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Analysts Warned That The EuroTitle:
Euro zone woes keep banks wary after Q1 bounce
(Reuters) - Quarterly reports from some of Europe's top banks showed the scars of the euro zone crisis on Thursday, with big losses on Spanish property, and fragile markets casting a shadow over the rest of the year despite an early investment banking rebound.
Spanish bank Santander said first quarter net profit dropped 24 percent after it took a 3.1 billion euro ($4.1 billion) provision to cover rising loan defaults, as the effects of Spain's property market crash were compounded by economic recession and joblessness afflicting nearly one in four workers.
Although results from Barclays and Deutsche Bank showed investment banking income bounced back strongly after a torrid end to last year, the sickly euro zone economy continues to dog the industry.
Barclays beat analysts' forecasts ...
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Dollar hits 3-week lows after Fed says ready to act if needed
(Reuters) - The dollar fell to a three-week low against a basket of major currencies on Thursday after the Federal Reserve said it was ready to launch another round of bond buying if the U.S. economy weakens.
The dollar's weakness boosted the Canadian dollar and pushed the British pound to a seven month high against the U.S. currency, as the central banks of Canada and Britian, in contrast to the Fed, are seen moving away from further stimulus.
A tightening of peripheral euro zone spreads lifted the euro, but with debt problems still brewing large and the threat of a recession and political instability hanging over the euro zone, the common currency was unlikely to break above its recent highs, analysts said.
The dollar index .DXY was at 78.849, having fallen as low as 78.823 its lowest ...
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RBNZ kept its policy rate unchange
FUNDAMENTAL OUTLOOK at 0800 GMT (EDT +0400)
WORLD
The RBNZ kept its policy rate unchanged at 2.5%, but implicitly raised the prospect of a future interest rate cut. The short overnight policy statement warned that continued strength of theNew Zealanddollar may force the bank “to reassess the outlook for monetary policy”. Previously, only a deferral of interest rate hikes was being considered in the case of persistent currency strength, but now two-way risk has been injected into the policy language. Surprisingly, theNew Zealanddollar did not weaken in response, and soon gained 30 pips in line with a more supportive backdrop for risk appetite.
Meanwhile, FX investors continue to digest the FOMC’s latest policy announcement and forecast revisions. Near-term GDP growth and inflation ...
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Euro rallies on housing data
The euro rallied against the dollar on Tuesday after two housing reports raised optimism about the economic recovery and in turn stoked risked tolerance against the backdrop of a two-day policy meeting at the central bank.
The euro was already bid after a debt sale in the Netherlands saw demand from investors a day after the Dutch government's collapse in a crisis over budget cuts. As institutional investors stepped in to buy the euro after the data, others who had bet against the European currency reversed positions. The move higher then fed on itself.
A closely watched survey showed home prices rose for the first time in 10 months, in an encouraging sign the battered sector is starting to stabilize.
A separate report showed single-family home sales dropped in March to their lowest ...
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Euro subdued ahead of Dutch auction; Aussie falls
(Reuters) - The euro steadied against the dollar on Tuesday but further gains looked unlikely ahead of a debt sale in the Netherlands that will be watched for any sign of lackluster demand after the country's governing coalition collapsed.
Most analysts said the auction of up to 2.5 billion euros of two- and 25-year bonds should see adequate demand given its small size, but investors were increasingly nervous about signs of political upheaval in the euro zone's core.
The Australian dollar hit a two-week low against the U.S. dollar after soft inflation data fuelled expectations of interest rate cuts by the Reserve Bank of Australia.
The euro had its worst day in a week on Monday, falling half a percent as worries over the outcome of France's presidential election and bearish ...
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Asian shares, euro ease; China factory output up
(Reuters) - Asian shares and the euro eased on Monday, but losses were kept in check after a report showed Chinese factory activity stabilizing in April, alleviating worries about a sharp deceleration in the world's second-largest economy.
European shares were also expecting a lower start, with financial spreadbetters predicting that major European markets would open down as much as 0.6 percent. U.S. stock futures were down 0.2 percent.
The HSBC Flash Purchasing Managers Index showed China's factory output ticked higher, new business rose from multi-month lows and export orders perked up, though not sufficiently for a private sector survey of purchasing managers to flag a return to expansionary territory.
The index, the earliest indicator of China's industrial activity, improved to 49.1 ...
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S&P warns on Indonesia policy moves, forgoes rating upgrade
(Reuters) - Indonesia's recent policy moves bode ill for Southeast Asia's largest economy, ratings agency Standard and Poor's warned on Monday, forgoing an expected upgrade in its credit rating to investment grade even as it lauded strong economic fundamentals.
Although S&P retained a positive outlook on its Indonesia rating and praised record first-quarter foreign direct investment figures released earlier in the day, it singled out policies in the key mining sector and failure to approve an immediate fuel price hike as negative developments.
"We feel that the policy environment has deteriorated because of this raft of recent measures or proposed measures, and the government's inability to push through what is really not subsidy reform, it is really a price adjustment and they couldn't ...
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Dukascopy Morning Forex Overview : 20/04/2012
Fundamental Analysis
EUR
"The debt crisis is far from over still and I think Spain will be worse before it gets better"
- Henrik Drusebjerg, a senior equity strategist at Nordea Bank AB
Spain sold 2.54 billion euros of debt dated 2014 and 2022 on Thursday, above the target range of 1.5 to 2.5 billion euros for the auction.
USD
"Progress in the labor market is not quite as strong as people had hoped, but we are still on a recovery track here"
- Scott Brown, chief economist at Raymond James & Associates Inc.
The number of Americans claiming for unemployment benefits declined by 2,000 to 386,000 in the week ended April 14 from the week before, said the Department of Labor on Thursday.
GBP
"Economic data does look like it is showing some stabilization"
- Samantha Fitzpatrick, senior ...
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Euro zone tensions boost German debt, sterling jumps
(Reuters) - Fears of a resurgence in the euro zone debt crisis boosted demand for safe-haven German bonds on Wednesday, while the Bank of England and a European Central Bank official signaled more monetary policy easing measures were unlikely.
The single currency also fell against the dollar as growing bad loan problems at Spanish banks added to the country's economic woes, and French president Nicolas Sarkozy, fighting for re-election, warned a strong euro hurt exporters.
"Investor demand for core paper remains firm, with the background threat of crisis tensions ratcheting yet higher, underpinning an overriding desire for capital preservation," said Rabobank strategist Richard McGuire.
The concerns about a flare-up in the euro zone debt crisis, which have largely centered on Spain's ...
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