Dubai World's debt standstill could darken prospects for the euro and other risk-sensitive currencies next week, thereby underpinning a rebound for the dollar.
Concerns about the broader impact of the Dubai government holding company's request for a standstill on its roughly $60 billion in outstanding debt will continue to weigh on financial markets.
These worries, which calmed somewhat Friday, may prompt an extension of the rebound in haven currencies such as the dollar and the yen when trading volumes return to normal after a holiday-thinned week
Saturday, November 28, 2009
Forex: Dollar Rally Fizzles As Risk Appetite Persists
The dollar wobbled against other major currencies on Friday, giving back some of its Thanksgiving Day gains in quiet trading. Stocks withstood early selling pressure brought on by the Dubai debt debacle, fueling some of the risk appetite that drove the dollar to yearly lows this week.
The buck slipped back to 1.4950 versus the euro, down a penny from its early highs. With the retreat, the buck stayed near its 16-month low of 1.5143 set on Wednesday.
A day plunging though support to hit a 1995 low of 84.80 yen, the dollar fetched 86.20 against its surging Japanese counterpart.
The dollar jumped to 1.6350 versus the sterling, but tailed off to trade near 1.6450 later in the day. Still, the dollar has picked up more than 4 cents from a 3-month low set earlier in November.
Commodity prices stabilized as the shock of Dubai's debt predicament waned. The dollar gave back its early gains versus resource-backed currencies, slipping to $1.0612 against Canada's loonie.
US stock markets finished an abbreviated session with notable losses on Friday, but weakness was not as pronounced as futures suggested before the opening bell.
There was no first-tier economic data from the US to consider today.
Next week, trading is likely to be impacted by the monthly employment report due to be released on Friday. Reports on construction spending and manufacturing and service sector activity are also likely to be in focus.
Along with the economic data, traders are also likely to keep an eye on President Barack Obama's announcement on troop levels in Afghanistan as well as Federal Reserve Chairman Ben Bernanke's confirmation hearings.
The buck slipped back to 1.4950 versus the euro, down a penny from its early highs. With the retreat, the buck stayed near its 16-month low of 1.5143 set on Wednesday.
A day plunging though support to hit a 1995 low of 84.80 yen, the dollar fetched 86.20 against its surging Japanese counterpart.
The dollar jumped to 1.6350 versus the sterling, but tailed off to trade near 1.6450 later in the day. Still, the dollar has picked up more than 4 cents from a 3-month low set earlier in November.
Commodity prices stabilized as the shock of Dubai's debt predicament waned. The dollar gave back its early gains versus resource-backed currencies, slipping to $1.0612 against Canada's loonie.
US stock markets finished an abbreviated session with notable losses on Friday, but weakness was not as pronounced as futures suggested before the opening bell.
There was no first-tier economic data from the US to consider today.
Next week, trading is likely to be impacted by the monthly employment report due to be released on Friday. Reports on construction spending and manufacturing and service sector activity are also likely to be in focus.
Along with the economic data, traders are also likely to keep an eye on President Barack Obama's announcement on troop levels in Afghanistan as well as Federal Reserve Chairman Ben Bernanke's confirmation hearings.
Risk Appetite Recovers But Sovereign Debt Concerns Still Simmer
G10 Advancers and Decliners vs USD
SEK -0.02
GBP -0.18
JPY -0.32
CAD -0.32
EUR -0.33
DKK -0.35
CHF -0.35
NOK -0.40
AUD -0.51
NZD -0.70
Global Indexes Current Level % Change
FTSE 100 Index 5'251.76 + 1.11
DAX Index 5'693.89 + 1.42
SMI Index 6'344.52 + 0.97
S&P 500 Index 1'094.95 - 1.41
DJIA Index 10'325.57 - 1.33
Nikkei 225 Futures 9'140.00 - 2.66
Hang Seng Futures 21'413.00 - 3.45
World Markets Current Level % Change
Gold 1'177.43 - 0.92
Silver 18.39 - 1.49
VIX 23.69 + 15.67
Crude wti 75.42 - 3.26
USD Index 75.02 + 0.30
Todays Calender Estimates Previous Country / GMT
No further releases --- --- ---
Currency Tech
EURUSD
R 2: 1.5200
R 1: 1.5100
CURRENT: 1.4970
S 1: 1.4800
S 2: 1.4626
GBPUSD
R 2: 1.7040
R 1: 1.6845
CURRENT: 1.6505
S 1: 1.6459
S 2: 1.6272
USDJPY
R 2: 90.60
R 1: 88.20
CURRENT: 86.95
S 1: 86.30
S 2: 83.60
AUDUSD
R 2: 0.9406
R 1: 0.9335
CURRENT: 0.9080
S 1: 0.8910
S 2: 0.8570
USDCAD
R 2: 1.0785
R 1: 1.0735
CURRENT: 1.0630
S 1: 1.0450
S 2: 1.0370
Market Brief
After the early drama of gold’s $50 plunge down to $1137.86 lows, risk appetite has recovered strongly thanks to European equities rallying into positive territory on the day; in turn helping US indices to recoup ground and sending the USD lower against most major currencies. The turnaround comes after a statement from Dubai’s Chairman of the Supreme Fiscal Committee started to gain some traction in the market; a statement which confirmed that the Dubai government intended to directly intervene and manage the debt restructuring of Dubai World. EURUSD has been on a dramatic round trip from 1.5020 highs down to 1.4828 this morning (just below the 100 day moving average but above major 1.4800 support), and since the recovery in equity markets the pair has traded back up to 1.4990 levels. Gold too has rebounded strongly back above $1175, but is still down over 1% on the day – underscoring the large volatility and precarious nature of trading this rally.
The morning data releases were largely overshadowed by broader risk appetite driven moves, however the first significant releases of the day were Swedish GDP and Retail Sales. The Q3 GDP figures missed forecasts with a 0.2% QoQ expansion against expectations for a 0.6% rate of growth, but Retail Sales figures convincingly beat forecasts with a 1.5% MoM increase in October against estimates of 0.5%. The SEK strengthened against the EUR after the releases; taking out 10.4450 support to touch 10.4100, and has since held onto its gains well. Eurozone Economic and Industrial Confidence indicators followed up later in the European morning but were exactly in line with forecasts (at -17 and -19 respectively), and FX markets were completely unmoved on the releases.
It seems that for now, the Dubai debt crisis has distracted markets from the growing concerns surrounding Greece’s own sovereign debt problems; however we feel the dismal and deteriorating state of Greek public finances will not be easily swept under the carpet and forgotten. With the spread between Greek government bonds and German government bonds soaring, and CDS premiums on Greek sovereign bonds climbing to more than double levels in early August (above 200bps), there are significant warning signs emerging that the financial crisis is far from concluded.
SEK -0.02
GBP -0.18
JPY -0.32
CAD -0.32
EUR -0.33
DKK -0.35
CHF -0.35
NOK -0.40
AUD -0.51
NZD -0.70
Global Indexes Current Level % Change
FTSE 100 Index 5'251.76 + 1.11
DAX Index 5'693.89 + 1.42
SMI Index 6'344.52 + 0.97
S&P 500 Index 1'094.95 - 1.41
DJIA Index 10'325.57 - 1.33
Nikkei 225 Futures 9'140.00 - 2.66
Hang Seng Futures 21'413.00 - 3.45
World Markets Current Level % Change
Gold 1'177.43 - 0.92
Silver 18.39 - 1.49
VIX 23.69 + 15.67
Crude wti 75.42 - 3.26
USD Index 75.02 + 0.30
Todays Calender Estimates Previous Country / GMT
No further releases --- --- ---
Currency Tech
EURUSD
R 2: 1.5200
R 1: 1.5100
CURRENT: 1.4970
S 1: 1.4800
S 2: 1.4626
GBPUSD
R 2: 1.7040
R 1: 1.6845
CURRENT: 1.6505
S 1: 1.6459
S 2: 1.6272
USDJPY
R 2: 90.60
R 1: 88.20
CURRENT: 86.95
S 1: 86.30
S 2: 83.60
AUDUSD
R 2: 0.9406
R 1: 0.9335
CURRENT: 0.9080
S 1: 0.8910
S 2: 0.8570
USDCAD
R 2: 1.0785
R 1: 1.0735
CURRENT: 1.0630
S 1: 1.0450
S 2: 1.0370
Market Brief
After the early drama of gold’s $50 plunge down to $1137.86 lows, risk appetite has recovered strongly thanks to European equities rallying into positive territory on the day; in turn helping US indices to recoup ground and sending the USD lower against most major currencies. The turnaround comes after a statement from Dubai’s Chairman of the Supreme Fiscal Committee started to gain some traction in the market; a statement which confirmed that the Dubai government intended to directly intervene and manage the debt restructuring of Dubai World. EURUSD has been on a dramatic round trip from 1.5020 highs down to 1.4828 this morning (just below the 100 day moving average but above major 1.4800 support), and since the recovery in equity markets the pair has traded back up to 1.4990 levels. Gold too has rebounded strongly back above $1175, but is still down over 1% on the day – underscoring the large volatility and precarious nature of trading this rally.
The morning data releases were largely overshadowed by broader risk appetite driven moves, however the first significant releases of the day were Swedish GDP and Retail Sales. The Q3 GDP figures missed forecasts with a 0.2% QoQ expansion against expectations for a 0.6% rate of growth, but Retail Sales figures convincingly beat forecasts with a 1.5% MoM increase in October against estimates of 0.5%. The SEK strengthened against the EUR after the releases; taking out 10.4450 support to touch 10.4100, and has since held onto its gains well. Eurozone Economic and Industrial Confidence indicators followed up later in the European morning but were exactly in line with forecasts (at -17 and -19 respectively), and FX markets were completely unmoved on the releases.
It seems that for now, the Dubai debt crisis has distracted markets from the growing concerns surrounding Greece’s own sovereign debt problems; however we feel the dismal and deteriorating state of Greek public finances will not be easily swept under the carpet and forgotten. With the spread between Greek government bonds and German government bonds soaring, and CDS premiums on Greek sovereign bonds climbing to more than double levels in early August (above 200bps), there are significant warning signs emerging that the financial crisis is far from concluded.
Friday, November 27, 2009
WORLD FOREX: Euro Trades Above $1.51; Dollar's Slide Continues
NEW YORK (Dow Jones)--The euro surged above $1.51 Wednesday, shattering a long-standing trading range as the onslaught on the dollar intensified.
The common currency advanced about 1.5 cents on the day, a significant single-session gain for a major currency.
As the greenback's retreat turned into a rout, the U.S. currency also touched fresh multi-month lows against the Swiss franc and yen.
The common currency advanced about 1.5 cents on the day, a significant single-session gain for a major currency.
As the greenback's retreat turned into a rout, the U.S. currency also touched fresh multi-month lows against the Swiss franc and yen.
CURRENCY TRADING SUMMARY
U.S. Dollar Trading (USD) with the FOMC minutes confirming a low rate outlook for some time the market took this as a signal to sell the USD and during the day key levels were broken across the board whilst Gold continued to surge higher. October Durable Goods Orders were -0.6% vs. 2% previously. Also released, Weekly Jobless Claims at 455k vs. 501k previously. In US Stocks, DJIA +30 points closing at 10464, S&P +5 points closing at 1110 and NASDAQ +7 points closing at 2176. Looking ahead, Thanks Giving Holidays.
The Euro (EUR) Broke through the Key 1.5000 in late Asia and then kicked on to break major resistance and year highs at 1.5060 in the US session to finish the day at 1.5140. Broad USD weakness and strength in Gold and Oil helped underpin the move higher which opens up potential further gains. Overall the EUR/USD traded with a low of 1.4960 and a high of 1.5146 before closing at 1.5130. Looking ahead, October Private Loans are forecast at -0.5% vs. -0.3%.
The Japanese Yen (JPY) broke Key resistance at 88 Yen to break lower towards Year lows at 87.10. October Trade Balance was positive at 0.42T Yen vs. 0.06T Yen previously. Crosses were mixed as strength in the majors counted the USD/JPY move lower. Overall the USDJPY traded with a low of 87.19 and a high of 88.66 before closing the day around 87.30 in the New York session. Looking ahead, BOJ Minutes released.
The Sterling (GBP) was very strong against the USD but mixed to weak against the Euro after Q3 GDP came in at expectations of -0.3%. EUR/GBP traded briefly below 0.9000 and GBP/JPY struggled to maintain ground. Overall the GBP/USD traded with a low of 1.6578 and a high of 1.6749 before closing the day at 1.6705 in the New York session. Looking ahead, November CBI distributive trades forecast at 13 vs. 8 previously.
The Australian Dollar (AUD) soared with gold from the start of Asia to end above the 0.9300 level and near year highs of 0.9406. AUD/JPY is the only cross struggling to gain as the Yen found strength and ignored the usual risk correlations. AUD/NZD trade above 1.27 in a continuation of recent strength. Overall the AUD/USD traded with a low of 0.9209 and a high of 0.9325 before closing the US session at 0.9320. Looking ahead, Q3 Capex forecast at 1.0 vs. 3.3% previously.
Oil & Gold (XAU) broke to fresh highs testing $1190 by the end of the US session. Overall trading with a low of USD$1166 and high of USD$1193 before ending the New York session at USD$1190 an ounce. Gained heavily on USD weakness after having under performed recently. Crude Oil was down +$1.94 ending the New York session at $77.96.
TECHNICAL COMMENTARY
Currency
Sup 2
Sup 1
Spot
Res 1
Res 2
EUR/USD
1.4833
1.4889
1.5125
1.5163
1.5285
USD/JPY
87.00
88.13
87.40
88.63
89.19
GBP/USD
1.6461
1.6498
1.6700
1.6750
1.6878
AUD/USD
0.9061
0.9112
0.9285
0.9337
0.9406
XAU/USD
1132.00
1153
1190.00
1200.00
1250.00
OIL/USD
75.00
77.00
77.60
78.00
80.00
Euro – 1.5125
Initial support at 1.4889 (Nov 24 low) followed by 1.4833 (Nov 23 low). Initial resistance is now located at 1.5163 (0.764 of 1.6038-1.2330) followed by 1.5285 (May 08 08 low)
Yen – 87.40
Initial support is located at 88.13 (Jan 21 low) followed by 87.00 (Psychological Level). Initial resistance is now at 88.63 (Nov 25 high) followed by 89.19 (Nov 23 high).
Pound – 1.6700
Initial support at 1.6498 (Nov 24 low) followed by 1.6461 (Nov 4 low). Initial resistance is now at 1.6750 (Nov 19 high) followed by 1.6878 (Nov 16 high).
Australian Dollar – 0.9285
Initial support at 0.9112 (Nov 23 low) followed by the 0.9061 (Nov 20 low). Initial resistance is now at 0.9337 (Nov 18 high) followed by 0.9406 (Nov 16 high).
Gold – 1190
Initial support at 1153 (Nov 23 low) followed by 1132 (Nov 20 high). Initial resistance is now at 1200 (Key level) followed by 1250 (Key level).
Oil – 77.60
Initial support at 77 (Intraday support) followed by 75.00 (Intraday support). Initial resistance is now at 78 (intraday resistance) followed by 80 (Key level).
The Euro (EUR) Broke through the Key 1.5000 in late Asia and then kicked on to break major resistance and year highs at 1.5060 in the US session to finish the day at 1.5140. Broad USD weakness and strength in Gold and Oil helped underpin the move higher which opens up potential further gains. Overall the EUR/USD traded with a low of 1.4960 and a high of 1.5146 before closing at 1.5130. Looking ahead, October Private Loans are forecast at -0.5% vs. -0.3%.
The Japanese Yen (JPY) broke Key resistance at 88 Yen to break lower towards Year lows at 87.10. October Trade Balance was positive at 0.42T Yen vs. 0.06T Yen previously. Crosses were mixed as strength in the majors counted the USD/JPY move lower. Overall the USDJPY traded with a low of 87.19 and a high of 88.66 before closing the day around 87.30 in the New York session. Looking ahead, BOJ Minutes released.
The Sterling (GBP) was very strong against the USD but mixed to weak against the Euro after Q3 GDP came in at expectations of -0.3%. EUR/GBP traded briefly below 0.9000 and GBP/JPY struggled to maintain ground. Overall the GBP/USD traded with a low of 1.6578 and a high of 1.6749 before closing the day at 1.6705 in the New York session. Looking ahead, November CBI distributive trades forecast at 13 vs. 8 previously.
The Australian Dollar (AUD) soared with gold from the start of Asia to end above the 0.9300 level and near year highs of 0.9406. AUD/JPY is the only cross struggling to gain as the Yen found strength and ignored the usual risk correlations. AUD/NZD trade above 1.27 in a continuation of recent strength. Overall the AUD/USD traded with a low of 0.9209 and a high of 0.9325 before closing the US session at 0.9320. Looking ahead, Q3 Capex forecast at 1.0 vs. 3.3% previously.
Oil & Gold (XAU) broke to fresh highs testing $1190 by the end of the US session. Overall trading with a low of USD$1166 and high of USD$1193 before ending the New York session at USD$1190 an ounce. Gained heavily on USD weakness after having under performed recently. Crude Oil was down +$1.94 ending the New York session at $77.96.
TECHNICAL COMMENTARY
Currency
Sup 2
Sup 1
Spot
Res 1
Res 2
EUR/USD
1.4833
1.4889
1.5125
1.5163
1.5285
USD/JPY
87.00
88.13
87.40
88.63
89.19
GBP/USD
1.6461
1.6498
1.6700
1.6750
1.6878
AUD/USD
0.9061
0.9112
0.9285
0.9337
0.9406
XAU/USD
1132.00
1153
1190.00
1200.00
1250.00
OIL/USD
75.00
77.00
77.60
78.00
80.00
Euro – 1.5125
Initial support at 1.4889 (Nov 24 low) followed by 1.4833 (Nov 23 low). Initial resistance is now located at 1.5163 (0.764 of 1.6038-1.2330) followed by 1.5285 (May 08 08 low)
Yen – 87.40
Initial support is located at 88.13 (Jan 21 low) followed by 87.00 (Psychological Level). Initial resistance is now at 88.63 (Nov 25 high) followed by 89.19 (Nov 23 high).
