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Analytics, News, and Forecasts for CFD Markets: currency news — 29-10-2012.
The euro reached the lowest level in almost three weeks amid a growing divide over Europe’s new bailout strategy and data that showed the region’s three-year- old crisis is weighing on its economy.
Retail sales in Spain dropped 11 percent in September from a year ago, a report showed, and the nation’s central bank set up a so-called bad bank.
The dollar remained stronger versus the euro even after consumer spending in the U.S. climbed more than forecast in September as incomes grew. Household purchases, which account for about 70 percent of the economy, rose 0.8 percent, the most since February, after a 0.5 percent gain the prior month, a Commerce Department report showed today in Washington.
The euro reached its low of the day versus the dollar after the Bank of Spain’s deputy governor, Fernando Restoy, set out plans for establishing a so-called bad bank, ordered by the European Union as a condition of the rescue.
The dollar and yen strengthened amid increased demand for refuge. The U.S. securities industry canceled equity trading on all markets today as Hurricane Sandy headed toward the New York City area.
The euro touched a two-week low against the yen after German Finance Minister Wolfgang Schaeuble rejected another debt restructuring for Greece.
The 17-member common currency slid against the dollar and yen today after Schaeuble, speaking in an interview with German radio Deutschlandfunk broadcast yesterday, said it would be “a bit unrealistic” to impose more losses on private bondholders. German Chancellor Angela Merkel’s government is willing to consider a European Central Bank proposal for a buyback of Greek debt, Steffen Seibert, Merkel’s chief spokesman, said today.
Gains in the yen were limited before Bank of Japan policy makers meet tomorrow after holding off from easing policy on Oct. 5. BOJ board members are facing political pressure to ease policy as data last week showed consumer prices fell for a fifth-straight month, making the central bank’s 1 percent inflation goal elusive. All but one of 27 economists surveyed by Bloomberg expect officials to increase stimulus tomorrow.
The pound weakened against the dollar after a report showed that house prices in England and Wales fell in October, noting the fourth consecutive decline. It is learned that house prices fell by 0.1% in September and 0.4% from a year earlier. At the same time, other data showed that the number of mortgage approvals rose to 50,000 last month from 47,700 in August, but it has not helped the currency recover their lost ground.
Sold E6.78bln vs target E5.6bln-E6.8bln
- E3.995bln 3-month BTF, avg yield -0.022% (-0.027%), cover 2.58 (3.18)
- E1.594bln 6-month BTF, avg yield -0.012% (-0.011%), cover 3.59 (3.27)
- E1.191bln 12-month BTF, avg yield 0.015% (0.022%), cover 4.10 (3.13)
EUR/USD $1.2890, $1.2900, $1.2950, $1.2975, $1.3000
USD/JPY Y79.50, Y80.20, Y80.50
GBP/USD $1.6000, $1.6100, $1.6195
EUR/GBP stg0.8030, stg0.8060
AUD/USD $1.0200, $1.0250, $1.0300, $1.0340, $1.0350
AUD/NZD NZ$1.2610
Data
09:30 United Kingdom Net Lending to Individuals, bln September -0.4 0.6 1.7
09:30 United Kingdom Mortgage Approvals September 47.7 48.5 50.0
12:30 U.S. Personal Income, m/m September +0.1% +0.5% +0.4%
12:30 U.S. Personal spending September +0.5% +0.6% +0.8%
12:30 U.S. PCE price index ex food, energy, m/m September +0.1% +0.1% +0.1%
12:30 U.S. PCE price index ex food, energy, Y/Y September +1.6% +1.7% +1.7%
13:00 Germany CPI, m/m (preliminary) October 0.0% 0.0% 0.0%
13:00 Germany CPI, y/y (preliminary) October +2.0% +1.9% +2.0%
The euro approached a two-week low against the dollar ahead of the meeting of prime ministers of Italy and Spain, which will discuss a plan to rescue the region. Also on such dynamics affect data that showed how the crisis affects the economy of the single currency bloc. According to today's report, the level of retail sales in Spain fell 11% in September, compared with last year. The euro fell to a two-week low against the yen as German Finance Minister Wolfgang Schaeuble rejected the restructuring of Greek debt. Note that the euro has appreciated by 0.3% against the dollar this month amid that European officials are waiting for treatment in Spain for financial assistance, which may eventually help draw a line under the debt crisis raging in the region. European policymakers are also waiting for the report, which will show the progress of Greece in achieving the internationally agreed development goals, which were developed by the European Commission, the International Monetary Fund and the ECB.
The dollar and the yen strengthened as signs of a global economic downturn increased the demand for refuge assets.
At the same time, strengthening of the yen has been limited, as many market participants expect the Bank of Japan's policy makers meeting to be held tomorrow and will be able to shed light on the future policy of the country. Also note that the Bank of Japan board members face pressure due to the fact that the presented last week data showed that consumer prices fell again, fixing the fifth decline in a row. Against this background, many analysts expect that the policy of the bank will announce the introduction of an additional stimulus that support flagging growth.
The Australian dollar fell against the decline of Asian stocks and growing concern over the outcome of the U.S. presidential election, which has undermined demand for higher-yielding assets. Note also that the currency losses were limited as traders are awaiting the decision of the Reserve Bank of Australia's interest rate, which will be announced at the meeting next week.
The pound weakened against the dollar after a report showed that house prices in England and Wales fell in October, noting the fourth consecutive decline. It is learned that house prices fell by 0.1% in September and 0.4% from a year earlier. At the same time, other data showed that the number of mortgage approvals rose to 50,000 last month from 47,700 in August, but it has not helped the currency recover their lost ground.
