Tag Archives: Dollar

UpsetDollar

Dollar Slips to Two-Year Low Before Ifo Release

The U.S. dollar slid further this week, hitting a two-year low against the euro ahead of the German Ifo Business Climate data release. The German Ifo, which is based on a surney of 7,000 executives and is the leading indicator of economic health in German the wider Eurozone, is expected by economists to rise to 108.2 from last month’s 107.7.

The forecast shows increased confidence in Europe’s largest economy, while the U.S. economy loses its footing as the Fed is expected to continue its easy-money stimulus into next year.
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More specifically the dollar fell 0.2 percent to $1.3824 against the euro yesterday, after reaching its lowest point since November 2011 at $1.3832. The U.S. currency has also fallen against the yen for similar reasons, losing 0.3 percent to 97.02 yen after reaching its lowest level since 9th October at 96.64. In the upcoming week the greenback is expected to drop an additional 1 percent against the euro and a 0.7 percent to the yen.

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Gold

Gold rallies as investors lose faith in dollar

Gold rallied back up to a near three-week high level as investors consider the implications the Non-Farm Payrolls which indicated that employers added fewer jobs to the U.S. economy in September than expected.

The precious metal, however, is till set to record its first annual drop since 2000, as earlier this year investors turned away from this economic safe-haven on the expectation of the American economy would improve and the Fed would begin to cut its $85 billion monthly bond purchases.

Economists now expect that policy makers will delay cutting bond purchasing until March 2014. The Fed’s next two policy meetings are scheduled for 29-30 October and 17-18 Dec.

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money-laundering

Dollar falls after lower-than-expected NFP report

Following yesterday’s release of U.S. Non-Farm Payrolls which showed slow growth and suggested that the Fed will not be easing its stimulus plan, the dollar fell to a two-year low against the euro. The much-awaited report by the Labor Department which had been delayed by the U.S. government shutdown showed yesterday that employers had added fewer jobs in the American than economists expected.

The yen also saw a rise against all major counterparts as investors seek for alternative refuge assets. The yen can be seen strengthening in periods of global economic turmoil because Japan does not rely on foreign capital to fund its deficit.

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Printing Dollar

Awaiting the NFP report

All eyes are on the U.S. dollar today, as the currency traded at 0.3 percent from an eight-month low yesterday, falling against most major currencies after the 16-day government shutdown that hampered the U.S. economy. More specifically, investors anxiously await the Non-Farm Payrolls release of September finally scheduled for later today, at 1:30 p.m. GMT.

The NFP report will indicate whether employment levels have reached sufficient targets for the Federal Reserve to reduce the economic stimulus, as had been previously forecast, or whether the government’s decision to extend the debt ceiling will prolong quantitative easing.

The Canadian dollar also ended its 3-day gain, as Canada’s central bank is expected to downgrade the country’s economy should the NFP report turn out to be lower than expected on account of the stunted economic growth in the U.S., Canada’s major trading partner

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US Job Growth: September report may be last clean gauge of the job market…

U.S. job growth is likely to have picked up a touch in September, suggesting the economy enjoyed rising momentum before an acrimonious budget fight in Washington took some of the wind out of its sails. Non-farm payrolls are expected to have increased by 180,000 workers, a step up from August’s gain of 169,000, according to a Reuters survey of economists. The unemployment rate is seen having held steady at a near five-year low of 7.3 percent. The Labor Department releases its closely watched monthly employment report today, more than two weeks later than originally scheduled because of the partial shutdown of the federal government earlier this month. The data regularly sets the tone for global financial markets. Economists, however, said the shutdown has lessened its importance, with officials at the Federal Reserve likely to hold off any decision on scaling back the U.S. central bank’s bond buying until the extent of the economic damage from the budget fight is clearer. The September report may be the last clean gauge of the job market before most short-term effects or longer-run damage from the budget battles hit U.S. employers and households. Meanwhile, the US economy ‘drifts on’ as the Fed is likely to hold off on scaling back economic stimulus until next year.

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Curb Your Enthusiasm, Say Analysts

Dollar Slips, Euro Stagnant

The dollar slipped into a near eight-month low last week following the U.S. government’s decision to lift its debt ceiling, which to many investors translates as unwillingness to begin curbing its stimulus program later this year as had been expected. The U.S. dollar fell against major rivals, including the euro, the pound and the yen, and not even the expectation of a positive Non-Farm Payrolls report, to be finally released on Tuesday 22nd October, has raised market confidence in the currency.

