances. "It is of paramount importance that the stability programme of each euro area country clearly defines the fiscal exit and consolidation strategies for the period ahead," Trichet said. He urged countries to focus more on expenditure reforms.

[IFX Darika]

Risk averse traders continued to flock to the relative safety of the dollar on Friday, with the world's de facto reserve currency enjoying a solid bid amid growing speculation the steam has run out of the global recovery.

The buck hit a fresh 9-month high again the euro, which has been hammered amid concerns that Greek debt problems will spread to other fragile economies without meaningful intervention on the part of more stable euro area nations.

However, with the eurozone struggling with anemic economic growth, major economies may be hesitant to drastically boost spending in order to prevent the Greek contagion.

European officials offered vague promises to support Greece on Thursday, and are expected to detail an aid package sometime next week.

Meanwhile, encouraging US retails sales data was overshadowed by news that China is engineering a soft slowdown of its economy.

A report from the Commerce Department on Friday showed that retail sales increased by 0.5 percent in January following a revised 0.1 percent decrease in December.

Adding to worries about the sustainability of the global recovery, China, now the engine of global growth, hiked its reserve requirement on banks in order to stem lending.

Even with the Dow taking back most of a 160 point drop in early dealing, the dollar sustained most of its gains against the euro.

The dollar rose to 1.3531 versus the euro, its highest level since last May, then backed off a penny to 1.3650.

At the same time, the buck extended this week's run of choppy trading versus the sterling, bouncing back and forth near 1.5600. The buck touched an 8-month high of 1.5533 a week ago, but has since risen no further.

The dollar also remained directionless against the yen, hanging around the Y90 mark.

The eurozone continued to lag behind the global economic recovery in the fourth quarter of 2009. Gross domestic product across the eurozone grew by only 0.1% in the fourth quarter compared to the previous three-month period.

The German economy, Europe's largest, unexpectedly stagnated in the fourth quarter as final consumption expenditure and investment failed to support growth.

Better-than-forecast French growth figures may have prevented the eurozone economy from sliding back into contraction mode.

Greece, saw its output shrink by 0.8% in the fourth quarter, casting doubts about the Greek public's willingness to accept cost cutting measures aimed at getting the nation's debt under control.

[IFX Darika]

In early European deals on Monday, the euro eased from an early Asian session's multi-day highs against the dollar, the yen and the pound as investors remain concerned about sovereign debt problems.

Research firm DBS said today that the euro's direction this week depends on two key events, namely the Greek bond issue and the Federal Reserve Chairman Ben Bernanke's testimony.

Early this week, Greece is expected to announce details on its plan to issue 10-year bonds, while Bernanke is expected to deliver his semi-annual congressional testimony on February 24 and 25.

The firm is of the view that the euro will resume its depreciation if the Greek bond issue causes widening of Greek credit default swap and if Bernanke relays more optimism about recovery, while also showing patience on rate hikes.

The euro that rose to an 11-day high of 0.8819 against the pound in early Asian deals on Monday showed choppy trading in late Asian deals but fell during the early European session. As of now, the euro-pound pair is worth 0.8795, down from Friday's close of 0.8805.

Against the franc, the euro declined to 1.4649 at 4:25 am ET, from an early Asian session high of 1.4668. As of now, the euro-franc pair is trading near Friday's close of 1.4649.

Monday morning in Asia, the euro strengthened to an 18-day high against the Japanese currency, but pared gains during late trading and extended its slide in early European deals. At 4:30 am ET, the euro-yen pair was worth 124.71, compared to Friday's close of 124.67.

Moving down from an Asian session's multi-day high of 1.3665 against the U.S. dollar, the euro touched a low of 1.3618 at 4:35 am ET. At present, the euro-dollar pair is trading at 1.3617, compared Friday's close of 1.3587.

Looking ahead, San Francisco Federal Reserve President Janet Yellen is scheduled to speak at the University of San Diego at 10:30 am ET.

Meanwhile, the Federal Reserve Chairman Ben Bernanke is scheduled to appear before the House Financial Services Committee hearing on "Prospects for Employment Growth: Is Additional Stimulus Needed?" at 11 am ET.

[IFX Svetlana]

Industrial new orders in the 16-nation currency bloc rose unexpectedly in December, but the pace of growth slowed.

Industrial new orders growth eased to 0.8% in December from 2.7% in November, the European Union statistics agency Eurostat said Wednesday. The monthly growth slowed in December, while the consensus forecast was for a fall of 1%. Excluding orders for ships, railway and aerospace equipment, the index slipped 0.4%.

New orders for capital goods rose sharply by 7% month-on-month and increase in non-durable consumer goods was 0.3%. A 1.5% decrease in durable consumer goods and a 4.1% fall in intermediate goods dragged down the growth.

Annually, orders were up 9.5% in December, reversing November's revised 0.6% fall, which was revised from 0.5%. For the whole year, the new orders index plunged 22.6%.

New orders in EU27 grew 0.6% in December from the prior month, pushing the annual growth to 6.3%. Excluding volatile orders, the index dropped 0.8%. The average new orders index plummeted 21.9% in 2009.

The available information revealed that total manufacturing working on orders improved in ten member states and fell in eleven. The largest increases were registered in France, Lithuania and Latvia. On the other hand, Hungary, Ireland and the Netherlands reported steep declines.

Driven by both domestic and external demand, factory orders in the largest Eurozone economy declined in December. According to data issued by the Federal Ministry of Economics and Technology, German factory orders fell 2.3% on a monthly basis in December after an increase of 2.7% in November.

In the fourth quarter of 2009, the EU16 expanded only 0.1% sequentially with the German GDP remaining flat. Italy's economy contracted 0.2%, while the French economy logged 0.6% growth in the final quarter. Over the whole year 2009, Eurozone shrank 4%.