Pound – 1.6700
Initial support at 1.6498 (Nov 24 low) followed by 1.6461 (Nov 4 low). Initial resistance is now at 1.6750 (Nov 19 high) followed by 1.6878 (Nov 16 high).
Australian Dollar – 0.9285
Initial support at 0.9112 (Nov 23 low) followed by the 0.9061 (Nov 20 low). Initial resistance is now at 0.9337 (Nov 18 high) followed by 0.9406 (Nov 16 high).
Gold – 1190
Initial support at 1153 (Nov 23 low) followed by 1132 (Nov 20 high). Initial resistance is now at 1200 (Key level) followed by 1250 (Key level).
Oil – 77.60
Initial support at 77 (Intraday support) followed by 75.00 (Intraday support). Initial resistance is now at 78 (intraday resistance) followed by 80 (Key level).
WORLD FOREX: Dollar/Yen At 14-Year Low Despite Japan Caution
TOKYO (Dow Jones)--The dollar plunged to a 14-year low against the yen in Asia Thursday, despite a stepped-up warning from the Japanese government, because of the mounting view that the U.S. is likely to maintain its rock-bottom interest rate for a prolonged period.
The U.S. unit dropped to Y86.29, its lowest level since Y84.92 marked on July 7, 1995. The fall came after a large accumulation of stop-loss selling orders were triggered around Y87.00, dealers said.
The decline came despite a ratcheted-up warning from Japanese Finance Minister Hirohisa Fuji that he will monitor dollar/yen movement "very closely."
While the comment made some traders more cautious about the possibility of any Japanese dollar-buying intervention, which would be the first in more than five years, others interpreted the comment as a sign that, at least for now, the government was offering little more than "verbal intervention," traders said.
"Fujii's comments highlighted the possibility of intervention on any further sharp falls, say below Y85," said Satoshi Tate, a senior vice president in the forex division of Mizuho Corporate Bank. "But at the same time, the comments did not convey a sense of real urgency, since they were essentially a repetition of the government's typical line."
Earlier in the week, minutes from the U.S. Federal Reserve indicated that the bank is not unduly concerned over the weak dollar. That has continued to weigh on the greenback, said Masanobu Ishikawa, general manager of spot foreign exchange at Tokyo Forex & Ueda Harlow.
"Also behind the dollar's weakness against the yen is that those minutes indicated the Fed is unlikely to raise interest rates anytime soon," Ishikawa added.
At 0450 GMT, the dollar stood at Y86.49, down from Y87.33 late Wednesday in New York. If the U.S. unit later fell to Y86.00, more stop-loss selling orders there could push it down sharply again, dealers said.
Meanwhile, the euro fell to Y130.76 from Y132.25, dragged down by the dollar's slide against the Japanese unit. Against the dollar, the euro stood at $1.5115 compared to $1.5143.
The Dollar Index, which measures the currency's value against six major units including the euro, fell to a fresh fifteen month low at 74.170, also largely on the unit's slide against the yen. At 0450 GMT, the index stood at 74.269 compared to 75.237.
The U.S. unit dropped to Y86.29, its lowest level since Y84.92 marked on July 7, 1995. The fall came after a large accumulation of stop-loss selling orders were triggered around Y87.00, dealers said.
The decline came despite a ratcheted-up warning from Japanese Finance Minister Hirohisa Fuji that he will monitor dollar/yen movement "very closely."
While the comment made some traders more cautious about the possibility of any Japanese dollar-buying intervention, which would be the first in more than five years, others interpreted the comment as a sign that, at least for now, the government was offering little more than "verbal intervention," traders said.
"Fujii's comments highlighted the possibility of intervention on any further sharp falls, say below Y85," said Satoshi Tate, a senior vice president in the forex division of Mizuho Corporate Bank. "But at the same time, the comments did not convey a sense of real urgency, since they were essentially a repetition of the government's typical line."
Earlier in the week, minutes from the U.S. Federal Reserve indicated that the bank is not unduly concerned over the weak dollar. That has continued to weigh on the greenback, said Masanobu Ishikawa, general manager of spot foreign exchange at Tokyo Forex & Ueda Harlow.
"Also behind the dollar's weakness against the yen is that those minutes indicated the Fed is unlikely to raise interest rates anytime soon," Ishikawa added.
At 0450 GMT, the dollar stood at Y86.49, down from Y87.33 late Wednesday in New York. If the U.S. unit later fell to Y86.00, more stop-loss selling orders there could push it down sharply again, dealers said.
Meanwhile, the euro fell to Y130.76 from Y132.25, dragged down by the dollar's slide against the Japanese unit. Against the dollar, the euro stood at $1.5115 compared to $1.5143.
The Dollar Index, which measures the currency's value against six major units including the euro, fell to a fresh fifteen month low at 74.170, also largely on the unit's slide against the yen. At 0450 GMT, the index stood at 74.269 compared to 75.237.
China Limits Speculation in Forex Deals
SHANGHAI -- China's foreign-exchange regulator tightened existing rules governing cross-border money transfers by individuals, in its latest effort to crack down on speculative capital flows even as pressure mounts on authorities to loosen control over the currency.
The latest measures from the State Administration of Foreign Exchange are designed to ensure individuals don't act as proxies in elaborate foreign-exchange deals that circumvent existing limits. In a statement, posted on its Web site Wednesday but dated Nov. 19, the agency said it is limiting the number of bank accounts owned by individuals that can be used in certain foreign-exchange transactions.
The latest measures from the State Administration of Foreign Exchange are designed to ensure individuals don't act as proxies in elaborate foreign-exchange deals that circumvent existing limits. In a statement, posted on its Web site Wednesday but dated Nov. 19, the agency said it is limiting the number of bank accounts owned by individuals that can be used in certain foreign-exchange transactions.
FOREX-Yen, dollar jump on Dubai woes; Japan warns on FX
* Yen hits another 14-year high on dollar, through 85 yen
* Pro-risk trades unwound on concerns about Dubai debt
* Japan finmin raises prospect of G7 joint statement on FX
* But FX and other assets steady, recover some ground
(Updates prices, adds quotes)
By Jamie McGeever
LONDON, Nov 27 (Reuters) - The yen hit a 14-year high versus the dollar and rallied broadly on Friday, while the dollar jumped against most other currencies as investors cut carry trades and risk exposure on concern about Dubai's debt problems.
Japan signalled growing discomfort with the yen's surge -- it briefly broke the 85 yen per dollar level -- and suggested it would be open to a Group of Seven joint statement on currencies to cool the rally.
Market sources said the Bank of Japan checked exchange rates earlier in Asian trading with Japanese commercial banks, raising fears of outright intervention, although analysts say this is unlikely right now.
But the speed and scale of dollar/yen's fall was such that a recovery was always likely, particularly after Japan's Finance Minister Hirohisa Fujii said the moves were "extreme" and it was possible Japan could respond.
The sharp declines in other markets were also reversed or pared back by mid-morning London trading. European stocks were flat on the day, having fallen at the open .FTEU3 on easing concerns over European banks' exposure to Dubai's debt crisis.
French banks said they had limited exposure to the debt crisis to the Dubai debt crisis and Bank of Italy Director General Fabrizio Saccomanni said Italian banks had "very limited" exposure.
Dubai struggled to ease fears of debt default on Thursday after its move to delay repayments at two flagship firms shook confidence in the Middle East and raised the prospect of further huge debt write-offs for banks. [ID:nGEE5AO2FN]
"FX markets are nervous as Dubai debt contagion fears fuelled a flight to quality bid, which favoured the dollar. The yen benefited via the crosses, but FX intervention risk rose significantly overnight," said Russell Bloom, analyst at Action Economics in London.
"But early liquidation of speculative positions has been absorbed by those placing their faith in BoJ action," he said.
The dollar fell as far as 84.82 yen JPY=, its weakest since 1995 and ever closer to its record low of 79.75, before pulling back up to 86.80 yen at 1045 GMT, up 0.4 percent on the day.
* Pro-risk trades unwound on concerns about Dubai debt
* Japan finmin raises prospect of G7 joint statement on FX
* But FX and other assets steady, recover some ground
(Updates prices, adds quotes)
By Jamie McGeever
LONDON, Nov 27 (Reuters) - The yen hit a 14-year high versus the dollar and rallied broadly on Friday, while the dollar jumped against most other currencies as investors cut carry trades and risk exposure on concern about Dubai's debt problems.
Japan signalled growing discomfort with the yen's surge -- it briefly broke the 85 yen per dollar level -- and suggested it would be open to a Group of Seven joint statement on currencies to cool the rally.
Market sources said the Bank of Japan checked exchange rates earlier in Asian trading with Japanese commercial banks, raising fears of outright intervention, although analysts say this is unlikely right now.
But the speed and scale of dollar/yen's fall was such that a recovery was always likely, particularly after Japan's Finance Minister Hirohisa Fujii said the moves were "extreme" and it was possible Japan could respond.
The sharp declines in other markets were also reversed or pared back by mid-morning London trading. European stocks were flat on the day, having fallen at the open .FTEU3 on easing concerns over European banks' exposure to Dubai's debt crisis.
French banks said they had limited exposure to the debt crisis to the Dubai debt crisis and Bank of Italy Director General Fabrizio Saccomanni said Italian banks had "very limited" exposure.
Dubai struggled to ease fears of debt default on Thursday after its move to delay repayments at two flagship firms shook confidence in the Middle East and raised the prospect of further huge debt write-offs for banks. [ID:nGEE5AO2FN]
"FX markets are nervous as Dubai debt contagion fears fuelled a flight to quality bid, which favoured the dollar. The yen benefited via the crosses, but FX intervention risk rose significantly overnight," said Russell Bloom, analyst at Action Economics in London.
"But early liquidation of speculative positions has been absorbed by those placing their faith in BoJ action," he said.
The dollar fell as far as 84.82 yen JPY=, its weakest since 1995 and ever closer to its record low of 79.75, before pulling back up to 86.80 yen at 1045 GMT, up 0.4 percent on the day.
Forex Worries About Dubai and Thin Liquidity Hurts Risk Correlated Trades
Concerns over Dubai World quasi-sovereign debt restructuring situation was still haunting risk correlated trades in the Asian session. And combined with thin liquidity has made for a volatile Friday. Asian equities markets were lower across the board, with the Hang Seng falling -4.8%. US 10yrs Trsys have gapped down to 3.20%, while Gold is down nearly $50 from Thursday's high. USD has seen invigorated buying, with EURUSD slipping to 1.4828 at the time of writing. The other big gainer, to the alarm of Japanese policy makers, has been the JPY. MoF intervention rhetoric increased significantly and Finance Minister Fujii provided markets his harshest warning yet, saying that "appropriate measures" were now justified as there was "no doubt the market has moved too far in one direction" and current FX moves were “extreme”. He also said that speaking with US and European officials to coordinate an international response would be a possible direction. News wires were citing market sources, which say BoJ was seen in the market checking rates in cross-JPY. The increased interventions risks seem to help, as the USDJPY bounce of the 84.83 low trading up to 86.83. On the economic front, the jobless rate fell unexpectedly from 5.7% in July to 5.5% in August and 5.3% in September while real household spending rose 1.6% y/y in October. While the Dubai story is still evolving, we expect at present, the knee-jerk fear of a systemic collapse are over blown. On the surface, the numbers, while large, are not unmanageable especially given Dubai's close relationship with cash heavy Abu Dhabi. And unlike in 2008, where policy makers were caught off guard, this time they are prepared and would respond with decisive action to prevent an extended market disruption. And in a move to control damage H.H. Sheikh Ahmed bin Saeed Al-Maktoum, Chairman of the Supreme Fiscal Committee, issued a statement yesterday reaffirming / clarifying the Dubai Government's intention to intervene directly and supervise the restructuring of Dubai World's debt obligations. What this event does highlight is the tendency for short term traders to cut positions at a moments concern, making risk correlated rallies very fragile.
WORLD FOREX: Dollar Pares Gain As Dubai Default Fears Subside
NEW YORK (Dow Jones)--Overnight gains in the dollar and the yen were trimmed early Friday in New York when global stocks and commodities recouped some losses as the worst fears about the Dubai debt crisis appeared to subside.
Market volatility calmed when many European banks and governments around the world indicated their exposure to state-run Dubai World's debt isn't as large as initially believed. Investors had fled riskier assets earlier in Asian and European trading due to intensified fears that a debt default by Dubai World would derail global financial markets and choke off an incipient economic recovery.
"For now the market is taking the view that the Dubai debt issue may be a storm rather than a hurricane," said Jane Foley, a research director at Forex.com in London.
Early in New York, the euro was trading at $1.4910, down from $1.5009 late Thursday, according to EBS via CQG. The dollar was at Y86.57, little changed frown from Y86.49, while the euro was at Y129.03, down from Y129.74. The U.K. pound was at $1.6394, down from $1.6499. The dollar was at CHF1.0112, up from CHF1.0038.
The Dollar Index, which tracks the greenback against a trade-weighted basket of six currencies, was at 75.283, up from 74.799.
With the rush to safe-haven assets abating, there is a feeling that the euro, the U.K. pound and the Australian dollar might be looking cheap right now, said Foley.
Trading is likely to remain thin and volatile as most investors in the U.S. choose to take a long weekend break after the U.S. Thanksgiving holiday Thursday. Both U.S. equity and bond markets have abbreviated sessions Friday.
"Unfortunately, thin trading conditions in the U.S. will mean that the markets will continue to distrust any price action through until Monday, given also thinned liquidity the potential for another surge in volatility is high," Foley said.
Stocks, oil and metals slumped overnight after Dubai World announced a six-month standstill on its debt. The euro sank as far as $1.4827, while the dollar fell below Y85 for the first time in 14 years, prompting Japanese authorities to threaten investors with intervention.
European banks, including Credit Suisse, UBS AG, Barclays, ING Groep INV and Deutsche Bank, indicated their exposure to Dubai World's debt wouldn't have a significant impact on them. Governments from India, Philippines, Brazil and Taiwan also rushed to say that their financial systems' exposure to the conglomerate is limited.
That prompted the euro to climb back from its overnight low to trade around $1.49. The dollar also bounced back from its low against the yen, as did European stock and commodity markets.
"There is quite a bit of nervousness in the market, so I wouldn't expect the dollar to be sold aggressively, and the euro around $1.49 may be far enough for now," Foley said.
U.S. stocks are set to open lower, with futures for the Standard & Poor's 500 index down 0.2%, after slumping earlier as much as 1.7%.
Dubai World, an investment company in property and financial services, accounts for about $60 billion of the city-state's $80 billion in liabilities, of which half is estimated by Credit Suisse analysts to be held by European banks.
U.S. banks have only $9.9 billion United Arab Emirates loan exposure compared $49.5 billion for U.K. banks, Royal Bank of Scotland estimates. That could assuage some of Friday's jitters in U.S. markets. But the lack of official data leaves investors wondering.
Market volatility calmed when many European banks and governments around the world indicated their exposure to state-run Dubai World's debt isn't as large as initially believed. Investors had fled riskier assets earlier in Asian and European trading due to intensified fears that a debt default by Dubai World would derail global financial markets and choke off an incipient economic recovery.
"For now the market is taking the view that the Dubai debt issue may be a storm rather than a hurricane," said Jane Foley, a research director at Forex.com in London.
Early in New York, the euro was trading at $1.4910, down from $1.5009 late Thursday, according to EBS via CQG. The dollar was at Y86.57, little changed frown from Y86.49, while the euro was at Y129.03, down from Y129.74. The U.K. pound was at $1.6394, down from $1.6499. The dollar was at CHF1.0112, up from CHF1.0038.
The Dollar Index, which tracks the greenback against a trade-weighted basket of six currencies, was at 75.283, up from 74.799.
With the rush to safe-haven assets abating, there is a feeling that the euro, the U.K. pound and the Australian dollar might be looking cheap right now, said Foley.
Trading is likely to remain thin and volatile as most investors in the U.S. choose to take a long weekend break after the U.S. Thanksgiving holiday Thursday. Both U.S. equity and bond markets have abbreviated sessions Friday.
"Unfortunately, thin trading conditions in the U.S. will mean that the markets will continue to distrust any price action through until Monday, given also thinned liquidity the potential for another surge in volatility is high," Foley said.
Stocks, oil and metals slumped overnight after Dubai World announced a six-month standstill on its debt. The euro sank as far as $1.4827, while the dollar fell below Y85 for the first time in 14 years, prompting Japanese authorities to threaten investors with intervention.
European banks, including Credit Suisse, UBS AG, Barclays, ING Groep INV and Deutsche Bank, indicated their exposure to Dubai World's debt wouldn't have a significant impact on them. Governments from India, Philippines, Brazil and Taiwan also rushed to say that their financial systems' exposure to the conglomerate is limited.
That prompted the euro to climb back from its overnight low to trade around $1.49. The dollar also bounced back from its low against the yen, as did European stock and commodity markets.
"There is quite a bit of nervousness in the market, so I wouldn't expect the dollar to be sold aggressively, and the euro around $1.49 may be far enough for now," Foley said.
U.S. stocks are set to open lower, with futures for the Standard & Poor's 500 index down 0.2%, after slumping earlier as much as 1.7%.
