The yen gained against most of its major counterparts before the release of minutes of the Federal Open Market Committee’s Sept. 21 meeting as a drop in global stocks discouraged demand for higher-yielding assets.
The dollar approached a 15-year low versus the yen and a record low against the Swiss franc as traders speculated that the Fed will debase the U.S. currency by stepping up quantitative easing. Australia’s dollar dropped for a second day versus the dollar on concern the currency’s advance toward parity with the greenback was too fast to be sustained.
“It’s anticipation of the FOMC minutes,” said Camilla Sutton, a Bank of Nova Scotia currency strategist in Toronto. “There’s an awful lot of anticipation about just how much the potential for quantitative easing was discussed.”
The yen appreciated 0.5 percent to 113.31 against the euro at 9:22 a.m. in New York, from 113.89 yesterday. The dollar dropped 0.2 percent to 81.87 yen, from 82.07, after touching 81.39 yesterday, the lowest since April 1995. The U.S. currency gained 0.3 percent to $1.3842 per euro, from $1.3876. It touched $1.4029 on Oct. 7, the weakest level since Jan. 28.
The 14-day relative strength index of the euro against the dollar fell slipped below 70 for the first time in 11 days. A reading higher than that level indicates an asset may be poised for a decline.
“Given the euro has gained at a fast pace and reached $1.40, there will be some selling,” said Toshiya Yamauchi, a senior currency analyst in Tokyo at Ueda Harlow Ltd. “The euro may fall to about $1.35.”
Yen Versus Won
Japan’s currency gained 1.6 percent to 13.82 South Korean won and climbed 0.8 percent to 13.93 versus the Norwegian krone as the drop in stocks spurred demand for safety. The Swiss franc appreciated 0.5 percent against the dollar to 96.01 centimes. It touched 95.55 centimes on Oct. 7, the strongest level ever. The franc climbed 0.8 percent to 1.3285 per euro.
Futures on the Standard & Poor’s 500 Index expiring in December lost 0.6 percent. The Stoxx Europe 600 Index slid 0.6 percent. The MSCI Asia Pacific Index fell 1.5 percent.
The won retreated from a five-month high versus the dollar on concern tighter lending curbs in China will cool demand for South Korea’s exports. The currency declined 1.3 percent to 1,131.45 per dollar. It reached 1,110.75 yesterday, the strongest level since May 3.
The Dollar Index, used by IntercontinentalExchange Inc. to track the greenback against the currencies of six major U.S. trading partners including the euro, yen, pound, Swiss franc, Canadian dollar and Swedish krona, gained 0.2 percent to 77.50.
Weaker Dollar
The gauge of the greenback has fallen 3.5 percent since Sept. 21, when the Fed said it’s prepared “to provide additional accommodation if needed to support economic recovery.”
Fed Chairman Ben S. Bernanke said on Oct. 4 the central bank’s first round of large-scale asset purchases aided the economy and more quantitative easing may help further. Vice Chairman Janet Yellen said in a speech yesterday that low interest rates may give firms the incentive to engage in excessive risk-taking.
The Fed will announce more bond purchases at next month’s FOMC meeting, helping the U.S. avoid the “very bad” outcome of a renewed recession, according to Goldman Sachs Group Inc.
The central bank is likely to announce about $500 billion of Treasury purchases through the spring or summer of 2011 and indicate they are ready to buy more, New York-based Jan Hatzius, chief U.S. economist at Goldman Sachs, said in an e-mailed note. The Fed may need to hold interest rates at current levels until 2015 or later, he wrote.
Noda’s View
The yen fell earlier today after Japanese Finance Minister Yoshihiko Noda said his government is ready to take bold action on currencies, including intervention.
Noda said he told counterparts of the Group of Seven industrialized nations that Japan intervened on Sept. 15 because the yen’s advance didn’t reflect economic fundamentals. The yen- selling operations, the first since 2004, weren’t aimed at a specific exchange level, he said in parliament.
