The dollar rose to a five-week high against the euro after a government report showed U.S. employers eliminated fewer jobs in April than economists forecast, indicating the labor market is weathering the economic slowdown.
The currency is headed for a second weekly gain versus the euro after the Federal Reserve cut interest rates on April 30 and said ``substantial'' easing since September would help foster growth. The yen fell against the Brazilian real and the South African rand as the jobs report encouraged investors to buy higher-yielding assets financed in Japan.
``It's pretty likely we've seen the lows in the dollar,'' said Robert Sinche, head of global currency strategy at Bank of America Corp. in New York. ``You've got a market that has been buying dollars, and certainly it got a nice reinforcement.''
The dollar increased 0.4 percent to $1.5411 per euro at 2:05 p.m. in New York, from $1.5475 yesterday. It touched $1.5361, the highest level since March 24. The dollar rose 0.8 percent to 105.25 yen, from 104.44 yesterday. It touched 105.70 yen, the strongest since Feb. 28. The euro rose 0.4 percent to 162.21 yen, from 161.60 yen.
Treasuries fell today on the payroll report, pushing the two-year note's yield to 2.54 percent, the highest level since January. Gold headed for a third weekly drop, its longest losing streak in a year, as the dollar's gain against the euro made the metal less attractive as a currency hedge. Gold futures traded in New York climbed 0.8 percent to $857.50 an ounce today.
Fed Rate Outlook
Interest-rate futures on the Chicago Board of Trade showed an 86 percent chance that policy makers will keep the fed funds target unchanged at 2 percent when they next meet June 25, compared with 80 percent odds yesterday. The balance of bets is for a decrease of a quarter-percentage point. The Fed cut the benchmark rate from 2.25 percent this week in its seventh reduction since September.
The dollar has risen 1.2 percent against the euro this week, its biggest rally since March, and has appreciated 3.6 percent from a record low of $1.6018 reached on April 22. It's the first time the dollar has posted two weeks of gains since December. The dollar rose 0.8 percent against the yen this week.
The yen fell more than 1 percent against the Brazilian real, the South African rand and the New Zealand dollar on speculation the payroll data led investors to resume carry trades, in which they get funds in a country with low borrowing costs and buy assets where returns are higher. The 0.5 percent target rate in Japan compares with 11.75 percent in Brazil, 11.5 percent in South Africa and 8.25 percent in New Zealand.
`Fed Is Done'
``This report reinforces that the Fed is done for the time being,'' said Alan Ruskin, head of international currency strategy in North America at RBS Greenwich Capital Markets Inc. in Greenwich, Connecticut. ``It reinforces all of the recent favorable trades, selling the yen.''
The dollar pared gains versus the euro after failing to break through $1.5340, where sell orders concentrated, according to Ruskin. ``The market is certainly very cautious not to push it too far,'' he said.
The pound was headed for a third weekly gain against the euro, the longest rally since May 2006, after the Bank of England said yesterday in its twice-yearly financial stability report that ``risk appetite will return gradually'' in coming months. Sterling increased 0.4 percent to 78.04 pence per euro, from 78.37 pence yesterday, and is up 0.9 percent this week.
The European Central Bank will cut its 4 percent main refinancing rate to 3.75 percent by the end of September and 3.50 percent by year-end, according to a Bloomberg News survey of economists.
Bund Spread
The yield advantage of two-year German bunds over comparable-maturity Treasuries decreased to 1.37 percentage points, the narrowest since February, making dollar-denominated assets more attractive to investors.
The Labor Department reported that U.S. payrolls shrank by 20,000 last month following a revised decline of 81,000 in March. The median forecast of 82 economists surveyed by Bloomberg News was for a drop of 75,000.
The U.S. Dollar Index, which measures the currency against six major counterparts, touched 73.698, the highest level since March 5. The index fell to 70.698 on March 17, the lowest since its 1973 inception.
``Buy the dollar!'' said Benedikt Germanier, a currency strategist at UBS AG in Stamford, Connecticut.
The U.S. currency increased 0.9 percent versus the Swiss franc and was up 0.7 percent against the South Korean won. It dropped 0.9 percent against the Brazilian real and 0.4 percent versus New Zealand's dollar.
Traders see the dollar will fluctuate less in the next several months. The implied volatility of options on the dollar against the most actively traded currencies declined to 10.4 percent today, the lowest since Feb. 28, according to data complied by JPMorgan Chase & Co. The volatility jumped to 14.5 percent on March 17, the highest since 1998.
