The dollar traded near a 15-year low against the yen amid growing expectations the Federal Reserve will expand credit easing steps to sustain the U.S. recovery.
The euro was close to an eight-month high against the greenback as yields on benchmark Treasury securities traded near the least since January 2009 and before data forecast to show a worsening U.S. labor market. The Australian dollar approached a record after a government report showed the nation added more jobs than economists expected.
“There is no clear sign that declines in U.S. yields will come to a halt as economic data continue to worsen,” said Tomohiro Nishida, a Tokyo-based foreign-currency dealer at Chuo Mitsui Trust & Banking Co., a unit of Japan’s seventh-largest banking group. “This will weigh heavily on the dollar.”
The dollar was at 82.86 yen at 6:40 a.m. in London from 82.93 in New York yesterday when it touched 82.77, the weakest level since May 1995 and less than the rate on Sept. 15 when Japan intervened for the first time since 2004.
The U.S. currency was at $1.3925 per euro from $1.3930 yesterday when it hit $1.3948, the weakest since Feb. 3. The yen stood at 115.38 per euro from 115.53. The pound fell to 87.79 pence per euro, the lowest level since May 7, before trading little changed at 87.70 pence.
U.S. initial jobless claims increased by 2,000 to 455,000 in the week ended Oct. 2, according to a Bloomberg News survey of economists ahead of today’s data. The unemployment rate climbed to 9.7 percent in September from 9.6 percent in August, according to a separate survey before tomorrow’s report.
Jobs, Treasuries
As the stimulus-led recovery failed to create jobs, companies in the U.S. unexpectedly cut 39,000 payrolls in September, according to figures from ADP Employment yesterday. The median of a Bloomberg News survey of 37 economists projected an increase of 20,000 jobs.
The yield on 10-year Treasuries reached 2.36 percent yesterday, the lowest level since January 2009.
The Dollar Index, which IntercontinentalExchange Inc. uses to track the greenback against the currencies of six major U.S. trading partners, hit 77.301 yesterday, the least since Jan. 19.
The yen was poised for a third-straight weekly advance versus the dollar on prospects that Japan will avoid currency- market intervention before this week’s meeting of finance ministers and central bankers from the Group of Seven industrialized nations.
Market Manipulation
“Given the risk that Japan may bear the brunt of international criticism for market manipulation, it is difficult for Japanese authorities to take action ahead of the key event,” said Kazumasa Yamaoka, a chief strategist at investment advisory company GCI Research Institute Ltd. in Tokyo.
Countries from Japan to Brazil have taken measures in recent weeks to devalue currencies and loosen monetary policy to safeguard export-led growth. Brazilian Finance Minister Guido Mantega warned Sept. 27 of a “currency war.”
Canadian Finance Minister Jim Flaherty told reporters in Ottawa countries are concerned that measures being taken around the globe to weaken currencies are distorting markets and trade.
“We don’t want these kind of distortions in currency values or distortions in trading relationships,” said Flaherty, who will chair a meeting of Group of Seven finance ministers in Washington on Friday.
Treasury Secretary Timothy F. Geithner said yesterday a “damaging dynamic” of large economies keeping their currencies undervalued can cause inflation and asset bubbles, and he called on countries to coordinate policies.
Won’t Join
Japan won’t weaken the yen to become more competitive with other countries in trade, and any currency intervention would be aimed at restraining excessive moves, Vice Finance Minister Fumihiko Igarashi said.
“It’s not our intention to engage in a currency- devaluation race for the sake of the national interest,” Igarashi said in an interview in Tokyo today. “We could conduct smoothing operations when movements are extremely volatile, that would be permissible.”
The pound fell to a five-month low against the euro on prospects that the Bank of England will join other central banks in increasing purchases of government debt.
Today’s BOE Monetary Policy Committee meeting may produce a three-way split if Andrew Sentance keeps up his bid for higher interest rates to fight inflation and Adam Posen follows through with his call for more stimulus. The BOE will keep the stimulus plan at 200 billion pounds ($317 billion) and its key rate at 0.5 percent, according to Bloomberg News surveys of economists.
BOE Speculation
“There’s speculation that the Bank of England may join the Fed in restarting quantitative easing this year,” said Mike Jones, a currency strategist at Bank of New Zealand Ltd. in Wellington. “The British pound is likely to continue to underperform as a result.”
The European Central Bank will also hold a policy-setting meeting today.
The so-called Aussie climbed 8 percent in the past month against the greenback as employment data fueled bets by traders that the South Pacific nation’s central bank will raise interest rates before the year ends.
Australia’s employers added 49,500 workers and the unemployment rate held at 5.1 percent in September, the government reported today. Economists in a Bloomberg News survey had forecast jobs would rise by 20,000.
“These numbers confirm that there’s still a lot of momentum in this economy,” said Tony Morriss, a senior markets strategist in Sydney at Australia & New Zealand Banking Group Ltd. “It’s very positive for the Aussie because interest-rate differentials already remain very supportive.”
Australia’s currency traded at 98.36 U.S. cents from 97.75 cents yesterday. It touched 98.46 U.S. cents earlier, the highest level since it reached a record 98.50 cents in July 2008.
