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Katerine

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Mar 31, 2009
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Obama Asks Congress For USD100 Bn IMF Boost

President Barack Obama Monday sought the Congress' backing for a proposed USD100 billion U.S. loan for the expansion of an International Monetary Fund (IMF) emergency fund by USD 500 billion, reports say.

The USD100 billion is part of the plan agreed at this month's Group of 20 summit in London to triple IMF resources to a total of $750 billion to help the Fund respond to crises in emerging market economies as a result of the global financial crisis and economic downturn.

Obama made the request Monday in several letters to two Democrats: House of Representatives speaker Nancy Pelosi and Senate Majority leader Harry Reid; and Republican House leader John Boehner and Senate Minority leader Mitch McConnell.

"Our proposal to increase U.S. participation in the NAB by up to USD 100 billion as part of an overall increase of 500 billion dollars was warmly endorsed by the G20 Leaders," the letters said.

The president pointed out the funding does not represent a budgetary expenditure or any increase in the deficit since it effectively represents an exchange of assets.

The transfer funds to the IMF under the program, known as an expansion of the New Arrangements to Borrow (NA will allow member-countries to provide credit to the IMF to deal with crises that may threaten the stability of the global financial system. In turn the donor nations would receive interest bearing assets in return, backed up by IMF resources including gold stocks.

Obama said countries were looking to the U.S. to deliver on its G-20 commitment, which could spur other governments to contribute to the IMF.

Noting that the NAB was "woefully inadequate" to deal with the severe economic and financial crisis, Obama said the deteriorating conditions threaten to worsen the recessions in the emerging economies and could cause currencies to collapse.

Asserting that rapid progress is essential to the restoration of confidence in the global economy and financial system so that the global economy can emerge from recession to recovery and to sustained growth, Obama appealed for help to deliver on the U.S. commitment by supporting inclusion of the NAB and related IMF proposals in the most timely legislative vehicle that will enable the United States to act quickly.

He said an enlargement of the NAB facility would allow for increased participation by emerging market economies, in particular China and India. Beijing has already indicated that it plans to contribute USD 40 billion to the IMF through a bond issued to its central bank by the Fund.

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IFX Darika

Banned
Apr 15, 2009
50
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Kaliningrad, Russia
European Economics Preview: UK Chancellor To Deliver Budget

Wednesday, UK's Chancellor of Exchequer Alistair Darling is set to announce his second budget statement at 7.30am ET.

According to the findings of the Operational Efficiency Programme released by the HM Treasury on Tuesday, there is a scope for GBP 15 billion of efficiency savings. In its pre-budget report, the government had increased the target for the current spending review period to GBP 35 billion savings.

Economists expect government borrowings in the range of GBP 150 billion to GBP 175 billion. This would lift borrowings to 12% of GDP for each of the coming two years.

Darling is also expected to downwardly revise the GDP forecast for the British economy.

At 3.30am ET, Dutch consumer confidence is due. Consumer confidence is forecast to rise to minus 33 in April from minus 34 last month.

Thereafter, the Bank of England minutes and the UK labor market statistics are due at 4.30am ET. At the end of two-day rate setting meeting, the Monetary Policy Committee of the BoE held the interest rate at historical low of 0.5%. A preliminary M4 money supply report is expected at the same time. After rising 1.4% in February, M4 money supply is expected to increase 1.2% on a monthly basis in March.

The number of people claiming jobless benefits in the UK is expected to increase 116,000 in March after reporting a record monthly increase in February. The claimant count rate is seen at 4.6%, up from 4.3% in February. Meanwhile, the ILO jobless rate for three months to February is forecast to increase to 6.7% from 6.5%.

In the meantime, the Office for National Statistics is also scheduled to issue UK's Public Sector Finance data. The public sector net cash requirement is seen at GBP 18 billion in March compared to GBP 4.4 billion in February.

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IFX Darika

Banned
Apr 15, 2009
50
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Kaliningrad, Russia
Dollar Mixed Versus Majors As Earnings Results Pour In

The dollar was mixed versus other major currencies Wednesday morning in New York, holding most of its recent gains versus the euro while coming under modest pressure against the yen. With little first-tier economic data for traders to consider, attention will turn to how equities markets behave amid the release of another flurry of key corporate earnings results.

Boeing, AT&T, Wells Fargo and McDonalds are just out with quarterly earnings. US stock futures continued to point to a lackluster open as traders weighed those results.

