Forex Trading News
Dollar, Euro, Pound & Yen

00:24 Saturday 5 June, 2010

The dollar and the yen rose against their major counterparts as concern that Europe’s debt crisis is expanding and the U.S. economic recovery may be growing more slowly pushed investors to the safest currencies.

The euro fell to the lowest level since March 2006 amid speculation the European fiscal crisis may be spreading into the financial system. A Hungarian government spokesman said “it’s no exaggeration to talk about default” by the nation, boosting demand for the Swiss franc as a haven. The yen gained versus all 16 of its most-traded peers after a government report showed the U.S. economy added fewer jobs in May than forecast.

“There’s strong risk aversion in the market, and the payrolls number was like a red flag to a bull,” said Richard Franulovich, a senior currency strategist at Westpac Banking Corp. in New York. “When you have problems with sovereign bonds, those bonds are held by banks. Those banks will weaken, and that’s driving the euro lower.”

The dollar fell 0.7 percent to 92.06 yen at 9:48 a.m. in New York, from 92.71 yen yesterday. The euro tumbled 1.7 percent to 110.86 yen, from 112.76, and dropped 1 percent to $1.2041, from $1.2163. The euro touched $1.2019, the lowest level since March 2006.

21:00 Friday 4 June, 2010

The euro fell below $1.21 for the first time since April 2006 before a report forecast to show U.S. payrolls grew the most since 1983, indicating the recovery in the world’s largest economy is gaining traction.

Japan’s currency was headed for a weekly drop versus the euro after Naoto Kan became prime minister, replacing Yukio Hatoyama, who resigned this week. The Swiss franc strengthened beyond 1.40 versus the euro for the first time.

“The overall fundamentals remain supportive of the dollar,” said Geoffrey Yu, a strategist at UBS AG in London. “We expect the dollar to gradually strengthen against the euro.”

The dollar appreciated 0.5 percent to $1.2108 per euro at 7:19 a.m. in New York, from $1.2163 yesterday. It touched $1.2091, the strongest level since April 2006. The yen gained 0.4 percent to 112.32 versus the euro, from 112.76. The dollar decreased 0.2 percent to 92.68 yen, from 92.71.

11:23 Friday 4 June, 2010

The pound rose against the euro, trading near its strongest level in 18 months, as a report showing U.K. house prices climbed to the highest in almost two years fueled optimism the economic recovery is solidifying.

Sterling also strengthened earlier to within a cent of three-week high against the dollar. Ten-year gilts fell, snapping three days of gains, as a rally in equities sapped demand for the perceived safety of fixed income and the government sold 2 billion pounds ($2.9 billion) of securities maturing in 2034.

“We’re having a good day for risk,” Elsa Lignos, a currency strategist at Royal Bank of Canada in London, said by telephone. “The data shows signs for a weak recovery, but it’s still early days.”

The pound gained 0.2 percent to 83.45 pence per euro as of 4:21 p.m. in London after advancing to 82.80 yesterday, the strongest level since Dec. 1, 2008. Against the dollar, it was 0.2 percent weaker at $1.4619. It reached $1.4771 yesterday, the strongest level since May 13.

11:20 Friday 4 June, 2010

Investors should buy September Eurodollar futures contracts because the recent increase in the rate banks say they pay for three-month loans in dollars may have gone too far, according to JPMorgan Chase & Co.

Banks’ need for dollar funding in peripheral European nations such as Spain and Italy is less than the market understands, according to a note today from JPMorgan strategists Terry Belton and Alex Roever in New York. They assigned a 99.45 “near-term target” price for the September contracts, which traded today at 99.245.

The cost of borrowing dollars for three months, known as the London interbank offered rate, or Libor, was 0.5378 percentage point today, according to the British Bankers’ Association, up from 0.2519 percentage point March 3. It touched a 10-month high of 0.5384 percentage point on May 27.

“Absent broader contagion of the sovereign-debt crisis into core Europe, last month’s move in forward Libor is overdone,” Belton and Roever wrote. “Our base case remains that this broader contagion is unlikely.”

11:16 Friday 4 June, 2010

Canada’s dollar fell against its U.S. counterpart as the euro slid and stocks swung between gains and losses amid concern Europe’s sovereign-debt crisis may worsen, making currencies tied to growth less attractive.