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The euro was close to an eight-month high against the greenback as yields on benchmark Treasury securities traded near the least since January 2009 and before data forecast to show a worsening U.S. labor market. The Australian dollar approached a record after a government report showed the nation added more jobs than economists expected.
“There is no clear sign that declines in U.S. yields will come to a halt as economic data continue to worsen,” said Tomohiro Nishida, a Tokyo-based foreign-currency dealer at Chuo Mitsui Trust & Banking Co., a unit of Japan’s seventh-largest banking group. “This will weigh heavily on the dollar.”
The dollar was at 82.86 yen at 6:40 a.m. in London from 82.93 in New York yesterday when it touched 82.77, the weakest level since May 1995 and less than the rate on Sept. 15 when Japan intervened for the first time since 2004.
The U.S. currency was at $1.3925 per euro from $1.3930 yesterday when it hit $1.3948, the weakest since Feb. 3. The yen stood at 115.38 per euro from 115.53. The pound fell to 87.79 pence per euro, the lowest level since May 7, before trading little changed at 87.70 pence.
U.S. initial jobless claims increased by 2,000 to 455,000 in the week ended Oct. 2, according to a Bloomberg News survey of economists ahead of today’s data. The unemployment rate climbed to 9.7 percent in September from 9.6 percent in August, according to a separate survey before tomorrow’s report.
Jobs, Treasuries
As the stimulus-led recovery failed to create jobs, companies in the U.S. unexpectedly cut 39,000 payrolls in September, according to figures from ADP Employment yesterday. The median of a Bloomberg News survey of 37 economists projected an increase of 20,000 jobs.
The yield on 10-year Treasuries reached 2.36 percent yesterday, the lowest level since January 2009.
The Dollar Index, which IntercontinentalExchange Inc. uses to track the greenback against the currencies of six major U.S. trading partners, hit 77.301 yesterday, the least since Jan. 19.
The yen was poised for a third-straight weekly advance versus the dollar on prospects that Japan will avoid currency- market intervention before this week’s meeting of finance ministers and central bankers from the Group of Seven industrialized nations.
Market Manipulation
“Given the risk that Japan may bear the brunt of international criticism for market manipulation, it is difficult for Japanese authorities to take action ahead of the key event,” said Kazumasa Yamaoka, a chief strategist at investment advisory company GCI Research Institute Ltd. in Tokyo.
Countries from Japan to Brazil have taken measures in recent weeks to devalue currencies and loosen monetary policy to safeguard export-led growth. Brazilian Finance Minister Guido Mantega warned Sept. 27 of a “currency war.”
Canadian Finance Minister Jim Flaherty told reporters in Ottawa countries are concerned that measures being taken around the globe to weaken currencies are distorting markets and trade.
“We don’t want these kind of distortions in currency values or distortions in trading relationships,” said Flaherty, who will chair a meeting of Group of Seven finance ministers in Washington on Friday.
Treasury Secretary Timothy F. Geithner said yesterday a “damaging dynamic” of large economies keeping their currencies undervalued can cause inflation and asset bubbles, and he called on countries to coordinate policies.
Won’t Join
Japan won’t weaken the yen to become more competitive with other countries in trade, and any currency intervention would be aimed at restraining excessive moves, Vice Finance Minister Fumihiko Igarashi said.
“It’s not our intention to engage in a currency- devaluation race for the sake of the national interest,” Igarashi said in an interview in Tokyo today. “We could conduct smoothing operations when movements are extremely volatile, that would be permissible.”
The pound fell to a five-month low against the euro on prospects that the Bank of England will join other central banks in increasing purchases of government debt.
Today’s BOE Monetary Policy Committee meeting may produce a three-way split if Andrew Sentance keeps up his bid for higher interest rates to fight inflation and Adam Posen follows through with his call for more stimulus. The BOE will keep the stimulus plan at 200 billion pounds ($317 billion) and its key rate at 0.5 percent, according to Bloomberg News surveys of economists.
BOE Speculation
“There’s speculation that the Bank of England may join the Fed in restarting quantitative easing this year,” said Mike Jones, a currency strategist at Bank of New Zealand Ltd. in Wellington. “The British pound is likely to continue to underperform as a result.”
The European Central Bank will also hold a policy-setting meeting today.
The so-called Aussie climbed 8 percent in the past month against the greenback as employment data fueled bets by traders that the South Pacific nation’s central bank will raise interest rates before the year ends.
Australia’s employers added 49,500 workers and the unemployment rate held at 5.1 percent in September, the government reported today. Economists in a Bloomberg News survey had forecast jobs would rise by 20,000.
“These numbers confirm that there’s still a lot of momentum in this economy,” said Tony Morriss, a senior markets strategist in Sydney at Australia & New Zealand Banking Group Ltd. “It’s very positive for the Aussie because interest-rate differentials already remain very supportive.”
Australia’s currency traded at 98.36 U.S. cents from 97.75 cents yesterday. It touched 98.46 U.S. cents earlier, the highest level since it reached a record 98.50 cents in July 2008.
http://jodnet.blogspot.com
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