EUR/USD: during the session the pair fell, setting the minimum at $ 1.2385, but is now showing a slight recovery
GBP/USD: Trading in the exchange rate dropped significantly, setting the minimum at $ 1.6027, near which is now
USD/JPY: the exchange rate during the session shows a slight decrease
At 23:30 GMT Japan will release data on changes in the level of household spending and preliminary data on industrial production for September. Also during this time will be published data on the unemployment rate for September.
EUR/USD
Offers $1.3020/25, $1.3000, $1.2980, $1.2950/60
Bids $1.2885/80, $1.2850, $1.2815/00
GBP/USD
Offers $1.6120/25, $1.6140/50, $1.6100/05
Bids $1.6060/50, $1.6030/20, $1.6005/00, $1.5975/65
AUD/USD
Offers $1.0450, $1.0395/00
Bids $1.0320, $1.0305/00, $1.0295/90
EUR/JPY
Offers Y103.80, Y103.50, Y103.40/45, Y103.20/25, Y102.90/00
Bids Y102.50, Y102.20, Y102.00, Y101.80
USD/JPY
Offers Y80.20/25, Y80.00, Y79.80
Bids Y79.30, Y79.20
EUR/GBP
Offers stg0.8100, stg0.8080, stg0.8050
Bids stg0.8025/20, stg0.8005-00, stg0.7980
EUR/USD $1.2890, $1.2900, $1.2950, $1.2975, $1.3000
USD/JPY Y79.50, Y80.20, Y80.50
GBP/USD $1.6000, $1.6100, $1.6195
EUR/GBP stg0.8030, stg0.8060
AUD/USD $1.0200, $1.0250, $1.0300, $1.0340, $1.0350
AUD/NZD NZ$1.2610
On Friday the euro rose sharply against the dollar, but was unable to hold its positions, and yet depart from the maximum values reached with the opening levels of the day, which was due to concern over the fact that Spain will ask for financial assistance to meet their problems. Also in the course of the day the single currency fell after the Spanish unemployment data showed that the unemployment rate has reached record levels.
Note that a request for help from Spain, which is the fourth largest economy in the euro zone will be considered positive for the euro, because this will allow the European Central Bank to start buying bonds, and reducing the cost of borrowing for countries with high debt.
Also, in a joint statement, the European Central Bank and the European Commission said that Spain is on the way to fix your problems in the financial sector, but this requires more drastic measures that will be used to address some problem banks.
The dollar sharply and suddenly fell against the euro after data showed that U.S. GDP grew by 2.0% in the third quarter, following growth of 1.3% in the second quarter, and the expectations of 1.9 %.
The dollar fell against the yen, after reaching a four-month high on expectations that the Bank of Japan will take further measures to mitigate the monetary policy during its meeting next week. Experts predict that the central bank will increase the asset purchase program as the target inflation rate of 1%, is likely to be unattainable, even in the financial year starting in April 2014.
The dollar index (DXY), which is used to track the value of the dollar against the currencies of six U.S. partner has changed a bit while still achieving the level of 80.094.
23:50 Japan Retail sales, y/y September +1.8% +0.4%
The yen remained higher after its biggest one-day gain in two months as signs of weakness in the global economy increased demand for haven assets. The Bank of Japan is scheduled to meet tomorrow after holding off from easing policy on Oct. 5.
Japan’s currency maintained last week’s advance versus the euro before reports tomorrow that may show Spain’s gross domestic product shrank last quarter, while Germany’s jobless rate rose this month for the first time in more than three years. The Spanish economy probably shrank 0.4 percent in the three months ended Sept. 30 from the previous quarter, according to the median estimate of economists surveyed by Bloomberg News before preliminary government data tomorrow. Germany’s unemployment rate may have risen to 6.9 percent this month from 6.8 percent in September a separate poll showed ahead of tomorrow’s release. That would be the first gain since June 2009,
The Australian dollar slid on speculation concern over the outcome of the U.S. presidential election is sapping demand for higher-yielding assets. U.S. President Barack Obama and Republican challenger Mitt Romney entered the final stretch of the presidential contest, where opinion polls have tightened.
The Securities Industry and Financial Markets Association suggested that trading end at noon New York time today in dollar-denominated fixed-income securities in the U.S. because of Hurricane Sandy. The New York Stock Exchange and New York Mercantile Exchange canceled floor trading for the day.
EUR / USD: during the Asian session the pair fell to $1.2915.
GBP / USD: during the Asian session the pair fell to $1.6075.
USD / JPY: during the Asian session, the pair traded in the range of Y79.60-75.
We begin the trading week with a fairly limited calendar Monday, especially on the European side. Spanish September retail sales are dueto be published at 0700GMT. The only scheduled UK data is the release of UK October BOE M4 data and UK October BOE Bankstats, due at 0930GMT. US data kicks off at 1230GMT, with the release of US September Personal Income, which is expected to rise 0.4% in September.
11:30 United Kingdom Net Lending to Individuals, bln September -0.4 0.6
11:30 United Kingdom Mortgage Approvals September 47.7 48.5
14:30 U.S. Personal Income, m/m September +0.1% +0.5%
14:30 U.S. Personal spending September +0.5% +0.6%
14:30 U.S. PCE price index ex food, energy, m/m September +0.1% +0.1%
14:30 U.S. PCE price index ex food, energy, Y/Y September +1.6% +1.7%
15:00 Germany CPI, m/m (preliminary) October 0.0% 0.0%
15:00 Germany CPI, y/y (preliminary) October +2.0% +1.9%
01:30 Japan Unemployment Rate September 4.2% 4.2%
01:30 Japan Household spending Y/Y September +1.8% +0.8%
01:50 Japan Industrial Production (MoM) (preliminary) September -1.6% -3.1%
01:50 Japan Industrial Production (YoY) (preliminary) September -4.6% -7.1%
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