In news from the housing sector, mortgage applications in the U.S. rose last week as lower interest rates encouraged refinancing. The Mortgage Bankers Association's index of applications rose 5.3 percent to 1,172.2 in the week ended April 17, from 1,113.2 the week before.

On Tuesday, Treasury Secretary Tim Geithner said that the "vast majority" of U.S. banks have enough capital and hinted that the credit markets may be thawing following their deep freeze.

Geithner will again take center stage this morning, speaking about the recession at 9 am ET.

The dollar was range-bound versus the euro Wednesday morning, clinging to its gains from a recent run-up. The buck hovered between 1.2900 and 1.3000 in early dealing, moving to the lower end of that range approaching 8 am ET. On Monday, the dollar hit a monthly high of 1.2887.

Meanwhile, the dollar was weaker against the sterling this morning as traders reacted to the release of the minutes of the latest Bank of England policy meeting. The dollar slipped to 1.4650, giving back its gains from the previous session and moving back towards last week's multi-month low near 1.5000.

Wednesday, the minutes of the Monetary Policy Committee meeting of the Bank of England held on April 8 and 9 showed that policymakers voted unanimously to hold the Bank Rate at a historical low of 0.5%.

The minutes also revealed that all the nine members of the MPC stood united while deciding to continue with the initial asset purchase plan worth GBP 75 billion.

Also, the jobless rate in the UK was 6.7% for the three months to February 2009, up from revised 6.1% in the previous quarter, the Office for National Statistics said Wednesday. That was in line with economists' expectations.

The dollar eased a bit versus the yen this morning, slipping to 97.73 before finding support near Monday's 3-week low of 97.64. The buck has leveled off since hitting a 3-month high of 101.43 earlier this month.

Export-driven Japan's trade balance for fiscal 2008 suffered its first annual deficit in nearly three decades, data released Wednesday showed. The Ministry of Finance said Japanese exports plunged a record 16.4% to Y71.14 trillion during the fiscal year ended in March.

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IFX Darika

Banned
Apr 15, 2009
50
0
0
Kaliningrad, Russia
Mexican peso extends falls against greenback 26-day

Extending morning deal's downtrend, the Mexican peso weakened against its US counterpart during New York afternoon trading on Monday. At present, the peso is trading near a 26-day low of 13.9755 versus the greenback, compared to Friday's North American session close of 13.3398. The next downside target level for the Mexican currency is seen at 14.20. The peso plummeted on concern that the outbreak of the swine flu will deepen the country's economic slump.

The flu outbreak may slow dollar flows from tourism and curb consumer spending at restaurants, theaters and other venues where crowds gather. Suspected deaths in Mexico have risen to 103 from the 81 announced earlier, Health Minister Jose Cordova said yesterday.

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IFX Darika

Banned
Apr 15, 2009
50
0
0
Kaliningrad, Russia
Euro mixed following German's preliminary inflation report

The euro showed mixed trading against its major counterparts after a preliminary report from the German statistical office showed that consumer price annual inflation rose to 0.7% in April from 0.5% recorded in March. While, the euro gained slightly against the pound it moved sideways against the rest of majors. As of now, the euro is trading at 0.8916 against the pound, 1.3076 against the greenback and 126.26 versus the yen.

On a monthly basis, the consumer price index, or CPI, was flat. Economists had forecast the CPI to climb 0.8% annually and 0.1% month-on-month.

The harmonized index of consumer prices, or HICP, climbed 0.7% year-on-year after rising 0.4% in March, while the consensus forecast was for a 0.8% increase. Compared to March, the HICP was flat.

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IFX Darika

Banned
Apr 15, 2009
50
0
0
Kaliningrad, Russia
German Govt. Expected To Cut GDP Forecasts

The German government is expected to slash its economic forecasts for 2009, reports said Wednesday, citing sources close to the government.

Gross domestic product, or GDP, is expected to decline 6% in 2009, the worst contraction since the World War II. The forecast was cut from a 2.25% fall predicted in January. Economy Minister Karl-Theodor zu Guttenberg will announce the latest set of forecasts at 7.00am ET.

Last week, a group of German economic think tanks jointly lowered their forecast for the biggest Eurozone economy. They now expect Germany to contract 6% in 2009, quicker than a 2.25% fall estimated previously. For 2010, the forecast group does not expect a dramatic recovery. GDP should decline 0.5%. Unemployment was forecast to rise to an average of 3.7 million this year and to 4.7 million next year.

