Greenback Relinquishes Gains on Oil
by Korman Tam
7/30/2008 3:20:00 PM
The dollar backed away from its gains versus the majors by afternoon New York trading, relinquishing a five-week high against the euro at 1.5523 to fall back near the 1.56-handle. The greenback initially received a boost from the better-than-expected ADP private sector payrolls report but later succumbed to a combination of profit taking ahead of key US economic reports starting tomorrow and a $4.58 rebound in oil to $126.71 per barrel.
The ADP private sector payrolls defied consensus estimates for a loss of 60k jobs in July, following a 79k loss a month earlier, instead increasing by 9k jobs. Traders quickly rewarded the dollar following another bout of upbeat economic data, reacting in similar fashion to yesterday's better-than-forecast consumer confidence survey. However, the euphoria was short-lived as oil extended its rally and markets shift focus to several potentially dollar negative reports in the remainder of the week.
The US reports scheduled for release tomorrow include the advanced reading for Q2 GDP, weekly jobless claims, July NY NAPM manufacturing and the July Chicago PMI. The advanced reading for GDP in Q2 is seen improving to 2.0% from 1.0% in the previous quarter. The Chicago PMI reading is seen remaining beneath the key 50-level for the 6th consecutive month, expected to decline to 49.0 from 49.6 and highlighting continued weakness in the US manufacturing sector. Although the report has been steadily improving since hitting a 7-year low in February at 44.5, it has remain mired in contraction territory for six months and is seen slipping lower from the previous month.
11:38 AM
11:38 AM
The Dollar
Dollar Advances to One-Month High as U.S. Companies Add Jobs
July 30 (Bloomberg) -- The dollar rose to a one-month high versus the euro and the yen after a private report showed U.S. companies unexpectedly added jobs this month.
The greenback also gained as a decline in crude oil eased concern elevated fuel costs will erode consumer spending. New Zealand's dollar dropped against all of the other major currencies except the Australian dollar after Reserve Bank Governor Alan Bollard said slowing economic growth will curb inflation in the next two years.
``It's premature to say employment destruction has hit bottom, but today is a good sign,'' said Mike Moran, a senior currency strategist at Standard Chartered in New York. ``In conjunction with a pullback in oil prices recently, it certainly contributed to the dollar's recovery.''
The dollar increased 0.4 percent to $1.5524 per euro at 9:49 a.m. in New York, from $1.5588 yesterday. It touched $1.5522, the strongest level since June 24. It may advance to $1.5460, Moran said. The U.S. currency rose 0.2 percent to 108.30 yen, from 108.11. It touched 108.33, the highest since June 25. The euro fell 0.2 percent to 168.14 yen, from 168.53.
July 30 (Bloomberg) -- The dollar rose to a one-month high versus the euro and the yen after a private report showed U.S. companies unexpectedly added jobs this month.
The greenback also gained as a decline in crude oil eased concern elevated fuel costs will erode consumer spending. New Zealand's dollar dropped against all of the other major currencies except the Australian dollar after Reserve Bank Governor Alan Bollard said slowing economic growth will curb inflation in the next two years.
``It's premature to say employment destruction has hit bottom, but today is a good sign,'' said Mike Moran, a senior currency strategist at Standard Chartered in New York. ``In conjunction with a pullback in oil prices recently, it certainly contributed to the dollar's recovery.''
The dollar increased 0.4 percent to $1.5524 per euro at 9:49 a.m. in New York, from $1.5588 yesterday. It touched $1.5522, the strongest level since June 24. It may advance to $1.5460, Moran said. The U.S. currency rose 0.2 percent to 108.30 yen, from 108.11. It touched 108.33, the highest since June 25. The euro fell 0.2 percent to 168.14 yen, from 168.53.
12:13 PM
2:33 PM
12:41 PM
JPY Falls
JPY Falls on Downgrade, USD Edges Higher
by Korman Tam
The greenback was higher against the euro and yen, rising to 1.5669 and 107.90, respectively. The dollar continues to benefit from further declines in oil, which fell to $123.63 per barrel, and renewed confidence stemming from government measures to support Fannie Mae and Freddie Mac.
Hawkish Fed commentary has also propped the currency higher. The Fed's Plosser reiterated his view that current interest rates at 2% are pretty low and ultimately, rates have to go up. He said it was important to protect the Fed's credibility by reinforcing its commitment to low inflation through action. Plosser added that it would be too late if the Fed waited for inflation expectations to become unanchored.
Markets will look ahead to Thursday's economic reports consisting of weekly jobless claims and existing home sales. Weekly jobless claims are estimated to increase to 375k, up from 366k a week earlier. Existing home sales are seen slipping to 4.93 million in June units versus 4.99 million units a month earlier.
by Korman Tam
The greenback was higher against the euro and yen, rising to 1.5669 and 107.90, respectively. The dollar continues to benefit from further declines in oil, which fell to $123.63 per barrel, and renewed confidence stemming from government measures to support Fannie Mae and Freddie Mac.
Hawkish Fed commentary has also propped the currency higher. The Fed's Plosser reiterated his view that current interest rates at 2% are pretty low and ultimately, rates have to go up. He said it was important to protect the Fed's credibility by reinforcing its commitment to low inflation through action. Plosser added that it would be too late if the Fed waited for inflation expectations to become unanchored.