Dubai World, an investment company in property and financial services, accounts for about $60 billion of the city-state's $80 billion in liabilities, of which half is estimated by Credit Suisse analysts to be held by European banks.
U.S. banks have only $9.9 billion United Arab Emirates loan exposure compared $49.5 billion for U.K. banks, Royal Bank of Scotland estimates. That could assuage some of Friday's jitters in U.S. markets. But the lack of official data leaves investors wondering.
FOREX-Yen, dollar jump on Dubai woes, but mkts calmer
* Yen hits 14-year high on dollar, through 85 yen
* Pro-risk trades unwound on concerns about Dubai debt
* But FX and other markets steady, recover some ground
* Japan finmin raises prospect of G7 joint statement on FX
(Updates prices, adds quote)
By Jamie McGeever
LONDON, Nov 27 (Reuters) - The yen hit a 14-year high versus the dollar and rallied broadly on Friday, while the dollar jumped against most other currencies as investors cut carry trades and risk exposure on concern about Dubai's debt problems.
By mid-session in London, however, exchange rates had recovered some ground and were trading in narrower ranges, while volatility had eased.
Earlier, Japan signalled growing discomfort with the yen's surge -- it briefly broke the 85 yen per dollar level -- and suggested it would be open to a Group of Seven joint statement on currencies to cool the rally.
Market sources said the Bank of Japan checked exchange rates earlier in Asian trading with Japanese commercial banks, raising fears of outright intervention, although analysts say this is unlikely right now.
But the speed and scale of dollar/yen's fall was such that a recovery was always likely, particularly after Japan's Finance Minister Hirohisa Fujii said the moves were "extreme" and it was possible Japan could respond.
The sharp declines in other markets were also reversed or pared back by mid-session in London. European banking stocks were up half a percent on the day, having fallen at the open .SX7P.
French banks said they had limited exposure to the Dubai debt crisis and Bank of Italy Director General Fabrizio Saccomanni said Italian banks had "very limited" exposure.
Dubai struggled to ease fears of debt default on Thursday after its move to delay repayments at two flagship firms shook confidence in the Middle East and raised the prospect of further huge debt write-offs for banks. [ID:nGEE5AO2FN]
"The market is taking a breather. Volatility had soared in early hours after the risk trade headed for the exits in thinned liquidity," said Jane Foley, chief strategist at FOREX.com.
* Pro-risk trades unwound on concerns about Dubai debt
* But FX and other markets steady, recover some ground
* Japan finmin raises prospect of G7 joint statement on FX
(Updates prices, adds quote)
By Jamie McGeever
LONDON, Nov 27 (Reuters) - The yen hit a 14-year high versus the dollar and rallied broadly on Friday, while the dollar jumped against most other currencies as investors cut carry trades and risk exposure on concern about Dubai's debt problems.
By mid-session in London, however, exchange rates had recovered some ground and were trading in narrower ranges, while volatility had eased.
Earlier, Japan signalled growing discomfort with the yen's surge -- it briefly broke the 85 yen per dollar level -- and suggested it would be open to a Group of Seven joint statement on currencies to cool the rally.
Market sources said the Bank of Japan checked exchange rates earlier in Asian trading with Japanese commercial banks, raising fears of outright intervention, although analysts say this is unlikely right now.
But the speed and scale of dollar/yen's fall was such that a recovery was always likely, particularly after Japan's Finance Minister Hirohisa Fujii said the moves were "extreme" and it was possible Japan could respond.
The sharp declines in other markets were also reversed or pared back by mid-session in London. European banking stocks were up half a percent on the day, having fallen at the open .SX7P.
French banks said they had limited exposure to the Dubai debt crisis and Bank of Italy Director General Fabrizio Saccomanni said Italian banks had "very limited" exposure.
Dubai struggled to ease fears of debt default on Thursday after its move to delay repayments at two flagship firms shook confidence in the Middle East and raised the prospect of further huge debt write-offs for banks. [ID:nGEE5AO2FN]
"The market is taking a breather. Volatility had soared in early hours after the risk trade headed for the exits in thinned liquidity," said Jane Foley, chief strategist at FOREX.com.
Forex: Dollar Steadies After Hitting 1995 Low Versus Yen
The dollar firmed up versus other majors Friday morning in New York, paring its massive losses from earlier in the week after a debt debacle at Dubai's state-run bank spooked investors around the globe.
State-run Dubai World, the conglomerate that spearheaded the emirate's breakneck growth, has sought a six-month "standstill" on its $60 billion debts with all lenders.
Global stocks hit the skids while US markets were closed for the Thanksgiving holiday. The safe haven dollar, which was under relentless pressure prior to the Dubai news, has managed to improve from yearly lows versus the euro, but remains close to yesterday's 1995 low against the yen.
The bottom fell out against the dollar against the yen this week. The greenback plunged through long-term support levels to hit a 14-year low of 84.80.
This morning, the dollar steadied to fetch 86.50 yen.
The dollar gained ground on the euro, rising to 1.4850 after hitting a 16-month low of 1.5143 Wednesday evening.
The dollar was trading near 1.6350, having picked up more than 5 cents from a 3-month low set earlier in November.
Commodity prices tailed off as the dollar improved against the euro, giving the buck a boost versus resource-linked currencies. Against the loonie, the dollar jumped to C$1.0750, an advance of about 3 Canadian cents from its mid-week level.
There is no major economic data scheduled for release from the US on Friday. Stock exchanges in New York close early today.
In news from overseas, Eurozone economic sentiment strengthened in November for the eighth month in a row as the economy picks up strongly from recession.
Still, the index remains at a very low level indicating that the healthy growth rates in the second half of this year would not possibly continue into 2010.
State-run Dubai World, the conglomerate that spearheaded the emirate's breakneck growth, has sought a six-month "standstill" on its $60 billion debts with all lenders.
Global stocks hit the skids while US markets were closed for the Thanksgiving holiday. The safe haven dollar, which was under relentless pressure prior to the Dubai news, has managed to improve from yearly lows versus the euro, but remains close to yesterday's 1995 low against the yen.
The bottom fell out against the dollar against the yen this week. The greenback plunged through long-term support levels to hit a 14-year low of 84.80.
This morning, the dollar steadied to fetch 86.50 yen.
The dollar gained ground on the euro, rising to 1.4850 after hitting a 16-month low of 1.5143 Wednesday evening.
The dollar was trading near 1.6350, having picked up more than 5 cents from a 3-month low set earlier in November.
Commodity prices tailed off as the dollar improved against the euro, giving the buck a boost versus resource-linked currencies. Against the loonie, the dollar jumped to C$1.0750, an advance of about 3 Canadian cents from its mid-week level.
There is no major economic data scheduled for release from the US on Friday. Stock exchanges in New York close early today.
In news from overseas, Eurozone economic sentiment strengthened in November for the eighth month in a row as the economy picks up strongly from recession.
Still, the index remains at a very low level indicating that the healthy growth rates in the second half of this year would not possibly continue into 2010.
UPDATE 1-Japan Fujii: forex steps possible as moves extreme
* Fujii refuses to comment specifically on intervention
* Banking min says international coordination may be needed
By Stanley White
TOKYO, Nov 27 (Reuters) - Japan's finance minister said currency moves had become extreme and a government response was possible, as the yen surged to a new 14-year high against the dollar on Friday. "I am extremely nervous and watching the market carefully," Hirohisa Fujii told reporters after a cabinet meeting.
"There's no doubt the market has moved too far in one direction. Moves right now are extreme, and it would be possible to take appropriate measures."
The greenback slumped to a 14-year low of 84.82 yen JPY= earlier on Friday, as investors shunned riskier assets due to concerns about Dubai's debt problems, but it briefly pared its losses after Fujii's comments.
Fujii added that he would be flexible on the Group of Seven nations issuing a joint statement on currencies. The dollar has been falling broadly recently as expectations that interest rates in the United States will remain low, speculation that Japan won't intervene in currency markets, and a bout of risk aversion all snowballed into a sell-off.
Fujii added that he was flexible on contacting currency authorities in the United States and Europe, and that he was open to the idea of a joint statement. However, he declined to comment on intervention, saying he wasn't in a position to use the word due to commitments with other G7 countries on currency flexibility.
Banking Minister Shizuka Kamei also weighed in on the dollar's slump against the yen, saying he had asked Fujii about the need for coordinated international action. [ID:nTFA006515] ((stanley.white@thomsonreuters.com; +81 3 6441 1984; Reuters Messaging: stanley.white.reuters.com@reuters.net)) ((If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com))
* Banking min says international coordination may be needed
By Stanley White
TOKYO, Nov 27 (Reuters) - Japan's finance minister said currency moves had become extreme and a government response was possible, as the yen surged to a new 14-year high against the dollar on Friday. "I am extremely nervous and watching the market carefully," Hirohisa Fujii told reporters after a cabinet meeting.
"There's no doubt the market has moved too far in one direction. Moves right now are extreme, and it would be possible to take appropriate measures."
The greenback slumped to a 14-year low of 84.82 yen JPY= earlier on Friday, as investors shunned riskier assets due to concerns about Dubai's debt problems, but it briefly pared its losses after Fujii's comments.
Fujii added that he would be flexible on the Group of Seven nations issuing a joint statement on currencies. The dollar has been falling broadly recently as expectations that interest rates in the United States will remain low, speculation that Japan won't intervene in currency markets, and a bout of risk aversion all snowballed into a sell-off.
Fujii added that he was flexible on contacting currency authorities in the United States and Europe, and that he was open to the idea of a joint statement. However, he declined to comment on intervention, saying he wasn't in a position to use the word due to commitments with other G7 countries on currency flexibility.
Banking Minister Shizuka Kamei also weighed in on the dollar's slump against the yen, saying he had asked Fujii about the need for coordinated international action. [ID:nTFA006515] ((stanley.white@thomsonreuters.com; +81 3 6441 1984; Reuters Messaging: stanley.white.reuters.com@reuters.net)) ((If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com))
WORLD FOREX:Dollar Plunges Below Y85; First Time In 14 Years
TOKYO (Dow Jones)--The dollar plunged below Y85.00 in Asia Friday to a fresh 14-year low, as investors piled into the yen on the view it offers the safest haven amid falling Asian share prices and concerns over global banks??? exposure to Dubai debt.
The dollar later rebounded somewhat, helped by a sterner warning from Japan's finance minister about the yen's sharp moves, but traders said market sentiment toward the greenback remains starkly bearish.
The dollar later rebounded somewhat, helped by a sterner warning from Japan's finance minister about the yen's sharp moves, but traders said market sentiment toward the greenback remains starkly bearish.
Forex and Dow Jones recommended keveks
Today's support: - 1.4878 and 1.4853(main), where correction is possible. Break would give 1.4816, where correction also may be. Then follows 1.4794. Break of the latter would result in 1.4772. If a strong impulse, we would see 1.4757. Continuation will give 1.4732.
Today's resistance: - 1.4991 and 1.5033(main). Break would give 1.5058, where a correction is possible. Then goes 1.5074. Break of the latter would result in 1.5092. If a strong impulse, we'd see 1.5116. Continuation will give 1.5135.
USD/JPY
Today's support: - 85.36, 84.94 and 84.60(main). Break would bring 84.46, where correction is possible. Then 84.17, where a correction may also happen. Break of the latter will give 83.84. If a strong impulse, we would see 83.70. Continuation would give 83.36 and 82.87.
Today's resistance: - 86.82, 87.37 and 87.64(main), where a correction may happen. Break would bring 87.83, where also a correction may be. Then 88.02. If a strong impulse, we would see 88.24. Continuation will give 88.53, 88.90 and 89.10.
DOW JONES INDEX
Today's support: - 10440.00, 10423.10, 10395.00 and 10358.25(main), where a delay and correction may happen. Break of the latter will give 10333.12, where correction also can be. Then follows 10295.75. Be there a strong impulse, we would see 10271.18. Continuation will bring 10248.70.
Today's resistance: - 10486.40 and 10528.42(main), where a delay and correction may happen. Break would bring 10544.28, where a correction may happen. Then follows 10572.40, where a delay and correction could also be. Be there a strong impulse, we'd see 10598.70. Continuation would bring 10618.80.
Today's resistance: - 1.4991 and 1.5033(main). Break would give 1.5058, where a correction is possible. Then goes 1.5074. Break of the latter would result in 1.5092. If a strong impulse, we'd see 1.5116. Continuation will give 1.5135.
USD/JPY
Today's support: - 85.36, 84.94 and 84.60(main). Break would bring 84.46, where correction is possible. Then 84.17, where a correction may also happen. Break of the latter will give 83.84. If a strong impulse, we would see 83.70. Continuation would give 83.36 and 82.87.
Today's resistance: - 86.82, 87.37 and 87.64(main), where a correction may happen. Break would bring 87.83, where also a correction may be. Then 88.02. If a strong impulse, we would see 88.24. Continuation will give 88.53, 88.90 and 89.10.
DOW JONES INDEX
Today's support: - 10440.00, 10423.10, 10395.00 and 10358.25(main), where a delay and correction may happen. Break of the latter will give 10333.12, where correction also can be. Then follows 10295.75. Be there a strong impulse, we would see 10271.18. Continuation will bring 10248.70.
Today's resistance: - 10486.40 and 10528.42(main), where a delay and correction may happen. Break would bring 10544.28, where a correction may happen. Then follows 10572.40, where a delay and correction could also be. Be there a strong impulse, we'd see 10598.70. Continuation would bring 10618.80.
Tokyo to respond to stock, forex moves -spokesman
TOKYO, Nov 27 (Reuters) - The top government spokesman said on Friday that Japan will take measures to support a fragile economy while responding to a drop in share prices and a rise in the yen.
"We'll deal with the situation while closely monitoring share prices and the currency problem," Chief Cabinet Secretary Hirofumi Hirano told a news conference.
"We'll deal with the situation while closely monitoring share prices and the currency problem," Chief Cabinet Secretary Hirofumi Hirano told a news conference.
FOREX-Yen off highs as Japan signals growing concern
* Yen hits another 14-year high on dollar, yen crosses fall
* Pro-risk trades unwound on concerns about Dubai debt
* Japan finmin raises prospect of G7 joint statement on FX
* Japan govt, BOJ were checking dlr/yen rates - sources
By Satomi Noguchi
TOKYO, Nov 27 (Reuters) - The yen hit its highest level in 14 years on the dollar on Friday before trimming gains as Japanese authorities made their presence felt by calling banks, moving one step closer to intervention to stem the yen's surge.
Market sources said Japan's government and the Bank of Japan had checked dollar/yen rates with commercial banks in morning trade in Asia, something dealers said went further than their normal market contact. [ID:nTKF106774]
Concerns about debt problems in Dubai saw investors unwinding yen-funded carry trades in the likes of the Australian and New Zealand dollars in early Asian trade, causing the dollar to plunge to a new 14-year trough below 85 yen.
Japan's finance minister raised the prospect of a Group of Seven joint statement on currencies to cool the yen's rally, but some traders and analysts were sceptical the move was disorderly enough to draw a response from the U.S. or Europe just yet. [ID:nT304288]
However, traders said talk of the calls to banks and the comments from officials had encouraged dealers to trim long yen positions, although they said they doubted Japan's authorities were ready to intervene just yet and this could have been a feint to discourage speculators.
"We heard about it (the call to banks) from different directions in the market," a trader at a Japanese bank said.
"The Bank of Japan may have wanted to make its presence felt."
The dollar fell as far as 84.82 yen JPY=, its weakest since 1995 and ever closer to its record low of 79.75, before pulling back up to 86.10 yen, still down 0.5 percent on the day.
Stop-loss selling in the dollar by Japanese margin traders likely gained steam after the greenback's drop below 86.00 yen, according to major margin broker GAITAME.com.
The broker also said initial signs suggested that there was a surge in loss-cut selling by margin traders earlier on Friday.
In a market made thinner by a U.S. holiday on Thursday, Japanese exporters had fuelled the early drop by buying yen ahead of the month-end, while traders also dumped dollars due to option triggers at 85.00 yen. Sell orders then kicked in below that level
* Pro-risk trades unwound on concerns about Dubai debt
* Japan finmin raises prospect of G7 joint statement on FX
* Japan govt, BOJ were checking dlr/yen rates - sources
By Satomi Noguchi
TOKYO, Nov 27 (Reuters) - The yen hit its highest level in 14 years on the dollar on Friday before trimming gains as Japanese authorities made their presence felt by calling banks, moving one step closer to intervention to stem the yen's surge.
Market sources said Japan's government and the Bank of Japan had checked dollar/yen rates with commercial banks in morning trade in Asia, something dealers said went further than their normal market contact. [ID:nTKF106774]
Concerns about debt problems in Dubai saw investors unwinding yen-funded carry trades in the likes of the Australian and New Zealand dollars in early Asian trade, causing the dollar to plunge to a new 14-year trough below 85 yen.
Japan's finance minister raised the prospect of a Group of Seven joint statement on currencies to cool the yen's rally, but some traders and analysts were sceptical the move was disorderly enough to draw a response from the U.S. or Europe just yet. [ID:nT304288]
However, traders said talk of the calls to banks and the comments from officials had encouraged dealers to trim long yen positions, although they said they doubted Japan's authorities were ready to intervene just yet and this could have been a feint to discourage speculators.
"We heard about it (the call to banks) from different directions in the market," a trader at a Japanese bank said.
"The Bank of Japan may have wanted to make its presence felt."
The dollar fell as far as 84.82 yen JPY=, its weakest since 1995 and ever closer to its record low of 79.75, before pulling back up to 86.10 yen, still down 0.5 percent on the day.
Stop-loss selling in the dollar by Japanese margin traders likely gained steam after the greenback's drop below 86.00 yen, according to major margin broker GAITAME.com.
The broker also said initial signs suggested that there was a surge in loss-cut selling by margin traders earlier on Friday.