In March, seasonally adjusted unemployed persons in Germany rose 69,000, bigger than 50,000 increased in February.

The International Monetary Fund forecasts the German economy to contract 5.6% in 2009 and 1% in 2010. Meanwhile, the Commmerzbank expects Germany to shrink 6%-7% this year.

On April 27, European Central Bank Governing Council member Axel Weber told German newspaper Franfurter Allgemeine that the German economy is unlikely to grow before the second half of the next year.

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IFX Darika

Banned
Apr 15, 2009
50
0
0
Kaliningrad, Russia
Irish Exporters Association Says Exports Fell In Q1, Warns of Higher Job Losses

Thursday, the Irish Exporters Association, or IEA, said the country's exports in the first quarter fell 9.6% year-on-year hit by global economic downturn. The association warned that unemployment in the sector would increase substantially if the government does not provide additional stimulus for the sector.

Total exports for the first quarter stood at EUR 33.78 billion, down from EUR 37.38 billion in the same period last year. The association forecasts exports to fall 13% in 2009, with a loss of export revenue worth EUR 20.2 billion and direct job losses of some 91,000.

John Whelan, Chief Executive of the IEA said, "The knock-on effect of job losses on this scale on the economy, however, is much greater as each export job supports two other jobs in the community."

Merchandise exports showed a decline of 3.4% in the first quarter, while exports of services fell 18%.


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IFX Darika

Banned
Apr 15, 2009
50
0
0
Kaliningrad, Russia
Eurozone Services PMIs Rise In May; Sector Returns To Growth In U.K.

In further signs that the worst of the recession is over, the decline in Eurozone service sector activities eased further in May, reports said Wednesday, citing data released by the Markit Economics.

The purchasing managers' index or PMI for the Eurozone service sector rose to 44.8 in May from a flash reading of 44.7 and 43.8 in April. The PMI thus reached to a seven-month high. However, the headline index is still below the 50-mark that divides expansion and contraction. The expectations index for the service sector rose to a 15-month high of 59.1 from April's 54.4.

The composite index that contains both service and manufacturing PMIs was at 44, an increase from previous month's 41.1 and the flash reading of 43.9.

The PMI for Germany's service sector increased to 45.2 from 43.8 in April and that for France stood at an eight-month high of 48.3, up from 46.5 in April and 47.6 initially estimated. The Italian services PMI climbed to 43.1 from 42 in the previous month. However, in Spain, the activity contracted notably. The PMI fell to 39.1 from 42.3.

Out of the euro area, the CIPS/Markit PMI for the British service sector unexpectedly moved above the 50-mark to record a growth for the first time in a year. The indicator rose to 51.7 in May from 48.7 in April, while forecast was for a reading of 49.5. That was the sixth consecutive gain.


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IFX Darika

Banned
Apr 15, 2009
50
0
0
Kaliningrad, Russia
Pound climbs to 5-day high against yen and franc

Extending its recent rally, the UK's sterling rallied strongly higher against its major rivals on Tuesday morning in Asia. The pound rose to a 5-day high of 158.6 against the Japanese yen and 1.7548 against the Swiss franc by 8:00 pm ET. The pound also ticked up to 1.6102 against the US dollar and 0.8656 against the euro during this time.

Traders mulled reports showing the average asking price for houses in Great Britain came in at -44.1 in May, the Royal Institute of Chartered Surveyors said today, posting an 18-month index high. The score beat analyst expectations for -50.0 following the revised -58.7 in April for the highest reading since November 2007.

At the same time, the British Retail Consortium report showed today that same-store sales in May were down 0.8 percent on year. Overall sales, including those from newly opened stores, were up 0.8 percent on year.

The next upside target levels for the pound are seen at 1.773 against the franc, 161 versus the yen, 1.61 against the buck and 0.865 against the euro. At Monday's North American session, the pound closed deals at 0.8663 against the euro, 1.7525 versus the franc, 1.6053 against the greenback and 158.14 against the yen.

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IFX Darika

Banned
Apr 15, 2009
50
0
0
Kaliningrad, Russia
Crude Stockpiles Drop 4.4 Million Barrels, Gasoline Stocks Also Fall

Crude oil inventories fell sharply in the recent week, according to Energy Information Administration data released Wednesday morning. Gasoline stockpiles also declined.