Markets will look ahead to Thursday's economic reports consisting of weekly jobless claims and existing home sales. Weekly jobless claims are estimated to increase to 375k, up from 366k a week earlier. Existing home sales are seen slipping to 4.93 million in June units versus 4.99 million units a month earlier.
7:50 AM
Paulson Support Interest Rate Raise
Dollar Advances as Paulson Stresses Support for U.S. Currency
July 22 (Bloomberg) -- The dollar rose the most against the euro in almost a week as Treasury Secretary Henry Paulson voiced support for the currency and the Federal Reserve Bank of Philadelphia president said interest rates should be raised.
July 22 (Bloomberg) -- The dollar rose the most against the euro in almost a week as Treasury Secretary Henry Paulson voiced support for the currency and the Federal Reserve Bank of Philadelphia president said interest rates should be raised.
2:54 PM
Yen Declines
Yen Declines as JPMorgan Earnings Fuel Demand for Higher Yields
July 17 (Bloomberg) -- The yen dropped against the dollar and the euro as better-than-expected earnings at JPMorgan Chase & Co. fueled investors' appetite for higher-yielding assets funded in Japan.
July 17 (Bloomberg) -- The yen dropped against the dollar and the euro as better-than-expected earnings at JPMorgan Chase & Co. fueled investors' appetite for higher-yielding assets funded in Japan.
8:40 AM
8:11 AM
Dollar Edges Higher
Dollar Edges Higher on Jawboning
by Korman Tam
The dollar edged up higher on Tuesday, rising to 1.5637 versus the euro and 107.51 against the yen as comments from Fed officials¡¯ added support for the greenback. Economic data released today included pending home sales and wholesale inventories. May pending home sales plunged sharply, down by 4.7% and reversing the 6.3% increase a month earlier. Meanwhile, wholesale inventories was marginally better than forecast at 0.8%, down from 1.3% from April.
Traders focused on Fed speak amid a quiet session for US economic reports. Fed Chairman Ben Bernanke propped up the dollar in the morning pledging to ¡°extend the duration of facilities for primary dealers beyond year-end, should current unusual and exigent circumstances continue to prevail in dealer funding markets¡±. Bernanke tempered heightened fears stemming from concerns over the solvency of Fannie Mae and Freddie Mac.
Hawkish comments from Richmond Fed President Jeffrey Lacker also benefited the dollar, saying the Fed must be prepared to raise rates even if unemployment remains high and growth is still weak. He also added that the Fed must act forcefully if inflation expectations erode and be vigilant of risks associated with persistent high inflation. Lacker said that downside risks to growth have diminished significantly since the start of the year while expectations for future inflation have become untethered. Interestingly, Lacker voted to leave policy unchanged at the Fed¡¯s June meeting with Plosser being the sole dissenter, voting for a rate hike in stead. Nonetheless, we expect the FOMC to leave rates unchanged until Q4 given the current economic outlook.
by Korman Tam
The dollar edged up higher on Tuesday, rising to 1.5637 versus the euro and 107.51 against the yen as comments from Fed officials¡¯ added support for the greenback. Economic data released today included pending home sales and wholesale inventories. May pending home sales plunged sharply, down by 4.7% and reversing the 6.3% increase a month earlier. Meanwhile, wholesale inventories was marginally better than forecast at 0.8%, down from 1.3% from April.
Traders focused on Fed speak amid a quiet session for US economic reports. Fed Chairman Ben Bernanke propped up the dollar in the morning pledging to ¡°extend the duration of facilities for primary dealers beyond year-end, should current unusual and exigent circumstances continue to prevail in dealer funding markets¡±. Bernanke tempered heightened fears stemming from concerns over the solvency of Fannie Mae and Freddie Mac.
Hawkish comments from Richmond Fed President Jeffrey Lacker also benefited the dollar, saying the Fed must be prepared to raise rates even if unemployment remains high and growth is still weak. He also added that the Fed must act forcefully if inflation expectations erode and be vigilant of risks associated with persistent high inflation. Lacker said that downside risks to growth have diminished significantly since the start of the year while expectations for future inflation have become untethered. Interestingly, Lacker voted to leave policy unchanged at the Fed¡¯s June meeting with Plosser being the sole dissenter, voting for a rate hike in stead. Nonetheless, we expect the FOMC to leave rates unchanged until Q4 given the current economic outlook.
11:33 AM
SHORT GBPJPY
GBPJPY
SHORT position at 211.60
STOP LOSS above 212.00 (- 40 pips).
THE TARGETS are 211.38 / 211.08
OP, SL & TP at your own risks
SHORT position at 211.60
STOP LOSS above 212.00 (- 40 pips).
THE TARGETS are 211.38 / 211.08
OP, SL & TP at your own risks
2:39 PM
8:07 AM
USDJPY : EURJPY
The Japanese currency is forecast to rise to 100 per dollar and 148 against the euro within a year, according to the median of analysts' estimates compiled by Bloomberg. The world's second-largest economy shrank at an annual 0.4 percent pace in the second quarter, a separate Bloomberg survey of 17 economists showed.
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