In a market made thinner by a U.S. holiday on Thursday, Japanese exporters had fuelled the early drop by buying yen ahead of the month-end, while traders also dumped dollars due to option triggers at 85.00 yen. Sell orders then kicked in below that level
Thursday, November 26, 2009
FOREX-Dollar recovers from 14-yr low vs yen
* Dollar hits 14-year low below 86.30 yen, then rebounds
* Japan's vice finmin: not considering intervention now
* SNB declines comment on Swiss franc intervention rumours
(Recasts, updates prices, adds quotes and comment, changes byline and dateline. Previous: TOKYO)
By Jamie McGeever
LONDON, Nov 26 (Reuters) - The dollar rebounded from a 14-year low against the yen on Thursday as traders betting against the U.S. currency cashed in on its recent slide, but the prospect of persistent loose U.S. monetary policy ensured overall sentiment remained bearish.
A fall of 1.7 percent in European stocks .FTEU3 and U.S. futures pointing to a lower open on Wall Street also encouraged traders to pare back positions that involve selling dollars for other currencies and assets like equities and commodities.
Some analysts also said Dubai's shock move on Wednesday to restructure its biggest corporate debtor, Dubai World, and delay repayment on some of the company's $59 billion of liabilities, could be weighing on risk appetite to the dollar's benefit.
But the dollar's recovery may be temporary. Japan's deputy finance minister Yoshihiko Noda told Reuters recent currency moves reflected dollar weakness and Japan wasn't considering intervening now.
The Swiss National Bank on Thursday declined to comment on market talk that it had intervened in the foreign exchanges to sell the Swiss franc, which had surged to its strongest level against the dollar since April last year.
The faster the dollar's fall, the more traders are aware of the threat of intervention from authorities like the SNB or Japan's Ministry of Finance. But the signals from these bodies -- and, more crucially, from U.S. policymakers -- suggests intervention isn't imminent, so the dollar could go even lower.
"The dollar may be exposed to potential intervention, but so far there has only been limited comments against its weakness," said Roberto Maliach, strategist at Unicredit in Milan.
"It's a sort of 'dead cat bounce' in a sense," he said of the dollar's recovery. "We had a sharp drop yesterday and people are taking profits. But the euro remains above the previous high of $1.5060," Maliach noted.
At 0845 GMT the dollar index, a barometer of its performance against six major currencies, was up nearly half a percent on the day at 74.59, bouncing back from a 15-month low of 74.17 earlier in the day.
The greenback was down half a percent against the yen at 86.85 yen JPY=, grinding back up from a low of 86.29 yen on trading platform EBS, its weakest level since 1995. Traders say 85 yen is now in the market's sights.
* Japan's vice finmin: not considering intervention now
* SNB declines comment on Swiss franc intervention rumours
(Recasts, updates prices, adds quotes and comment, changes byline and dateline. Previous: TOKYO)
By Jamie McGeever
LONDON, Nov 26 (Reuters) - The dollar rebounded from a 14-year low against the yen on Thursday as traders betting against the U.S. currency cashed in on its recent slide, but the prospect of persistent loose U.S. monetary policy ensured overall sentiment remained bearish.
A fall of 1.7 percent in European stocks .FTEU3 and U.S. futures pointing to a lower open on Wall Street also encouraged traders to pare back positions that involve selling dollars for other currencies and assets like equities and commodities.
Some analysts also said Dubai's shock move on Wednesday to restructure its biggest corporate debtor, Dubai World, and delay repayment on some of the company's $59 billion of liabilities, could be weighing on risk appetite to the dollar's benefit.
But the dollar's recovery may be temporary. Japan's deputy finance minister Yoshihiko Noda told Reuters recent currency moves reflected dollar weakness and Japan wasn't considering intervening now.
The Swiss National Bank on Thursday declined to comment on market talk that it had intervened in the foreign exchanges to sell the Swiss franc, which had surged to its strongest level against the dollar since April last year.
The faster the dollar's fall, the more traders are aware of the threat of intervention from authorities like the SNB or Japan's Ministry of Finance. But the signals from these bodies -- and, more crucially, from U.S. policymakers -- suggests intervention isn't imminent, so the dollar could go even lower.
"The dollar may be exposed to potential intervention, but so far there has only been limited comments against its weakness," said Roberto Maliach, strategist at Unicredit in Milan.
"It's a sort of 'dead cat bounce' in a sense," he said of the dollar's recovery. "We had a sharp drop yesterday and people are taking profits. But the euro remains above the previous high of $1.5060," Maliach noted.
At 0845 GMT the dollar index, a barometer of its performance against six major currencies, was up nearly half a percent on the day at 74.59, bouncing back from a 15-month low of 74.17 earlier in the day.
The greenback was down half a percent against the yen at 86.85 yen JPY=, grinding back up from a low of 86.29 yen on trading platform EBS, its weakest level since 1995. Traders say 85 yen is now in the market's sights.
Swiss National Bank Intervenes in Forex Markets
The Swiss National Bank intervened in foreign exchange markets Thursday to prevent the Swiss franc from rising further, selling the Swiss currency against both the dollar and the euro, market-watchers said.
Market watchers said the intervention marks the first time the SNB has been primarily active in the Swiss franc-dollar pair, after three interventions earlier this year focusing on the Swiss franc-euro cross.
“There’s market talk about an SNB intervention to keep the franc from rising at a fast pace, selling Swiss francs against the dollar this time,” said Kasper Kirkegaard, currency strategist at Danske Bank. The SNB declined to comment.
The intervention, which appears to have taken place at a level of CHF0.9950 against the dollar, was then probably followed by a similar move in the Swiss franc-euro cross at levels around CHF1.50 to the euro, Kirkegaard added.
The move shoved the dollar up to the day’s high of 1.0044 Swiss francs, while the euro moved up to 1.5135 Swiss francs. But the euro then sunk back to the 1.5085 area, while the dollar has settled back at parity. At 1149 GMT, the dollar traded at 1.003 Swiss france and the euro at 1.5085 Swiss francs.
Analysts at UBS AG said this marks the fourth time the SNB has intervened in currency markets this year, and added that the focus on the Swiss franc-dollar rate came as a surprise.
However, the message in the SNB’s apparent actions is significant.
“If they had not intervened, then the euro could now be at about CHF1.40 and the dollar would be at about CHF0.90,” said Thanos Papasavvas, a currencies investor at asset management firm Investec in London. “They have been successful in decelerating the rate of the franc’s appreciation,” he added. – Martin Gelnar and Katie Martin
Market watchers said the intervention marks the first time the SNB has been primarily active in the Swiss franc-dollar pair, after three interventions earlier this year focusing on the Swiss franc-euro cross.
“There’s market talk about an SNB intervention to keep the franc from rising at a fast pace, selling Swiss francs against the dollar this time,” said Kasper Kirkegaard, currency strategist at Danske Bank. The SNB declined to comment.
The intervention, which appears to have taken place at a level of CHF0.9950 against the dollar, was then probably followed by a similar move in the Swiss franc-euro cross at levels around CHF1.50 to the euro, Kirkegaard added.
The move shoved the dollar up to the day’s high of 1.0044 Swiss francs, while the euro moved up to 1.5135 Swiss francs. But the euro then sunk back to the 1.5085 area, while the dollar has settled back at parity. At 1149 GMT, the dollar traded at 1.003 Swiss france and the euro at 1.5085 Swiss francs.
Analysts at UBS AG said this marks the fourth time the SNB has intervened in currency markets this year, and added that the focus on the Swiss franc-dollar rate came as a surprise.
However, the message in the SNB’s apparent actions is significant.
“If they had not intervened, then the euro could now be at about CHF1.40 and the dollar would be at about CHF0.90,” said Thanos Papasavvas, a currencies investor at asset management firm Investec in London. “They have been successful in decelerating the rate of the franc’s appreciation,” he added. – Martin Gelnar and Katie Martin
Fed's Exit Strategy Crucial For China's Forex Reserves: Ex-PBoC Adviser
The real value of China's foreign exchange reserves will be eroded unless the Federal Reserve implements an exit strategy successfully, said Yu Yongding, a former adviser to the People's Bank of China.
In a speech delivered in Melbourne, Yu, a member of the Chinese Academy of Social Sciences, said the "inevitable" decline of the dollar may erode China's holdings of U.S. Treasuries.
China, the world's biggest holder of forex reserves, is the biggest creditor of the U.S. Yu noted that China needs to reduce its current and capital account surplus, or it should divert its forex reserves away from the U.S.
He warned that China's current loose monetary policy is paving the way for another asset bubble. Yu said the way the Chinese government addressed the financial crisis last year has only helped to increase the country's resilience on investment as a source of growth.
Citing the huge gap between the massive growth rate of monetary supply and economic growth, Yu said China would face very large inflationary pressure.
by RTT Staff Writer
In a speech delivered in Melbourne, Yu, a member of the Chinese Academy of Social Sciences, said the "inevitable" decline of the dollar may erode China's holdings of U.S. Treasuries.
China, the world's biggest holder of forex reserves, is the biggest creditor of the U.S. Yu noted that China needs to reduce its current and capital account surplus, or it should divert its forex reserves away from the U.S.
He warned that China's current loose monetary policy is paving the way for another asset bubble. Yu said the way the Chinese government addressed the financial crisis last year has only helped to increase the country's resilience on investment as a source of growth.
Citing the huge gap between the massive growth rate of monetary supply and economic growth, Yu said China would face very large inflationary pressure.
by RTT Staff Writer
Brazil Stocks Open Lower As Dubai, Forex News Weighs
SAO PAULO (Dow Jones)--Brazil's Ibovespa stock index opened lower Thursday as news of Dubai World's attempt to renegotiate its debt had emerging market indexes like the Bovespa paying the price.
The Ibovespa opened 1.08% lower to 67,182 points on the BM&F Bovespa stock exchange.
Although Dubai stole most of the headlines, Japan's concern over the U.S. dollar and the possibility that the Swiss National Bank will raise interest rates to counter a weak dollar also has investors selling equities. Fund managers around the world have been waiting for signs that major central banks will start raising interest rates, which often make the more stable fixed income markets more attractive than volatile equity markets.
"Investors are still trying to digest Dubai news, so right now it is a collection of variables that are pushing Brazil stocks lower," said Andre Perfeito, an economist at Gradual Investimentos in Sao Paulo.
Overall, Brazil's risk level remains intact despite the news that Dubai World, the investment fund of Dubai in the United Arab Emirates, will defer six months on billions in loans owed to a host of major European banks.
Dubai credit default swaps, or CDS, jumped over 100 basis points on Wednesday on the news, while Brazil's CDS were little changed. So far Thursday, Brazil CDS were around 119.35 basis points over U.S. Treasurys with no major indications that Brazil risk levels will skyrocket later Thursday.
"If it becomes clear that European banks are not going to get any return on their investment in Dubai, it could set off a string of bad banking news that will take stocks lower. Brazil won't be able to escape that," Perfeito said.
Brazil's economy has been humming along just fine despite one of the worst global recessions since World War II. Unemployment data for October Thursday came within market consensus of 7.5%, down from 7.7% in September. The government also reported an October primary budget surplus of 13.82 billion Brazilian reals ($8 billion), reversing a September deficit of BRL5.76 billion.
That Brazil's economy is performing well is no surprise for fund managers who like historic low interest rates, increasing salaries, and Chinese demand for Brazilian raw materials. But concerns over interest rates in Japan and Switzerland led to moderate share price declines in Brazil banking and major raw material exporters.
Oil major Petrobras (PBR) was off 1.09% to BRL39.02 and mining company Vale SA (VALE) was 1.22% lower to BRL42.84.
Banco Bradesco (BBD) was trading 0.77% lower to BRL36.07 and Banco do Brasil (BBAS3.BR) was 0.97% lower to BRL30.53.
Defensive stocks were early gainers. Power company AES Eletropaulo (ELPL6.BR) was up 0.37% to BRL34.88 and government-owned energy giant Centrais Eletricas Brasileiras, or Eletrobras (EBR), was up 0.4% to BRL25.35 per share.
Graphic analysis of the Ibovespa index shows decisive moves below 67,250 could eventually signal a move to 66,000, according to Hencorp Commcor.
The Ibovespa opened 1.08% lower to 67,182 points on the BM&F Bovespa stock exchange.
Although Dubai stole most of the headlines, Japan's concern over the U.S. dollar and the possibility that the Swiss National Bank will raise interest rates to counter a weak dollar also has investors selling equities. Fund managers around the world have been waiting for signs that major central banks will start raising interest rates, which often make the more stable fixed income markets more attractive than volatile equity markets.
"Investors are still trying to digest Dubai news, so right now it is a collection of variables that are pushing Brazil stocks lower," said Andre Perfeito, an economist at Gradual Investimentos in Sao Paulo.
Overall, Brazil's risk level remains intact despite the news that Dubai World, the investment fund of Dubai in the United Arab Emirates, will defer six months on billions in loans owed to a host of major European banks.
Dubai credit default swaps, or CDS, jumped over 100 basis points on Wednesday on the news, while Brazil's CDS were little changed. So far Thursday, Brazil CDS were around 119.35 basis points over U.S. Treasurys with no major indications that Brazil risk levels will skyrocket later Thursday.
"If it becomes clear that European banks are not going to get any return on their investment in Dubai, it could set off a string of bad banking news that will take stocks lower. Brazil won't be able to escape that," Perfeito said.
Brazil's economy has been humming along just fine despite one of the worst global recessions since World War II. Unemployment data for October Thursday came within market consensus of 7.5%, down from 7.7% in September. The government also reported an October primary budget surplus of 13.82 billion Brazilian reals ($8 billion), reversing a September deficit of BRL5.76 billion.
That Brazil's economy is performing well is no surprise for fund managers who like historic low interest rates, increasing salaries, and Chinese demand for Brazilian raw materials. But concerns over interest rates in Japan and Switzerland led to moderate share price declines in Brazil banking and major raw material exporters.
Oil major Petrobras (PBR) was off 1.09% to BRL39.02 and mining company Vale SA (VALE) was 1.22% lower to BRL42.84.
Banco Bradesco (BBD) was trading 0.77% lower to BRL36.07 and Banco do Brasil (BBAS3.BR) was 0.97% lower to BRL30.53.
Defensive stocks were early gainers. Power company AES Eletropaulo (ELPL6.BR) was up 0.37% to BRL34.88 and government-owned energy giant Centrais Eletricas Brasileiras, or Eletrobras (EBR), was up 0.4% to BRL25.35 per share.
Graphic analysis of the Ibovespa index shows decisive moves below 67,250 could eventually signal a move to 66,000, according to Hencorp Commcor.
Wednesday, November 25, 2009
Forex: Dollar Hits Fresh Yearly Lows Versus Euro, Swiss Franc
The dollar plunged to a fresh 15-month low versus the euro and slumped below parity versus the Swiss franc for the first time in nineteen months Wednesday morning in New York.
The bottom fell out on the buck amid quiet dealing as traders geared up for a slew of economic news ahead of the Thanksgiving holiday.
With the major decline versus the euro, the dollar fell through support to hit a yearly low near 1.5100. Increased risk aversion and speculation that the interest rate gap between the US and Euro area will widen has caused investors to flee from the buck in search of higher returns.
The dollar fell to .9992 versus the Swiss franc, extending a relentless slide to hit its lowest level since March 2008.
At the same time, the buck hit a 10-month low versus the yen, dropping to 87.65. Back in January, the dollar touched a 1995 low of 87.08 before finding support.
Meanwhile, the buck slipped to a weekly low of 1.6745 versus the sterling. With the loss, the dollar stayed near a 3-month low of 1.6877 from earlier in November.
Many traders will be away from their desks getting ahead start on the Thanksgiving holiday, but stalwarts will be reacting to a deluge of key economic data.
Readings on personal income and spending, jobless claims, consumer sentiment and new home sales are all due out this morning.
Initial jobless claims for last week are expected to come at around 500,000, a modest improvement from 505,000 the prior week.
The bottom fell out on the buck amid quiet dealing as traders geared up for a slew of economic news ahead of the Thanksgiving holiday.
With the major decline versus the euro, the dollar fell through support to hit a yearly low near 1.5100. Increased risk aversion and speculation that the interest rate gap between the US and Euro area will widen has caused investors to flee from the buck in search of higher returns.
The dollar fell to .9992 versus the Swiss franc, extending a relentless slide to hit its lowest level since March 2008.
At the same time, the buck hit a 10-month low versus the yen, dropping to 87.65. Back in January, the dollar touched a 1995 low of 87.08 before finding support.
Meanwhile, the buck slipped to a weekly low of 1.6745 versus the sterling. With the loss, the dollar stayed near a 3-month low of 1.6877 from earlier in November.
Many traders will be away from their desks getting ahead start on the Thanksgiving holiday, but stalwarts will be reacting to a deluge of key economic data.
Readings on personal income and spending, jobless claims, consumer sentiment and new home sales are all due out this morning.
Initial jobless claims for last week are expected to come at around 500,000, a modest improvement from 505,000 the prior week.
Forex: Jobless Claims Drop To Lowest In Fourteen Months
The number of people filing first-time unemployment claims dropped more than expected last week, falling to the lowest level since the beginning of the year.
This provides more evidence of a stabilizing labor market, though layoffs still remain high on a historic basis.
Economists will be looking toward the monthly jobs statistics due out next week to confirm that the employment situation is firming up.
The U.S. Labor Department revealed that initial jobless claims dropped 35,000 for the week ended November 21, the biggest drop since the week of August 1.
The drop took the key measure of layoffs to a level of 466,000 - the first reading below 500,000 early January.
Claims reached a peak in late March at a level of 674,000 and have been easing lower over the past few months.