U.S. commercial crude oil inventories decreased by 4.4 million barrels from the previous week. At 361.6 million barrels, U.S. crude oil inventories remained above the upper boundary of the average range for this time of year.

The report backed the American Petroleum Institute data revealed Tuesday, showing crude supplies dropped 5.96 million barrels last week. Participation in the API survey is voluntary, so the EIA report is more closely watched.

Total motor gasoline inventories decreased by 1.6 million barrels last week, distillate fuel inventories slipped by 300,000 barrels and propane/propylene inventories increased by 1.4 million barrels.

Over the last four weeks, motor gasoline demand has increased by 0.4 percent from the same period last year, distillate fuel demand has declined 8.4 percent from the same period last year and jet fuel demand is 14.3 percent lower.

Crude oil maintained its early gains following the report. Light sweet crude moved to $70.71, up 90 cents for the session. Oil touched as high as $71.79 shortly after the data was announced but quickly cooled off.


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IFX Darika

Banned
Apr 15, 2009
50
0
0
Kaliningrad, Russia
Dollar Choppy Versus Other Majors Wednesday

The dollar firmed up in choppy trading versus other major currencies Wednesday, but most of its gains came prior to the release of the Federal Reserve's Beige Book, which said that economic conditions remained weak or deteriorated further during the period from mid-April through May.

After coming under pressure over the last two days versus the euro and sterling amid increased risk appetite, the dollar steadied as a rally in stocks faded, causing traders to seek safer ground in the world's reserve currency.

The dollar spent most of the afternoon between 1.3900 and 1.4000, staying away from a 5-month low of 1.4338 set a week ago. Versus the sterling, the dollar managed to hold its ground near 1.6350, having slipped more than 5 cents over the previous two sessions. 8 days ago, the buck dropped to a 6-month low of 1.6662, culminating a dismal one-month run to the downside.

Russian Central Bank rattled currency traders today by saying it may cut its U.S. treasury investments in favor of International Monetary Fund bonds.

Also Wednesday, official data showed that the German annual inflation rate reached the lowest level since 1987 on easing energy and food prices. French industrial production dropped faster than expected in April due to widespread contraction in all industrial sub-sectors, especially in the manufacture of petroleum products.

Out of the euro area, British manufacturing output recorded growth for the second straight month in April signaling that the economy is on the road to a gradual recovery.

The dollar crept higher versus the yen, rising back above 98 to challenge a 4-week high of 98.87, set Monday morning. Wednesday saw some key statistical data releases from major Asian economies. Official reports showed that orders for Japanese machinery dropped to the lowest level in more than two decades and in China, consumer prices fell for the fourth straight month.

Back in the US, the Fed's Beige Book, a compilation of anecdotal evidence on economic conditions from each of the twelve Federal Reserve districts, said manufacturing activity declined or remained at a low level across most districts.

However, the Fed said that several districts also reported that the outlook by manufacturers has improved somewhat.

With the value of exports falling by more than the value of imports in the month of April, the Commerce Department released a report Wednesday morning showing that the U.S. trade deficit for the month came in modestly wider than in March.

The report showed that the trade deficit widened to $29.2 billion in April from a revised $28.5 billion in March. Economists had expected the deficit to widen to $29.0 billion from the $27.6 billion originally reported for the previous month.


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IFX Darika

Banned
Apr 15, 2009
50
0
0
Kaliningrad, Russia
Dollar Shows Mixed Trading Against Majors

Thursday during early deals, the U.S. dollar showed mixed performance against its major counterparts. While the recovered its Asian session's loss against the euro and the pound, it pared gains against the yen and the franc. The dollar rose from a 3-day low against the euro and jumped to a 9-day high against the pound.

Traders now look forward to the New York session, in which the Labor Department is due to release its customary weekly jobless claims report for the week ended June 13th at 8:30 am ET.

The results of the Philadelphia Federal Reserve's manufacturing survey are due out at 10 am ET. Economists expect the diffusion index of current activity to show a reading of -17 for June.

At the same time, the Conference Board is scheduled to release a report on the U.S. leading index for May . The consensus estimate calls for a 0.9% increase in the leading indicators index for the month.