The Canadian currency, known as the loonie, fell against nine of its 16 most-traded counterparts as traders prepared for jobs reports in Canada and the U.S. tomorrow. The 16-nation currency neared a four-year low against the dollar on speculation the European Central Bank may need to take steps to boost the liquidity in the financial system.

“The market continues to be extremely nervous and near- term indicators still stack up to a weaker euro,” Camilla Sutton, director of currency strategy in Toronto at Bank of Nova Scotia, Canada’s third-largest lender, said in an e-mail. “The Canadian dollar is simply reacting to broader markets as we await tomorrow’s employment data.”

The Canadian dollar dropped 0.2 percent to C$1.0405 per U.S. dollar at 4:24 p.m. in Toronto, from C$1.0383 yesterday. It earlier rose as much as 0.5 percent. One Canadian dollar buys 96.11 U.S. cents.

11:11 Friday 4 June, 2010

Group of 20 central banks are delaying their withdrawal of emergency stimulus as Europe’s debt crisis shakes financial markets and threatens to hinder the global recovery.

G-20 finance chiefs begin talks today in Busan, South Korea, after central banks from Australia to Canada identified investor reaction to Europe’s indebtedness as a hurdle to higher interest rates. European Central Bank President Jean-Claude Trichet has reversed his exit strategy to combat the euro’s biggest test, while the Federal Reserve’s Charles Evans signaled market stress will delay a rise in U.S. borrowing costs.

“Given the increase in uncertainty in the economy, it would be perfectly natural for people to be less eager to tighten,” William White, a former Bank for International Settlements chief economist who pointed to risks in financial markets before the 2008 credit crisis, said in an interview in Seoul.

The need for central bankers to keep rates lower for longer may spark tension in Busan as monetary policy makers intensify their public demands for fiscal authorities to restrain debt in return. The pressure is an echo of the 1990s, when then-Fed Chairman Alan Greenspan and counterparts lobbied leaders to narrow deficits that threatened a bondholder revolt.

11:06 Friday 4 June, 2010

The euro may re-test a four-year low versus the dollar after failing to rebound on a so-called double bottom trading pattern, according to FXPrime Corp.

The 16-nation currency last week fell back through double- bottom levels after initial gains that had the potential to be the first signs of a technically driven rebound, Hiroshi Yanagisawa, a Tokyo-based dealer at the foreign-exchange unit of Japanese trading house Itochu Corp. said in an interview. That opens the way for renewed weakness in the currency, he said.

“The failure to rebound after forming a double bottom blew off positive technical signals for the currency,” he said. “The euro is likely to resume a downtrend and re-test a 50 percent Fibonacci retracement line from a historical high.”

The euro made two troughs of about the same depth on May 19 and May 27 in a so-called double-bottom pattern, before breaking through those levels on June 1 to drop to $1.2111, the lowest level since April 2006. The currency’s 50 percent retracement is at $1.2134, based on the low of 82.30 U.S. cents in October 2000 and its record high of $1.6038 in July 2008.

11:03 Friday 4 June, 2010

The dollar traded near a four-year high versus the euro before a report forecast to show that U.S. payrolls grew the most in May since 1983, indicating the recovery is gaining traction.

The greenback was poised for a two-week advance against the yen after Kansas City Federal Reserve Bank President Thomas Hoenig yesterday called for an increase in the target federal funds rate to 1 percent by the end of the summer as the U.S. economic recovery has the momentum to sustain itself.

“The slew of data signal a solid improvement in the U.S. economy and financial markets there are stable relative to other markets,” said Norihiro Tsuruta, chief strategist in Tokyo at Shinko Research Institute Ltd., a unit of Japan’s second-largest banking group Mizuho Financial Group Inc. “This will encourage a shift in net asset allocations into the U.S. market.”

The dollar was at $1.2178 as of 9:42 a.m. in Tokyo from $1.2163 in New York yesterday. It touched $1.2111 on June 1, the most since April 2006. The U.S. currency changed hands at 92.64 yen from 92.71 yesterday when it reached 92.81 yen, the strongest since May 18. The shared currency was at 112.83 yen from 112.76.

Return to the top of this Forex Trading News - Dollar Euro Pound Yen page

Return to the Yen Forex Trading Home Page