Last week's decline marked the fourth consecutive week of retreats.
Continuing claims, which measures the number of people receiving ongoing unemployment help, fell 190,000 to a level of 5.423 million, the 10th consecutive week of declines.
Continuing claims reached 6.904 million in late June before beginning a retreat. The most recent data marked the lowest reading since March.
This provides more evidence of a stabilizing labor market, though layoffs still remain high on a historic basis.
Economists will be looking toward the monthly jobs statistics due out next week to confirm that the employment situation is firming up.
The U.S. Labor Department revealed that initial jobless claims dropped 35,000 for the week ended November 21, the biggest drop since the week of August 1.
The drop took the key measure of layoffs to a level of 466,000 - the first reading below 500,000 early January.
Claims reached a peak in late March at a level of 674,000 and have been easing lower over the past few months.
Last week's decline marked the fourth consecutive week of retreats.
Continuing claims, which measures the number of people receiving ongoing unemployment help, fell 190,000 to a level of 5.423 million, the 10th consecutive week of declines.
Continuing claims reached 6.904 million in late June before beginning a retreat. The most recent data marked the lowest reading since March.
FOREX-Dollar slides as U.S. data, rate outlook weigh
* U.S. jobless claims, spending data weigh on dollar
* FOMC minutes still pressuring dollar
* Dollar/yen hits 10-mth low, euro/dollar at 15-mth high (Updates prices, adds comments, U.S. data; changes dateline, previous LONDON, byline)
By Gertrude Chavez-Dreyfuss
NEW YORK, Nov 25 (Reuters) - The dollar slid to a fresh 15-month low against a basket of currencies on Wednesday as the decline in weekly jobless claims and a rise in personal consumption improved the outlook for the U.S. economy.
Traders had earlier sold the dollar across the board, pushing it to a 10-month low against the yen, as Federal Reserve minutes released on Tuesday showed policymakers saw the U.S. currency's recent decline as "orderly". The minutes also affirmed expectations U.S. interest rates will stay essentially at zero until around mid-2010.
The U.S. reports along with the Fed stance emboldened investors to seek riskier investments elsewhere for higher returns, boosting higher-yielding such as the Australian dollar.
"The U.S. data was mixed but overall the market is taking it positively. Jobs are the most important thing, so they're latching on to the fact that jobless claims were below 500,000, which means we could see a better non-farm payrolls report going forward," said Kathy Lien, director of FX research at GFT in New York.
"That should feed risk appetite, which is why the dollar hasn't rallied much against the euro or sterling but has pared losses a bit against the yen."
For most of the year, the dollar, which is typically viewed as a safe haven, tends to fall on upbeat economic data. -------------------------------------------------
For personal spending data, click on [ID:nCAT004957], durables goods, [ID:nCAT004958]; and jobless claims [ID:nOAT004372].
For a graphic on US weekly jobless claims, please click on
here -------------------------------------------------
The euro EUR= hit a 15-month high at $1.5096 according to Reuters data, and was last up 0.6 percent at $1.5058.
The ICE Futures dollar index .DXY, which measures its performance against a basket of six currencies, fell to 74.399, a 15-month low. It was last at 74.523, down 0.7 percent.
The dollar fell 1.1 percent to 87.53 yen JPY=, according to Reuters data, after falling as low as 87.40, its lowest since January.
(Additional reporting By Steven C. Johnson) (Editing by Theodore d'Afflisio) ((gertrude.chavez@thomsonreuters.com; +1 646 223 6322; Reuters Messaging: gertrude.chavez.reuters.com@reuters.net)) ((Multimedia versions of Reuters Top News are now available for: * 3000 Xtra: visit topnews.session.rservices.com * BridgeStation: view story .134 For more information on Top News: topnews.reuters.com))
* FOMC minutes still pressuring dollar
* Dollar/yen hits 10-mth low, euro/dollar at 15-mth high (Updates prices, adds comments, U.S. data; changes dateline, previous LONDON, byline)
By Gertrude Chavez-Dreyfuss
NEW YORK, Nov 25 (Reuters) - The dollar slid to a fresh 15-month low against a basket of currencies on Wednesday as the decline in weekly jobless claims and a rise in personal consumption improved the outlook for the U.S. economy.
Traders had earlier sold the dollar across the board, pushing it to a 10-month low against the yen, as Federal Reserve minutes released on Tuesday showed policymakers saw the U.S. currency's recent decline as "orderly". The minutes also affirmed expectations U.S. interest rates will stay essentially at zero until around mid-2010.
The U.S. reports along with the Fed stance emboldened investors to seek riskier investments elsewhere for higher returns, boosting higher-yielding such as the Australian dollar.
"The U.S. data was mixed but overall the market is taking it positively. Jobs are the most important thing, so they're latching on to the fact that jobless claims were below 500,000, which means we could see a better non-farm payrolls report going forward," said Kathy Lien, director of FX research at GFT in New York.
"That should feed risk appetite, which is why the dollar hasn't rallied much against the euro or sterling but has pared losses a bit against the yen."
For most of the year, the dollar, which is typically viewed as a safe haven, tends to fall on upbeat economic data. -------------------------------------------------
For personal spending data, click on [ID:nCAT004957], durables goods, [ID:nCAT004958]; and jobless claims [ID:nOAT004372].
For a graphic on US weekly jobless claims, please click on
here -------------------------------------------------
The euro EUR= hit a 15-month high at $1.5096 according to Reuters data, and was last up 0.6 percent at $1.5058.
The ICE Futures dollar index .DXY, which measures its performance against a basket of six currencies, fell to 74.399, a 15-month low. It was last at 74.523, down 0.7 percent.
The dollar fell 1.1 percent to 87.53 yen JPY=, according to Reuters data, after falling as low as 87.40, its lowest since January.
(Additional reporting By Steven C. Johnson) (Editing by Theodore d'Afflisio) ((gertrude.chavez@thomsonreuters.com; +1 646 223 6322; Reuters Messaging: gertrude.chavez.reuters.com@reuters.net)) ((Multimedia versions of Reuters Top News are now available for: * 3000 Xtra: visit topnews.session.rservices.com * BridgeStation: view story .134 For more information on Top News: topnews.reuters.com))
FOREX-Dollar index hits 15-mth low after Fed minutes
* Dollar hits 15-mth low vs currency basket
* FOMC minutes: Dollar decline has been "orderly"
* Dollar/yen hits 10-mth low, nears 13-year trough
(Adds comment, updates throughout)
By Naomi Tajitsu
LONDON, Nov 25 (Reuters) - The dollar hit a 15-month low against a currency basket on Wednesday after Federal Reserve minutes showed policymakers saw the U.S. currency's recent decline as "orderly".
Traders dumped the U.S. currency across the board, pushing it down to a 10-month low against the yen, as the minutes also reinforced the view U.S. interest rates will stay essentially at zero until around mid-2010.
The U.S. currency's latest bout of weakness came as European shares .FTEU3 rose 0.7 percent and gold XAU= hit a record high of $1,179.80, underlining the trend for investors to diversify away from the dollar and into other assets.
Minutes from the U.S. central bank's November meeting showed board members considered the dollar's fall against major currencies since March "orderly", further persuading investors the U.S. currency will stay weak. [ID:nN24313828]
"When the Fed says the dollar's decline has been 'orderly' ...they're implicitly saying this is not something they will do anything about," said Johan Javeus, chief currency strategist at SEB in Stockholm.
The dollar has been sold for much of 2009, falling 8 percent on a trade-weighted basis and 30 percent versus the high-yielding Australian dollar since January on the view U.S. rates will stay low as other countries start to raise theirs.
By 1144 GMT, the dollar index .DXY, which measures its performance against a basket of six currencies, had fallen 0.8 percent to 74.438.
The euro EUR= hit a 15-month high of $1.5096 and was last up 0.8 percent at $1.5076. The Swiss franc CHF= briefly hit parity against the U.S. dollar.
Traders said dollar losses accelerated after Russia's central bank said it would use part of its reserves to purchase Canadian dollars, underlining moves by central banks to diversify out of the U.S. currency.
The dollar fell 1 percent to 87.64 yen JPY=, according to Reuters data, off a low of 87.57. It approached a 13-year low of 87.10 hit in January.
* FOMC minutes: Dollar decline has been "orderly"
* Dollar/yen hits 10-mth low, nears 13-year trough
(Adds comment, updates throughout)
By Naomi Tajitsu
LONDON, Nov 25 (Reuters) - The dollar hit a 15-month low against a currency basket on Wednesday after Federal Reserve minutes showed policymakers saw the U.S. currency's recent decline as "orderly".
Traders dumped the U.S. currency across the board, pushing it down to a 10-month low against the yen, as the minutes also reinforced the view U.S. interest rates will stay essentially at zero until around mid-2010.
The U.S. currency's latest bout of weakness came as European shares .FTEU3 rose 0.7 percent and gold XAU= hit a record high of $1,179.80, underlining the trend for investors to diversify away from the dollar and into other assets.
Minutes from the U.S. central bank's November meeting showed board members considered the dollar's fall against major currencies since March "orderly", further persuading investors the U.S. currency will stay weak. [ID:nN24313828]
"When the Fed says the dollar's decline has been 'orderly' ...they're implicitly saying this is not something they will do anything about," said Johan Javeus, chief currency strategist at SEB in Stockholm.
The dollar has been sold for much of 2009, falling 8 percent on a trade-weighted basis and 30 percent versus the high-yielding Australian dollar since January on the view U.S. rates will stay low as other countries start to raise theirs.
By 1144 GMT, the dollar index .DXY, which measures its performance against a basket of six currencies, had fallen 0.8 percent to 74.438.
The euro EUR= hit a 15-month high of $1.5096 and was last up 0.8 percent at $1.5076. The Swiss franc CHF= briefly hit parity against the U.S. dollar.
Traders said dollar losses accelerated after Russia's central bank said it would use part of its reserves to purchase Canadian dollars, underlining moves by central banks to diversify out of the U.S. currency.
The dollar fell 1 percent to 87.64 yen JPY=, according to Reuters data, off a low of 87.57. It approached a 13-year low of 87.10 hit in January.
Wimm-Bill-Dann 3Q Net Pft Rises 44%; Boosted By Forex Gain
By Will Bland
Of DOW JONES NEWSWIRES
MOSCOW (Dow Jones)--Russian dairy products and juice maker OAO Wimm-Bill-Dann (WBD) Wednesday reported a 44% jump in third-quarter net profit as lower financial expesnes offset dwindling volumes.
Of DOW JONES NEWSWIRES
MOSCOW (Dow Jones)--Russian dairy products and juice maker OAO Wimm-Bill-Dann (WBD) Wednesday reported a 44% jump in third-quarter net profit as lower financial expesnes offset dwindling volumes.
Monday, November 23, 2009
RBI's new forex norms 'liberal': Experts
Here is a verbatim transcript of an exclusive interview with AV Rajwade and K Chandrashekar on CNBC-TV18. Also watch the accompanying video.
Q: Would you say that by granting the right to write or sell options to companies, RBI has taken a step forward? Have they taken enough steps to ensure that this liberal reform is not misused?
Rajwade: I have question marks about whether this is the appropriate time to give a liberal twist to reform in the derivative market. They are all seeing what has happened globally in terms of deregulation on derivative market and how the bank themselves did not understand what they were doing the kind of losses that got incurred. We also have many cases in India of major losses being sustained through derivatives. Timing wise, one is not very happy about the liberalize currency derivatives. I don’t think that the documentary requirement per se provided a balance against risk of writing options.
I my opinion, writing an option can never hedge an exposure. In fact, AS 30, the accounting standard 30, which is corresponding to IAS 39, explicitly says that a written option cannot be a hedge of any kind except under very limited circumstances. If I assume that liberalization was the objective, then we should not be using the word hedge at all. We should throw open whole thing to whatever the companies want to do.
However, if the idea is to limit the use of derivatives for hedging, then the writing option does not fall even if they are covered by commercial receipts of payments. They do not fall in the category of hedge as defined under standard text books or reference books. They have some special provisions for Small and Medium Enterprises (SMEs). In relation to this particular issue, the word used in draft guidelines, is that SMEs can use derivatives for managing exposures. Managing exposures definitely has a different connotation from hedging exposures. SMEs which are relatively unsophisticated, should they have less regulation than other larger industries? I have a serious question mark on that particular point.
Q: How will you react to this that enough mess has been created even when corporates has only limited freedom to set options? Why should the companies be given this right and ask for more trouble?
Chandrasekhar: Option writing, on the part of companies, is a new thing which has been introduced. It has been discussed for sometime. According to me, it is a good step. I would not say that it is in the nature of speculative or something. I would rather say that it is an experience that companies would get in terms of understanding the market. RBI has allowed it with a lot of ring fencing. You have to have an actual underlying and you can’t offer zero cost structures. Therefore, you are clearly doing something on the underlying and it is clearly done to risk mitigate. To that extent, dealt in options market on the buying side and writing options is a step forward.
Q: The other part which has drawn a lot of flak is the excessive documentation which is required. There are some who believe that if all the paper work is done, the price at which a forward contract has been agreed to by the company. The bank will just pass and contracts cannot be done. Would you agree to this?
Chandrasekhar: The aim of the RBI is to create a solid Standard Operating Procedure (SOP), which is understandable in the current context of various kinds of miss-selling and other kinds of things that could go on. Therefore, the intention is correct and the documentation could have been made more convenient for all the people to follow because it is very important to have a convenient system of operation also. So in excessive documentation you should not forget you want to do something good and something to deepen the market in order to create liquidity in the market. There could be a much better way of addressing this issue of documentation.
Q: Do you think documentation requirements are so huge that forward premium or prices may change even before the paper work is completed?
Rajwade: I would agree that the documentation requirements are too onerous, but not necessarily on the grounds which you argue. Companies are not trading in currencies. So it is not as if every moment's change is going to make a difference to them. Hence, I don’t think that it is the crux of matter. The crux of issue is whether any regulation should be principle based or rules based.
According to me, it is a sort of conflict between the administrative cultures in different countries. The Americans are famous for rule based regulations. The British historically was more principle based. Now they are moving towards the American style. My own bias is towards principle based regulations to many detailed rules, in regard to documentation, copies, recording, etc. because there is no way the central bank is going to be able to verify whether all these things are being implemented or not. So I would prefer a much more principle based regulation than rules based highly documentation oriented regulatory culture.
Q: Do you accept that the conditions introduced will restrict the misuse of this option writer? You know that the companies must follow higher accounting standards, that there must be a declaration from the statutory auditor about the extent of exposure and authorization by the board. Are all these caveats not enough?
Rajwade: I have a slight difference of opinion in it. The existing documentary requirements are not that really less onerous. If you go through the master circular, they are not that less onerous, and many of them have never been implemented. Adding some more documentation, which would also not be implemented, I don’t think it is going to carry us much further in any case.
Q: There seems to be a Catch-22 in the rules. Only companies complying with the AS30 and AS32 rules will be allowed to write options. However, some of these accounting standards do not recognize these options as hedges.
Chandrasekhar: According to me, those who carry options on their books, for example M&M, follow AS30. According to experts it is covered. There are two kinds of opinions on that. So whether it directly of indirectly refers to it, there are two opinions. There are enough ways of addressing the issue. That should not be a reason to stop this. Companies that are following AS30 may not immediately be following AS32 that is the disclosure and other things. We should welcome anything that is done as progress to something better.
Q: What would you advice if you have to give feedback to these rules?
Rajwade: I have never believed that following the American pattern, is necessarily a reform. Reform to my mind means change. Change does not mean either opening your capital account to everybody or following a more deregulatory approach as the Americans have always done. Considering the no of cases that have taken place in India about disputes and huge losses on currency derivatives there is a case for tightening the rules and not for liberalizing them.
Q: Don’t you think the new rules are doing that?
Rajwade: I don’t think the new rules are doing that. They have banned complex structures and banned zero cost structures. However, writing of options which they have opened up and giving room for SMEs to do speculative activity and calling it managing rather than hedging are major negatives for me.
Q: Would you say that by granting the right to write or sell options to companies, RBI has taken a step forward? Have they taken enough steps to ensure that this liberal reform is not misused?
Rajwade: I have question marks about whether this is the appropriate time to give a liberal twist to reform in the derivative market. They are all seeing what has happened globally in terms of deregulation on derivative market and how the bank themselves did not understand what they were doing the kind of losses that got incurred. We also have many cases in India of major losses being sustained through derivatives. Timing wise, one is not very happy about the liberalize currency derivatives. I don’t think that the documentary requirement per se provided a balance against risk of writing options.
I my opinion, writing an option can never hedge an exposure. In fact, AS 30, the accounting standard 30, which is corresponding to IAS 39, explicitly says that a written option cannot be a hedge of any kind except under very limited circumstances. If I assume that liberalization was the objective, then we should not be using the word hedge at all. We should throw open whole thing to whatever the companies want to do.
However, if the idea is to limit the use of derivatives for hedging, then the writing option does not fall even if they are covered by commercial receipts of payments. They do not fall in the category of hedge as defined under standard text books or reference books. They have some special provisions for Small and Medium Enterprises (SMEs). In relation to this particular issue, the word used in draft guidelines, is that SMEs can use derivatives for managing exposures. Managing exposures definitely has a different connotation from hedging exposures. SMEs which are relatively unsophisticated, should they have less regulation than other larger industries? I have a serious question mark on that particular point.
Q: How will you react to this that enough mess has been created even when corporates has only limited freedom to set options? Why should the companies be given this right and ask for more trouble?
