Forex NEWS by RTT in partnership with InstaForex

[IFX Darika]

Financial Professionals Say U.S. Economy Still In Recession

Financial professionals hold the view that the U.S. economy remains in a recession, despite signs of stability in recent months, a survey said Tuesday. The survey was conducted amongst attendees of the 2009 annual conference of the Association for Financial Professionals on October 5.

Around 20% of respondents assessed that the recession will end before of the year, while 69% expect the recession to continue well into 2010. Nearly 22% expect company payrolls to shrink further, while just 14% anticipate their organization to resume hiring over the next six months.

Only 21% of financial professionals said their organization will increase capital spending in the months ahead. Majority of survey respondents expect to either maintain or further cut capital spending over the coming six months.


News are provided by InstaForex.

 

[IFX Darika]

Dollar Edges Lower Versus Euro, Sterling

The dollar touched a fresh yearly low versus the euro on Tuesday, even after European Central Bank President Jean-Claude Trichet and finance ministers of the sixteen Eurozone countries expressed "worries" about forex movements and voiced support for a strong U.S. dollar.

Its been a brutal stretch for the dollar of late, particularly against the euro. Amid expectations that the interest rate gap between the US and other industrialized nations will widen rapidly once the economic recovery takes hold, the dollar has fallen almost 25 cents from its 2009 highs against the euro, set back in March.

Late Monday night, the dollar dropped to 1.4993, its lowest level in more than fourteen months. The pair was little changed from that mark approaching 8 am ET.

The dollar barely budged versus most other majors ahead of data on US housing starts and producer prices. The Bank of Canada's interest rate decision may also be in focus.

While most economists expect the BoC to maintain its current overnight call rate, Australia, another resource-based economy, surprisingly hiked its key interest rate earlier this month.

Earnings news will also garner attention as participants continue to look for signs that corporations are able to grow revenues.

The dollar was stuck in the mud versus the loonie ahead of the BoC decision, inching slightly higher to C$1.0320. A surprise from central bankers in Ottawa could drive the dollar to parity with the loonie.

Against the sterling the dollar extended its 6-week low, touching 1.6446. With the loss, the buck moved further away from last week's 5-month high near 1.5700.

Choppy trading kept the dollar above the 90 mark versus the yen. Speculation that Japanese officials may intervene to weaken the yen has helped the dollar rebound after testing a 1995 low of 87.08.

Japan's leading index stood at 83.2 in August, down from the initial estimate of 83.3, the Cabinet Office reported Tuesday. However, the leading index improved for the sixth month in a row. In July, the reading was 82.5.

News are provided by InstaForex.

 

[IFX Darika]

IMF Upgrades Asia's Growth Outlook

Thursday, the International Monetary Fund raised Asia's economic outlook saying that the region is rapidly rebounding from the depth of the global crisis.

In its latest regional economic outlook, the Washington-based IMF said it expects Asia's gross domestic product to grow 2.8% this year and by 5.8% next year. In May, the lender had forecast Asia's growth to decelerate to 1.3% in 2009 before rebounding to 4.3% in 2010. The new forecasts are short of the 6.7% average growth recorded over the past decade.

"The primary driver of Asia's recovery has been a progressive return towards normalcy following the abrupt collapse in global trade and finance at the end of 2008," the IMF report said. According to the report, the other key driver of Asia's recovery has been the region's rapid and forceful policy response.

"The "green shoots" of recovery appear more firmly rooted in Asia than in other regions," the report said. "Now Asia is leading as the world pulls out of recession."

While raising its world economic outlook on October 1, the IMF said the world economy is expected to grow 3.1% next year, more than the 2.5% growth forecast in July. The lender expects the Japanese economy to contract 5.4% this year and to grow by 1.7% next year. Australia's growth is forecast to touch 0.7% this year and 2% next year. New Zealand's economy is predicted to shrink 2.2% in 2009 and to expand by 2.2% next year.

China is likely to log the fastest growth in the region, 8.5% this year and 9% in 2010. India is set to follow, with growth projected at 5.4% in 2009 and at 6.4% next year. Meanwhile, South Korea's economy is predicted to shrink 1% before expanding by 3.6% next year.

At the same time, the IMF today revised its outlook for Singapore to show a 4.3% expansion in 2010 after a 1.7%contraction this year. In its world economic outlook, the organization had forecast Singapore GDP to rise 4.1% in 2010 after falling 3.3% this year.

