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Euro Continues To BenefitTitle:
Gold edges down on firm dollar; eyes on budget talks
Gold edged down on Friday as the dollar regained strength on Moody's warning to downgrade Spain, while investors continued to watch U.S. debt ceiling talks after Republicans delayed a vote on a debt plan.
Republicans in the House of Representatives decided not to vote on a plan to raise the debt limit, fueling uncertainty whether Washington could reach an agreement in time as the clock ticks down to the August 2 deadline.
The dollar rose against the euro after Moody's said it placed Spain's credit rating for possible downgrade, pressuring prices of gold.
But sentiment in bullion is supported as the U.S. debt ceiling talks drag on, even though trading interest was low as investors moved to the sideline of the market waiting for further cues.
"There is far too much uncertainty and no one ...
Title:
EUR/USD Can't Hold Above 1.45
For the second day in a row the US dollar is stronger as the weakness seen in US equities yesterday has carried over into the European trading session. US law makers are no closer to a solution to raise the debt ceiling than they were yesterday and this is reflected in both the value of the EUR/USD and in global equities.
Falling in-line with the S&P's 2.0% decline yesterday European equities are lower across the board with the DAX down 1.75% and the FTSE lower by 0.75%. A lack of deal to avert a US default continues to weigh on market sentiment combined with yesterday's weak core durable goods orders has hit equities particularly hard.
In the foreign exchange markets the dollar has surprisingly benefited from this environment while gains in the JPY and CHF have been mute. In all ...
Title:
Is Gold Money?
Is gold money?
That question, directed to Federal Reserve Chairman Ben Bernanke by Congressman Ron Paul in last week’s hearings before the House Financial Services Committee, strikes terror in the heart of all central bankers.
Bernanke looked stunned and then answered, “No: Gold is an asset.”
The rising price of gold reflects global uncertainties, he explained. “The reason that people hold gold is as a protection against what we call tail risks: really, really bad outcomes.”
The daily headlines report those potential risks: governments needing bailouts, from Greece to Harrisburg, Pennsylvania; the possibility that the euro will splinter; runaway deficit spending in the US.
With every headline, it is becoming increasingly apparent how much the governing class has overreached. Those who ...
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Dukascopy Afternoon Forex Overview : 26/07/2011
Previous session overview
The debt stalemate in Washington continues to weigh on the dollar before a pair of economic reports on US consumer confidence and home sales. Economists expect the Conference Board's consumer confidence index to fall, while new home sales are expected to rise.
With market participants locked in on the debt debate, economic reports could become secondary. A report out earlier Tuesday that showed home prices fell 4.5% in May did little to move the dollar.
The euro rose against the dollar to USD1.4474 from USD1.4378 late Monday. The greenback fell to CHF0.8025 from CHF0.8060.
The dollar is at JPY78.04 from JPY78.28 late Monday. The ICE U.S. Dollar Index is down 0.5% at 73.724.
Elsewhere, the pound rose against the buck, after U.K. economic growth in the second ...
Title:
Bankruptcy: From Greece to Rhode Island
Central Falls, Rhode Island faces a plight that should be studied for its application elsewhere. It is nearly out of money. This is common news today, whether in Greece or California. The various parties are assumed to possess a means to carry on. This is assumed because it is generally so. The banks had the Fed; General Electric had the Fed and the FDIC; Greece has the ECB; California is prepared to launch a bridge loan.
Despite the band-aids, the trend towards insolvency continues. Central Falls has reached a dead end.
Quoting The New York Times (July 11, 2011): “The impoverished city, operating under a receiver for a year, has promised $80 million worth of retirement benefits to 214 police officers and firefighters, far more than it can afford. Those workers’ pension fund will ...
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The Weekly Bottom Line : 22/07/2011
The Weekly Bottom Line
HIGHLIGHTS OF THE WEEK
United States
Debate on the debt ceiling is approaching the July 22nd deadline set by the President. A solution continues to elude policymakers and continues to overshadow markets.
Failure to raise the debt ceiling would lead to a prioritization of spending commitments. Putting outlays in line with revenues would require cuts of 45%. While a technical default is unlikely, the impact on confidence and financial markets of missing the deadline would be severe.
The “Gang of six” plan, a bipartisan Senate compromise between three Democrats and three Republicans, appears to be the best guidepost for what an eventual plan will look like. This plan would trim deficits by $3.7 trillion over 10 years and cut $500 billion from deficits ...
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Forex - Nervous Trading Ahead of Thursdays EU Summit
Forex News and Events:
A slightly more slightly optimistic tone, after yesterday when the European bank stress tests were deemed flawed (not even mentioning a sovereign default) and triggered a risk off environment. However, is a growing sense of trepidation around Thursday`s EU summit which has manifested itself in choppy, quick to find safe-havens trading. Traders are nervously watching the aggressive sell-off in Spanish and Italian sovereign yields. There is a feeling that the event horizon for these larger European economies is not too far off (especially with Italy having to go to the capital markets heavily in the remainder of the year). However, in anticipation of positive events potentially emerging from the Summit, short-term traders have been unwinding short EURUSD positions. ...
Title:
Deflation and the Gold Price Trajectory
What happened last week?
The Great Correction gave notice: it’s not going away.
On Friday, the Dow rose 42 points. The gold price advanced towards $1,600. Oil seems to be headed for $100.
With gold over $1,600, is it time to sell? Nah…not even close. It will have to go to $2,500 just to reach the high – adjusted for inflation – set 30 years ago.
But a lot of water has gone under the bridge in the last 3 decades. And almost every drop of it gurgles to us: Gold will go higher.
There’s much more debt than there was 30 years ago…and much more ‘funny money.’ What’s more, Paul Volcker is no longer at the Fed. This time, America’s central bank is run by Ben Bernanke…who has made it very clear what his response to crisis will be – print more money!
Yes, dear reader, gold is going higher. A ...
Title:
Euro down on debt crisis; Swiss hits record highs
The euro fell on Monday, hitting a record low against the Swiss franc and dropping against the yen on concerns the euro zone debt crisis will only get worse in the near term.
The dollar also hit a record low against the Swiss franc as investors worried that there was little apparent movement by the Congress in dealing with the nation's looming debt ceiling crisis. That concern eased somewhat after more positive comments from U.S. Treasury Secretary Timothy Geithner about the prospects for a deal being reached but until the details are in place, it will continue to weigh on sentiment.
Italian and Spanish 10-year bond yields rose sharply while the cost of insuring peripheral euro zone debt against default soared to record highs on contagion risks and policymakers' failure to quickly ...
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