Parity The Parity Opened

Forex Morning Briefing: China hikes rates by 25 bps; Hurts Aussie and Commodities. News: Forex: Australian dollar slips after Chinese rate hike Global Markets: Asian stocks mixed following rate hike; commodities edge lower Japan: Government to lift borrowing limit by 50 trillion yen Russia: Central bank hikes deposit rate on inflation concerns China: People’s Bank of China raises rates by 25bps United States: Quiet week for US economic data Rates in Asia and Indices: EURUSD: 1.3170 - 1.3072 USDCHF: 0.9641 – 0.9575 GBPUSD: 1.5457 - 1.5400 EURJPY: 108.93 – 108.42 USDJPY: 82.97 – 82.65 DowJones: 11'573.49 +0.12% NASDAQ: 2'665.60 -0.22% S & P 500: 1'256.77 -0.16% Nikkei: 10’355.99 +0.75% Shanghai: 2’781.40 -1.90% Gold: $ 1'385.80 Crude Oil: $ 91.78 Comments: In a surprise move, the People’ ...

The Canadian dollar slumped today, extending its decline from the highest level in this month, as crude oil, the main nation’s export, declined and the wholesale sales declined, reducing the appeal of the Canadian currency. January delivery for crude oil gained 0.8 percent to $88.75 per barrel and then dropped 0.9 percent to $87.26. Oil declined on the concerns that the financial crisis in Europe would spread. The wholesale sales in Canada remained unchanged at $44.9 billion in October, while they were expected to rise by 0.8 percent after advancing 0.7 percent in September. On December 15th the Canadian currency reached parity with the US dollar, touching the highest level this month. Unfortunately for the loonie, as the Canadian currency is often called, it tends to drop after reaching ...

The Australian dollar jumped, reaching parity with the US currency, today as China refrained from increasing its interest rates, boosting the commodities and the stocks and increasing the attractiveness of the currency. China was expected to increase the interest rates after the inflation reached 5.1 percent in November. The requirement for the banks to increase their reserves further fueled to the expectation of the interest rates hike. The unexpected decision to hold the rates shook the markets and they still are trying to accommodate themselves to the news. The MSCI World Index of stocks grew 0.6 percent. The Reuters/Jefferies CRB Index of raw materials advanced as much as 1.2 percent. The analysts say that the increase of the interest rates is still possible in the near future. AUD/ ...

Well… Friday I took off and I guess the currency traders did too, for the bloodshed in the currency and precious metals on Friday was akin to Custer’s Last Stand at Little Bighorn! I checked in late in the day, and had to turn the screen off, I couldn’t bear to watch it! I’ve always told you that those kinds of days can be very volatile with wild swings in prices due to the low volume and not everyone being on the trading desks… Well, Friday was one of those days… The selling began when there was discussion that, while Ireland looked as if it could get their aid package/bailout, Portugal or Spain could be next in line… And then the you-know-what hit the fan, and before you could say pass the stuffing one more time, the selling begot more selling… On a sidebar… Some of you may recall what ...

The main economic release of the day was the BoE Minutes which were broadly in line with expectations, if a little more hawkish on inflation expectations. Seven members of the nine-strong committee were happy to keep both rates and the asset purchase target unchanged (at 0.50% and GBP200bn respectively), but once again there was dissent from member Sentence who voted for a hike of 25bps and Posen who pushed for the asset purchase target to be increased to 250bn. Whilst the two dissenters clearly have opposing views on the economy, the minutes suggest that for some of the remaining members, the upside risks to CPI had increased – especially with regards to inflation expectations in the face of above target CPI. Nevertheless, the majority believed that it was premature to be tightening ...

The main driver for the moves of the US dollar, as well as most other currencies, this week was the quantitative easing, which weakened already weak greenback. The favorable US nonfarm payrolls allowed the dollar to return some strength yesterday, but it posted weekly losses against most major currencies. The quantitative easing may bolster the US economy, but it weakens the US currency. The euro profited from the easing, further boosted by the claims of the European Central Bank President Jean-Claude Trichet that the European policy makers would refrain from the excessive stimulus. The dollar rebounded against the euro later as the concerns for the budget deficits of some European countries resurfaced. The Canadian and Australian currencies managed to reach parity with the greenback this ...

(Reuters) - Asian stocks rose on Wednesday tracking overnight gains on Wall Street while the dollar was under pressure ahead of a Federal Reserve meeting that is expected to provide more stimulus to spur a flagging recovery. European shares also opened higher as a swing toward the Republicans in U.S. elections lifted investor sentiment. The MSCI index of Asia Pacific stocks outside of Japan was up 0.9 percent helped by gains in materials and energy in line with Wall Street. Hong Kong's Hang Seng Index led the gains in Asia leaping to their highest in 28 months spurred by gains in banks, property and oil counters. The index jumped higher after breaking above a key Fibonacci retracement level. South Korea's KOSPI closed up 0.9 percent on foreign buying with banks and insurers up amid ...

Huge week for financial markets as several Central Banks will be having their meetings along with elections in the US – some leading economic data is also due out this week (just in case you have not heard). All together, the week should make for some directionless volatility. We suspect that the highlight of the week, the FOMC meeting, will underwhelm the market regarding the size and scope of QE2. While the initial injection will likely fall short of expectations, incremental future asset purchases are going to remain data dependent and thus further easing will be even more conditional. Given this base scenario we expect a slight rally in USD following the FOMC meeting, however we doubt any strong directional move. FX markets are seeing a slow erosion of USD positioning this morning ...

One of the riskier currencies, crippled by the Chinese interest rates hike, was the Australian dollar, which slumped today against its US counterpart after trading at parity last week. The increase of the interest rates is considered to be the attempt of the Chinese policy makers to slow the growth. The slower China’s growth isn’t particularly good for Australia, as China is the nation’s biggest trading partner. Earlier the Aussie surged as the Monetary Policy Meeting Minutes of the Reserve Bank of Australia signaled about the possible rates hike in Australia itself, saying that “interest rates would need to rise at some point if the economy evolved in line with the central scenario of a gradual tightening in resource utilization”. AUD/USD traded at 0.9741 as of 13:41 GMT today after it ...