Chandrasekhar: Option writing, on the part of companies, is a new thing which has been introduced. It has been discussed for sometime. According to me, it is a good step. I would not say that it is in the nature of speculative or something. I would rather say that it is an experience that companies would get in terms of understanding the market. RBI has allowed it with a lot of ring fencing. You have to have an actual underlying and you can’t offer zero cost structures. Therefore, you are clearly doing something on the underlying and it is clearly done to risk mitigate. To that extent, dealt in options market on the buying side and writing options is a step forward.
Q: The other part which has drawn a lot of flak is the excessive documentation which is required. There are some who believe that if all the paper work is done, the price at which a forward contract has been agreed to by the company. The bank will just pass and contracts cannot be done. Would you agree to this?
Chandrasekhar: The aim of the RBI is to create a solid Standard Operating Procedure (SOP), which is understandable in the current context of various kinds of miss-selling and other kinds of things that could go on. Therefore, the intention is correct and the documentation could have been made more convenient for all the people to follow because it is very important to have a convenient system of operation also. So in excessive documentation you should not forget you want to do something good and something to deepen the market in order to create liquidity in the market. There could be a much better way of addressing this issue of documentation.
Q: Do you think documentation requirements are so huge that forward premium or prices may change even before the paper work is completed?
Rajwade: I would agree that the documentation requirements are too onerous, but not necessarily on the grounds which you argue. Companies are not trading in currencies. So it is not as if every moment's change is going to make a difference to them. Hence, I don’t think that it is the crux of matter. The crux of issue is whether any regulation should be principle based or rules based.
According to me, it is a sort of conflict between the administrative cultures in different countries. The Americans are famous for rule based regulations. The British historically was more principle based. Now they are moving towards the American style. My own bias is towards principle based regulations to many detailed rules, in regard to documentation, copies, recording, etc. because there is no way the central bank is going to be able to verify whether all these things are being implemented or not. So I would prefer a much more principle based regulation than rules based highly documentation oriented regulatory culture.
Q: Do you accept that the conditions introduced will restrict the misuse of this option writer? You know that the companies must follow higher accounting standards, that there must be a declaration from the statutory auditor about the extent of exposure and authorization by the board. Are all these caveats not enough?
Rajwade: I have a slight difference of opinion in it. The existing documentary requirements are not that really less onerous. If you go through the master circular, they are not that less onerous, and many of them have never been implemented. Adding some more documentation, which would also not be implemented, I don’t think it is going to carry us much further in any case.
Q: There seems to be a Catch-22 in the rules. Only companies complying with the AS30 and AS32 rules will be allowed to write options. However, some of these accounting standards do not recognize these options as hedges.
Chandrasekhar: According to me, those who carry options on their books, for example M&M, follow AS30. According to experts it is covered. There are two kinds of opinions on that. So whether it directly of indirectly refers to it, there are two opinions. There are enough ways of addressing the issue. That should not be a reason to stop this. Companies that are following AS30 may not immediately be following AS32 that is the disclosure and other things. We should welcome anything that is done as progress to something better.
Q: What would you advice if you have to give feedback to these rules?
Rajwade: I have never believed that following the American pattern, is necessarily a reform. Reform to my mind means change. Change does not mean either opening your capital account to everybody or following a more deregulatory approach as the Americans have always done. Considering the no of cases that have taken place in India about disputes and huge losses on currency derivatives there is a case for tightening the rules and not for liberalizing them.
Q: Don’t you think the new rules are doing that?
Rajwade: I don’t think the new rules are doing that. They have banned complex structures and banned zero cost structures. However, writing of options which they have opened up and giving room for SMEs to do speculative activity and calling it managing rather than hedging are major negatives for me.
Forex: Euro Snaps Back Versus Dollar As Stocks Gain
The euro reached near-term highs against other major currencies on Monday as higher global stocks improved the appeal for riskier currencies.
European Central Bank Governing Council member Miguel Fernandez Ordonez said Monday the ECB's current refinancing rate of 1% is appropriate. He added that financial markets do not expect the central bank to hike rates until sometime in the second half of 2010.
Private sector business activity in the Eurozone continued to improve, expanding for a fourth month in November, preliminary survey data released by Markit Economics showed Monday.
The euro leveled off near a weekly high around 1.4980 versus the dollar. With the climb, the European currency crept closer to a 15-month high above 1.5060.
The euro remained near a 10-day high against the British pound, moving near 0.9020. The European currency reached as high as 0.9038 in overnight dealings.
The Bank of England proposed to set capital surcharges across firms to reflect their individual contribution to systemic risk.
The euro rose to a five-day high against the Japanese yen, trading near 1.4975. The 16-member currency has been trending higher since late last week.
The Japanese markets were closed on Monday.
The Markit flash Eurozone composite output index, which includes both manufacturing and services, rose to a two-year high of 53.7 in November, up from 53 in October. It rose above the expected reading of 53.3. A reading above 50 indicates an expansion, while a reading below 50 signals a contraction.
Meanwhile, French services sector activity increased to the 37-month high in November, a flash report from the Markit Economics showed on Monday.
European Central Bank Governing Council member Miguel Fernandez Ordonez said Monday the ECB's current refinancing rate of 1% is appropriate. He added that financial markets do not expect the central bank to hike rates until sometime in the second half of 2010.
Private sector business activity in the Eurozone continued to improve, expanding for a fourth month in November, preliminary survey data released by Markit Economics showed Monday.
The euro leveled off near a weekly high around 1.4980 versus the dollar. With the climb, the European currency crept closer to a 15-month high above 1.5060.
The euro remained near a 10-day high against the British pound, moving near 0.9020. The European currency reached as high as 0.9038 in overnight dealings.
The Bank of England proposed to set capital surcharges across firms to reflect their individual contribution to systemic risk.
The euro rose to a five-day high against the Japanese yen, trading near 1.4975. The 16-member currency has been trending higher since late last week.
The Japanese markets were closed on Monday.
The Markit flash Eurozone composite output index, which includes both manufacturing and services, rose to a two-year high of 53.7 in November, up from 53 in October. It rose above the expected reading of 53.3. A reading above 50 indicates an expansion, while a reading below 50 signals a contraction.
Meanwhile, French services sector activity increased to the 37-month high in November, a flash report from the Markit Economics showed on Monday.
FOREX-U.S. dollar drops on Fed comments, stocks gain
* Fed's Bullard reaffirms low interest rates view
* ECB's Trichet, Paramo talk about exit strategy
* Dollar rises from 6-week low vs yen; Aussie, kiwi gain
* U.S. existing home sales surge 10.1 pct in Oct. (Updates prices, adds comment, changes byline)
By Wanfeng Zhou
NEW YORK, Nov 23 (Reuters) - The dollar fell against a basket of currencies on Monday after comments from a Federal Reserve official reinforced expectations U.S. interest rates would stay low for some time.
A rally in stock markets and gains in gold and oil prices also dented safe-haven demand for the dollar and lifted commodity-linked currencies like the Canadian and New Zealand dollars.
St. Louis Federal Reserve President James Bullard on Sunday said the Fed should keep alive its mortgage-related assets purchase program beyond a planned end date to stimulate the economy. Investors saw the Fed keeping wider monetary policy accommodative for the foreseeable future. See [ID:nN22246631]
"Risk appetite is back ... with stocks up globally," said John Doyle, foreign-exchange strategist at Tempus Consulting in Washington. "Also weighing on the dollar was speculation that the Federal Reserve will keep stimulus measures in place for longer than many expect, ensuring that interest rates remain virtually zero," he added.
Low rates would limit returns on many U.S. investments, prompting investors to diversify out of the greenback and seek other riskier currencies and assets with higher yields.
In afternoon trading, the euro was up 0.7 percent at $1.4969 EUR=, after hitting a session high of $1.5001, according to Reuters data. The euro has struggled to stay above $1.50 in recent weeks.
Analysts said moves were exacerbated by thin liquidity with Tokyo markets shut and ahead of Thursday's U.S. Thanksgiving holiday.
The euro EURJPY=R rose 0.9 percent to 133.34 yen. The dollar gained 0.2 percent to 89.08 yen JPY= after hitting a six-week low of 88.58 yen, according to Reuters data.
An industry report showing U.S. existing home sales jumped to a more than 2-1/2-year high in October further spurred risk appetite and pressured the dollar. See [ID:nN23249040].
"The (housing) data adds to bearish U.S. dollar momentum, as stronger-than-expected home sales data is bullish for equity markets," said George Davis, chief technical strategist at RBC Capital Markets in Toronto.
* ECB's Trichet, Paramo talk about exit strategy
* Dollar rises from 6-week low vs yen; Aussie, kiwi gain
* U.S. existing home sales surge 10.1 pct in Oct. (Updates prices, adds comment, changes byline)
By Wanfeng Zhou
NEW YORK, Nov 23 (Reuters) - The dollar fell against a basket of currencies on Monday after comments from a Federal Reserve official reinforced expectations U.S. interest rates would stay low for some time.
A rally in stock markets and gains in gold and oil prices also dented safe-haven demand for the dollar and lifted commodity-linked currencies like the Canadian and New Zealand dollars.
St. Louis Federal Reserve President James Bullard on Sunday said the Fed should keep alive its mortgage-related assets purchase program beyond a planned end date to stimulate the economy. Investors saw the Fed keeping wider monetary policy accommodative for the foreseeable future. See [ID:nN22246631]
"Risk appetite is back ... with stocks up globally," said John Doyle, foreign-exchange strategist at Tempus Consulting in Washington. "Also weighing on the dollar was speculation that the Federal Reserve will keep stimulus measures in place for longer than many expect, ensuring that interest rates remain virtually zero," he added.
Low rates would limit returns on many U.S. investments, prompting investors to diversify out of the greenback and seek other riskier currencies and assets with higher yields.
In afternoon trading, the euro was up 0.7 percent at $1.4969 EUR=, after hitting a session high of $1.5001, according to Reuters data. The euro has struggled to stay above $1.50 in recent weeks.
Analysts said moves were exacerbated by thin liquidity with Tokyo markets shut and ahead of Thursday's U.S. Thanksgiving holiday.
The euro EURJPY=R rose 0.9 percent to 133.34 yen. The dollar gained 0.2 percent to 89.08 yen JPY= after hitting a six-week low of 88.58 yen, according to Reuters data.
An industry report showing U.S. existing home sales jumped to a more than 2-1/2-year high in October further spurred risk appetite and pressured the dollar. See [ID:nN23249040].
"The (housing) data adds to bearish U.S. dollar momentum, as stronger-than-expected home sales data is bullish for equity markets," said George Davis, chief technical strategist at RBC Capital Markets in Toronto.
Sunday, November 22, 2009
Dollar down on outlook for low U.S. interest rates
* U.S. dollar retreats after biggest rally in 3 weeks
* BoE minutes seen as relatively dovish; sterling hit
* U.S. CPI up 0.3 percent but core inflation tame (Updates prices, adds detail)
By Nick Olivari
NEW YORK, Nov 18 (Reuters) - The dollar slid against the euro on Wednesday after notching its biggest rise in three weeks on Tuesday, with fresh data doing little to alter the view that U.S. interest rates will remain at record lows well into 2010.
Reports showing slightly higher-than-expected U.S. inflation and a slide in new home construction helped keep euro gains below $1.50. For more on U.S. data, see [ID:nN1899353].
Most dealers say the dollar's longer-term declining trend is intact and noted that although the Federal Reserve may be in the early stages of withdrawing its huge stimulus measures, it is still nowhere near raising interest rates from record lows.
On Tuesday, the Fed said it would pare back a discount window borrowing facility and St. Louis Fed President James Bullard said on Wednesday that officials will probably adjust asset-purchase programs before they resort to hiking rates.
"That throws cold water on any lingering thoughts of rate hikes," said Jacob Oubina, strategist at Forex.com in Bedminster, New Jersey.
This also offsets comments this week from Fed Chairman Ben Bernanke, who triggered a dollar rally when he said the Fed -- the U.S. central bank -- was attentive to the dollar's value.
The euro rose 0.6 percent to $1.4949 EUR= while against the yen, the dollar edged up 0.1 percent to 89.38 yen JPY=.
Bernanke's rare dollar comments, which were echoed by other Fed officials and European Central Bank President Jean-Claude Trichet, had pushed the euro down toward $1.48 on Tuesday.
Earlier reports showing a slight gain in the overall U.S. Consumer Price Index and a slide in housing starts undercut some foreign currency gains against the dollar on the view that a sluggish U.S. economy could undermine global recovery.
But that wasn't enough to change the Fed's outlook.
"We're not worried so much about inflation," said Amelia Bourdeau, senior strategist at UBS in Stamford, Connecticut. "Overall, it's still benign because the year-over-year figure was still negative."
* BoE minutes seen as relatively dovish; sterling hit
* U.S. CPI up 0.3 percent but core inflation tame (Updates prices, adds detail)
By Nick Olivari
NEW YORK, Nov 18 (Reuters) - The dollar slid against the euro on Wednesday after notching its biggest rise in three weeks on Tuesday, with fresh data doing little to alter the view that U.S. interest rates will remain at record lows well into 2010.
Reports showing slightly higher-than-expected U.S. inflation and a slide in new home construction helped keep euro gains below $1.50. For more on U.S. data, see [ID:nN1899353].
Most dealers say the dollar's longer-term declining trend is intact and noted that although the Federal Reserve may be in the early stages of withdrawing its huge stimulus measures, it is still nowhere near raising interest rates from record lows.
On Tuesday, the Fed said it would pare back a discount window borrowing facility and St. Louis Fed President James Bullard said on Wednesday that officials will probably adjust asset-purchase programs before they resort to hiking rates.
"That throws cold water on any lingering thoughts of rate hikes," said Jacob Oubina, strategist at Forex.com in Bedminster, New Jersey.
This also offsets comments this week from Fed Chairman Ben Bernanke, who triggered a dollar rally when he said the Fed -- the U.S. central bank -- was attentive to the dollar's value.
The euro rose 0.6 percent to $1.4949 EUR= while against the yen, the dollar edged up 0.1 percent to 89.38 yen JPY=.
Bernanke's rare dollar comments, which were echoed by other Fed officials and European Central Bank President Jean-Claude Trichet, had pushed the euro down toward $1.48 on Tuesday.
Earlier reports showing a slight gain in the overall U.S. Consumer Price Index and a slide in housing starts undercut some foreign currency gains against the dollar on the view that a sluggish U.S. economy could undermine global recovery.
But that wasn't enough to change the Fed's outlook.
"We're not worried so much about inflation," said Amelia Bourdeau, senior strategist at UBS in Stamford, Connecticut. "Overall, it's still benign because the year-over-year figure was still negative."
Forex banker alarm at US plan for clearing
By Jennifer Hughes in London, Joanna Chung in New York,and Tom Braithwaite in Washington
Published: November 19 2009 02:00 | Last updated: November 19 2009 02:00
Foreign exchange bankers reacted with alarm yesterday to proposals from Barney Frank, the powerful chairman of the House financial services committee, that would require trades in currency derivatives to be processed through a centralised clearing system.
Bankers said the proposals would introduce systemic risks into the financial system and that the sheer size of the market would dwarf the risk that could be sustained by any clearing house.
About $3,200bn of currency is traded daily around the world. About two-thirds of that trade is in derivatives that are used frequently by companies during the normal course of business to hedge the risk that currencies move sharply between a deal being struck and completed.
Bankers say that companies would face higher costs for these hedges under centralised clearing and that potentially they could be required to post extra collateral.
However, some large users of currency hedging said yesterday they were unconcerned by the putative change, having calculated that the potential increase in cost would be "marginal" and outweighed by greater security and price transparency.
The proposals was made by Mr Frank, outlined in an interview with Risk magazine, as lawmakers and regulators tussle over the detail of legislative proposals governing the vast over-the-counter derivatives market.
Some companies have shrugged off entreaties from their banks to lobby members of Congress over derivatives reform, concluding that their interests could be better served by the broad shift to central clearing and exchange trading.
Others, such as Caterpillar this week, have argued they face costly margin requirements under some versions of the regulatory reforms now under way.
Mr Frank said that mooted exemptions for foreign exchange trades from the OTC market reforms being considered by US Congress would not be adopted.
"The administration had asked for that amendment, but we are going to take away the exemption for foreign currency [swaps and forwards]," he said. Mr Frank's office confirmed that he would seek to remove the exemptions.
www.ft.com/tradingroom
Copyright The Financial Times Limited 2009. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web.
Published: November 19 2009 02:00 | Last updated: November 19 2009 02:00
Foreign exchange bankers reacted with alarm yesterday to proposals from Barney Frank, the powerful chairman of the House financial services committee, that would require trades in currency derivatives to be processed through a centralised clearing system.
Bankers said the proposals would introduce systemic risks into the financial system and that the sheer size of the market would dwarf the risk that could be sustained by any clearing house.
About $3,200bn of currency is traded daily around the world. About two-thirds of that trade is in derivatives that are used frequently by companies during the normal course of business to hedge the risk that currencies move sharply between a deal being struck and completed.
Bankers say that companies would face higher costs for these hedges under centralised clearing and that potentially they could be required to post extra collateral.
However, some large users of currency hedging said yesterday they were unconcerned by the putative change, having calculated that the potential increase in cost would be "marginal" and outweighed by greater security and price transparency.
The proposals was made by Mr Frank, outlined in an interview with Risk magazine, as lawmakers and regulators tussle over the detail of legislative proposals governing the vast over-the-counter derivatives market.
Some companies have shrugged off entreaties from their banks to lobby members of Congress over derivatives reform, concluding that their interests could be better served by the broad shift to central clearing and exchange trading.
Others, such as Caterpillar this week, have argued they face costly margin requirements under some versions of the regulatory reforms now under way.
Mr Frank said that mooted exemptions for foreign exchange trades from the OTC market reforms being considered by US Congress would not be adopted.
