Forex Trading News
Dollar, Euro, Pound & Yen

23:58 Wednesday 9 June, 2010

The Canadian dollar rose for a third day, the longest winning streak in almost a month, as crude oil and stocks increased, fueling demand for assets linked to economic growth.

Canada’s currency, known as the loonie, has gained 11.5 percent this year versus its developed-world counterparts, Bloomberg Correlation-Weighted Indexes show, the second-best performance after the yen. China’s stocks rose the most in more than two weeks after Reuters reported a surge in the nation’s exports and higher-than-estimated new loans in May.

“Risk appetite seems to be more constructive, pulling markets a little bit higher,” said Shaun Osborne, chief currency strategist in Toronto at Toronto-Dominion Bank. “Equity markets are holding up and we’ll probably see the Canadian dollar do a bit better.”

The Canadian dollar advanced 0.7 percent to C$1.0397 per U.S. dollar at 9:36 a.m. in Toronto, from C$1.0475 yesterday. Its three-day winning streak is the longest since a four-day period ended May 12. One Canadian dollar buys 96.22 U.S. cents.

23:52 Wednesday 9 June, 2010

The euro gained for second day against the dollar and yen as stocks and commodities advanced before the European Central Bank announces a decision tomorrow on interest rates.

The dollar fell against most major counterparts as Federal Reserve Chairman Ben S. Bernanke reiterated to a congressional panel that the U.S. recovery is being restrained by the housing and commercial real-estate markets and repeated his call for lawmakers to come up with a long-term deficit-reduction plan. The yen fell against most major peers on speculation the global economy will weather Europe’s debt crisis.

“The stock market rally is positive for sentiment on a near-term basis, and the euro may see a relief rally as risk aversion eases,” said Michael Woolfolk, senior currency strategist in New York at Bank of New York Mellon Corp., the world’s largest custodial bank, with more than $20 trillion in assets under administration. “The ECB meeting will be an opportunity for it to comment on how it intends to address the deterioration in financial market conditions and economic outlook.”

The euro strengthened 0.5 percent to $1.2030 at 10:15 a.m. in New York, from $1.1973 yesterday. The euro appreciated 0.4 percent to 109.91 yen, from 109.51. The dollar was at 91.37 yen, compared with 91.46.

11:18 Wednesday 9 June, 2010

nvestors’ negativity towards the euro has created an “anti-bubble” of sentiment that overstates prospects for a breakup of the currency, which may rebound to $1.30, Schneider Foreign Exchange said.

“Although the single currency could very well fall further, it is our opinion that further euro sales should not be triggered by break-up or euro-sustainability fears,” Stephen Gallo, head of market analysis at Schneider in London, said in an e-mailed note. “We stick with our view that euro-dollar fair value is in the $1.30-$1.35 range, although we confess that it may take a considerable period of time for that range to come back into play.”

11:15 Wednesday 9 June, 2010

The dollar gained toward a four-year high against the euro on speculation U.S. policy makers will reiterate that an economic recovery is gaining pace.

The euro weakened against 11 of its 16 most-traded counterparts as economists surveyed by Bloomberg forecast the European Central Bank will leave its key interest rate at a record low until the second quarter of 2011. The ECB next meets tomorrow. Federal Reserve Chairman Ben S. Bernanke testifies before a House Budget Committee today after saying June 7 in Washington that the central bank will raise rates before the economy returns to full employment. The yen rose as Asian stocks fell, spurring demand for the safest assets.

“The Fed will be tightening before the ECB with the U.S. economy recovering at a faster pace,” said Adam Carr, a senior economist at ICAP Australia Ltd. in Sydney. “Both those things are dollar supportive.”

The dollar gained to $1.1946 per euro as of 9:35 a.m. in Tokyo from $1.1973 in New York yesterday. It climbed as high as $1.1877 per euro on June 7, the strongest since March 2006. The dollar bought 91.35 yen from 91.46. The yen rose to 109.12 per euro from 109.51 yesterday, when it fell 0.5 percent.

08:15 Wednesday 9 June, 2010

Canada’s dollar appreciated for a second day as the sovereign-debt crisis in Europe drove investors toward the currencies of nations with relatively sound balance sheets. Government debt fell.

The Canadian currency, known as the loonie, has gained 11.4 percent this year versus its developed-world counterparts, Bloomberg Correlation-Weighted Indexes show. That’s the second- best performance, trailing only the yen, and comes even as the MSCI World Index has declined 10.5 percent over the period and crude oil, the nation’s largest export, has dropped 9.1 percent.