The IMF said Asian policymakers consequently face two major challenges - to maintain policy stimulus until the recovery becomes self-sustaining and to devise a way to return to sustained, rapid growth in a new global environment. It also said Asia will need to be willing to live with smaller current account surpluses and more flexible exchange rate management. Moreover, it said output in the large G7 economies is forecast to grow by 1.3% next year, recouping only half the contraction estimated for 2009, because private demand in these countries remains constrained by the legacy of the crisis.

Asia's V-shaped recovery may be the sharpest on record and may turn into a square-root-shaped recovery soon, DBS Bank economist David Carbon said in a note on Wednesday. "That is, a sharp drop, a sharp rise, and then a palpable turn sideways." The DBS economist expects growth to be back to "normal" for most of the countries in the region by the first quarter of 2010.

Carbon also expects key central banks in the region to hike rates in the first quarter. The bank forecasts India to hike rates as early as January and South Korea in the first quarter. China is expected to start pushing rates up in the second quarter as well as allow its currency to appreciate against the U. S. dollar.

Earlier in the month, Australia became the first G-20 central bank to raise key interest rate after the global financial crisis. India's central bank became the second in the group to start exiting from an easy monetary policy, though it retained key interest rates.

News are provided by InstaForex.

 

[IFX Darika]

Dollar Fighting Back Versus Euro As Focus Turns To Fed

The dollar surged ahead versus the euro Tuesday morning in New York as the Federal Reserve prepared to meet amid growing anxiety that the economic growth seen over the summer may not be sustainable without continued support measures.

With the US consumer still on edge as unemployment approaches 10 percent, many analysts are pointing out that while the third quarter figures on the economy are somewhat encouraging, organic growth is unlikely until the jobs situation improves.

The safe haven dollar has managed recover versus the euro over the past week, prompting the rally in global equities to run out of steam.

The dollar jumped to a monthly high of 1.4623, rising more than a penny even as traders considered news that the European Commission expects the euro area economy to emerge from recession in the second half of 2009.

However, the economy is set to contract 4% for 2009 as a whole.

Joaquin Almunia, Commissioner for Economic and Monetary Affairs said, "The EU economy is coming out of recession. This owes much to the ambitious measures taken by governments, central banks and the EU that have not only prevented a systemic meltdown but have kick-started the recovery. However, the road ahead is a challenging one."

The dollar firmed up a bit versus the yen, moving back above the 90 mark. The pair has been choppy over the past few weeks, with the buck finding a measure of support after testing a 1995 low in October.

Meanwhile, the dollar was steady versus its Australian counterpart even after the RBA raised its interest rate for the second straight session. The dollar rose to .8920 versus the aussie, but leveled off to .8965 approaching 8 am ET.

In October, Australia became the first G-20 member nation to hike its benchmark interest rate since the onset of the financial crisis in late 2008.

The dollar hit a weekly high versus the sterling, rising to 1.6260 before hitting resistance. On a longer term basis, the pair has been moving between 1.5700 and 1.6700 for months.

All eyes will be on Washington, DC tomorrow as the Fed wraps up its latest policy meeting. While Ben Bernanke and company are universally expected to maintain the key interest rate near zero, traders will be paying close attention to the accompanying statement, looking to see whether rates will be left alone "for some time to come," as the central bank has recently assured.

Looking at today's economic calendar, the government is releasing September factory orders at 10 am ET. Economists are looking for a September gain of 1 percent.

News are provided by InstaForex.

 

[IFX Darika]

Japanese Consumer Prices Fall Further, Unemployment Drops Unexpectedly

Consumer prices in Japan continued to fall at a rapid pace in October, official data showed on Friday, giving credence to the deflationary concerns of the government. However, a surprise decline in unemployment, along with household spending data put more of a positive, yet momentary, spin on things for the beleaguered economy.

Core consumer prices, which exclude fresh food from the price basket, dropped 2.2% in October from a year earlier, but slower than a 2.3% fall in the previous month, the Ministry of Internal Affairs and Communication reported. Economists had expected a 2.4% decline. General consumer prices dropped 2.5% year-on-year in October, after a 2.2% fall in prices in each of the three preceding months.

On November 20, the Cabinet Office declared that the economy is in deflation, the first official announcement of deflation since mid-2006. In its monthly economic report for November, the government said, "Recent price developments show that the Japanese economy is in a mild deflationary phase." The report said the economy is picking up, but faces difficult situation such as a high unemployment rate.

