As The Yen Climbs

The euro slipped to a four-month low against the dollar on Tuesday as a political stalemate in Greece stoked fear the country may renege on bailout pledges made to international creditors and exit the currency bloc. Concerns about slowing Chinese and global growth also drove down higher-yielding currencies and boosted the safe-haven dollar and yen, with the Australian dollar flirting with a five-month low against the U.S. currency. Greek Party leaders are expected to convene at 2 p.m. (1100 GMT) but there is little hope President Karolos Papoulias's proposal to form a technocrat government would end the stalemate, making a new election the most likely outcome. Many market players think a fresh election will make it more likely for Athens to ditch its bailout pledges and hence the euro, ...

Fundamental Analysis EUR Italy's borrowing costs increased during last bond sale, escalating worries about Italy's ability to repay its obligations. Three-year bonds faced a rise in the interest rate from 2.76% to 3.89%. Adding to concerns over the Euro Zone's economic state, Greek unemployment rate surged to 21.8% in January as compared to 14.8% in January 2011. USD US March CPI increased by 0.3% thus outpacing the 0.2% investor consensus forecast. Core CPI was in line with the expectations at 0.2% last month, Bureau of Labor Statistics reported today. GBP FTSE 100 index traded lower on Friday as lower than expected China's GDP growth weighed on investor sentiment. Additionally Spanish shares tumbled as country's bond yields climbed. Sage Group lost 2.2% after Jefferies cut the stock' ...

Fundamental Analysis EUR "There’s been a growing realization that in fact the economic numbers particularly out of the States have been better than expected" - David Miller, a partner at Cheviot Asset Management The Stoxx Europe 600 Index declined 1.14 per cent to 268.97. Germany’s DAX Index slid 1.39 per cent and France’s CAC 40 Index lost 1.32 per cent. The U.K.’s FTSE 100 Index tumbled 1.17 per cent to 5,891.41. USD "The housing market continues to recover at a very gradual rate" - Sal Guatieri, a senior economist at BMO Capital Markets U.S. housing starts declined slightly in February, but the biggest increase in building permits in more than three years shows the industry is recovering. Housing starts fell 1.1% to an annual rate of 698,000 last month. GBP "The Bank of England is ...

Dukascopy Fundamental Analysis EUR Italy managed to sell EUR 6 billion of its 3-year notes with borrowing costs declining to the lowest reading since October 2010 as ECB loans supported demand. The yield on Italian 3-year bill slipped two basis points to 2.66%. The borrowing costs on benchmark 10-year notes also gave up two basis points, attaining 4.87% compared to 7.26% in November 25. USD Ben Bernanke, Head of Fed, announced on his speech today that policy makers expect a moderate economic growth. Additionally, Bernanke forecasted a decreasing unemployment level and subdued inflation. Economic experts claim that the untraditional fiscal measures implemented by the Fed are finally giving returns. GBP The number of UK unemployment claims surged more than expected in February and the ...

Dukascopy Fundamental Analysis EUR Germany expects EU finance officials to reach an agreement over Greek bailout on meeting due February 20, German lawmakers announced today. Greece should increase its responsibilities in order be rescued otherwise Europe will have to take another way of action, the one that nobody really wants, Steffen Kampeter, German Deputy FM, emphasized. USD 2011’s most hated stocks have increased in value almost twice as fast as S&P 500’s growth for the period. This trend has burnt short sellers’. The 26 stocks from S&P500, which had attracted the most of short-sellers’ attention, have gained 18% during the last year. The index itself has only gained 8% in the same period. GBP UK retail sales, released today by National Statistics, have positively surprised ...

Dukascopy Fundamental Analysis EUR Europe's largest economy contracted less than expected in fourth quarter, signalling Germany may avoid crisis despite declining demand across region. German GDP dropped 0.2% in last quarter of 2011 compared to 0.6% growth in the third quarter. Economists questioned by Bloomberg predicted a drop of 0.3%. Meanwhile France's economy unexpectedly in expanded 0.2% in last three months of 2011. USD Demand for automobiles pushed upwards the industrial production level in the US. The total industrial output rose by 0.7% in January; the December figure was revised to +1.5%. Analysts believe that shortages in business inventories and increasing machinery investments will keep industrial output level quite high in near term. GBP UK unemployment rose to 2.67, ...

Fundamental Analysis EUR Europe's finance ministers suspended a bailout funding for Greece and left officials in Athens either to ratify lately issued debt cut plan or to leave Euro Zone. Euro area countries will not deliver EUR 130 billion rescue funding until Greece will not implement its austerity plan, said Jean-Claude Juncker, Luxembourg's PM. USD US Consumer sentiment (Michigan preliminary index) dropped more-than-expected today to 72.5 points. The consensus forecast stood at 74.8; investors’ sentiment was on the downside today amid continuous Greek turmoil. GBP British house prices fell to 6-months record high in January on concern about country's economy amid European debt woe. The average value of home in Whales and England dropped 0.2% compared to December, reaching GBP 218. ...

Fundamental Analysis EUR ECB president Mario Draghi has been informed that the Greek austerity deal has been reached; meanwhile an official Greek government announcement is expected soon. The news have had a positive impact on European investors' sentiment. USD Treasuries climbed higher on Wednesday as investors monitored developments in Greece. Borrowing costs on 10-year bills gave up 1 basis point, reaching 1.97% while those on 5-year bonds traded flat at 0.82%. Yields on 30-year notes dropped 1 basis point, attaining 3.14%, the highest since October 2011. GBP The Bank of England agreed on further easing measures and ijections of GBP 50B into the british economy. Additionally, BoE decided to maintain interest rates at the current level of 0.5%, where they have stood since 2009. CHF ...

(Reuters) - Japan's finance and economic ministers piled pressure on the Bank of Japan on Thursday to consider easing policy further, as the yen climbs back to levels that led to Tokyo to intervene heavily in currency markets last year to protect its export-reliant economy. BOJ Deputy Governor Hirohide Yamaguchi said he saw no need to ease policy right away, but the central bank could face growing calls to offer more monetary stimulus to help exporters through any prolonged slump, even though it has limited options remaining to support the faltering economy. "Yen buying has strengthened, led by short-term and speculative moves on the back of expectations for low interest rates in the U.S. until 2014," Finance Minister Jun Azumi told lawmakers. "I would like the BOJ to take account of ...