"The administration had asked for that amendment, but we are going to take away the exemption for foreign currency [swaps and forwards]," he said. Mr Frank's office confirmed that he would seek to remove the exemptions.
www.ft.com/tradingroom
Copyright The Financial Times Limited 2009. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web.
US dollar falls broadly as data spurs growth fears
* Dollar falls across board as data fuels recovery concern
* U.S. consumer sentiment falls, trade gap widens
* Higher-yielding Australian, New Zealand dollars rally (Updates prices, adds detail)
By Steven C. Johnson
NEW YORK, Nov 13 (Reuters) - The dollar fell broadly on Friday after data showing a wider U.S. trade deficit and weaker consumer sentiment reinforced views that the United States may return to economic health more slowly than other countries.
A brighter outlook abroad, including a report showing the euro zone may have exited recession in the third quarter, boosted the euro and also encouraged investors to buy stocks and high-yielding currencies such as the Australian dollar.
The dollar ended the week down about 0.5 percent against a basket of major currencies .DXY, its fourth weekly decline in the last five weeks.
News that the U.S. trade gap was at its widest in September in more than a decade worried investors on Friday. A separate report showed a grim jobs outlook left consumers in their worst mood in three months in November, supporting expectations that U.S. interest rates will remain near zero for a long time.
"There is increasing evidence that the U.S. recovery is much more vulnerable than previously thought, which provides another reason for traders to bail out of U.S. dollars," said Kathy Lien, director of FX research at GFT Forex in New York.
The euro was up 0.5 percent at $1.4919 EUR=, nearly a cent above the day's low. It neared a 2009 high around $1.5060 earlier this week. The dollar fell 0.8 percent to 89.64 yen JPY= and the euro shed 0.3 percent to 133.73 yen EURJPY=.
Traders said yen gains were partly driven by Finance Minister Hirohisa Fujii's saying he was less worried about Japanese government bonds and budget requests for the next fiscal year. For more, see [ID:nTKX006536].
For more on the U.S. and European data see [ID:nN13463684] and [ID:nLD681404].
Wall Street stocks rose and investors also bought relatively high-yield currencies such as the Australian dollar AUD=, up 1.2 percent to $0.9338, and the New Zealand dollar NZD=, 1.6 percent stronger at $0.7436.
Sterling rose 0.7 percent at $1.6689 GBP=, and the dollar fell sharply against the Mexican peso MXN= and the Brazilian real BRL=.
With the U.S. jobless rate above 10 percent and the Federal Reserve signaling it's in no rush to lift interest rates, analysts say investors are increasingly borrowing dollars at low rates to finance trades in assets with higher returns.
News that the U.S. trade gap unexpectedly widened by 18.2 percent as imports from China increased and oil prices rose for a seventh straight month in September advanced that view.
* U.S. consumer sentiment falls, trade gap widens
* Higher-yielding Australian, New Zealand dollars rally (Updates prices, adds detail)
By Steven C. Johnson
NEW YORK, Nov 13 (Reuters) - The dollar fell broadly on Friday after data showing a wider U.S. trade deficit and weaker consumer sentiment reinforced views that the United States may return to economic health more slowly than other countries.
A brighter outlook abroad, including a report showing the euro zone may have exited recession in the third quarter, boosted the euro and also encouraged investors to buy stocks and high-yielding currencies such as the Australian dollar.
The dollar ended the week down about 0.5 percent against a basket of major currencies .DXY, its fourth weekly decline in the last five weeks.
News that the U.S. trade gap was at its widest in September in more than a decade worried investors on Friday. A separate report showed a grim jobs outlook left consumers in their worst mood in three months in November, supporting expectations that U.S. interest rates will remain near zero for a long time.
"There is increasing evidence that the U.S. recovery is much more vulnerable than previously thought, which provides another reason for traders to bail out of U.S. dollars," said Kathy Lien, director of FX research at GFT Forex in New York.
The euro was up 0.5 percent at $1.4919 EUR=, nearly a cent above the day's low. It neared a 2009 high around $1.5060 earlier this week. The dollar fell 0.8 percent to 89.64 yen JPY= and the euro shed 0.3 percent to 133.73 yen EURJPY=.
Traders said yen gains were partly driven by Finance Minister Hirohisa Fujii's saying he was less worried about Japanese government bonds and budget requests for the next fiscal year. For more, see [ID:nTKX006536].
For more on the U.S. and European data see [ID:nN13463684] and [ID:nLD681404].
Wall Street stocks rose and investors also bought relatively high-yield currencies such as the Australian dollar AUD=, up 1.2 percent to $0.9338, and the New Zealand dollar NZD=, 1.6 percent stronger at $0.7436.
Sterling rose 0.7 percent at $1.6689 GBP=, and the dollar fell sharply against the Mexican peso MXN= and the Brazilian real BRL=.
With the U.S. jobless rate above 10 percent and the Federal Reserve signaling it's in no rush to lift interest rates, analysts say investors are increasingly borrowing dollars at low rates to finance trades in assets with higher returns.
News that the U.S. trade gap unexpectedly widened by 18.2 percent as imports from China increased and oil prices rose for a seventh straight month in September advanced that view.
U.S. Senate To Act On Climate Bill Next Spring
(RTTNews) - Democratic Senate Majority Leader Harry Reid of Nevada said Tuesday that the U.S. Senate will act in early 2010 on legislation to combat climate change--in a clear sign of lack of political will to tackle a long-term environmental issue and ending hopes of a breakthrough before the crucial December 7-18 U.N. Climate Change Conference in Denmark's capital Copenhagen.
"We are going to try to do that sometime in the spring," Reid told reporters, as the White House-backed push to remake U.S. health care still dominates the Senate agenda just weeks before the congressional session ends.
Legislation on health care, overhauling financial markets and job creation will get priority over a measure to cap emissions of carbon dioxide and other gases linked to climate change, Senate Democratic leaders said Tuesday.
The decision confirms that the U.S. Congress is unlikely to adopt legislation to combat climate change--one of President Barack Obama's top domestic priorities--by next month's global talks.
Senator John McCain (R., Ariz.), said the delay was "just a matter of reality, they can't get anything done at this time." McCain, who has previously supported climate legislation, has said he wouldn't support the current Senate proposal because of disagreements over its handling of nuclear energy.
The decision came the same day when President Obama voiced strong support in Beijing for a "comprehensive" agreement that would "rally the world" towards achieving a legally-binding agreement at the Copenhagen climate talks next month, reviving hopes of a deal being reached.
"We agreed to work toward a successful outcome in Copenhagen. Our aim there... is not a partial accord or a political declaration, but rather an accord that covers all of the issues in the negotiations and one that has immediate operational effect," Obama told reporters alongside Chinese President Hu Jintao.
Obama had earlier said action to curb greenhouse gases would unleash investment in clean-energy technology and create jobs.
"We are going to try to do that sometime in the spring," Reid told reporters, as the White House-backed push to remake U.S. health care still dominates the Senate agenda just weeks before the congressional session ends.
Legislation on health care, overhauling financial markets and job creation will get priority over a measure to cap emissions of carbon dioxide and other gases linked to climate change, Senate Democratic leaders said Tuesday.
The decision confirms that the U.S. Congress is unlikely to adopt legislation to combat climate change--one of President Barack Obama's top domestic priorities--by next month's global talks.
Senator John McCain (R., Ariz.), said the delay was "just a matter of reality, they can't get anything done at this time." McCain, who has previously supported climate legislation, has said he wouldn't support the current Senate proposal because of disagreements over its handling of nuclear energy.
The decision came the same day when President Obama voiced strong support in Beijing for a "comprehensive" agreement that would "rally the world" towards achieving a legally-binding agreement at the Copenhagen climate talks next month, reviving hopes of a deal being reached.
"We agreed to work toward a successful outcome in Copenhagen. Our aim there... is not a partial accord or a political declaration, but rather an accord that covers all of the issues in the negotiations and one that has immediate operational effect," Obama told reporters alongside Chinese President Hu Jintao.
Obama had earlier said action to curb greenhouse gases would unleash investment in clean-energy technology and create jobs.
China Forex Reform To Help On Imbalances
By Terence Poon and Patricia Jiayi Ho
Of DOW JONES NEWSWIRES
BEIJING (Dow Jones)--U.S. President Barack Obama said China's reform of its exchange-rate mechanism, as well as efforts to boost domestic demand and protect intellectual property rights, will help address trade imbalances with the U.S., ...
Of DOW JONES NEWSWIRES
BEIJING (Dow Jones)--U.S. President Barack Obama said China's reform of its exchange-rate mechanism, as well as efforts to boost domestic demand and protect intellectual property rights, will help address trade imbalances with the U.S., ...
Forex: Crude Closes Below $78 After Jobs Report
(RTTNews) - Crude oil prices dropped more than $2 per barrel on Thursday as a disappointing jobs report raised energy demand worries.
Light sweet crude oil for December delivery dropped to $77.46 per barrel, losing $2.12 for the session. Prices dipped as low as $77.06.
The Labor Department reported initial jobless claims for the week came in at 505,000, unchanged from the previous week's revised figure. Economists had been expecting jobless claims to edge up to 504,000 from the 502,000 originally reported for the previous week.
A Conference Board report showed that the leading indicators index rose 0.3 percent in October following a 1.0 percent gain in September. Economists had been expecting the index to increase by 0.4 percent.
The Philly Fed said its index of regional activity in the manufacturing sector rose to 16.7 in November from 11.5 in October, with a positive reading indicating growth in the sector. Economists had been expecting a much more modest increase by the index to 12.2.
Oil finished modestly higher on Wednesday as Energy Department data showed crude oil inventories fell by 900,000 barrels in the week ended November 13. Experts were looking for a rise of 1.2 million barrels.
Gasoline inventories decreased by 1.7 million barrels.
Light sweet crude oil for December delivery dropped to $77.46 per barrel, losing $2.12 for the session. Prices dipped as low as $77.06.
The Labor Department reported initial jobless claims for the week came in at 505,000, unchanged from the previous week's revised figure. Economists had been expecting jobless claims to edge up to 504,000 from the 502,000 originally reported for the previous week.
A Conference Board report showed that the leading indicators index rose 0.3 percent in October following a 1.0 percent gain in September. Economists had been expecting the index to increase by 0.4 percent.
The Philly Fed said its index of regional activity in the manufacturing sector rose to 16.7 in November from 11.5 in October, with a positive reading indicating growth in the sector. Economists had been expecting a much more modest increase by the index to 12.2.
Oil finished modestly higher on Wednesday as Energy Department data showed crude oil inventories fell by 900,000 barrels in the week ended November 13. Experts were looking for a rise of 1.2 million barrels.
Gasoline inventories decreased by 1.7 million barrels.
islamabad Chamber of Commerce
ISLAMABAD: Islamabad Chamber of Commerce and Industry (ICCI) has urged the State Bank of Pakistan to reduce interest rates.
‘The economy is showing positive indicators while inflation has also shrunk and these are the ideal times that SBP should bring down interest rate to single digit level in forthcoming review of monetary policy,’ ICCI President Zahid Maqbool said.
In a statement, he said that the main objective of maintaining a tight monetary policy was to control inflation and fiscal as well as current account deficits.
Now the inflation has come down, forex reserves have increased and the current account deficit has also declined, he said, adding that it was high time that the government makes a cut in the policy rate to provide relief to the business community.
He was of the view that cutting interest rates to single digit level will produce multiple benefits for the economy.
‘It will lower the cost of doing business, give a strong boost to business and industrial activities, provide easy credit and loaning facilities to trade and industry, promote better investment and exports and generate more tax revenue for the government,’ he added.—APP
‘The economy is showing positive indicators while inflation has also shrunk and these are the ideal times that SBP should bring down interest rate to single digit level in forthcoming review of monetary policy,’ ICCI President Zahid Maqbool said.
In a statement, he said that the main objective of maintaining a tight monetary policy was to control inflation and fiscal as well as current account deficits.
Now the inflation has come down, forex reserves have increased and the current account deficit has also declined, he said, adding that it was high time that the government makes a cut in the policy rate to provide relief to the business community.
He was of the view that cutting interest rates to single digit level will produce multiple benefits for the economy.
‘It will lower the cost of doing business, give a strong boost to business and industrial activities, provide easy credit and loaning facilities to trade and industry, promote better investment and exports and generate more tax revenue for the government,’ he added.—APP
Sunday, November 15, 2009
Forex reserves $14.7bn; GDP to stay 3.3.pc
Amanullah Khan
Karachi—Expressing confidence over gradual economic turnaround of the country, Prime Minister Syed Yusuf Raza Gilani has said that despite tough times the would rate of real GDP growth likely to be around 3.3 per cent during the fiscal year 2010 while the foreign exchange reserves have risen to a respectable level from $ 6 billion to $14.7 billion.
Discussing country’s economic health he said that there are positive signs of improvement in the economy despite international and domestic problems. The government is however taking effective measures to create enabling environment for growth of business.
Addressing prominents of the trade and industry at the 33rd FPCCI export awards ceremony held at the Governor’s House Saturday, he said the government is aware of the fact about high cost business and need to relax the cost of doing by taking corrective steps on urgent basis.
The policy making institutions also understand that the key to survive in the existing tough situation is to become more competitive, quality conscious and innovative,” Gilani said.
He said Pakistani business community can compete in the international market effectively while keeping these principles in view. He assured the FPCCI that it would be taken into confidence on all important policy decisions. He said improvement in Pakistan’s sovereign rating was helped by remittances from overseas Pakistanis that hit a record mark of $800 million in October 2009.
Gilani said the issues like falling exports lack of diversification of products and markets stem from structural weaknesses inherent in the economy. These factors have been addressed through a medium term plan called, “Strategic Trade Policy Framework 2009-12”.
He expressed confidence in the industry, and said the business community has the potential to gear up our economy. “With your constant efforts towards economic betterment, we would be better positioned to address the core issues relating to poverty and job creation in the near future.”
He hoped that with the cooperation of the private sector the government would achieve these objectives. Ministry of Commerce as part of initiative has recently provided Rs. 27.3 million from Export Development Fund for opening of FPCCI offices in China and Brussels for better export marketing. The ministry has provided Rs. 9.380 million from Export Development Fund to FPCCI for installation of video conferencing facility at FPCCI offices at Karachi, Lahore, Islamabad, Quetta and Peshawar. The prime minister said a comprehensive Textile Policy 2009-14 has also been announced to revive the textile sector through Textile Investment Support Fund of Rs. 40 billion.
The Strategic Trade Policy Framework (SPTF) provides assurance for continuation of trade policy for three years and the businesses can plan their production and export orders accordingly. The important policy initiatives under SPTF are certainty for capital cost, reliability of electricity supply at mutually agreed time by the Electricity Distribution Companies and insurance cover for visiting buyers.
The Policy has been set in motion and the initiatives are at various stages of implementation.
The prime minister said Textile Policy envisages developing international and domestic deter for Commerce Makhdoom Amin Fahim, President FPCCI Sultan Ahmad and Chawla, CEO TDAP Syed Mohibullah Shah.
Karachi—Expressing confidence over gradual economic turnaround of the country, Prime Minister Syed Yusuf Raza Gilani has said that despite tough times the would rate of real GDP growth likely to be around 3.3 per cent during the fiscal year 2010 while the foreign exchange reserves have risen to a respectable level from $ 6 billion to $14.7 billion.
Discussing country’s economic health he said that there are positive signs of improvement in the economy despite international and domestic problems. The government is however taking effective measures to create enabling environment for growth of business.
Addressing prominents of the trade and industry at the 33rd FPCCI export awards ceremony held at the Governor’s House Saturday, he said the government is aware of the fact about high cost business and need to relax the cost of doing by taking corrective steps on urgent basis.
The policy making institutions also understand that the key to survive in the existing tough situation is to become more competitive, quality conscious and innovative,” Gilani said.
He said Pakistani business community can compete in the international market effectively while keeping these principles in view. He assured the FPCCI that it would be taken into confidence on all important policy decisions. He said improvement in Pakistan’s sovereign rating was helped by remittances from overseas Pakistanis that hit a record mark of $800 million in October 2009.
Gilani said the issues like falling exports lack of diversification of products and markets stem from structural weaknesses inherent in the economy. These factors have been addressed through a medium term plan called, “Strategic Trade Policy Framework 2009-12”.
He expressed confidence in the industry, and said the business community has the potential to gear up our economy. “With your constant efforts towards economic betterment, we would be better positioned to address the core issues relating to poverty and job creation in the near future.”
He hoped that with the cooperation of the private sector the government would achieve these objectives. Ministry of Commerce as part of initiative has recently provided Rs. 27.3 million from Export Development Fund for opening of FPCCI offices in China and Brussels for better export marketing. The ministry has provided Rs. 9.380 million from Export Development Fund to FPCCI for installation of video conferencing facility at FPCCI offices at Karachi, Lahore, Islamabad, Quetta and Peshawar. The prime minister said a comprehensive Textile Policy 2009-14 has also been announced to revive the textile sector through Textile Investment Support Fund of Rs. 40 billion.
The Strategic Trade Policy Framework (SPTF) provides assurance for continuation of trade policy for three years and the businesses can plan their production and export orders accordingly. The important policy initiatives under SPTF are certainty for capital cost, reliability of electricity supply at mutually agreed time by the Electricity Distribution Companies and insurance cover for visiting buyers.
The Policy has been set in motion and the initiatives are at various stages of implementation.
The prime minister said Textile Policy envisages developing international and domestic deter for Commerce Makhdoom Amin Fahim, President FPCCI Sultan Ahmad and Chawla, CEO TDAP Syed Mohibullah Shah.
Thursday, November 5, 2009
Forex Brokers
MetaTrader 4 Forex Brokers — a list of Forex brokerage firms that support MetaTrader 4 Forex trading software as their trading platform.
