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Dollar Traded At ItsTitle:
Growth worries mount, sending the dollar lower
(Reuters) - World shares eased and the dollar hit a two-month low against the Japanese yen on Tuesday, after signs of recovery in China's vast factory sector failed to offset worries over the health of the global economy and the euro zone crisis.
But activity was limited with many markets in Asia and Europe closed for the May Day holiday.
The MSCI's world equity index .MIWD00000PUS was down just 0.1 percent to 328.40, as it added to losses of about 1.5 percent in April. The stronger yen hit Japan's export-related equities, sending the Nikkei index .N225 to a 2-1/2 month closing low.
"In general, stock markets and risk assets seem to be extremely resilient in the face of the news flow which has undoubtedly been in the more negative nature," James Ferguson, strategist at Westhouse ...
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Aussie felled by RBA cut, U.S. dollar heavy
(Reuters) - The Australian dollar fell sharply on Tuesday after the Reserve Bank of Australia slashed rates by a deeper-than-expected 50 basis points while soft data nudged the U.S. dollar to a fresh two-month low versus the yen.
A sharp fall in business activity in the U.S. Midwest combined with data on Monday showing Spain was in recession dented investor appetite for risk and supported the safe-haven yen, which also rose against the broadly weaker Aussie dollar.
Markets had been expecting a 25 basis point rate cut from the Australian central bank (RBA) and the surprise drove the Australian dollar down more than 1 percent to $1.0312 and to a three-month low near 82 yen.
The Aussie traded near a five-month low against sterling, which rose above A$1.5700 despite a weaker than expected ...
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Gold eases from two-week highs as dollar ticks up
(Reuters) - Gold eased from two-week highs on Tuesday, breaking its longest stretch of daily gains since the start of this year, in line with the dollar paring earlier losses incurred by waning investor confidence in the reliance of the U.S. economy.
A sharp fall in business activity in the U.S. Midwest combined with data on Monday showing Spain was in recession dented investor appetite for risk and supported the safe-haven yen, which also rose against the broadly weaker Australian dollar.
Gold has drawn a degree of strength from the most recent spate of data from the United States that has revived expectations among some quarters of the investment community for the Federal Reserve to offer additional support to the economy via a third round of quantitative easing, or purchases of ...
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Dukascopy Morning Forex Overview : 01/05/2012
Fundamental Analysis
EUR
"We fear things are likely to get worse before they get better"
- Martin van Vliet, a senior euro-region economist at ING Bank
Spain sank into recession in the first quarter of 2012. The economy contracted 0.3 per cent, after shrinking by the same amount in the previous quarter, Madrid-based National Statistics Institute data showed on Monday.
USD
"What was encouraging was that the income numbers improved. Our expectation is that job growth does increase gradually"
- Peter Newland, an economist at Barclays Capital Inc.
U.S. consumer spending was boosted by higher than expected incomes, said the Bureau of Economic Analysis on Monday. Household purchases increased 0.3 per cent. Incomes gained 0.4 per cent, the most in three months.
GBP
"This is year three of a ...
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YouTradeFX Daily Market Analysis : 01/05/2012
Fundamental News
Today's highlight;
- Interest Rate Decision. (AUD, 5:30, GMT)
- RBA Rate Statement. (AUD, 5:30, GMT)
- ISM Manufacturing Index. (USD, 15:00, GMT)
- Unemployment Rate. (NZD, 23:45, GMT)
The EUR/USD is trading at 1.3233 having retraced Friday’s gains, at the close of the European session down 0.2%, but still trading above 1.32. European bond yields are generally stable and EUR volatility is trading near its lows at 8.4. News flow has generally been negative, with Spain entering a recession (GDP came in at ‐0.3% in Q1), S&P downgrading 11 banks and the March central bank data revealing a lack of foreign demand for Spanish debt.
As expected, S&P has downgraded 11 Spanish banks and put a further 6 on watch; while taking the opposite tact, Moody’s has announced that ...
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Gold hits two-week high as U.S. data weighs on dollar
(Reuters) - Gold inched up to a two-week high on Tuesday, supported by weakness in the dollar after latest data indicated the U.S. economic recovery might be losing steam.
Though the disappointing data may fuel expectations that the U.S. Federal Reserve might launch more quantitative easing, the top two Fed officials both said they saw no need for further easing but also said they do not believe the Fed should quickly move to raise rates.
Bullion ended April in the red for the third consecutive month after data showed improvement in the U.S. economy and the Fed's stance became less dovish. More monetary easing raises inflation pressure and burnishes gold's appeal as a hedge against rising prices.
"The market has been let down a few times by the Fed, but gold should benefit as the Fed is ...
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NZ Dollar Down as Trade Surplus Shrinks
The New Zealand dollar fell yesterday and extended its decline today. New Zealand’s traded surplus unexpectedly shrank in March, adding to the negative market sentiment that sent the nation’s currency down.
New Zealand exports declined NZ$400 million in March compared to the same period a year ago, while import rose NZ$48 million, resulting in a trade surplus of NZ$134 million. That is compared to the February surplus of NZ$202 million and the expected figure of NZ$437 million.
On more positive note, the business confidence index rose from 33.8 in March to 35.8 in April. The Reserve Bank of New Zealand left its main interest rate unchanged at 2.5 percent on April 26. Reserve Bank Governor Alan Bollard was rather hawkish in his statement after the decision:
The domestic economy is ...
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Euro posts worst month vs dollar since December
(Reuters) - The euro dropped against the dollar on Monday and notched its worst monthly performance since December, weighed down by news of Spain slipping back into recession and signs of weaker economic momentum in the United States.
Investors were also wary of buying euros before weekend elections in France and Greece and a European Central Bank meeting this week that could further knock down sentiment.
"Risk aversion was today's theme, with the economic outlook for the euro zone looking bleak," said Camilla Sutton, chief currency strategist at Scotia Capital in Toronto.
"In the U.S., overall deterioration in economic data has left the door squarely open for the Fed to add more stimulus."
Data on U.S. spending and business activity in the Midwest reinforced that view that the U.S. ...
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Euro on track for worst month vs dollar since December
(Reuters) - The euro dropped against the dollar on Monday and was on track for its worst month since December, weighed down by news of Spain slipping back into recession and signs of weaker economic momentum in the United States.
Investors were also wary of buying euros before weekend elections in France and Greece and a European Central Bank meeting this week that could further knock sentiment on the euro zone currency.
"All the news out of Europe is getting worse, although we're still in a range," said Win Thin, senior currency strategist at Brown Brothers Harriman in New York. "I think the European news and the generally weak U.S. data are sort of feeding into this risk-aversion mode."
The euro failed to gain traction despite signs the U.S. economic recovery was losing momentum, ...
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