Friday, May 2, 2008
India spot gold prices close 1.3 percent lower; revives domestic demand
MUMBAI (Thomson Financial) - India spot gold prices closed 1.3 percent down, led by overseas leads, triggering domestic demand ahead of the festival and wedding season, traders said.
In London, gold slipped to a fresh four-month low of $844.90 an ounce in early afternoon trade after U.S. employment data came in better than expected, boosting the dollar amid hopes that the world's biggest economy could be turning a corner.
Most physical buyers took this opportunity to buy at lower levels, said a treasury official at India's state-run Corporation Bank.
The Indian festival of Akshaya Tritiya is due in India on May 7 and is considered to be an auspicious day for buying gold and silver.
Mumbai gold of 0.995 purity closed 145 rupees lower at 11,255 rupees per 10 grams, while gold of 0.999 purity closed 150 rupees lower at 11,310 rupees per 10 grams.
Silver of 0.999 purity closed 385 rupees lower at 22,330 per kilogram.
In London, gold slipped to a fresh four-month low of $844.90 an ounce in early afternoon trade after U.S. employment data came in better than expected, boosting the dollar amid hopes that the world's biggest economy could be turning a corner.
Most physical buyers took this opportunity to buy at lower levels, said a treasury official at India's state-run Corporation Bank.
The Indian festival of Akshaya Tritiya is due in India on May 7 and is considered to be an auspicious day for buying gold and silver.
Mumbai gold of 0.995 purity closed 145 rupees lower at 11,255 rupees per 10 grams, while gold of 0.999 purity closed 150 rupees lower at 11,310 rupees per 10 grams.
Silver of 0.999 purity closed 385 rupees lower at 22,330 per kilogram.
HIGHLIGHTS Outlook of US economic indicators to be released in the coming week
WASHINGTON (Thomson Financial) - The following is a synopsis of US economic indicators to be released in the coming week, with forecasts compiled by Thomson's IFR Markets.
The coming week will be light with economic data compared to this past week. Among the most closely-watched numbers will be the ISM non-manufacturing index and the international trade deficit. Also in the week, there will be speeches by Federal Reserve Chairman Ben Bernanke, Fed Governor Randall S. Kroszner, and Kansas City Fed President Thomas Hoening.
MONDAY, MAY 5
The week will begin with the release of the Institute of Supply Management's non-manufacturing index, which in April is expected to have dipped to 49.3 from 49.6.
"In general, the economy is weakening and so you'd expect this number to remain below fifty and drop lower," said Jay Bryson of Wachovia. A level of 50 is considered the contraction/expansion threshold.
WEDNESDAY, MAY 7
Preliminary productivity in the first quarter is expected to have decreased to a 1.7 pct annual rate, below the 1.9 pct rate in the previous quarter.
Bryson pointed out that when the economy is in a downturn, output decreases, but because companies are slow to lay off workers, productivity ultimately increases.
"We're not looking for a huge decline in productivity, and it could keep unit labor costs relatively under control," he said. Preliminary unit labor costs are expected to have increased by 2.6 pct in the first quarter, the same rate of change as in the previous quarter.
Pending home sales in March are expected to have dropped to 83.8 from 84.6 in the previous month.
"Consumer sentiment plunged in March to the lowest level since the 1980 recession, suggesting growing concern about future financial prospects and the state of the economy," said economists from Lehman Brothers. "This should discourage new home purchases," they added.
Consumer credit is expected to have increased to 6.0 bln usd in March, up from 5.2 bln usd in the previous month. Economists say much of the credit will be in the form of credit cards.
Joel Naroff of Naroff Economic Advisors says consumer credit is hard to predict. "On one side consumers are pressured to spend less. On the other side, they may be forced to put expenses on credit card." Lately, credit cards are being used for every day expenses, like food and gasoline, which have increased in price, he said.
THURSDAY, MAY 8
Initial jobless claims are expected to have increased to 370,000 in the week ending May 3rd. This past week, claims increased 35,000 to 380,000.
Meanwhile, continuing claims are expected to have totaled 3.000 mln in the week ending April 26, above the previous week's four-year high of 3.019 mln.
Economists expect that wholesalers increased their inventories in March by just 0.5 pct, well below the 1.1 pct accumulation rate in the previous month.
"We believe that some unnecessary inventory building has occurred in the wholesale sector, forcing firms to cut production and liquidate stocks," said economists from Lehman Brothers. "However, a rise in commodity prices during the month is likely to boost the nominal value of wholesale stocks, offsetting some of this contraction and leaving overall wholesale inventory growth positive."
Wholesale sales are expected to have recovered in March, increasing 0.7 pct compared to a 0.8 pct decline in the previous month.
