Forays Into The Currency

Japanese Finance Minister Jun Azumi said on Friday that he was monitoring currency moves with extra care and was prepared to respond as appropriate - a veiled reference to yen-selling intervention. Azumi said speculators were over-reacting after the yen rose to a three-month high versus the dollar and the euro. He said he has confirmed with Group of Seven countries several times in the past that excessive currency moves are undesirable. "We are watching currencies with a heightened sense of caution and are prepared to respond as appropriate," Azumi said. "There was a sudden rise in the yen last night that is attributable to some speculators who are over-reacting." The dollar rose 0.2 percent to 79.39 yen, also above a three-month low of 79.13 yen touched the previous session. The euro ...

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 euro climbed to a more than one-week high against the dollar on Monday after an orderly auction of Greek default insurance supported views that Greece's threat to the euro zone has diminished. The euro also gained against the yen, hitting its strongest level in the almost five months since the Bank of Japan intervened to stem the currency's advance. Investors unwound bearish bets on the euro and focused on a Greek credit default swap auction that set the payout for holders of CDS totaling about 3.2 billion euros. The auction fixed a fair value price of 21.5 cents on the euro for Greek bonds, within expectations. That means an owner of Greek CDS would be paid 78.5 cents on the euro, which analysts said was enough to compensate for the roughly 75 percent loss investors ...

(Reuters) - The euro climbed to its highest in more than a week against the dollar on Monday after an orderly auction of Greek default insurance lent support to views that Greece presents less of a threat to the euro zone. The euro also gained against the yen, hitting its strongest level in the almost five months since the Bank of Japan intervened to stem its currency's advance. Investors unwound bearish bets on the euro and were focused on a Greek credit default swap auction to set the payout for holders of CDS totaling about 3.2 billion euros. The auction fixed a fair value price of 21.5 cents on the euro for Greek bonds, within expectations. That means an owner of Greek CDS would be paid 78.5 cents on the euro, which analysts said was enough to compensate for the roughly 75 percent ...

(Reuters) - The euro held its ground against the dollar on Tuesday as most traders clung to hopes Greece would finally clinch a rescue package despite its politicians postponing a decision to accept painful terms by yet another day. Greek optimism also helped equities and other risk sensitive currencies including the Australian dollar. The Aussie also got a boost when the Reserve Bank of Australia surprisingly kept interest rates steady at 4.25 percent. Failure to secure the 130 billion euro ($170 billion) rescue for Greece would risk a messy debt default and destabilize the entire euro zone, an outcome deemed too extreme to contemplate by many experts. European Union officials say the full package must be agreed with Greece and approved by the euro zone, European Central Bank and ...

(Reuters) - The euro nudged lower on Tuesday in Asia, though most traders clung to hopes Greece would finally clinch a rescue package despite its politicians postponing a decision to accept painful terms by yet another day. The Australian dollar jumped a full cent to a six-month peak at $1.0812 and reached a record high on the euro after the Reserve Bank of Australia in a surprise move kept interest rates steady at 4.25 percent. Failure to secure the 130 billion euro ($170 billion) rescue for Greece would risk a messy debt default and destabilize the entire euro zone, an outcome deemed too extreme to contemplate by many experts. These hopes have kept euro bears in check for now, resulting in a volatile but resilient single currency. The euro stood at $1.3108, a tad below late New York ...

With all of the economic turmoil that took place last month, investors who owned gold as a safe haven appeared to benefit. During the month of November gold ended with a 1.9% gain in US dollar terms. This is now the seventh month this year which saw the dollar falling against gold. Will gold maintain this haven status heading into the close of the year or will the market see an exodus as investors clear their books in the final quarter? Past performance is not indicative of future results. ***chart courtesy of Gecko Software The international issues have so far supported fresh forays into precious metals. Gold's gains were evident against other currencies, not just the US dollar. The euro dropped 5% against gold in November. The British pound fell nearly 4% against gold. The Aussie ...

(Reuters) - The euro eased from a seven-week peak on Friday as markets consolidated after a huge relief rally in riskier assets sparked by a deal on Europe's debt crisis, though further gains were eyed with asset managers still to cut short positions. The deal included an agreement that private banks and insurers would accept 50 percent losses on their Greek debt holdings, leveraging of the EU bailout fund and recapitalization of its banks. While the agreement is unlikely to solve all Europe's financial problems, the clear signs of progress, combined with healthy U.S. third-quarter GDP, made the outlook more favorable for risk-seeking trades. Traders said funds that had been underweight risk in the past few months piled back into markets for fear of missing out on a more sustainable ...

(Reuters) - The euro came off a seven-week peak on Friday as investors took a breather after a huge relief rally in riskier assets following a deal on Europe's debt crisis, though investors were eyeing more short-term gains in the currency. The deal included an agreement that private banks and insurers would accept 50 percent losses on their Greek debt holdings, leveraging of the EU bailout fund and recapitalization of its banks. While the agreement is unlikely to solve all Europe's financial problems, the clear signs of progress, combined with healthy U.S. third-quarter GDP, changed the outlook for the dollar to strongly bearish and to more upbeat for riskier currencies. Traders said funds that had been underweight risk in the past few months piled back into markets for fear of missing ...