The dollar gained against the euro after falling to a 3-day low of 1.3992 at 3:20 am ET Thursday. The euro-dollar pair that closed yesterday's trading at 1.3947 reached 1.3908 by about 4:55 am ET. The near term resistance level for the dollar is seen at 1.383.

Italy's trade deficit decreased to EUR277 million in April from EUR1.02 billion in the previous year, the country's statistical office ISTAT said today. Economists expected a deficit of EUR250 million.

Exports dropped 28.7% year-on-year to EUR23.9 billion, while imports declined 30% to EUR24.2 billion. Month-on-month, on a seasonally adjusted basis, exports fell 2.9% and imports were down 3.9%.

At 5:25 am ET Thursday, the dollar reached a 9-day high of 1.6191 against the pound, moving up from an Asian session low of 1.647. If the dollar strengthens further, it may likely target the 1.581 level.

A report from the Office for National Statistics showed an annual decline of 1.6% in the U.K. retail sales volume in May. Economists had expected only 0.4% fall in sales. From April, retail sales volume unexpectedly decreased 0.6%, as economists were looking for a 0.3% rise.

Meanwhile, the Bank of England said in a preliminary report that the M4 money supply grew 16.6% year-over-year in May, slower than the 17.4% increase in April. Economists had expected an increase of 17.3%.

On a monthly basis, the M4 money supply rose 0.2% in May, marking the same pace as in the previous month. Economists were looking for an increase of 0.7%.

The dollar jumped to 1.0831 against the Swiss franc before losing ground at 1:10 am ET Thursday. Currently, the dollar-franc pair is worth 1.0769, down from yesterday's close of 1.0802. The next target level for the pair is seen at 1.065.

The Swiss National Bank left its three-month libor target range unchanged at 0-0.75% as expected. In other words, the bank kept its key interest rate unchanged at 0.25%.

The central bank said in a statement that it will continue to provide the economy with a generous supply of liquidity and to purchase Swiss franc bonds with the aim of reducing risk premia on long-term bonds issued by private sector borrowers. The SNB also said it will take firm action to prevent an appreciation of the Swiss franc against the euro.

The dollar soared to 96.10 against the yen by about 3:00 am ET Thursday. Thereafter, the dollar dropped and touched 95.64 at 4:55 am ET and this may be compared to Wednesday's close of 95.71.On the downside, 95.53 is seen as the next target level for the U.S. currency.

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IFX Darika

Banned
Apr 15, 2009
50
0
0
Kaliningrad, Russia
IMF May Raise Global Growth Forecast For 2010, Official Says

The International Monetary Fund or IMF may raise its 2010 growth outlook for the world economy in the coming weeks, reflecting some improvements in global economic conditions, IMF's First Deputy Managing Director John Lipsky said Friday. He called for forceful policies to tackle the financial sector stress and continued international collaboration to ensure signs of economic improvement lead to a sustained global recovery.

In a keynote address to Turkish Industrialists' and Businessmen's Association in Bodrum, Lipsky said, "Financial conditions have improved, confidence is recovering gradually, and indicators of future production and demand have firmed. Reflecting these developments, I expect that in the coming weeks we will revise our growth projections modestly upward, mainly with regard to 2010."

However, he warned that given the worldwide increase in unemployment, it is far too early to conclude that the goal of restoring global growth has been accomplished.

While noting that recent indicators have signaled a slowdown in economic contraction, Lipsky said the timing and pace of the global economic recovery remains uncertain.

In April, the IMF had forecast that the global economy will contract by 1.3% in 2009, the deepest recession since the World War II. The economy is then expected to grow by 1.9% in 2010. The IMF is due to announce its updated forecasts for the world economy on July 7.

However, Lipsky said, "Even the upbeat indicators widely cited as representing "green shoots" still point to a global recovery that would be sluggish by historic standards."

He said activity in the advanced economies will revive only gradually over the course of 2010, weighed down by financial deleveraging, limited credit growth, weak household income growth and declining household net worth. Emerging economies are unlikely to return to trend growth while advanced economies are still underperforming. As a result, output gaps and unemployment rates in most economies likely will continue rising through 2010, Lipsky said.

In this context, he said, it should be clear that in most cases, continued strong policy actions will be needed during the remainder of this year and into 2010 in order to insure that economic activity begins a sustained improvement.

He stressed that robust growth will not be achieved until continuing financial sector problems are addressed forcefully. He noted that recent bank stress tests in major advanced economies, especially in the United States and the United Kingdom, have represented a significant step toward rebuilding market confidence and attracting new private capital.