Last week, the Organisation for Economic Co-operation and Development warned against lingering deflation in the economy and said an increase in the central bank's bond purchases would help in battling deflation. According to the Bank of Japan's forecast in October, the CPI excluding fresh food, would fall 1.5% in fiscal 2009 and would drop 0.8% in fiscal 2010 and a 0.4% decline in fiscal 2011.

On a monthly basis, overall consumer prices dropped 0.4%, and excluding fresh food, prices fell 0.1%.

BNP Paribas economist Azusa Kato said that the slowing in the rate of decline in the core CPI was simply the result of a 'technical error', namely the waning base effect from surging petroleum product prices through August of last year. Excluding this, price deflation actually broadened in October, he pointed out.

Meanwhile, the CPI in the Tokyo area dropped 2.2% on year in November and fell 0.2% on a monthly basis. The core CPI fell 1.9% on a yearly basis, but slower than a 2.3% decline anticipated by economists. Month-on-month, core consumer prices were down 0.1%.

"Despite the economic recovery that has been driven by fiscal stimulus and rising exports to emerging economies, downward pressures on prices have hardly abated and the supply-demand gap remains quite large," Kato said. Even after the disappearance of techinical factors around February, BNP Paribas expects that a minus inflation rate of more than -1% should take root for a while, as deflationary expectations are taking hold at the consumer and corporate level.

On a more encouraging note for the economy, unemployment levels continued to fall against expectations. The unemployment rate stood at a seasonally adjusted 5.1% in October, down from 5.3% in the previous month, the Ministry of Internal Affairs & Communications reported. Economists had expected the unemployment rate to rise to 5.4%. The jobless rate declined for the third consecutive month.

The total number of unemployed persons declined to 3.36 million from 3.52 million. At the same time, the number of employed persons decreased to 62.44 million from 62.64 million in the prior month, while total labor force strength slid to 65.82 million from 66.19 million.

In other news, real household spending in Japan grew 1.6% year-on-year in October following the 1% increase in the previous month. Economists had expected real household spending to rise 0.7%.

Household spending excluding that on housing, purchase of vehicles, money gifts and remittance climbed 0.7%. Spending on medical care surged 11.4% annually in October, while spending on transportation & communication rose 4.7%. On the other hand, household spending on education declined 4.6%.

Spending among workers' households increased 0.6% from the previous year, the same rate of growth as in the preceding month. In nominal terms, total household spending dropped 1.3%.

Retail sales figures for October were also released on Friday, with sales falling 0.9% year-on-year to JPY 10.83 trillion in October, slower than the 1.3% decline in the preceding month. Economists had expected sales to drop 1.6%. This marks the fourteenth straight month in which retail sales have fallen on an annual basis.

"The outlook for consumption is not bright," BNP Paribas economist Hiroshi Shiraishi said. "Employee income, the key to consumption, is unlikely to improve anytime soon as businesses continue to cut costs in order to cope with chronically low operating rates." BNP Paribas expects GDP-based consumption, which increased at a solid pace in the second and third quarters to start to lose momentum from the final quarter of the year.

News are provided by InstaForex.

 

[IFX Svetlana]

Yen Soars To New Multi-day Highs Against Majors On Weak Equities

Wednesday, the yen rose to new multi-day highs against its major counterparts as a fall in global stock prices prompted investors to seek the safety of the Japanese currency.

World stock markets extended their losses today as Japan's much weaker-than-expected economic growth and rising debt loads around the world added to concerns the global recovery was faltering.

Investors in Asia were rattled after Japan downwardly revised its economic growth for the third quarter today to reflect a marked worsening of domestic demand in the country.

The Cabinet Office announced that gross domestic product expanded just 0.3% quarter-on-quarter in the third quarter, revised down from the 1.2% growth estimated initially.

Economists had expected the GDP growth rate to be revised to 0.7%.

After falling sharply Tuesday, European markets added to their losses, with benchmarks in Germany, France and Britain down 0.1 percent or more.

Earlier in Asia, Japan's Nikkei 225 stock average fell 135.75 points, or 1.3 percent, to 10,004.72.

Hong Kong's key index shed 318.76, or 1.4 percent, to 21,741.76, and Shanghai's benchmark was off 1.7 percent at 3,239.57.

Australia's market lost 0.7 percent, India's stock measure declined 0.4 percent and Singapore's market was off 0.3 percent.

The South Korean market defied the downdraft and gained 0.4 percent to 1,634.17, helped after the International Monetary Fund raised the country's economic growth forecast for 2010. Taiwan's market also rose 0.4 percent.