But while the U.S. crisis has been temporarily averted, European investors foster no high hopes for improvements in the euro zone, as many issues still remained to be resolved. Although the upcoming two-day European Union summit is set to tackle some of the issues and provide solutions at least on how to provide backstop funds for failing euro zone banks, no major breakthrough is expected, especially without a coalition government set in place in Germany after September’s elections.

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morning-coffee

5 4 3 2 1…Google shares are ‘Go’ as mobile takes off

Google Inc shares jumped past $1,000 on Friday as investors bet on the Internet company’s continued dominance of the mobile and video advertising businesses despite aggressive competition from Facebook Inc and Yahoo Inc. Shares of the world’s No. 1 search company rose more than 14 percent to an all-time high of $1,015.46, swelling its market value by about $40 billion. That vaulted Google past Microsoft Corp and Berkshire Hathaway Inc in capitalization and brought it to No. 3 among U.S. companies, behind only Apple Inc and Exxon Mobil Corp. Google, whose Android is the world’s most-used mobile software and YouTube is the most popular video-streaming service, on Thursday reported a 23 percent jump in net revenue from its Internet business. Advertising volume soared 26 percent - the highest rate of growth in the past year - and more than made up for an 8 percent slide in ad prices.”Google’s ownership of the Android ecosystem makes Google like the house, in Vegas terms,” said Stifel Nicolaus analyst Jordan Rohan. “The success of Android, which becomes more and more popular every day, is starting to really add up, and Google is collecting small tolls along the way.” Small tolls perhaps, but with the meteoric rate of growth that Google is experiencing, they are surely headed for a big blast off!

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Manufacturing Rallies

Manufacturing Rallies?

The recent index rally in the US has inspired many to applaud FED chairman Ben Bernanke for his pro-market fiscal policies. Peter Schiff, the CEO of Euro Pacific Capital points out in his recent article that market performance “is now almost completely correlated to Fed activism”. Indeed, market rallies, as with S&P 500 and Dow Jones, tell us more about investor confidence and very little about actual economic health of country and the companies listed in these indexes. Schiff argues that all recent market rallies are preceded by fresh stimulants from the FED and thus the markets fall when the stimulus tab runs dry.

For the investor, it’s imperative to know which variables to look at before investing. If Schiff is correct, markets will surge after Bernanke’s next decision to stimulate the economy. In other words, a case can be made that the rallies we are currently witnessing are largely artificial. Stock-investing is a powerful and historically efficient tool to boost the economy, but if Schiff is right, the only this investors are boosting is a big fat bubble - wholly dependent on the government’s economic policies.

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Fear and Loathing in the Eurozone

Fear and Loathing in the Eurozone

The eurozone wobbles from crisis to crisis, but the recent demand by eurozone finance ministers, that Cypriots should pay up to 10 per cent of their savings in return for the planned 10 billion euro bailout, have justly raised eyebrows on both sides of the pond. Obliging a government to take funds from citizens bank accounts, from people who – unlike their leaders – have acted responsibly by saving up for a rainy day, is lunacy. The plan to raid citizens’ savings accounts is indicative of the willingness by many European politicians to hold the fragile house of cards together at any cost. In search for their perfect European utopia these politicians seem to be willing to sacrifice the personal and individual freedoms of their constituents. At least one thing seems to be certain; the single currency exists because of the political fervour emanating from Brussels. Europeans do not need the euro, but their representatives do. The Cyprus-issue affected the markets and during early Monday trading the euro slipped to $1.2888, its lowest point since December.

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Draghi Drags Down the Euro

Draghi Drags Down the Euro

The euro weakened against the dollar on Monday following the European Central Bank President Mario Draghi’s comments suggesting continued economic feebleness in the eurozone. According to Draghi, “Available indicators signal further weakness at the beginning of 2013, with domestic demand remaining dampened. This is due to weak consumer and investor sentiment and to the necessary balance sheet adjustments in both the public and private sectors. Foreign demand also remains subdued.” The EUR/USD dropped to 1.3340 from 1.3360, after Draghi’s comments.

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