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IFX Darika

Banned
Apr 15, 2009
50
0
0
Kaliningrad, Russia
US Dollar Ticks Up Following May Personal Income Report

The greenback, which slumped to multi-day lows against most majors just before the release of the US Commerce Department report on personal income, started trending higher following the report. As of now, the dollar is trading at 95.42 against the Japanese yen, 1.0847 versus the Swiss franc, 1.6491 against the pound and 1.4083 against the euro.

The report showed that personal income jumped 1.4 percent in May following an upwardly revised 0.7 percent increase in April. Economists had expected income to rise 0.3 percent compared to the 0.5 percent growth originally reported for the previous month.

Additionally, the Commerce Department also said that personal spending rose 0.3 percent in May after coming in unchanged in the previous month. The moderate increase in spending came in line with economist estimates.


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IFX Darika

Banned
Apr 15, 2009
50
0
0
Kaliningrad, Russia
Dollar And Yen Plunge On Improving Risk Appetite

Tuesday in Asia, the U.S. dollar and the Japanese yen plummeted against their key counterparts as hopes of an economic recovery increased risk appetite to buy higher-yielding assets.

The dollar and the yen are viewed as safe-haven currencies and tend to attract buying when worries about the global economy and financial markets flare up, but can come under pressure when such concerns recede.

Asian stock markets are broadly higher today, taking their cue from gains on Wall Street with energy stocks buoyed by a continued rise in crude oil prices.

Japan's Nikkei 225 was up 1.9%, Australia's S&P/ASX 200 was 1.5% higher, Korea's Kospi Composite Index was up 0.8%, Hong Kong's Hang Seng was up 1.4%, China's Shanghai Composite was 0.1% higher and Taiwan shares were up 0.9%.

Japan's Nikkei average rose 1.9 percent today, and briefly it hit 10,000 as surging crude prices boosted trading houses such as Mitsubishi Corp., which deal in oil, amid growing optimism that economic recession may be easing.

The 225-issue Nikkei Stock Average gained 184.57 points, or 1.89 percent, from Monday to 9,968.04 in the morning session after briefly touching 10,000.30. The benchmark index last topped the 10,000 line on June 15, logging an intraday high of 10,126.55.

The broader Topix index of all First Section issues on the Tokyo Stock Exchange was up 14.32 points, or 1.56 percent, to 929.64.

Stock market gains are fueling risk appetite in the currency markets, sending the euro, aussie and kiwi higher.

Sentiment in Japan was helped by news that household spending in May rose 0.3% on year, up for the first time in 15 months, and beating expectations for a 1.5% decline.

But that was tempered by the release of the May jobless rate, which rose to 5.2%, the highest since September 2003, from 5.0% in April. Analysts had expected an increase of 5.1% for May.

The job-to-applicant ratio came in at a record low of 0.44, compared to forecasts for 0.45 after the 0.46 level in April.

But the number of employed persons rose from 63.22 million in April to 63.42 million in May. The job participation rate was 60.5 percent, up from 60.4 percent a month earlier.

The Organization for Economic Cooperation and Development last week forecast Japan's jobless rate will rise to an unprecedented 5.8 percent in 2010.

In Asian trading on Tuesday, the yen fell to a 2-week low of 159.97 against the pound. This may be compared to yesterday's close of 159.15. If the yen weakens further, it may likely target the 162.6 level.

The yen has declined 4% against the pound after it reached a 3-week high of 154.13 on June 23.

The yen tumbled to a 15-day low of 135.97 against the euro during Asian deals on Tuesday. The next downside target level for the Japanese currency is seen at 138. At yesterday's close, the euro-yen pair was quoted at 135.32.

The euro gained 1% against the yen yesterday after a report showed that the Euro-zone economic sentiment rose more than expected in June.

The economic sentiment indicator rose to 73.3 from an upwardly revised reading of 70.2 recorded in May. Meanwhile, economists had expected the index to rise to 71 from May's initially reported reading of 69.3.

Against the Swiss franc, the yen slipped to a 6-day low of 89.14 in Asian deals on Tuesday. On the downside, 89.8 is seen as the next target level for the yen. The franc-yen pair was worth 88.80 at Monday's New York session close.

After hitting a 1-month high of 86.89 against the franc on June 24, the yen has been declining and it has lost more than 2% thus far.

