Forex Trading News
Dollar, Euro, Pound & Yen

00:12 Wednesday 16 June, 2010

Global demand for long-term U.S. financial assets rose more than forecast in April as investors in the U.K., China and Japan added to their holdings of Treasuries, a government report showed.

Net buying of long-term equities, notes and bonds totaled $83 billion in April, compared with net purchases of a record $140.5 billion in March, Treasury Department data released today in Washington showed. Including short-term securities such as stock swaps, foreigners bought a net $15 billion, compared with net buying of $26 billion the previous month.

Signs of a sustained recovery in the U.S., as well as a flight from the financial-market turmoil in Europe, may increase the flow of investment into the world’s largest economy. International investors accumulated Treasuries for an 11th straight month, today’s report showed.

“Overseas investors still love Treasuries,” said Ward McCarthy, chief financial economist at Jefferies & Co. in New York. “Safety is still the primary concern. I expect this pattern will be repeated in the May and June data as well.”

21:35 Tuesday 15 June, 2010

The euro rose against the dollar for a second day as stock markets gained, reducing refuge demand.

The 16-nation currency erased its loss as the Stoxx Europe 600 Index rose 0.5 percent and futures on the Standard & Poor’s 500 Index expiring in September increased 0.5 percent. Manufacturing in the Federal Reserve Bank of New York’s district expanded in June for an 11th month, a report today is forecast by economists to show.

“Stocks are driving currency markets today,” said Lauren Rosborough, a senior currency analyst at Westpac Banking Corp. in London. “The markets want to go down, but there’s no real decisive news out there to make it happen right now.”

21:31 Tuesday 15 June, 2010

The pound stayed near a one-month high against the dollar amid speculation the emergency budget that Prime Minister David Cameron’s government will announce in a week’s time will contain the nation’s fiscal deficit.

U.K. government bonds fell a second day as stocks rose, curbing demand for the safety of fixed-income assets. The pound was also buoyed as a U.K. house-price gauge climbed to the highest level in four months in May. A separate report showed inflation slowed in May for the first time in three months, while still exceeding the government’s 3 percent upper limit.

“The momentum is with sterling-dollar at the moment, and it can shrug off any negative data,” said Steve Barrow, head of Group of 10 foreign-exchange research at Standard Bank Plc in London. “Of more significance is the fiscal side, and the market is getting more confident” that Cameron will prevent a crisis for Britain’s public finances, he said.

11:33 Tuesday 15 June, 2010

The euro may rise to a three-week high against the dollar after it broke out of a so-called descending wedge, according to Forecast Pte in Singapore.

Europe’s single currency climbed beyond $1.2097 last week, the upper trend line of the descending wedge, signaling further gains in coming weeks, said Pak Lai Ng, a technical analyst at Forecast, citing trading patterns. A descending wedge is typically seen as “bullish,” according to Ng. The upper trend line connects the highs of May 21 and June 3. The pattern is formed by a series of lower highs and lower lows.

“With the wedge broken, the euro should go back to the high of that wedge,” Ng said in an interview, citing the May 21 high of $1.2672.

08:36 Tuesday 15 June, 2010

Greece’s credit rating was cut to non-investment grade, or junk, by Moody’s Investors Service, threatening to further undermine demand for the debt-strapped nation’s assets as it struggles to rein in its budget deficit.

In making the four-step downgrade to Ba1 from A3, Moody’s cited “substantial” risks to economic growth from the austerity measures tied to a 110 billion-euro ($134.5 billion) aid package from the European Union and the International Monetary Fund. The lower rating “incorporates a greater, albeit, low risk of default,” Moody’s said in a statement yesterday in London. The outlook is stable, it said.

Greece has cut spending, raised taxes and trimmed wages to tackle the deficit, which swelled to 13.6 percent of gross domestic product last year, more than four times the EU limit. To secure the EU-IMF aid, the government pledged to trim the shortfall to 8.1 percent of GDP this year and bring it back under the 3 percent EU ceiling in 2014. The crisis has prompted investors to sell the bonds of Greece and other high-deficit nations and pushed the euro down 15 percent this year.

“We’ve got a lot of uncertainty around the growth outlook for Greece,” Sarah Carlson, vice president-senior analyst in Moody’s sovereign-risk group, said in a telephone interview yesterday. “It’s rare for a country to implement so much structural reform in a very short time.”

08:34 Tuesday 15 June, 2010

Deputy Prime Minister Nick Clegg will say tackling Britain’s record deficit is the government’s top priority, as the independent budget office makes new forecasts that will be used for next week’s emergency budget.