“Canada is one of the best-looking currencies out there,” Sacha Tihanyi, a currency strategist at Bank of Nova Scotia, said by phone from Toronto. “The fundamentals are strong and detached from a lot of the things that are shaking up sovereign credit markets.”

The Canadian currency climbed 1.3 percent to C$1.0483 per U.S. dollar at 4:24 p.m. in Toronto, compared with C$1.0617 yesterday, when it rose as much as 1.1 percent. One Canadian dollar buys 95.39 U.S. cents.

08:12 Wednesday 9 June, 2010

Two-year U.S. swap spreads fell by the most in almost two weeks as currency traders lowered their predictions for euro price swings, adding to optimism global banks can withstand losses on European government debt.

The difference between yields on two-year Treasuries and the rate to convert fixed payments to floating traded as high as 64.21 basis points on May 25 on concern Greece’s funding crisis would spread and damage the financial institutions holding government debt. The spread, a measure of bank risk, narrowed as much as 5.38 basis points today to 41.25 as implied volatility between the euro and dollar fell.

“The absence of news has become news itself,” said Christian Cooper, a senior rates trader at Jefferies & Co. in New York. “We’re not out of the woods yet and we’ll certainly see some additional volatility, but not to the magnitude that we saw before.”

Two-year swap spreads were 4.38 basis points lower at 42.25 at 1:46 p.m. in New York. The five-year swap spread narrowed 2.13 basis points to 36, and 10-year spreads contracted half a basis point to 10.75. The 30-year differential was 0.75 basis point lower at minus 16.75. A basis point is 0.01 percentage point.

08:09 Wednesday 9 June, 2010

The rate to exchange Australian dollars for yen is moving in lockstep with U.S. stocks by the most on record as concern Europe’s debt crisis will derail growth pushes investors to the safety of the Japanese currency.

The 120-day correlation between Aussie-yen and the Standard & Poor’s 500 Index rose to 0.8277 today, the highest since at least 1991, or as far back as Bloomberg data goes. The relationship dropped to as low as 0.06295 on Feb. 2, the weakest since October 2008. A correlation of 1 would mean they move in lockstep, minus 1 that they move inversely.

The Australian dollar fell 9.9 percent to 75.17 yen this year on speculation that Europe’s fiscal woes have forced traders to reduce carry trades, in which they borrow money in currencies with low interest rates to buy higher yielding assets. Japan’s benchmark rate of 0.1 percent has made the yen a popular choice for funding such transactions. The risk to these trades is that yen will appreciate, wiping out any gains.

“The market thought the risks were localized and didn’t have the fear that a local risk would become a global risk,” said Sebastien Galy, a currency strategist at BNP Paribas SA in New York. “Now, there’s one unified source of risk and there’s no notion of a diversification of the source of risk. Every source of shock -- any small risk -- ends up being a big risk.”

08:06 Wednesday 9 June, 2010

The four Persian Gulf states planning a single currency will temporarily halt their preparations because of the debt crisis facing the euro region, said Sheikh Mohammed bin Essa al-Khalifa, chief executive of Bahrain’s Economic Development Board.

“It will take a bit more time to see how this euro thing plays out and what lessons can be learned,” al-Khalifa said in an interview at Bloomberg’s headquarters in New York. “You can’t afford to get this wrong.”

Saudi Arabia, Kuwait, Qatar and Bahrain took an initial step toward a single currency on March 30 when their central bank governors held the first meeting of the Monetary Council, a precursor to a united central bank. Kuwait’s dinar is pegged to a basket of currencies while the other three countries have a peg to the dollar.

08:02 Wednesday 9 June, 2010

The euro rose for the first time in four days versus the greenback as stocks and commodities advanced, damping demand for haven currencies.

The Australian and Canadian dollars rose against most of their major counterparts. The pound fell versus most of its major peers after Fitch Ratings said the U.K.’s fiscal challenge is “formidable.” The Standard & Poor’s 500 Index ended the day up 1.1 percent after it swung between gains and losses at least 13 times.

“Any time you see a positive close on Wall Street, that tends to help whet investors’ appetite for riskier assets,” said Joe Manimbo, a market analyst in Washington at Travelex Global Business Payments, a currency-exchange network.

The euro rose 0.4 percent to $1.1973 at 5 p.m. in New York, from $1.1923 yesterday. It gained as much as 0.7 percent to $1.2009. The yen fell 0.1 percent to 91.46 per dollar, after gaining as much as 0.6 percent and losing as much as 0.6 percent, from 91.37 yesterday. It fell 0.5 percent to 109.49 per euro, after gaining as much as 0.6 percent.

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