Continues To Undermine The Pound

The euro fell to a four-month low against the dollar on Wednesday and risked more losses on the prospect of prolonged political instability in Greece that could result in the country exiting the euro. With Greece announcing fresh elections next month and investors concerned about the knock-on effects of a Greek euro exit for economies like Spain and Italy, investors fled the euro and sought the perceived safety of the dollar and the yen. The dollar rose to its highest in four months against a basket of currencies, while the euro also hit a three-month low versus the yen. The euro dropped to $1.2681 against the dollar on EBS trading platform, which left it on track to test the January low of $1.2624, below which would mark the euro's lowest level since August 2010. However, it recovered ...

Fundamental Analysis EUR "It is looking more and more likely that Spain is going to have some form of a bailout" - Lyn Graham-Taylor, Rabobank strategist Spain's cost of borrowing on the international debt markets breached the level of 6 per cent for 10-year bonds on Monday, mounting pressure on the European Central Bank to conduct new round of bond purchases. USD "There is no sign that higher fuel prices have damaged consumer sentiment and spending" - Jeremy Lawson, a senior U.S. economist at BNP Paribas U.S. month on month retail sales rose by more than expected in March, said the Census Bureau on Monday. Total retail sales increased 0.8 per cent the previous month after increasing 1.0 per cent in February. GBP " is not a universal signal of a housing-market recovery" - Miles ...

Fundamental Analysis EUR "Equity markets ended the first quarter well" - Simon Denham, managing director of Capital Spreads The Stoxx Europe 600 Index gained 0.12 per cent to 259.07. Germany's DAX Index retreated 0.13 per cent and France's CAC 40 Index gained 0.19 per cent. The U.K.'s FTSE 100 Index rose 0.35 per cent to 5,723.67. USD "You’re going to see a slowing in the pace of job growth" - Neil Dutta, an economist at Bank of America Corp. The number of Americans, who have found a job in in March, fell to 120 thousand from 240 thousand the previous month, the Bureau of Labor Statistics said on Friday. Unemployment slid to 8.2 per cent, the lowest in three years, from 8.3 per cent. GBP "If I were on the MPC, I'd be more worried about whether inflation is coming back (down) as ...

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 " orderly default in the short term is the most likely scenario" - Marc Ostwald, senior strategist at Monument Securities The euro zone’s debt crisis will remain unresolved, even if Greece defaults in the forthcoming months, believes Marc Ostwald, senior strategist at Monument Securities. USD "We’re starting to see improvement in some of the key leading housing indicators" - Carl Riccadonna, a senior U.S. economist at Deutsche Bank Securities Inc. Sales of existing U.S. homes rose for a third consecutive month in December, a sign the housing market is gaining momentum. Purchases grew 5 per cent to a 4.61 million annual rate, said the National Association of Realtors on Friday. GBP "The 0.6% increase in retail sales volumes in December boosts hopes that the ...

What happens when people actively shun their official currency…? Governments are often tempted to live beyond their means. Today, that means national debts and quantitative easing. But a few hundred years ago, it meant debasing coinage. Silver and gold coins would be ‘clipped’ – with a tiny quantity of their metal shaved off the edge every time they passed through government hands – or they would be minted with a lower precious metal content than their face value stated. This would enable the monetary authorities to produce more coins for the same amount of bullion, increasing the government’s spending power in the marketplace. The net result was that coins with identical face values did not necessarily hold the same commodity value. And this often led to a rather interesting phenomenon. ...

Previous session overview The dollar regained some ground in Asia Tuesday as investors soured on risk amid security fears and continued euro-zone debt worries. The U.S. currency rebounded amid fear of reprisals from Al Qaeda after the killing of Osama bin Laden Monday. The dollar had tumbled in late New York trading Monday as markets re-focused on low U.S. yields, underpinned by the Federal Reserve Board's ultra-loose monetary policy. As of 0450 GMT Tuesday the euro was being quoted at USD1.4811, after peaking above USD1.4900 late in New York. The yen strengthened on the general risk-off theme, even with Tokyo markets closed for the Golden Week holiday. The U.S. dollar was threatening to sink below JPY81.00, a level it last crossed March 25 as it rose following G-7 intervention to ...

Recent developments in Egypt are having a significant impact on commodities and the major currencies. Just before the weekend, when protests in Egypt began escalating, crude prices jumped 500 pips to $90.80 a barrel. In addition, safe-haven currencies such as the yen were also largely supported, and the Japanese currency is currently strengthening against all of its major rivals. Economic News USD - Dollar Closes a Volatile Week with Green Signals The dollar saw a very volatile session during last week's trading. The dollar began last week's session with a falling trend against the euro and the British pound. The EUR/USD pair reached as high as the 1.3755 level and the GBP/USD reached as high as the 1.6015 level. Yet eventually both pairs reversed trends, the EUR/USD is now trading ...

Yesterday's most significant economic news was clearly the S&P's announcement that Japan's credit ratings will be downgraded from AA- to AA. The Japanese yen saw sharp falls against all the major currencies in response. In addition, disappointing U.S. economic data have weakened the dollar against the euro and the British pound. Economic News USD - Dollar Weakens Following Disappointing Economic Data The U.S. Dollar fell against most of its major currency rivals on Thursday's trading session. The dollar fell about 60 pips vs. the euro, and the EUR/USD pair reached a daily high of 1.3757. The greenback also dropped about 60 pips vs. the British. The dollar fell yesterday after a report showed that the number of Americans that filed for the first time for unemployment benefits rose by ...