“The extraordinary developments of the last few weeks in the euro zone matter enormously for the U.K.,” Clegg will say in a speech in London today, according to extracts released by his office. “Most immediately, they matter because the attitude of markets has changed. Markets have stopped believing that all European governments can service their debts.”

Echoing Clegg’s comments, Treasury officials said the U.K.’s underlying fiscal position is weak, suggesting Chancellor of the Exchequer George Osborne will stick to plans to reduce spending in the June 22 budget. The Conservative-Liberal Democrat coalition has warned the cuts will be the deepest since Margaret Thatcher was prime minister in the 1980s and will last longer than any other since World War II.

08:32 Tuesday 15 June, 2010

The pound rose and gilts fell after reports predicting faster economic growth and a narrower-than- forecast budget deficit spurred speculation the Bank of England will have to raise interest rates.

Sterling advanced to a one-month high versus the dollar after policy maker Andrew Sentance said officials face “interesting debates” in the second half of 2010 on how long to keep up stimulus. The Confederation of British Industry, the U.K.’s biggest business lobby, raised its forecast for gross domestic product. The Office for Budget Responsibility said the deficit will narrow to 71 billion pounds ($105 billion) by April 2015, from 155 billion pounds this fiscal year.

“We’re getting increasingly positive comments,” said Neil Mellor, a currency strategist at Bank of New York Mellon Corp. in London. “Sovereign risk has clearly been a driver of risk retreat and there’s a relief to some extent that lawmakers are getting on with” tackling the U.K. budget deficit, he said.

08:29 Tuesday 15 June, 2010

The euro may become a “weaker entity” or even lose some members unless its 16 participants cooperate more closely on fiscal policy, according to Pacific Investment Management Co.

Pimco, which runs the world’s biggest mutual fund, is “cautious” on the region’s government debt, said Andrew Balls, the company’s head of European portfolio management. While Europe’s most-indebted nations are reducing spending, it’s not yet clear the cuts won’t weigh on economic growth, he said.

“The range of possible outcomes includes the preservation of the current euro-zone, albeit as a weaker entity unless urgent progress is made on a deeper fiscal union, or one or more euro-zone members restructuring their debt and also the possible exit of a current member country,” Balls wrote in a research report received by e-mail today.

08:25 Tuesday 15 June, 2010

Canada’s dollar fell from the highest level this month as a downgrade of Greece rekindled concern that the global economic recovery will stall.

The loonie, as the currency is sometimes known, rose 3 percent last week, the most in eight months, on speculation economic growth will fuel demand for the nation’s raw materials. Moody’s Investors Service lowered Greece’s credit rating to junk, increasing investors’ risk aversion.

“The downgrade of Greece was a catalyst,” Shaun Osborne, chief currency strategist at TD Securities Inc., a unit of Canada’s second-largest bank, said by phone from Toronto. “We generally think that the Canadian dollar is going to struggle to do much better than C$1.02 or C$1.03 because a lot of the good news is priced in.”

08:22 Tuesday 15 June, 2010

ETF Securities Ltd. will offer 22 currency exchange-traded funds on the London Stock Exchange in a bid to create more access to assets not always available to international investors.

The funds include four so-called emerging-market exchange- traded commodities with long and short exposure to the Chinese renminbi, also known as the yuan, and the Indian rupee. The remaining 18 products will be based on the British pound’s long or short exposure to Group of 10 currencies. A long is a bet a currency will increase and a short is a bet it will fall.

“Many emerging-market currencies are not accessible to foreign investors due to restrictions or capital controls,” the company said in a statement today. “Even though a currency such as the Chinese renminbi is pegged to the U.S. dollar, it is possible for emerging-market currency ETCs to change in price.”

08:12 Tuesday 15 June, 2010

The euro pared gains against the dollar after Moody’s Investors Service lowered Greece’s credit rating to non-investment grade, signaling the region’s governments may struggle to narrow their budget deficits.

Europe’s common currency earlier climbed the most versus the greenback in more than two weeks after a report showing the region’s industrial production expanded at a faster pace than forecast prompted traders to unwind bets it would decline. The yen reversed its losses against the dollar as stocks and crude oil pared gains, spurring demand for the currency as a refuge.

“The downgrade of Greece was certainly well anticipated; the timing was not,” said Michael Woolfolk, senior currency strategist in New York at Bank of New York Mellon Corp., world’s largest custodial bank, with more than $20 trillion in assets under administration. “It continues to draw attention to the still unresolved problems of the EU.”

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