The dollar also weakened today on optimism the global slump is waning, reducing the currency's appeal as a refuge.

During Asian deals on Tuesday, the dollar plunged to 1.6663 against the pound. This set the lowest level for the dollar since June 03. If the dollar slides further, it may likely target a new multi-month low of 1.70. The pound-dollar pair closed yesterday's trading at 1.6567.

The pound rose as U.K. consumers became much more upbeat about the economy's prospects over the next 12 months in June, boosting the overall measure of confidence for the fourth time in five months.

Consumers seem to believe that the measures taken by the government and the Bank of England to support the economy are likely to work, and indicating that they in turn won't cut back on spending as sharply as many economists had expected.

Polling firm GfK NOP said today that the headline measure of consumer confidence rose to -25 in June from -27 in the previous month. The index was in line with economists' expectations. At the same time, the index came in better than the minus 34 registered in June last year.

The dollar plummeted to a 7-month low of 1.6666 against the pound on June 03. Although the dollar gained thereafter, it pulled back again after reaching a 12-day high of 1.5805 on June 08.

However, the pound-dollar pair largely bounced between 1.6212 and 1.6623 for the past two weeks, but the pair moved off the range today.

The dollar slumped to a 4-day low of 1.0802 against the Swiss franc and a 6-day low of 1.4133 against the euro in Asian deals on Tuesday. If the dollar drops further, it may likely target 1.065 against the franc and 1.418 against the euro. The euro-dollar pair closed trading at 1.4089 and the dollar-franc pair at 1.0823 on Monday.

Extending yesterday's 1% gain, the dollar surged up against the yen in today's early Asian deals and reached a 5-day high of 96.33 at 8:05 pm ET. But the dollar fell thereafter and the pair is currently trading at 95.69, down from yesterday's New York session close of 96.06. The near term support level for the U.S. currency is seen at 95.1.

Traders are now likely to focus on the European session, in which the Swiss May UBS consumption indicator, French May PPI, German June unemployment rate, Euro-zone M3 money supply for May and CPI for June, Italian CPI for June and PPI for May, U.K. final first quarter GDP estimate and current account reports are expected.

From the U.S., the S&PCase-Shiller home price index for April and the consumer confidence report for June are due in the North American session.

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IFX Darika

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Apr 15, 2009
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Kaliningrad, Russia
Greenback Declines Against Majors

The US dollar that edged slightly higher against its major rivals immediately after the ADP employment report lost ground shortly. As of 8:30 am ET, the greenback drifted lower to 96.67 against the Japanese yen, 1.0795 against the Swiss franc, 1.6494 against the pound and 1.4123 against the euro.

The ADP report showed that non-farm private employment fell by 473,000 jobs in June following a revised decrease of 485,000 jobs in May. Economists had expected a decrease of 394,000 jobs compared to the loss of 532,000 jobs originally reported for the previous month.

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IFX Darika

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Apr 15, 2009
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Kaliningrad, Russia
Greenback Falls Versus Euro, Sterling Thursday Morning

The dollar pulled back versus the euro and sterling but managed to stabilize against the resurgent yen Thursday morning in New York, as traders looked ahead to weekly jobless claims figures.

Yesterday, The Group of Eight largest industrialized nations meeting in L'Aquila released a statement recognizing serious downside risks to the global economy.

Still, stock futures on Wall Street crept ahead Thursday morning on Wall Street, fueling renewed risk appetite. Alcoa kicked off earnings season with a better than expected result.

The dollar gave back some of its recent gains versus the euro and sterling. Versus the euro, the dollar dropped to 1.3980, falling more than a penny from its 3-week high of 1.3832.

The dollar plunged versus the sterling, dropping to 1.6260 from a monthly high of 1.5982.

Thursday, the Bank of England retained its key interest rate and decided to continue with its asset purchase scheme totaling GBP 125 billion by utilizing central bank reserves.

At the end of the two-day rate setting meeting, the Monetary Policy Committee decided to hold the Bank Rate at 0.5% as expected. The rate now stands at the lowest since the central bank was established in 1694.

The dollar steadied versus the yen,, holding near 93 after plummeting to a 5-month low of 91.79.

Despite nagging rumors that G8 leaders would discuss an alternative to the dollar as the world's de facto reserve currency, there was no mention of a new international currency in the statement released following the first day of meetings in Italy.

