Dollar Pares Earlier

With the Bank of England rate decision is just around the corner, the British Royal Currency declined against the low yielding U.S. dollar, on mixed sentiment and thoughts regarding what the Bank of England might do now as the royal economy officially slipped into recession and as inflation is still skyrocketing as well. The Monetary Policy Committee is projected to leave rates unchanged at 0.5% and the asset purchases program steady at 325 billion pound as the bank still attempts to balance between rising inflation and weakening growth, noting that further cut in the rates is highly unexpected this meeting or this year in general as price pressures prevents policy makers from taking further actions in favor of growth. The sterling pound declines on slight possibility some of the nine ...

(Reuters) - Gold fell for a third day on Wednesday, touching a four-month low and all but wiping out its gains for the year as the escalation in the euro zone debt crisis prompted investors to favor dollars and German government bonds as safe-havens. Political disarray in Greece, a change in the French presidency and renewed concern about the resilience of the Spanish banking sector sent the euro to a 15-week low against the dollar and propelled German bond futures to record highs. Spot gold was down 1.2 percent on the day at $1,585.01 an ounce at 0940 GMT, having lost more than 3 percent so far this week in its largest weekly slide since mid-March. "It's not as though the escalation of the political risk in Europe is doing anything positive for gold prices at all and this is totally ...

Fundamental Analysis EUR "The likelihood of inflation falling below 2 percent in the short run remains low, putting the ECB in a difficult situation." - Peter Vanden Houte, an economist at ING Inflation in the euro zone rose by more than expected in April, mounting pressure on the European Central Bank to take action against price pressures. USD "Manufacturing is still in pretty good shape." - Scott Brown, chief economist at Raymond James & Associates Inc. Manufacturing in the U.S. expanded in April at the fastest pace in 10 months, showed Institute for Supply Management data on Tuesday. GBP "The good news is that manufacturing clocked up a fifth straight rise, whilst cost pressures have eased a little and some firms are still recruiting." - Lee Hopley, chief economist at EEF U.K. ...

Spiking U.S. bond yields and super-loose Japanese monetary policy are reviving the yen carry trade, which could spell more weakness in the currency after its biggest two-month drop in three years. The yen was last in vogue as a cheap global funding vehicle for buying higher-yielding assets in 2005-2008, before the global financial crisis sent investors fleeing to the exits. Now with a global economic recovery slowly picking up steam and Europe's debt crisis seemingly off the boil, traders are again looking to sell the low-interest rate yen to raise cash for forays into riskier and more rewarding assets. With U.S.-Japan interest rate differentials narrow until mid-March and geopolitical risks troubling investors, many investors were skeptical the yen carry trade would make a comeback for ...

(Reuters) - The yen fell on Tuesday as the Bank of Japan eased monetary policy by expanding its asset-buying scheme, but the impact on the currency may prove short-lived while nagging worries over the euro zone crisis keep it supported as a safe haven. The BOJ boosted its asset buying and lending scheme by 10 trillion yen ($130 billion), to 65 trillion yen, with the entire increase to be used for purchases of long-term Japanese government bonds (JGBs). The dollar rose to a near three-week high of 78.19 yen on trading platform EBS with gains of around 0.6 percent on the day. The euro rose 0.7 percent on the day to 103.10 yen. "The knee-jerk reaction has been to sell the yen and that's understandable with the BoJ being a bit more active than it has been in the past," said Lee Hardman, ...

Fundamental Analysis EUR German exports declined more rapidly than economists predicted in December as debt crisis harmed the export demand across the troubled region. Exports lost 4.3% compared to November when they added 2.6%. In contrast, analysts predicted only a 1% decline in European biggest economy's exports. Nevertheless economists suggest the German exports may gain momentum in 2012 as business confidence surged in January. USD Coca-Cola the world's biggest soft-drink producer, reported higher than expected 4th quarter profit as juices and teas stimulated sales in Asia. Profits totalled 79 US cents per share compared to 77 cents a share predicted by analysts. Coca Cola shares gained 1.3% on the announcement. Company's stocks advanced 6.4% in 2011. GBP UK FTSE 100 Index opened ...

US dollar is paring some of its earlier gains against the euro as risk appetite improves. However, greenback still has the upper hand against European currencies right now as the data coming out of the United States seems to indicate that the economic recovery could speed up. Right now, the big excitement is the non-farm payrolls for January. Analysts had expected some gains for jobs, but the figures released beat expectations by quite a bit. The US economy added 243,000 jobs in January, and the unemployment rate fell from 8.5% to 8.3%. This state of affairs resulted in a great deal of enthusiasm for stocks. Additionally, the US dollar saw a boost in Forex trading, especially when compared with the relatively insipid data coming out of Europe. Eurozone retail sales fell, and Great ...

Gold prices were on course for their biggest monthly rise since August on Tuesday, boosted by economic unease in Europe and the United States and raising the possibility of a climb toward last year's record high of just over $1,900 per ounce. Sentiment for gold at the end of January compares starkly with late December, when prices dropped by more than 10 percent in their biggest monthly fall since the collapse of Lehman Brothers in an investor dash for cash. A $400 price drop from last September's record $1,920.30 had left investors questioning whether gold had ended an 11-year rally. Gold was up 0.8 percent at $1,742.59 an ounce by 1523 GMT, having earlier touched $1,747.39 - its highest since mid-December and up some 11 percent on the month to date. Currency fundamentals turned ...

(Reuters) - Japan's big trading houses are using financial firepower bolstered by a decade-long commodities boom and a yen near record highs to ramp up a natural resources buying spree. Their multi-billion dollar bet on commodities demand from emerging economies will boost already fierce competition for emerging energy sources like shale gas and for top quality mines with high-grade ore and long mine life. Trading houses like Mitsubishi Corp (8058.T) have set aside a record warchest of 2.6 trillion yen ($33 billion) in the two years to March 2013, which backed by a $130 billion government fund makes them formidable competitors in the race to secure the means to fuel economic growth. For firms armed with a yen hovering around 77 to the dollar, just off a record high 75.55 hit in October, ...