Done By Monday's Euro

(Reuters) - The euro rose against the dollar on Wednesday as gains on stock markets encouraged traders to push it through resistance levels, but it stayed vulnerable to further selling as worries about indebted euro zone countries persisted. Analysts said the single currency could succumb to another bout of weakness if low-rated euro zone government bonds come under further selling pressure, with Spanish 10-year yields hovering close to 6 percent. A weak auction of German 10-year bonds weighed a little on the euro, but traders said market players were encouraged by the fact that peripheral bond yields did not rise as a result. "Spreads in peripheral Europe did not widen on the (German) auction which was taken as a positive. Everyone was short the euro from yesterday, so we have just ...

(Reuters) - The dollar leaped higher against the euro and yen on Tuesday as minutes from the Federal Reserve's March policy meeting weakened expectations of more stimulus measures from the U.S. central bank. Fed policymakers appeared less keen to launch a new phase of monetary stimulus through a third round of bond buying, or quantitative easing (QE). In the half hour following the release, the euro tumbled a full cent, its biggest drop since March 9. The Fed's two rounds of QE were tantamount to printing money, so diminished expectations of QE3 lifted the appeal of the dollar. The minutes surprised the market because just last week Fed Chairman Ben Bernanke kept alive the idea of more stimulus by warning about the risks of long-term unemployment for the economy, which investors ...

(Reuters) - The dollar rose 1 percent against the yen on Tuesday as minutes from the U.S. Federal Reserve's March meeting weakened expectations of more stimulus measures. Fed policymakers appeared less keen to launch a new round of monetary stimulus through a third round of bond buying, or quantitative easing. QE is tantamount to printing money, and while diminished expectations of QE3 buoyed the dollar against the yen, the greenback remained in its weeks-long trading range against the euro. "What the minutes have done was essentially take the market off guard because the members have indicated that there is no need for additional stimulus, unless the economy lost momentum or inflation was slower to pick up," said Alexander Chepurko, foreign exchange analyst at Forex Club in New York. " ...

Dukascopy Technical Analysis EUR/USD "If buying of Treasurys gains steam and bond yields fall in the wake of Monday's Bernanke's comments, the dollar could face more pressure against currencies such as the euro" - Societe Generale (based on CNBC) Even though the pair is trading slightly above the 1.3291/1.3325 area, it is expected to move southwards in the nearest future as the EU debt risks have not been swept away completely. EUR/JPY "The Fed’s stance to support the economic recovery through policy easing and adding liquidity to the market is helping boost sentiment" - Shinkin Asset Management Co. (based on Bloomberg) EUR/JPY rallied above the 110 level and eased the risks of bearish reversal. GBP/USD "This is more of a dollar move than a sterling move. It feels like the market was ...

Global stocks rallied on Monday while the dollar retreated after Federal Reserve Chairman Ben Bernanke said that in order to reduce unemployment, easy monetary policy should stay in place. The benchmark S&P 500 index closed at its highest level since May 2008. Bernanke, speaking to the National Association for Business Economics, said accommodative monetary policy would support demand and, over time, drive down long-term unemployment. His comments supported views that easy monetary policy would remain in place for some time and fanned expectations for more Fed asset purchases. Previous rounds of quantitative easing have weakened the dollar and boosted U.S. and global stocks. "We are clearly addicted to this highly liquid market, and Bernanke has reassured that it (will) stay up this ...

Global stocks rose on Monday while the dollar retreated after U.S. Federal Reserve Chairman Ben Bernanke said a continuation of easy monetary policy would be key to cutting U.S. unemployment. Bernanke, speaking to the National Association for Business Economics, said accommodative monetary policy would support demand and, over time, drive down long-term unemployment. His comments underscored views easy monetary policy would remain in place for some time and fanned expectations for more quantitative easing. Previous rounds of Fed asset purchases have weakened the dollar and boosted U.S. and global stocks. Gains in U.S. equities pushed the S&P 500 to a more than 12 percent gain so far this year, leaving it on track for its best quarter since 2009. The advance has been fuelled by months of ...

Gold fell 5 percent to below $1,690 an ounce on Wednesday for its biggest one-day drop in more than three years, as speculation that central banks might be done with easy monetary policies led funds to exit the bullion trade. Gold fell nearly $100 and silver was down $3 from session highs. Losses started to snowball at 10 a.m. EST (1500 GMT) after U.S. Federal Reserve Chairman Ben Bernanke did not mention another round of monetary easing was imminent. Trading volume exploded when speculation about an unusually large sell-order ran rampant. Option traders said funds were heavy buyers of puts to protect against further losses. Gold's losses dwarfed those in the euro and other commodities as bullion fell through key support after it failed to sustain gains around $1,790 an ounce, above ...

The euro rose to a session high and shares reversed early losses after key German data bolstered hopes that Europe's largest economy was recovering and a strong Italian bond sale added to signs that financing pressures were being contained. Those factors revived sentiment after a raft of euro zone credit downgrades and warnings on the AAA ratings of France, Britain and Austria from Moody's, which hit European markets early on. U.S. stock index futures pointed to Wall Street extending Monday's gains with U.S. retail sales data for January expected to support the growing confidence that growth in the world's top economy was improving. Germany's ZEW Indicator of Economic Sentiment suggested the recovery, which slowed at the end of last year, is back on track there and that analysts are ...

Economic Data Analysis Central Banks - Still Easing for Now Ongoing negotiations over Greek bail out, with ECB standing pat ahead of next LTRO. MPC likely to continue QE with further £50bn, but difficult judgements lie ahead. RBA to cut rates this week; easing Chinese inflation pressures could herald PBoC loosening. Another week closes with the promise of a deal on the Greek PSI debt swap. The urgency for such a deal is rising with a hard deadline of 13 February approaching. The coming week will be a question of sequencing. The coming days should see Greece agree with the Troika measures to address deficit target slippage. This needs to be done by Monday's Euro Area finance ministers meeting so it can approve Greece's second bail out package, in turn necessary to allow the ...