Forex Trading News
Dollar, Euro, Pound & Yen

00:51 Tuesday 8 June, 2010

Investors should buy currencies considered the safest such as the dollar, yen and Swiss franc because the global recovery will slow as governments focus on budget cuts, Bank of Tokyo-Mitsubishi UFJ Ltd. said.

“Escalating global sovereign debt concerns are prompting governments globally to re-focus attention on fiscal consolidation, diverting attention away from supporting global growth,” Lee Hardman, a London-based foreign-exchange strategist, wrote in a note today. “We continue to prefer remaining defensively positioned long safe-haven currencies such as the yen, dollar, and Swiss franc.”

The Japanese currency rose against its 16 most-actively traded peers today. The Dollar Index advanced for a seventh consecutive day while the Swiss franc traded at less than 1.40 per euro for the second day.

00:41 Tuesday 8 June, 2010

Canada’s dollar rose for the first time in three days as stocks gained, burnishing the appeal of assets linked to economic growth.

The currency, known as the loonie, increased as crude oil, the nation’s largest export, pared its decline. The loonie has climbed 10.7 percent this year versus its developed-world counterparts, Bloomberg Correlation-Weighted Indexes show, the third-best performance after the yen and the U.S. dollar.

“Expect the market to trade off equities,” Steve Butler, director of foreign-exchange trading in Toronto at Bank of Nova Scotia’s Scotia Capital, said in an e-mail. “The market is still very keen to buy U.S. dollar dips overall.”

The Canadian currency rose 0.7 percent to C$1.0551 at 10:14 a.m. in Toronto, compared with C$1.0629 on June 4. One Canadian dollar buys 94.78 U.S. cents.

00:31 Tuesday 8 June, 2010

Group of 20 finance chiefs’ lack of comment on the 17 percent drop in the euro versus the dollar this year at last week’s meeting signals they approve of the shared currency’s direction, according to Morgan Stanley.

“Despite the volatility we’ve seen in currency markets, there haven’t been complaints about the path of the euro,” Sophia Drossos, co-head of global foreign-exchange strategy at Morgan Stanley, said in an interview on Bloomberg Television’s “In the Loop With Betty Liu.”

The currency has fallen this year against all of its most- traded counterparts tracked by Bloomberg on concern Europe’s sovereign-debt crisis will slow the economic recovery.

The euro dropped 0.2 percent to $1.1938 at 9:24 a.m. in New York, from $1.1967 on June 4. It earlier touched $1.1877, the lowest level since March 2006. The currency may fall to $1.16 by the end of the year, Drossos said.

00:24 Tuesday 8 June, 2010

Hungary’s government reversed course over the weekend, saying there was no danger of default after it spent two days telling the world the nation was at risk of a Greece-like crisis.

Analysts from the European Union to Moody’s Investors Service say the current message is correct. That may not be enough to ease investor concern until Prime Minister Viktor Orban takes concrete steps to achieve the budget deficit target set by the EU and International Monetary Fund. The cabinet will approve plans today and Orban will present them tomorrow, Istvan Hollik, a government press official, said by phone.

“It’s a pretty big change from one day to the next,” Gyorgy Barcza, an economist at KBC Groep NV in Budapest, said in a June 5 interview. “It’s positive, but local assets may not recover quickly because the new government now has a credibility deficit and that takes time to overcome.”

Hungary’s domestic politics roiled global markets last week as officials in Orban’s week-old government compared the country to Greece while claiming the previous administration lied about public finances. The comments were flashed around the world by the news media, feeding concerns Europe’s sovereign debt crisis was spreading, triggering a 4.8 percent two-day drop in the forint and pushing the euro to its lowest level in four years.

00:02 Tuesday 8 June, 2010

The euro’s 21 percent tumble from last year’s high has left the currency above the average level since its creation in 1999 and stronger than its predecessor, the deutsche mark.

Even as the euro weakened 2.5 percent last week against the dollar and fell below $1.20 for the first time since March 2006, it remains higher than the close of $1.1837 on Jan. 4, 1999, the first Monday of trading after its introduction, and stronger than the $1.1842 monthly average since inception. A Bloomberg composite of the currencies comprising the euro averaged $1.1945 through last week from the end of 1988, when Europe’s foreign- exchange market was dominated by the German mark.