PayPal Forex Brokers — a list of Forex brokers accepting PayPal on-line payment system as a way to deposit/withdraw money to/from customers' accounts.
WebMoney Forex Brokers — a list of Forex brokers that accept WebMoney e-currency system as the fast deposit/witdhrawal method, offering high security combined with the fast transfers.
Oil Trading Forex Brokers — those Forex brokers that allow trading commodities, and more specifically, oil, are listed in this category.
Gold Trading Forex Brokers — if you wish to find a Forex broker that offers precious metals trading then this list will help you.
Muslim Friendly Forex Brokers — a list of Forex brokers that try to be friendly to Muslim Forex traders offering "no-interest" margin accounts.
Forex Brokers with Web Based Platform — a list of Forex brokers that fully support Forex trading without installing any trading software.
Moneybookers Forex Brokers — a list of Forex brokers that accept Moneybookers electronic payment system as for trading funds transfers.
Forex Brokers with CFD Trading — a list of Forex broker companies that allow their traders to trade not only Forex, but also CFDs (Contracts for Difference).
Forex Brokers with Advanced Trading Platform — a list of Forex brokers with unique and powerful Forex trading software.
Institutional Forex Brokers — a list of on-line Forex brokers that are backed by strong and respected off-line financial companies.
ECN Forex Brokers — a list of on-line Forex brokers that act as ECNs (Electronic Communication Network) offering Forex traders highly competitive spreads.
Liberty Reserve Forex Brokers — a list of Forex brokers that accept Liberty Reserve payment system as the method of depositing/withdrawing funds to/from the trading accounts.
A full list of retail Forex broker companies that offer on-line Forex trading services:
Sort by: Order | Minimum Account | Traders' Rating | Name
Forex Broker Name Min. Account Size MT4 WebMoney CFD Browser-based
Platform Registered
with any Regulator Easy On-line
Account Opening Rating
FXOpen $1 + + - - + + 9.0
InstaForex $1 + + + - + + 3.1
Forex4you $1 + + + - - + 6.9
E-Global $20 + - + - + + 8.6
Ava FX $100 - + + - - + 6.9
FxCompany $100 + + + - + + 6.3
EXNESS $100 + + + - + + 6.9
FXcast $10 + + - - - + 5.0
LiteForex $1 + + + - - + 5.0
Marketiva $1 - + - - + + 7.2
MasterForex $1 + + + - - + 5.2
Easy-Forex $200 - - - + + + 7.7
InvestTechFX $100 + - + - + + 8.4
EFOREX $25 + - - - - + 5.3
10Pips $100 - + + - - + 7.2
Boston Merchant Financial $100 + + + - + + 6.2
Aurora Global Markets $1,500 - - + + + - 4.8
eToro $50 - + - + + + 4.8
FastBrokers $500 + - - - + + 8.4
Forex Capital Trading $100 - - - + + + 7.9
Forex Broker Name Min. Account Size MT4 WebMoney CFD Browser-based
Platform Registered
with any Regulator Easy On-line
Account Opening Rating
IS Markets $250 + - + - + + 4.5
Plus500 $50 - - + - - + 8.5
ACM $2,000 + - - + + - 6.8
Alpari $200 + - - - + + 7.0
Deutsche Bank FOREX $5,000 - - - - + - 7.0
Forex.com $250 + - - + + - 7.1
FX Solutions $250 + - - - + - 2.9
FXCM $2,000 + - - + + + 8.3
GFT Forex $250 - - - - + + 7.8
Interbank FX $250 + - - - + - 7.6
OANDA $1 - - - + + + 6.6
Realtime Forex $3,000 - - - - + + 6.3
Saxo Bank $2,000 - - + - + - 7.4
CMS Forex $200 - - - - + + 8.5
Interactive Brokers $5,000 - - + + + + 9.8
X-Trade Brokers $2,000 + - + - + - 6.0
MB Trading $400 + - - - + - 8.4
Tadawul FX $500 + - - - + + 8.3
Forex.CH $2,000 + - - - + - 3.0
Finotec $200 - - + - + + 7.4
Forex Broker Name Min. Account Size MT4 WebMoney CFD Browser-based
Platform Registered
with any Regulator Easy On-line
Account Opening Rating
Hotspot FX $7,500 + - - - + - 8.4
ECN broker $200 - - - - + + 2.9
PFG Forex $1,000 - - - - + + 7.4
Dukascopy $50,000 - - - - + - 8.5
High Street Networking $100 - + - + - - 3.1
Real Trade $20 + + + - - + 5.4
Forex Club $10 - - - - + + 7.2
MIG Investments $5,000 + - - - + - 8.3
RCG fxtrader $5,000 - - - - + - 5.7
Questrade FX $250 - - - + + - 7.5
IKON GM – Royal Division $2,500 + - - - + - 7.9
ODL Securities $2,000 + - + - + + 7.6
MGFOREX $500 - - - + + + 8.3
MF Global $10,000 - - + - + - 3.6
IG Markets $200 - - + + + + 8.3
CMC Markets $2,000 - - + - + - 3.8
IFC Markets $1 - + - - + + 8.5
Neuimex $400 + + + - + + 2.6
MFN $500 - - + - - + 3.6
Invest2Forex $1000 + - - - + - 7.6
Forex Broker Name Min. Account Size MT4 WebMoney CFD Browser-based
Platform Registered
with any Regulator Easy On-line
Account Opening Rating
iFOREX $100 - - - + - + 7.5
FIBOGroup $300 + - + - - + 3.1
FXDD $500 + + - - - + 4.8
iTradeFX $300 - - - - + + 3.6
ActivTrades €250 + - + + + + 8.3
ABN AMRO marketindex £1 - - + + + + 7.5
GCI Financial $2,000 + + + + + + 7.6
Forex Trading Edge $1,000 + - - + + + 3.1
Xforex $100 - - - + - + 7.4
CitiFX $10,000 - - - - + - 7.4
VarengoldBankFX $1,000 + - + - + - 7.4
FxPro $100 + - + - + + 8.2
GFS Forex & Futures $500 - - - - + + 7.0
DeltaStock $100 + - + + + - 8.0
Forex-Metal $1 + + + - + + 3.5
TradeView Forex $2,500 + - - - + - 3.1
One Financial $250 + - + + + - 6.2
Exto Capital $1,000 - + + + + + 4.7
NobleTrading $250 - - - + + + 8.5
NordMarkets $1,000 - - - - + - 8.4
Forex Broker Name Min. Account Size MT4 WebMoney CFD Browser-based
Platform Registered
with any Regulator Easy On-line
Account Opening Rating
GDI Markets $10,000 - - + - + - 6.5
FXCM Micro $25 - - - - + + 6.0
FXD24 $250 + + - - - + 7.9
Fit Markets $500 - - - + + - 6.9
Ingot Brokers $100 + - - - + - 6.0
ForexGen $250 + - - - - + 5.0
Latitude FX $1,000 + - - + + + 7.6
FXTSwiss $2,000 + - - - - + 3.1
Apex FX Trading $2,000 + - - - - + 2.8
GOMarkets $1 + - + - + + 8.0
ATC Brokers $3,500 + - - - + - 6.9
Windsor Brokers $100 + - + - + - 6.2
Finexo $100 - - - + + + 7.5
Forex WebTrader $25 - - - + - + 4.8
ForexYard $100 - - - + - + 3.5
HY Markets $50 - - - + + + 5.8
Prime4x $100 + - + - - + 7.9
Arab Financial Brokers $2,000 + - - - + + 5.5
WH SelfInvest €2,500 - - + + + - 8.7
Sucden £5,000 - - + - + - 5.2
Forex Broker Name Min. Account Size MT4 WebMoney CFD Browser-based
Platform Registered
with any Regulator Easy On-line
Account Opening Rating
FOREX UKRAINE $100 + + + - - + 7.1
FX|Clearing $10 + - - - + + 7.7
Admiral Markets $10 + + + - - + 6.7
EMPFX $300 - - + - - + 3.8
Advised Trading $10,000 + - - - - - 2.4
Bulbrokers $50 + - + - + - 5.1
HMS Markets €10,000 - - + - + - 4.8
FXCH $2,000 + + + - - + 7.3
BroCo $100 + + + - + - 7.9
FX-PRO $1,000 + - - - - + 3.4
ATG $25,000 - - - - + - 8.1
Advanced Markets $2,500 - - - - + - 6.3
AL Trade $200 + + + - - + 3.1
TeleTRADE $2,000 + - + - - + 6.2
WSD $1,000 + - + - + - 3.0
NTWO $2,000 + - + - - + 3.5
Taurus Global Markets $5,000 + - + - - + 3.4
Gallant FX $500 + - - - + + 8.9
Tamley Global Markets $500 - - - - + + 7.8
Forex Place $100 + - + - - + 4.0
Forex Broker Name Min. Account Size MT4 WebMoney CFD Browser-based
Platform Registered
with any Regulator Easy On-line
Account Opening Rating
Wall Street Brokers $10 + - + - - + 8.3
FXM Financial Group $10 + + - - + + 3.7
StartForex $100 + - - + - + 5.4
Alma Forex $1 + + - - + + 3.0
UFXBank $500 - + - + - + 6.7
SwissDealing $0 - - - - - + 7.0
MoneyRain $100 + + + - + + 7.5
FXGreece $2,000 - - - + - - 1.5
RFXT $1,000 + - - - + + 3.8
FX Trading $500 + - - - - + 4.3
United World Capital $25 + - + - + + 9.2
Azurite Markets $100 - - + + + - 5.0
1pipfix $100 + + + - - + 3.8
Basel Financial $50 + + - - + + 7.5
Forex Systems $250 + - + - + + 5.0
IamFX $500 + - - - - + 6.0
OneCorpFX $1,000 + - - - - + 3.0
FXG Bank $100 + - - + - - 5.0
Forex Glossary
ADX (Average Directional Index) — standard technical indicator that measures the strength of a trend.
Ask (Offer) — price of the offer, the price you buy for.
Aussie — a Forex slang name for the Australian dollar.
Bank Rate — the percentage rate at which central bank of a country lends money to the country's commercial banks.
Bid — price of the demand, the price you sell for.
Broker — the market participating body which serves as the middleman between retail traders and larger commercial institutions.
Cable — a Forex traders slang word GBP/USD currency pair.
Carry Trade — in Forex, holding a position with a positive overnight interest return in hope of gaining profits, without closing the position, just for the central banks interest rates difference.
CCI (Commodity Channel Index) — a cyclical technical indicator that is often used to detect overbought/oversold states of the market.
CFD — a Contract for Difference — special trading instrument that allows financial speculation on stocks, commodities and other instruments without actually buying.
Commission — broker commissions for operation handling.
CPI — consumer price index the statistical measure of inflation based upon changes of prices of a specified set of goods.
EA (Expert Advisor) — an automated script which is used by the trading platform software to manage positions and orders automatically without (or with little) manual control.
ECN Broker — a type of Forex brokerage firm that provide its clients direct access to other Forex market participants. ECN brokers don't discourage scalping, don't trade against the client, don't charge spread (low spread is defined by current market prices) but charge commissions for every order.
ECB (European Central Bank) — the main regulatory body of the European Union financial system.
Fed (Federal Reserve) — the main regulatory body of the United States of America financial system, which division — FOMC (Federal Open Market Committee) — regulates, among other things, federal interest rates.
Fibonacci Retracements — the levels with a high probability of trend break or bounce, calculated as the 23.6%, 32.8%, 50% and 61.8% of the trend range.
Flat (Square) — neutral state when all your positions are closed.
Fundamental Analysis — the analysis based only on news, economic indicators and global events.
GDP (Gross Domestic Product) — is a measure of the national income and output for the country's economy; it's one of the most important Forex indicators.
GTC (Good Till Cancelled) — order to buy or sell of a currency with a fixed price or worse. The order is alive (good) until execution or cancellation.
Hedging — maintaining a market position which secures the existing open positions in the opposite direction.
Jobber — a slang word for a trader which is aimed toward fast but small and short-term profit from an intra-day trading. Jobber rarely leaves open positions overnight.
Kiwi — a Forex slang name for the New Zealand currency — New Zealand dollar.
Leading Indicators — a composite index (year 1992 = 100%) of ten most important macroeconomic indicators that predicts future (6-9 months) economic activity.
Limit Order — order for a broker to buy the lot for fixed or lesser price or sell the lot for fixed or better price. Such price is called limit price.
Liquidity — the measure of markets which describes relationship between the trading volume and the price change.
Long — the position which is in a Buy direction. In Forex, the primary currency when bought is long and another is short.
Loss — the loss from closing long position at lower rate than opening or short position with higher rate than opening, or if the profit from a position closing was lower than broker commission on it.
Lot — definite amount of units or amount of money accepted for operations handling (usually it is a multiple of 100).
Margin — money, the investor needs to keep at broker account to execute trades. It supplies the possible losses which may occur in margin trading.
Margin Account — account which is used to hold investor's deposited money for FOREX trading.
Margin Call — demand of a broker to deposit more margin money to the margin account when the amount in it falls below certain minimum.
Market Order — order to buy or sell a lot for a current market price.
Market Price — the current price for which the currency is traded for on the market.
Momentum — the measure of the currency's ability to move in the given direction.
Moving Average (MA) — one of the most basic technical indicators. It shows the average rate calculated over a series of time periods. Exponential Moving Average (EMA), Weighted Moving Average (WMA) etc. are just the ways of weighing the rates and the periods.
Offer (Ask) — price of the offer, the price you buy for.
Open Position (Trade) — position on buying (long) or selling (short) for a currency pair.
Order — order for a broker to buy or sell the currency with a certain rate.
Pivot Point — the primary support/resistance point calculated basing on the previous trend's High, Low and Close prices.
Pip (Point) — the last digit in the rate (e.g. for EUR/USD 1 point = 0.0001).
Profit (Gain) — positive amount of money gained for closing the position.
Principal Value — the initial amount of money of the invested.
Realized Profit/Loss — gain/loss for already closed positions.
Resistance — price level for which the intensive selling can lead to price increasing (up-trend).
RSI (Relative Strength Index) — indicator that measures of the power of direction price movement by comparing the bullish and bearish portions of the trend.
Scalping — a style of trading notable by many positions that are opened for extremely small and short-term profits.
Settled (Closed) Position — closed positions for which all needed transactions has been made.
Slippage — execution of order for a price different than expected (ordered), main reasons for slippage are — "fast" market, low liquidity and low broker's ability to execute orders.
Spread — difference between ask and bid prices for a currency pair.
Standard Lot — 100,000 units of the base currency of the currency pair, which you are buying or selling.
Stop-Limit Order — order to sell or buy a lot for a certain price or worse.
Stop-Loss Order — order to sell or buy a lot when the market reaches certain price. It is used to avoid extra losses when market moves in the opposite direction. Usually is a combination of stop-order and limit-order.
Support — price level for which intensive buying can lead to the price decreasing (down-trend).
Swap — overnight payment for holding your position. Since you are not physically receiving the currency you buy, your broker should pay you the interest rate difference between the two currencies of the pair. It can be negative or positive.
Technical Analysis — the analysis based only on the technical market data (quotes) with the help of various technical indicators.
Trend — direction of market which has been established with influence of different factors.
Unrealized (Floating) Profit/Loss — a profit/loss for your non-closed positions.
Useable Margin — amount of money in the account that can be used for trading.
Used Margin — amount of money in the account already used to hold open positions open.
Volatility — a statistical measure of the number of price changes for a given currency pair in a given period of time.
VPS (Virtual Private Server) — virtual environment hosted on the dedicated server, which can be used to run the programs independent on the user's PC. Forex traders use VPS to host trading platforms and run expert advisors without unexpected interruptions.
Forex FAQ
You can read the detailed answer in the separate section of the site — "What is Forex?".
How can I start trading Forex?
You'll need to register a trading account with a Forex broker, such as Marketiva. Then you can begin using their Forex client program to buy and sell currencies. This will take less than 5 minutes of your time!
Who owns Forex and where is it located?
It's not owned by anyone in particular. Forex is an Interbank market, meaning that it's transactions are conducted only between two participants - seller and the buyer. So as long as existing banking system will exist, Forex will be here. It's not connected to any specific country or government organization.
What the working hours of Forex market?
Forex market is open from 22:00 GMT Sunday (opening of Australia trading session) till 22:00 GMT Friday (closing of USA trading session).
What is margin?
Margin is money you need to have in your broker account to secure your open position. Different brokers require different amount of margin money to keep your positions open.
What are the "long" and "short" positions?
Long position is a "buy" position, meaning that this position will be in profit if price goes up.
Short position is a "sell" position, meaning that this position will be in profit if price goes down.
What is the best Forex trading strategy?
There is none. You should constantly develop your own strategies for every possible market situation, if you want to be in profit. Specific strategies can only be good for a certain period of time and for certain currency pairs.
How much money I need to start trading Forex?
With Marketiva you can start trading Forex with as little as $1. Usually, the minimum amount varies from $100 to $10,000 ($100,000 and more for Interbank trading).
I can't (or don't want to) install any Forex trading software on my computer. Can I still trade Forex?
If you don't want (or it is not possible) to install new software to start trading Forex then a good option for you would be using web based trading platform. You can browse our Forex brokers list to find those which support such platform. Here are those brokers which have web based trading options: Easy Forex, ForexYard, Oanda, Saxo Bank, ACM, Interactive Brokers.
I've downloaded the expert advisor for MetaTrader platform but I don't know how to install it. What should I do?
You can read the MetaTrader Expert Advisors User's Tutorial to find out how to intstall those expert advisors.
I've downloaded a custom indicator for MetaTrader platform but I don't know how to install it. What should I do?
You can read the MetaTrader Indicators User's Tutorial to find out how to intstall those indicators.
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