The coming week will be light with economic data compared to this past week. Among the most closely-watched numbers will be the ISM non-manufacturing index and the international trade deficit. Also in the week, there will be speeches by Federal Reserve Chairman Ben Bernanke, Fed Governor Randall S. Kroszner, and Kansas City Fed President Thomas Hoening.
MONDAY, MAY 5
The week will begin with the release of the Institute of Supply Management's non-manufacturing index, which in April is expected to have dipped to 49.3 from 49.6.
"In general, the economy is weakening and so you'd expect this number to remain below fifty and drop lower," said Jay Bryson of Wachovia. A level of 50 is considered the contraction/expansion threshold.
WEDNESDAY, MAY 7
Preliminary productivity in the first quarter is expected to have decreased to a 1.7 pct annual rate, below the 1.9 pct rate in the previous quarter.
Bryson pointed out that when the economy is in a downturn, output decreases, but because companies are slow to lay off workers, productivity ultimately increases.
"We're not looking for a huge decline in productivity, and it could keep unit labor costs relatively under control," he said. Preliminary unit labor costs are expected to have increased by 2.6 pct in the first quarter, the same rate of change as in the previous quarter.
Pending home sales in March are expected to have dropped to 83.8 from 84.6 in the previous month.
"Consumer sentiment plunged in March to the lowest level since the 1980 recession, suggesting growing concern about future financial prospects and the state of the economy," said economists from Lehman Brothers. "This should discourage new home purchases," they added.
Consumer credit is expected to have increased to 6.0 bln usd in March, up from 5.2 bln usd in the previous month. Economists say much of the credit will be in the form of credit cards.
Joel Naroff of Naroff Economic Advisors says consumer credit is hard to predict. "On one side consumers are pressured to spend less. On the other side, they may be forced to put expenses on credit card." Lately, credit cards are being used for every day expenses, like food and gasoline, which have increased in price, he said.
THURSDAY, MAY 8
Initial jobless claims are expected to have increased to 370,000 in the week ending May 3rd. This past week, claims increased 35,000 to 380,000.
Meanwhile, continuing claims are expected to have totaled 3.000 mln in the week ending April 26, above the previous week's four-year high of 3.019 mln.
Economists expect that wholesalers increased their inventories in March by just 0.5 pct, well below the 1.1 pct accumulation rate in the previous month.
"We believe that some unnecessary inventory building has occurred in the wholesale sector, forcing firms to cut production and liquidate stocks," said economists from Lehman Brothers. "However, a rise in commodity prices during the month is likely to boost the nominal value of wholesale stocks, offsetting some of this contraction and leaving overall wholesale inventory growth positive."
Wholesale sales are expected to have recovered in March, increasing 0.7 pct compared to a 0.8 pct decline in the previous month.
Thursday, May 1, 2008
Where do you start if you want to learn Forex trading online?
Well a good starting point is to look at just what Forex trading is and who the players in this market are. We should also think about just why you should be learning Forex trading and thinking about starting you own online Forex trading business.
Don't forget to check outour growing collection ofin-house Forex articles.
The Forex market (which is sometimes referred to as the FX market and for which the full title is The Foreign Exchange Market) was established as we know it today in 1971 following the demise of fixed currency exchanges. Forex currency trading is conducted around the clock, 5 days a week, and daily currency trades are worth in the region of $1.9 trillion US dollars. This means that the Forex the largest market in the world and puts the major stock markets very firmly into second place.
A world-wide market established to facilitate the buying and selling of currency, the Forex market involves large organizations, such as central governments, commercial companies and international commercial banks as well as smaller players such as brokerage houses and individual brokers.
There is no set location for the market (although there are major trading centers around the world in a number of cities such as London, Frankfurt, New York and Tokyo) but it is essentially an 'over-the-counter' market with the vast majority of trading being conducted by telephone and on the internet.
The exchange of currencies is a central element in supporting global trade and, as the major currencies such as the US dollar (USD), the British pound (GBP), the Euro (EUR), the Japanes yen (JPY) and others move against each other and the foreign currency exchange rate for any given pair of currencies changes, there is the opportunity to make money from currency exchanges.
The major players in the market take advantage of this by buying and selling in deals which often run into many millions of dollars, but the smaller players are also extremely active and often trade in deals of as low as one hundred thousand dollars. And, by trading on the back on the smaller players, individuals can get into the market with a lot less than that!
The fact that even small players can join this market means that, as long as you are prepared to take the time to understand the currency markets and to learn the skills of Forex trading, then, with a little bit of capital to invest, it is possible to enjoy an excellent income from online currency trading.