While former Federal Reserve Chairman Paul Volcker said last month that Europe’s widening debt crisis may cause the 16- nation currency to dissolve, European Central Bank President Jean-Claude Trichet said May 31 the euro is keeping its value in a “remarkable fashion.” Policy makers may welcome the drop to boost exports, Goldman Sachs Group Inc. and Morgan Stanley said.

“Many would say this weaker euro is just what the doctor ordered,” said Alan Ruskin, head of foreign-exchange strategy at Royal Bank of Scotland Group Plc in Stamford, Connecticut. “From a levels standpoint they should have absolutely no complaints and they can live with a euro this low.”

23:51 Monday 7 June, 2010

The euro swung between gains and losses after recovering from a four-year low as stocks fluctuated following a report that showed German factory orders unexpectedly jumped.

The pound rallied against the dollar and the euro as U.K. Prime Minister David Cameron prepared voters for the deepest spending cuts in a generation, increasing investor confidence his government will tackle a record budget deficit. Canada’s dollar rose against most of its major counterparts as oil pared a loss, boosting demand for currencies linked to growth.

“The factory data allowed the euro to rebound this morning,” said Andrew Wilkinson, senior market analyst at Interactive Brokers Group LLC in Greenwich, Connecticut. “The data is a kind of a bring-it-on call to investors. It creates a short squeeze and the guessing game becomes how long does the reprieve last.” A short position is a bet a currency will fall.

The euro slipped 0.1 percent to $1.1953 at 10:29 a.m. in New York from $1.1967 on June 4. It fell earlier to $1.1877, the weakest since March 2006. Europe’s common currency fell 0.2 percent to 109.79 yen, after touching 108.08 yen, the lowest level since November 2001. The greenback was little changed at 91.92 yen, compared with 91.9 on June 4.

12:41 Monday 7 June, 2010

European Central Bank President Jean- Claude Trichet and Treasury Secretary Timothy F. Geithner diverged on prescriptions to sustain growth, with Europe set to tighten budgets and the U.S. seeking stronger domestic demand.

The impact of narrower budget gaps “on growth could not be considered negative because it would improve confidence,” Trichet told reporters yesterday after meeting with Group of 20 finance chiefs in Busan, South Korea. The need for such action is clear in “old industrialized economies,” he said.

The remarks underline determination within the 16-nation euro area to shrink budget deficits in the wake of a sovereign debt crisis that has led to a 750 billion-euro ($913 billion) rescue fund for the region’s weakest members. The emphasis contrasts with the message delivered to the G-20 by the U.S., which wants countries with trade surpluses, including China and Germany, to stoke demand to help sustain the global recovery.

“Stronger domestic demand growth in Japan and in the European surplus countries” is needed, Geithner said at a separate press briefing in Busan. Spending in both areas is “relatively weak,” he said.

12:33 Monday 7 June, 2010

The euro dropped to its weakest level since November 2001 versus the yen and touched a four-year low against the dollar on concern Europe’s sovereign debt crisis will spread, denting global growth.

The yen gained versus all 16 of its most-traded counterparts as Asian equities extended a global slump after a report June 4 showed that employers in the U.S. hired fewer workers in May than economists had forecast. Europe’s shared currency fell for a third day after officials in Hungary’s government last week compared the country to Greece while claiming the previous administration lied about public finances.

“The euro is the clearest sell out of all this,” said Greg Gibbs, a foreign-exchange strategist at Royal Bank of Scotland Group Plc in Sydney. “The market is groaning under the weight of excessive debt levels and there’s a lot of concern over the state of European banks. Hungary is just another straw being piled onto the camel’s back.”

The euro slid 1.5 percent to 108.38 yen as of 10:55 a.m. in Tokyo from 109.98 in New York on June 4, when it declined 2.5 percent. It touched 108.19 yen, the weakest since November 2001. The 16-nation currency fell to $1.1893 from $1.1967 in New York and touched $1.1883, the lowest level since March 2006. The yen strengthened for a second day to 91.15 per dollar from 91.90.

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