The slow return to trading did little to erase last week’s losses for the US Dollar, as investors anticipate a rise in US consumer confidence to be published in tomorrow’s report. A somewhat strong fourth quarter in the US has eroded the pessimism that had been plaguing consumers, and the subsequent rise in confidence has halted the purchase of the greenback. Evaluated numerically, US consumer confidence rose to 58.6 in December, up significantly from 56 in November. Asian Trading Today In Asian trading today, the Dollar saw little change from last week, with the currency trading at $1.3041 per Euro. The Dollar Index, which compares the US Dollar against its six most prominent trading partners, dropped 0.2 percent last week. Still, the Index has climbed nearly 10% since its low in … Read entire article »

Markets continue to tread water as mixed economic data from US provides no inspiration to traders who are already in holiday mood. Headline durable goods orders rose strongly by 3.8% in November comparing to expectation of 2.2%. Ex-transport orders rose 0.3%, a bit lower than consensus of 0.4%. Personal income and spending rose 0.1% in November, missing expectation of 0.3%. Headline PCE unexpectedly moderated to 2.4% yoy in November while core PCE was unchanged at 1.7% yoy. Data from Canada saw GDP flat in October versus expectation of 0.2% mom rise. Nonetheless, Canadian dollar remains firm as held by strengthen in crude oil, which is back trading above 100 psychological level. Moody’s affirmed Austria’s AAA sovereign rating on “very high economic strength. The rating agency noted Austria’s skilled labor force, … Read entire article »

By: Barbara Zigah In thin trading in the run up to the Christmas holiday, the Euro edged higher against the U.S. Dollar but still on track to close out the year lower as investors worry that the Eurozone’s debt crisis will linger long into the new year. As reported at 10:22 a.m. (JST) in Tokyo the Euro was trading at $1.3063, rebounding from the $1.3050 traded in the New york hours. The trading band remains tight, between $1.3016 and $1.3120, and analysts expect it to remain there in the absence of any key economic data. Historical records show that the resilient Euro is only 2.4% lower against the U.S. Dollar, despite the incredible volatility of the past several months. Investors are still considering the latest ECB tender, which failed to restore confidence … Read entire article »

Markets are pretty steady in thin holiday trading today. Euro is holding on to 1.3 against dollar despite making new record low against Aussie. Meanwhile, commodity currencies are generally higher, as lifted by risk appetite following positive employment data from US yesterday. Rebound in oil prices, which touches 100 again, is providing some additional support to the Canadian dollar. Recent actions in DOW suggests that a new high above 12284.31 might be seen next week just before the year closes and that could lead commodity currencies further higher. ECB Executive Board member Bini Smaghi said that quantitative easing is appropriate ” if economic conditions justify it, in particular in countries facing a liquidity trap that may lead to deflation.” Smaghi noted that ECB is “given a clear mandate” of price … Read entire article »

Forex markets are generally staying in tight range today even though dollar is mildly firmly after solid employment data. Initial jobless claims, though, unexpectedly dropped to 364k in the week ended Dec 17, hitting the best figure since April 2008. Four week moving average of initial claims also improved to 380k, best since June 2008. Continuing claims dropped to 3.55m in the week ended Dec 10, the best number since September 2008. Though, Q3 GDP was revised lower to 1.8% annualized, comparing to expectation of being unchanged at 2.0%. Other data released today saw UK GDP revised up to 0.6% qoq in Q3. New Zealand Q3 GDP rose more than expected by 0.8% qoq. Fitch published a special report of “US Public Finances, An Update” yesterday that detailed … Read entire article »

By: Barbara Zigah Following an initial rally on the news that the ECB’s latest offering had been so well received, the euphoria quickly waned as market players understood that the offer was essentially only a liquidity operation, and could not in any way solve the underlying problem of the Eurozone debt crisis. As reported at 2:14 p.m., the Euro was trading against the U.S. Dollar at $1.3044, well off Wednesday’s rally of $1.3199 and only slightly off the low of $1.327. The newest offering of unlimited 3-year loans, saw a buy-in of some €489 billion, beating the ECB’s predictions and analysts forecasts of €350 billion worth of loans. Some investors are speculating on the intended purchases, with some believing it may have been used for carry-trade purposes, as was done during … Read entire article »

ECB allotted as much as EUR 489.19b in the three year Long Term Refinancing Operation today, surpassing market expectations of around EUR 300b. The fund was offered to 523 banks and that’s the largest amount in any single operation, even the prior record of EUR 442b set at June 2009 one-year auction. Separately, EUR 29.4b of funds was allotted to 72 banks in a three-month operation. In general, it’s believed that the operation was successful in adding liquidity into the financial sector and should ease tension in the credit markets. However, there are criticism that ECB are still just addressing the symptoms of the sovereign debt crisis, rather than the cause. Nonetheless, Euro responded positively to the result while European stocks jumped However, the common currency pared some gains after … Read entire article »

ECB allotted as much as EUR 489.19b in the three year Long Term Refinancing Operation today, surpassing market expectations of around EUR 300b. The fund was offered to 523 banks and that’s the largest amount in any single operation, even the prior record of EUR 442b set at June 2009 one-year auction. Separately, EUR 29.4b of funds was allotted to 72 banks in a three-month operation. In general, it’s believed that the operation was successful in adding liquidity into the financial sector and should ease tension in the credit markets. However, there are criticism that ECB are still just addressing the symptoms of the sovereign debt crisis, rather than the cause. Nonetheless, Euro responded positively to the result while European stocks jumped However, the common currency pared some gains after … Read entire article »

The BOE minutes indicated that policymakers voted unanimously in December to leave the Bank rate at 0.5% and the asset purchase program at 275B pound. While all of them believed the current global and domestic economic situations did not warrant for monetary easing, they were split on the implications of the November inflation report. While some believed further expansion of the asset buying program would be inevitable, others viewed that the risks to inflation around the target were more balanced in the medium-term. Policymakers acknowledged the sovereign debt problems in the Eurozone and risks to domestic growth outlook. Yet, all members agreed that “given the magnitude of the current uncertainties, in the external environment in particular, relative to the precision with which the appropriate stance of policy could be calibrated, there … Read entire article »

The BOE minutes indicated that policymakers voted unanimously in December to leave the Bank rate at 0.5% and the asset purchase program at 275B pound. While all of them believed the current global and domestic economic situations did not warrant for monetary easing, they were split on the implications of the November inflation report. While some believed further expansion of the asset buying program would be inevitable, others viewed that the risks to inflation around the target were more balanced in the medium-term. Policymakers acknowledged the sovereign debt problems in the Eurozone and risks to domestic growth outlook. Yet, all members agreed that “given the magnitude of the current uncertainties, in the external environment in particular, relative to the precision with which the appropriate stance of policy could be calibrated, there … Read entire article »