Despite the fact that you cannot trade on your own and will have to use the services of a Forex broker, you certainly don't need a fortune and many Forex brokers will now allow you to open an online Forex mini account with as little as $250.
The Forex market is a technical market and it does takes a while to come to grips with the basic principles underlying the currency markets, to develop the necessary skills in the use of some of the 'tools of the trade' (like technical and fundamental analysis tools) and to learn Forex currency trading online.
Despite this, you do not have to be an expert in the currency markets to profit from them. As long as you take the time to learn foreign exchange currency trading and put in a bit of effort it is quite easy to gain enough of an understanding to begin making money through Foreign trading online.
Foreign currency trading provides an excellent opportunity for the small investor to make money but learning to trade Forex is essential before heading out into the market.
Through a large and growing collection of articles covering everything from the history of foreign currency trading to fundamental and technical analysis, psychology and strategies, tools and software we aim to help you learn to day trade Forex quickly and easily.
Don't forget to check outour growing collection ofin-house Forex articles.
The Forex market (which is sometimes referred to as the FX market and for which the full title is The Foreign Exchange Market) was established as we know it today in 1971 following the demise of fixed currency exchanges. Forex currency trading is conducted around the clock, 5 days a week, and daily currency trades are worth in the region of $1.9 trillion US dollars. This means that the Forex the largest market in the world and puts the major stock markets very firmly into second place.
A world-wide market established to facilitate the buying and selling of currency, the Forex market involves large organizations, such as central governments, commercial companies and international commercial banks as well as smaller players such as brokerage houses and individual brokers.
There is no set location for the market (although there are major trading centers around the world in a number of cities such as London, Frankfurt, New York and Tokyo) but it is essentially an 'over-the-counter' market with the vast majority of trading being conducted by telephone and on the internet.
The exchange of currencies is a central element in supporting global trade and, as the major currencies such as the US dollar (USD), the British pound (GBP), the Euro (EUR), the Japanes yen (JPY) and others move against each other and the foreign currency exchange rate for any given pair of currencies changes, there is the opportunity to make money from currency exchanges.
The major players in the market take advantage of this by buying and selling in deals which often run into many millions of dollars, but the smaller players are also extremely active and often trade in deals of as low as one hundred thousand dollars. And, by trading on the back on the smaller players, individuals can get into the market with a lot less than that!
The fact that even small players can join this market means that, as long as you are prepared to take the time to understand the currency markets and to learn the skills of Forex trading, then, with a little bit of capital to invest, it is possible to enjoy an excellent income from online currency trading.
Despite the fact that you cannot trade on your own and will have to use the services of a Forex broker, you certainly don't need a fortune and many Forex brokers will now allow you to open an online Forex mini account with as little as $250.
The Forex market is a technical market and it does takes a while to come to grips with the basic principles underlying the currency markets, to develop the necessary skills in the use of some of the 'tools of the trade' (like technical and fundamental analysis tools) and to learn Forex currency trading online.
Despite this, you do not have to be an expert in the currency markets to profit from them. As long as you take the time to learn foreign exchange currency trading and put in a bit of effort it is quite easy to gain enough of an understanding to begin making money through Foreign trading online.
Foreign currency trading provides an excellent opportunity for the small investor to make money but learning to trade Forex is essential before heading out into the market.
Through a large and growing collection of articles covering everything from the history of foreign currency trading to fundamental and technical analysis, psychology and strategies, tools and software we aim to help you learn to day trade Forex quickly and easily.
What Is Online Currency Trading?
Online currency trading or the foreign exchange (FOREX) provides an incredible opportunity for the average person.
1) You can set up a demo account for trading that will provide you with real time trading information. The feeds are real and the movements are real, this allows you to learn and tweak your trading style.
2) A new trader can start with a few hundred dollars. One BIG thing to consider is the leverage the FOREX gives you. A $300 account will enable you to control $60,000.00 worth of currency. That alone should peak your interest.
3) Successful Forex traders live a life style most people only dream about.
The foreign exchange averages 3.2 trillion dollars a day, which is more than stocks and commodities, combined. In addition, stocks have some pitfalls that are not present with online currency trading, such as insider trading or executives that "cook" the books.
Education is the key and the great thing is most of it is free to learn.
There are a few things you can do to start, first Google "forex" and you will see a lot of places that allow you to set up a free demo account. Next learn what technical analysis is and how to use it to your advantage.
In the event you need to ask some questions or have comments we are here to assist you. We are active traders, however, we are not brokers. So we will tell you our real opinion. Along with that you will have other traders placing their own experiences as well. So here is to learning forex.