A Labor Department report on the number of first time claimants for unemployment benefits is likely to be in the radar, given the linkage jobs and wage growth has got with consumer spending. Economists expect the report to reveal a decline in claims in the recent reporting week. Additionally, the results of the Treasury auction of $11 billion worth of 30-year bonds may also be closely watched.

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IFX Darika

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Apr 15, 2009
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Kaliningrad, Russia
Dollar Strengthens Against European Majors

Friday morning in Asia, the U.S. dollar advanced against the currencies of Europe, U.K. and Switzerland. On the other hand, the dollar pared its recent gains against the Japanese yen.

Leaders of the world's biggest developed and emerging nations avoided a debate over the dollar's role in the global economy as they agreed not to devalue their currencies to promote their exports.

With officials from Brazil, India, China and Russia pushing consideration of alternative reserve currencies, their joint statement's language on foreign exchange echoed an agreement at an April summit of the Group of 20.

The leaders agreed to "refrain from competitive devaluations of our currencies," according to the statement released after their meeting yesterday at the G-8 summit in L'Aquila, Italy. They also agreed to "promote a stable and well-functioning international monetary system."

The global financial crisis and the surge in U.S. borrowing have prompted Russian President Dmitry Medvedev to advocate diversification away from the dollar. Russia and its counterparts have yet to come up with a viable alternative.

The dollar that closed yesterday's trading at 1.4025 against the euro rose to 1.3969 during early Asian deals on Friday. The near term resistance level for the U.S. currency is seen at 1.389.

A report from the U.S. Labor Department showed yesterday that first-time claims for unemployment benefits decreased substantially in the week ended July 4th.

The report showed that jobless claims fell to 565,000 from the previous week's revised figure of 617,000. Economists had been expecting a more modest decrease to 603,000 from the 614,000 originally reported for the previous week.

In early Asian trading on Friday, the dollar climbed to 1.6273 against the pound. This may be compared to yesterday's close of 1.6339. On the upside, 1.61 is seen as the next target level for the dollar.

Against the Swiss franc, the dollar gained in early Asian deals on Friday. At 10:45 pm ET, the dollar-franc pair reached 1.0830, up from yesterday's 1.0783. If the pair advances further, it may likely target the 1.092 level.

The dollar strengthened to 93.20 against the yen at 7:50 pm ET Thursday. Thereafter, the dollar-yen pair slipped and it is presently trading near yesterday's close of 92.99. The next downside target level for the pair is seen at 91.8.

An index measuring the prices of domestic corporate goods fell 6.6 percent on year in June, the Bank of Japan said today, marking the fastest pace of decline on record.

Analysts had been expecting a fall of 6.4 percent on year following the revised 5.5 percent decline in May. On a monthly basis, the prices for corporate goods eased 0.3 percent versus expectations for a 0.1 percent decline. The May reading was revised from -0.4 percent to -0.5 percent.

The industrial production reports from France and Italy as well as the French current account-all for the month of May are scheduled for release in the European session today.

From the U.S., the trade balance for May, import and export price indexes for June and the Reuters/University of Michigan's preliminary consumer confidence report for July are expected in the New York session.

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IFX Darika

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Apr 15, 2009
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Kaliningrad, Russia
East Asian Economies In Transition Phase From Recession To Recovery: ADB

Thursday, in its July issue of the Asia Economic Monitor, the Asia Development Bank noted that the East Asian Economies had already entered the transistion from recession to recovery, although the economic growth was continuing to slow this year.

"Emerging East Asia could see a V-shaped recovery, with growth dipping sharply in 2009 before regaining last year's pace in 2010," Jong-Wha Lee, ADB Chief Economist and Head of the Office of Regional Economic Integration said.

However, the report cautioned saying that given the tentative nature of the expected recovery, it was critical for authorities to continue to follow measures which would support domestic demand and growth. "Monetary and fiscal policies in the region need to remain accommodative until the recovery gains substantial traction", the ADB said.

"Emerging East Asia should reinforce cooperation in enhancing financial stability by accelerating regional initiatives, and actively participate in designing the new global financial architecture", it added.

Moreover, the ADB pointed out that deep recessions in the U.S,Europe and Japan would continue to hurt emerging Easing Asian economies, particularly the smaller one that were highly reliant on exports. However, larger economies like China, that had implemented major fiscal packages were begining to see some results from the stimulus packages.

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