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Dollar, Euro, Pound & Yen

00:13 Friday 18 June, 2010The pound climbed against 13 of its 16 most-traded counterparts after U.K. retail sales increased more than economists predicted in May, boosting speculation that Britain’s economic recovery is gathering pace.

Sterling neared the highest level in a month versus the dollar as the Office for National Statistics said sales rose 0.6 percent on the month, beating the 0.1 percent median estimate in a Bloomberg survey. The currency recovered from a dip after Bank of England Governor Mervyn King said a slowdown in economic growth may curb inflation. Government bonds also advanced.

“The figure today was responsible for the move up,” said George Tchetvertakov, head of market research at Alpari Ltd., a U.K.-based online foreign-exchange provider. “Retail sales are way higher than expected and suggest things aren’t as bad as they looked.”

00:07 Friday 18 June, 2010

The dollar may reach 93.50 against Japan’s currency should it hold above a so-called support area between 90.97 and 90.85 yen, Commerzbank AG said, citing technical indicators.

The 90.97 level is an upward sloping support line, according to Karen Jones, head of fixed-income, commodity and currency technical analysis at Commerzbank in London. The 90.85 figure represents last week’s low, she said.

“We favor recovery from 90.97/90.85, looking for another upside attempt to 93.50 yen, the 78.6 percent Fibonacci retracement of the selloff in May,” Jones wrote in an e-mailed report today. A break above 93.50 “retargets the high around 95.00,” reached in May, Jones said.

00:03 Friday 18 June, 2010

Canada’s dollar weakened versus its U.S. counterpart for the first time in three days as stocks and crude oil declined and as a report showed wholesale sales unexpectedly fell in April.

The currency fell against all 16 of its most-traded counterparts as it failed three times in four sessions to appreciate beyond C$1.0225, forming a so-called triple top. Bank of Canada Governor Mark Carney said yesterday the uneven global recovery and prospects of renewed weakness in Europe mean future increases in its target interest rate aren’t “preordained.”

“You’re seeing the Canadian dollar soften a little bit today with commodities, oil in particular slightly lower,” Blake Jespersen, director of foreign exchange at Bank of Montreal, said by phone from Toronto. “‘Overall we’re in consolidation mode for the next few days.”

22:06 Thursday 17 June, 2010

Malaysia’s ringgit and South Korea’s won led declines in Asian currencies as concern Europe’s debt crisis will worsen bolstered demand for dollars.

The Bloomberg-JPMorgan Asia Dollar Index slipped from a two-week high and the MSCI Asia-Pacific Index of shares fell for the first time in six days. The European Commission yesterday called on governments to take “ambitious” steps to rein in budget deficits.

“Should the European debt crisis worsen, you will see a flight to quality for the dollar and that will weigh on the Asian currencies,” said Yeo Chin Tiong, head of treasury at OSK Investment Bank Bhd. in Kuala Lumpur. “It’s just that whenever any crisis happens, everybody just parks in U.S. assets and all others suffer as a result.”

11:18 Thursday 17 June, 2010

The yen rose for a second day against the euro on concern Europe’s debt crisis will impair an economic recovery of the 16-nation region, boosting demand for Japan’s currency as a refuge.

The yen strengthened against all of the major currencies on speculation European Union leaders will agree on ways to tighten financial-market regulation at a summit meeting today. The euro weakened for a second day versus the dollar after Spain’s central bank said yesterday it plans to publish the results of stress tests carried out on the nation’s lenders to counter speculation it needs international aid.

“The EU heads may call for more rules, which may weigh on growth,” said Tsutomu Soma, a bond and currency dealer at Okasan Securities Co. in Tokyo. “Risk aversion may persist, so the yen and the dollar could be bought.”

08:31 Thursday 17 June, 2010

The euro may extend its decline to a level last reached in 2003 on Europe’s sovereign-debt crisis, according to Sophia Drossos, co-head of global currency strategy at Morgan Stanley.

The shared currency will fall as much as 9 percent to $1.12 as the market forces the 16 member nations to rein in spending on programs such as welfare and retirement benefits, Drossos said in a radio interview today with Tom Keene on “Bloomberg Surveillance.”

“There are structural problems in Europe that aren’t going away any time soon,” said Drossos. “The euro still has further to decline.”

08:25 Thursday 17 June, 2010

Canada’s dollar erased an earlier gain versus its U.S. counterpart as equities fell, making growth-linked currencies less attractive.

The currency, known as the loonie, earlier rose as much as 0.7 percent after equities rebounded from the day’s lows and Bank of Canada Governor Mark Carney suggested economic conditions require steadily increasing interest rates.

The Canadian currency traded at C$1.0246 per U.S. dollar at 4:36 p.m. in Toronto, matching yesterday’s C$1.0254 close, the strongest since May 13. It earlier fell as much as 0.7 percent and rose as much as 0.3 percent. One Canadian dollar buys 97.60 U.S. cents

08:24 Thursday 17 June, 2010

Canada’s dollar may appreciate to a five-week high versus its U.S. counterpart after it broke past a support level of C$1.0378 as renewed risk appetite boosted the currency, according to Royal Bank of Canada.

“The key here is the importance of risk aversion and the importance of equity markets,” said George Davis, chief technical analyst at RBC Capital Markets, in a telephone interview. “That is what has been driving the price action.”

The loonie closed beyond C$1.0378 on June 10 for the first time in almost a month and has finished stronger than that level every day since then. The level was along a trend line drawn from highs reached in April, when the currency traded on a one- for-one basis with its U.S. counterpart.

08:21 Thursday 17 June, 2010

South Korea’s won may strengthen to the 1,125-1,100 level in 12 to 18 months as concern about conflicts with North Korea and derivatives regulation eases, according to Wells Fargo & Co.

Tension with North Korea after the sinking of a warship in March and regulatory uncertainty have pushed the won down 9 percent since the beginning of May, according to a note from Nick Bennenbroek, New York-based head of currency strategy.

“We don’t see ongoing regional tensions as a reason for further won weakness,” he wrote in the note dated yesterday. “The strength of Korea’s economic rebound should soon begin to pay dividends for the won.”

08:18 Thursday 17 June, 2010

The euro fell against the dollar and the yen as most U.S. stocks declined amid concern that Europe’s debt crisis will damp investor appetite for riskier assets.

The common currency trimmed its losses versus the greenback as Spain’s central bank said it plans to publish the results of stress tests carried out on the nation’s lenders in an effort to dispel speculation that it would need international aid to bolster its financial system. The correlation between the euro and the Standard & Poor’s 500 Index has increased to 53 percent from about 32 percent at the end of May.

“There’s still some serious problems in the euro zone that aren’t going to be papered over,” said Win Thin, a senior currency strategist at Brown Brothers Harriman & Co. in New York. “There’s a lot of uncertainty in the market, there’s still concern about global growth.”

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