1) You can set up a demo account for trading that will provide you with real time trading information. The feeds are real and the movements are real, this allows you to learn and tweak your trading style.
2) A new trader can start with a few hundred dollars. One BIG thing to consider is the leverage the FOREX gives you. A $300 account will enable you to control $60,000.00 worth of currency. That alone should peak your interest.
3) Successful Forex traders live a life style most people only dream about.
The foreign exchange averages 3.2 trillion dollars a day, which is more than stocks and commodities, combined. In addition, stocks have some pitfalls that are not present with online currency trading, such as insider trading or executives that "cook" the books.
Education is the key and the great thing is most of it is free to learn.
There are a few things you can do to start, first Google "forex" and you will see a lot of places that allow you to set up a free demo account. Next learn what technical analysis is and how to use it to your advantage.
In the event you need to ask some questions or have comments we are here to assist you. We are active traders, however, we are not brokers. So we will tell you our real opinion. Along with that you will have other traders placing their own experiences as well. So here is to learning forex.
Forex - U.S. dollar up sharply, extending gains after ISM manufacturing data
LONDON (Thomson Financial) - The U.S. dollar was up sharply, extending earlier gains after a better-than-expected survey on U.S. manufacturing activity.The ISM manufacturing index held steady at 48.6 in April, still below the 50 level to signal continued contraction in the sector but beating forecasts for a decline to 48.0.The release gave market players further excuse to buy the U.S. dollar, taking the euro to a five-week low of $1.5440."The report was a real mixed bag, providing no fundamental basis for buying the greenback. Nonetheless, players used the report as an excuse to extend the overnight dollar rally," said Michael Woolfolk at the Bank of New York Mellon.The U.S. dollar has been gaining since last night's decision by the Federal Reserve to cut interest rates by 25 basis points, marking a departure from the aggressive monetary easing of recent months and prompting optimism that the worst of the credit crisis may be over."A lot of people believe the worst is over and the perception is that this will be the end of the rate cuts," said Mic Mills, a trader at TradIndex.com.Attention Friday will turn to the release of key U.S. jobs data, where another better-than-expected reading will allow the U.S. dollar to extend its gains further."If non-farm payrolls surprises tomorrow on the upside, the resulting dollar rally has more potential than recent history suggests," BNY Mellon's Woolfolk said.London 1519 GMT London 1106 GMTU.S. dollar yen 104.08 up from 104.03 Swiss franc 1.0490 up from 1.0440 EuroU.S. dollar 1.5439 down from 1.5533 pound 0.7819 unchanged yen 160.71 up from 161.60 Swiss franc 1.6196 down from 1.6220 PoundU.S. dollar 1.9746 down from 1.9862 yen 205.51 down from 206.60 Swiss franc 2.0707 down from 2.0733 Australian dollar U.S. dollar 0.9322 down from 0.9377 pound 0.4720 unchanged yen 96.98 down from 97.50
Dollar rises as markets consider end to rate cuts
NEW YORK (AP) - The dollar gained strength Thursday amid mixed economic data following the Federal Reserve's signal that it might be done with rate cutting for the near term.The 15-nation euro dropped to $1.5432 in midday New York trading, down from the $1.5642 it purchased in New York late Wednesday. The British pound also slid to $1.9723 from $1.9893.The dollar rose to 104.56 Japanese yen, up from 104.17 late Wednesday.The Commerce Department said consumer spending edged up 0.4 percent in March, while the Institute for Supply Management said an index of manufacturing activity in April was 48.6 for April, unchanged from March. Both readings, while weak, were better than expected and offset the 1.1 percent March drop in construction spending and the larger-than-expected jump in weekly jobless claims to 380,000.By midday, the Dow Jones industrial average had jumped more than 150 points as investors took hope from a surging dollar and oil's fall back toward $111 a barrel.The Federal Reserve cut a key interest rate by a quarter-point Wednesday, a smaller move than the aggressive easing it undertook earlier this year. There were signs the Fed may believe it has done enough to prevent a deep recession.The Fed action pushed the federal funds rate down to 2 percent, the lowest level since late 2004. It marked the seventh rate cut by the central bank since it began easing credit conditions last September.The European Central Bank has left rates unchanged at 4 percent.Though lower interest rates can spur a nation's economy, they can weigh on its currency as traders transfer funds to countries where they can earn higher returns.In other midday New York trading, the dollar rose to 1.0500 Swiss francs from 1.0338 francs late Wednesday in New York, and soared to 1.0191 Canadian dollars from 1.0046.
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