Against the US dollar, the Japanese yen traded higher during early deals on Wednesday. At 3:35 am ET, the yen climbed to a 6-day high of 87.49 against the dollar, compared to 88.45 hit late New York Tuesday. The next upside target level for the yen is seen around 87.1.

The Japanese unit that closed Tuesday's North American session at 130.04 against the European currency reached a 12-day high of 128.80 at 3:55 am ET Wednesday. If the yen gains further, 128.0 is seen as the next target level.

Germany's Federal Statistical Office said today in a final report that the consumer price index or CPI increased 0.4% year-on-year in November, faster than the flat reading in the previous month. The consumer price inflation in November was revised from 0.3% estimated initially. The consumer prices increased for the first time since June 2009.

French trade deficit widened to EUR 4.39 billion in October from EUR 2.80 billion deficit in September, data released by the Customs Office showed today. Economists had forecast deficit to narrow to EUR 2.3 billion.

Against the Japanese currency, the British pound edged higher during today's early deals. At 3:40 am ET, the yen rose to an 8-day high of 142.05 against the pound, compared to Tuesday's closing value of 144.07. On the upside, 141.2 is seen as the next target level for the yen.

Consumer confidence in the United Kingdom held firm in November led by greater optimism about the future economic situation, the results of a survey showed today.

The Nationwide Building Society announced that the consumer confidence index stood at 73 in November, unchanged from the upwardly revised reading for October. The expectations index rose to 108 from 107 and this was offset by a decline in the present situation index by 2 points to 20. The index measuring spending intentions rose to 106 from 104.

The yen that closed Tuesday's New York deals at 86.15 against the Swiss franc hit a 12-day high of 85.30 at 3:50 am ET Wednesday. The franc-yen pair is currently trading at 85.63 with 84.7 seen as the next target level.

Switzerland's unadjusted jobless rate rose to 4.2% in November from 4% recorded in October, the State Secretariat for Economic Affairs said today. That was in line with economists' expectations. At the same time, the seasonally adjusted jobless rate stood stable at 4.1%.

Across the Atlantic, the U.S. wholesale inventories report for October is due in the North American session.

News are provided by InstaForex.

 

[IFX Darika]

European Currency Plunges To 2 1/2- Month Low Against US Dollar

During early deals on Tuesday, the European currency plunged to a 2 1/2-month low against the US dollar and traded near a 1-month low versus the British pound ahead of the German and Euro-Zone ZEW economic sentiment survey results.

At 5:00 am ET, the Centre for European Economic Research or ZEW is expected to release economic sentiment survey results for Germany. The economic sentiment indicator for Germany is seen at 50 in December, down from 51.1 in the previous month. The current conditions index is expected to rise to minus 60.1 from minus 65.6. Meanwhile, the economic sentiment indicator for the Eurozone is seen at 49.9 in December compared to 51.8 in November.

While, the euro pared its Asian session's gains against the Japanese yen it edged higher against the Swiss franc.

Against the US dollar, the European currency traded down during early deals on Tuesday. At 4:25 am ET, the euro-dollar pair declined to 1.4548, compared to 1.4658 hit late New York Monday. This set the lowest mark for the pair since October 2, 2009. The next downside target level for the pair is seen around 1.437.

The 16-nation currency that closed Monday's North American session at 0.8988 against the British pound plunged to a 26-day low of 0.8946 at 3:50 am ET Tuesday. If the euro-pound pair falls further, 0.889 is seen as the next target level.

House prices in the United Kingdom rose for the fourth straight month in November, a barometer of sentiment in the residential property market showed today.

The house price balance index from the Royal Institution of Chartered Surveyors (RICS) increased to 35 points in November from 34 points in October. Economists had expected a reading of 39 points. The survey subtracts the percentage of surveyors reporting falling prices from those reporting rising prices.

Against the Swiss franc, the single currency edged higher during Tuesday's early deals. At 1:30 am ET, the euro-franc pair reached a high of 1.5135, compared to Monday's closing value of 1.5123. On the upside, 1.515 is seen as the next target level for the pair.

Switzerland's State Secretariat for Economic Affairs announced today its latest economic forecasts. Experts now see a 1.6% decline in gross domestic product this year, slightly less than the 1.7% fall forecast in September. Meanwhile, the growth forecast for 2010 was hiked to 0.7% from 0.4%. The Swiss economy, which emerged from recession in the third quarter, is expected to grow 2% in 2011.

The euro lost ground after hitting a high of 130.41 against the yen at 12:00 am ET Tuesday. Currently, the euro-yen pair is trading at 129.86 with 129.1 seen as the next target level. The pair closed Monday's New York deals at 129.92.

