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Dollar hits two-month low as U.S. economic momentum slows
(Reuters) - The dollar fell to a two-month low against a basket of currencies on Monday, weighed down after modest first quarter growth in the U.S. economy kept alive chances of further monetary easing by the Federal Reserve.
The dollar is likely to come under more pressure if data, including U.S. jobs numbers, this week disappoints. U.S. growth cooled in the first quarter partly due to businesses cutting back on investments, reinforcing the central bank's contention that interest rates should be kept near zero through 2014.
The slowdown fuelled speculation that the Fed may eventually launch another bond buying program, or a third round of quantitative easing. That would likely have a negative effect on the dollar while giving riskier assets like stocks, commodities and higher-yielding ...
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EUR/USD Ignored The S&P Downgrade Of Spain
Sunrise Market Commentary : 30/04/2012
- Fixed Income: new highs for Bund Future (141.38) and US Note Future (132-17)
- Core bonds set new contract highs on Friday after the Spanish rating downgrade. However, sentiment changed in the European session and led to return action. Today, trading will be thin ahead of tomorrow's Labour Day Holiday in most of Europe. Main items this week will be the ECB meeting (Thursday) and the US payrolls (Friday).
- Currencies: EUR/USD ignored the S&P downgrade of Spain.
- On Friday morning, the focus on the European markets was on the S&P downgrade of Spain. However, the reaction developed in a very orderly way. EUR/USD reversed the early losses and the dollar lost further ground after the weaker than expected US GDP. USD/JPY is testing the key ...
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Gold near two-week high on dollar, U.S. GDP data
(Reuters) - Gold held near a 2-week high on Monday on the prospect of more safe haven buying, with the dollar under pressure from weaker-than-expected U.S. economic data and speculation the Federal Reserve could ease policy further to boost growth.
Although the slowdown may not be bad enough to prompt the Fed to launch a third round of bond buying, or quantitative easing, expectations for such a move plus fears about the debt crisis in Europe could offer gold much-needed impetus to break free from the current range.
Money managers in gold futures and options had slashed net long positions in the week ended April 24 for a third decline in four weeks, after gold failed to break out of a narrow range.
Gold added $2.07 an ounce to $1,664.39 by 2:20 a.m. EDT (0620 GMT), but the metal was ...
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Dollar Tumbles Following Disappointing GDP Figure
A worse than expected Advance GDP figure sent the dollar tumbling to multi-week lows against several of its main currency rivals on Friday. The EUR/USD closed out the week at 1.3249, up close to 100 pips for the day. Against the JPY, the greenback was down 115 pips to finish the day at 80.27. Turning to this week, the US Non-Farm Payrolls figure should be closely watched when it is released on Friday. In addition, Tuesday's US ISM Manufacturing PMI and Wednesday's ADP Non-Farm Employment Change may lead to significant activity in the marketplace. The dollar may extend its losses should any of the indicators come in below expectations.
Economic News
USD - Dollar Volatility Expected Ahead of Non-Farm Report
A disappointing US GDP figure resulted in heavy losses for the dollar to close out ...
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Asia shares gain as U.S. data raises hope of Fed easing
(Reuters) - Asian shares rose on Monday as weaker-than-expected U.S. growth data left open the possibility of further monetary stimulus from the Federal Reserve to boost growth, but trading was subdued with Japanese and Chinese markets closed.
The dollar remained pressured by Friday's report showing annual growth in the U.S. economy cooled in the first quarter to 2.2 percent, below a 2.5 percent forecast, and concerns about lower fuel demand brought oil prices lower.
"A flavor of QE (quantitative easing) is back in the air, driving the U.S. dollar lower and risky assets higher," said Sebastien Galy, strategist at Societe Generale.
Asian equities followed the rise in global equities on Friday on the back of strong earnings reports, although Asian growth prospects were clouded as South ...
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The Weekly Bottom Line : 27/04/2012
The Weekly Bottom Line
HIGHLIGHTS OF THE WEEK
United States
- Europe provided plenty of negative headlines this week. Both Spain and the U.K. confirmed their economies fell back in recession, while the former saw its unemployment rate jump to 24.4%.
- The Dutch government collapsed over a dispute regarding fiscal tightening measures and S&P downgraded Spain's sovereign rating by two notches to BBB+.
- Although unspectacular, things were better in the U.S. First quarter GDP growth came softer than expected. However moderate, a 2.2% q/q annualized economic expansion feels comforting against the European backdrop.
Canada
- Retail trade slid by 0.2% in February as auto sales declined following strong January results.
- Newfoundland and Labrador brought down its budget, ...
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Lacker sees U.S. Fed rate hike in mid-2013
(Reuters) - Richmond Federal Reserve Bank President Jeffrey Lacker said on Friday he believes the U.S. central bank will have to raise interest rates in mid-2013, not late 2014 as suggested in this week's policy decision.
For a third meeting running, Lacker was the lone dissenter against the Fed's calendar-linked interest rates guidance.
"I dissented because I do not believe economic conditions are likely to warrant an exceptionally low federal funds rate for this length of time," Lacker said.
"My current assessment is that an increase in interest rates is likely to be necessary by mid-2013 in order to prevent the emergence of inflationary pressures."
That was more specific than his March dissent, when Lacker stated an increase in the benchmark federal funds rate, now set in a zero to ...
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Market Drivers - Currencies : 27/04/2012
Today's Comment
Already today we will see a positioning up to the next eventful week. PMIs from the UK, Sweden, Norway as well as ISMs and employment data from the US will be released. The ECB will hold a monetary-policy meeting, and on Sunday (6 May) a presidential election will be held in France and a parliamentary election in Greece. It will be an eventful week and next week will be the best bet for a week which will boost the markets slightly again. Volatility since new year has almost collapsed (see graph). Lower volatility leads to cheaper options, and currently options are at their lowest level since before the financial crisis - we do not anticipate that this will continue.
The focus of attention will today be on consumer confidence from Germany (at 08.00) as well as retail sales ...
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EUR/USD Hits a 3-Week High
The US dollar tumbled vs. its major currency rivals throughout yesterday's trading session, following the most recent economic predictions from the Fed which stated that a new round of quantitative easing could be initiated if US unemployment does not drop further. The EUR/USD shot up to a three-week high as a result of the news, reaching as high as 1.3262. Today, traders will want to pay attention to the US Advance GDP figure, set to be released at 12:30 GMT. A better than expected figure could help the USD rebound vs. riskier currencies, like the euro and AUD.
Economic News
USD - US GDP Figure May Help Dollar Recover Losses
The US dollar fell vs. several of its main currency rivals yesterday, including the euro and British pound. Investors began shifting their funds away from the ...
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