“Investors remain cautious about intervention when the dollar-yen dips toward 82,” said Daisaku Ueno, Tokyo-based president at Gaitame.com Research Institute Ltd., a unit of Japan’s largest currency margin company.
http://jodnet.blogspot.com
The dollar approached a 15-year low versus the yen and a record low against the Swiss franc as traders speculated that the Fed will debase the U.S. currency by stepping up quantitative easing. Australia’s dollar dropped for a second day versus the dollar on concern the currency’s advance toward parity with the greenback was too fast to be sustained.
“It’s anticipation of the FOMC minutes,” said Camilla Sutton, a Bank of Nova Scotia currency strategist in Toronto. “There’s an awful lot of anticipation about just how much the potential for quantitative easing was discussed.”
The yen appreciated 0.5 percent to 113.31 against the euro at 9:22 a.m. in New York, from 113.89 yesterday. The dollar dropped 0.2 percent to 81.87 yen, from 82.07, after touching 81.39 yesterday, the lowest since April 1995. The U.S. currency gained 0.3 percent to $1.3842 per euro, from $1.3876. It touched $1.4029 on Oct. 7, the weakest level since Jan. 28.
The 14-day relative strength index of the euro against the dollar fell slipped below 70 for the first time in 11 days. A reading higher than that level indicates an asset may be poised for a decline.
“Given the euro has gained at a fast pace and reached $1.40, there will be some selling,” said Toshiya Yamauchi, a senior currency analyst in Tokyo at Ueda Harlow Ltd. “The euro may fall to about $1.35.”
Yen Versus Won
Japan’s currency gained 1.6 percent to 13.82 South Korean won and climbed 0.8 percent to 13.93 versus the Norwegian krone as the drop in stocks spurred demand for safety. The Swiss franc appreciated 0.5 percent against the dollar to 96.01 centimes. It touched 95.55 centimes on Oct. 7, the strongest level ever. The franc climbed 0.8 percent to 1.3285 per euro.
Futures on the Standard & Poor’s 500 Index expiring in December lost 0.6 percent. The Stoxx Europe 600 Index slid 0.6 percent. The MSCI Asia Pacific Index fell 1.5 percent.
The won retreated from a five-month high versus the dollar on concern tighter lending curbs in China will cool demand for South Korea’s exports. The currency declined 1.3 percent to 1,131.45 per dollar. It reached 1,110.75 yesterday, the strongest level since May 3.
The Dollar Index, used by IntercontinentalExchange Inc. to track the greenback against the currencies of six major U.S. trading partners including the euro, yen, pound, Swiss franc, Canadian dollar and Swedish krona, gained 0.2 percent to 77.50.
Weaker Dollar
The gauge of the greenback has fallen 3.5 percent since Sept. 21, when the Fed said it’s prepared “to provide additional accommodation if needed to support economic recovery.”
Fed Chairman Ben S. Bernanke said on Oct. 4 the central bank’s first round of large-scale asset purchases aided the economy and more quantitative easing may help further. Vice Chairman Janet Yellen said in a speech yesterday that low interest rates may give firms the incentive to engage in excessive risk-taking.
The Fed will announce more bond purchases at next month’s FOMC meeting, helping the U.S. avoid the “very bad” outcome of a renewed recession, according to Goldman Sachs Group Inc.
The central bank is likely to announce about $500 billion of Treasury purchases through the spring or summer of 2011 and indicate they are ready to buy more, New York-based Jan Hatzius, chief U.S. economist at Goldman Sachs, said in an e-mailed note. The Fed may need to hold interest rates at current levels until 2015 or later, he wrote.
Noda’s View
The yen fell earlier today after Japanese Finance Minister Yoshihiko Noda said his government is ready to take bold action on currencies, including intervention.
Noda said he told counterparts of the Group of Seven industrialized nations that Japan intervened on Sept. 15 because the yen’s advance didn’t reflect economic fundamentals. The yen- selling operations, the first since 2004, weren’t aimed at a specific exchange level, he said in parliament.
“Investors remain cautious about intervention when the dollar-yen dips toward 82,” said Daisaku Ueno, Tokyo-based president at Gaitame.com Research Institute Ltd., a unit of Japan’s largest currency margin company.
http://jodnet.blogspot.com
0 التعليقات
Post a Comment