Across the Atlantic, the U.S. PPI and industrial production reports for November, NAHB housing market index and the results of the New York Federal Reserve's empire state manufacturing survey for December and the Treasury Department's report on the flows of financial instruments into and out of the U.S. for October have been slated for release.

News are provided by InstaForex.

 

[IFX Svetlana]

Pound Spikes Down Against Majors.

The British pound staged a sharp fall against its major counterparts at 2:00 am ET Thursday. The pound-dollar pair thus declined to a 2-day low of 1.6217, compared to 1.6336 hit late New York Wednesday. The next downside target level for the pair is seen around 1.621.

Meanwhile, the British currency is currently trading at 0.8885 against the euro and 1.6971 versus the franc, compared to today's early Asian session's new multi-week highs of 0.8854 and 1.7030 respectively. This may be compared to yesterday's closing values of 0.8898 against the European currency and 1.6970 versus the Swiss franc.

Against the Japanese yen, the pound is now quoted at 145.86, compared to Wednesday's closing value of 146.67.


News are provided by InstaForex.

 

[IFX Svetlana]

Dear forumers!

InstaForex Company sincerely congratulates all its clients, partners
and friends with upcoming holidays: Christmas and New Year 2010!
The expiring year became a serious challenge for many of us, but we
achieved the considerable success and in the coming year we are not
going to recede from the chosen course!

We wish all our clients the professional growth in trading world,
profitable trend and favorable forecasts! We wish you luck and success
in business, new opportunities and perspectives!

We wish our partners all-round development, and also we hope that
in 2010 we will have only the effective cooperation and maturing of
our partnership relations!

Happy New Year 2010!

 

[IFX Darika]

Aussie Advances To New Multi-day Highs Against Most Majors

The Australian dollar advanced to a new multi-day highs against the currencies of Japan, US, Europe and New Zealand as a surge in local stocks encouraged investors to bet on higher-yielding currencies.

On the equity front, the Australian market ended in the positive territory today having reopened after 4 holidays, taking cues from Wall Street where the major averages ended higher in yesterday's trading session.

The benchmark S&P/ASX200 Index advanced 54.20 points, or 1.13% to close at 4,845, while the All-Ordinaries Index ended at 4,857, representing a gain of 53.40 points, or 1.11%.

During early trading on Tuesday, the Australian dollar rose to an 8-day high of 1.6133 against the euro. This may be compared with yesterday's closing value of 1.6216. On the upside, 1.608 is seen as the next target level.

The Aussie showed strength against the Japanese yen during Tuesday's early trading. At about 4:05 am ET, the Aussie-yen pair reached an 18-day high of 81.98, with 82.8 seen as the next upside target level. At Monday's New York session close, the pair was quoted at 81.30.

In early trading on Tuesday, the Australian dollar advanced to an 12-day high of 0.8952 against the US currency. The next upside target level for the aussie-greenback pair is seen at 0.901. The Aussie-dollar pair closed Monday's deals at 0.8872.

From U.S., the S&P/Case-Shiller home price index, is scheduled to be released at 9 am. Economists expect a 7.30% year-over-year decline in the 20-city composite house price index for October following a 9.36% drop in the previous month.

The Conference Board is scheduled to release its consumer confidence report for December at about 10 am ET. The report, is expected to show that the consumer confidence index rose to 53 in December.

The Australian currency edged up against the New Zealand dollar during early Asian deals on Tuesday. At 1:55 am ET, the aussie advanced to a 6-day high of 1.2566 against the kiwi, compared to 1.2537 hit late New York Wednesday. The next upside target level for the Aussie-kiwi pair is seen around 1.262. As of now, the pair is trading at 1.2558.

The Australian dollar also traded up against its Canadian counterpart during this time period and hit as high as 0.9323 by 4:10 am ET. This may be compared with yesterday's closing value of 0.9254. On the upside, 0.951 is seen as the next resistance level.

News are provided by InstaForex.

 

[IFX Darika]

Dollar Rises To 3-day High Against Yen

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]

European Economics Preview: U.K. Public Sector Finance Data Due

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]

Greenback Mixed Ahead Of Jobless Claims

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]

European Economics Preview: Eurozone Manufacturing PMI Due

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]

Trichet Repeats Eurozone Recovery Would Be Uneven

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]

Dollar Hits Fresh Highs Versus Slumping Euro

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]

Euro Eases From Multi-day Highs Against Most Majors

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]

Eurozone December Industrial New Orders Growth Eases

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%.