OctaFX.Com - Financial News and Analysis

[OctaFX_Farid]

Australian Dollar Sold as Dovish RBA Cuts Hopes for Future Rate Hike

LONDON (Reuters) - World stocks hit their lowest in over a week on Thursday and Wall Street was set open in the red as manufacturing slumps in China and the euro zone fuelled global growth concerns.

The downbeat data triggered flows back into safe-haven assets that boosted German government debt, while it also sent the euro lower and left the common currency looking vulnerable to further losses.

The HSBC flash Purchasing Managers' Index, the earliest indicator of China's industrial activity, fell to 48.1 in March from February's four-month high of 49.6.

The euro zone's leading economies Germany and France both reported an unexpected contraction in manufacturing activity. [nL9E7J203Z], sending Markit's Composite PMI for the region down to 48.7 in March from 49.3 in February.

Anything below 50 is viewed as a contraction.

"When you get numbers like this out of the euro zone it definitely puts the growth outlook into question and points to a mild recession," said Niels Christensen, currency strategist at Nordea in Copenhagen.

"There should be a widening of rate differentials in favor of the dollar, so a lower euro/dollar will be the result".

MSCI's main world equity index <.MIWD00000PUS> fell 0.4 percent to its lowest in eight days after hitting its highest level since August earlier in the week.

U.S. stock index futures <.NDc1> pointed to losses of 0.5-0.6 percent at the Wall Street open.

Recent comments by the U.S. Federal Reserve have cut expectations of further quantitative easing, or asset buying. Previous rounds of QE had supported risky assets.

"Everyone was so focused on Greece and the debt crisis is still on everyone's mind, but attention is focusing back on to fundamentals," said DZ Bank rate strategist Michael Leister.

"The PMIs alone don't make for such a big story but they fit into the bigger picture risk-off theme that we're seeing."

European stocks <.FTEU3> weakened for a fourth straight session, heading for their longest negative run in four months. They fell 1 percent to 10-day lows and emerging stocks <.MSCIEF> fell 0.4 percent to two-week lows.

The euro dropped 0.4 percent against the dollar to $1.3162 and 1 percent against the yen to 109.

The dollar lost 0.7 percent to 82.79 yen although it gained 0.2 percent against a basket of major currencies <.DXY>.

Brent crude oil was down 0.5 percent at $123.55 a barrel.

Mar 06, 2012 04:09

OctaFX.Com News Updates

[OctaFX_Farid]

Stocks slip on growth worries, bonds rise

NEW YORK (Reuters) - World stocks drifted lower on Friday, pulled down by a decline in U.S. home sales as concerns about global growth cooled enthusiasm.

Commodity prices ticked higher on the belief the prior day's sell-off in risk assets was overdone.

The Commerce Department said sales of new single-family homes slipped 1.6 percent in February to a seasonally adjusted 313,000-unit annual rate. January's sales pace was revised down to 318,000 units from the previously reported 321,000 units.

U.S. government debt prices rose for the fourth day in a row, reversing more of last week's losses, as concerns about the economic picture in China and Europe competed with improved U.S. employment for investors' attention.

The benchmark 10-year U.S. Treasury note was up 18/32 in price to yield 2.21 percent.

Wall Street opened mixed, but then fell on the U.S. home sales. European and global stock indices were lower.

The belief that equity markets have gained to much in too short a time has dampened investor sentiment. The benchmark S&P 500, on track for its first weekly decline in six weeks, has gained more than 10 percent so far this year and almost 30 percent since its October lows.

"We are all looking for a correction in the markets and that is what we are getting at the moment," said Frank Lesh, a futures analyst and broker at FuturePath Trading LLC in Chicago.

"It's not a deep and serious correction, but we were a bit overbought and we could just move sideways to slightly lower to correct that, and it appears that is what we are doing."

The Dow Jones industrial average (DJI:DJI) was down 11.24 points, or 0.09 percent, at 13,034.90. The Standard & Poor's 500 Index (MXP:SPX) was down 1.68 points, or 0.12 percent, at 1,391.10. The Nasdaq Composite Index (NAS:COMP) was down 13.33 points, or 0.44 percent, at 3,049.99.

The MSCI world equity index <.MIWD00000PUS> was off 0.1 percent, while a measure of top European stocks <.FTEU3> lost 0.8 percent and emerging markets <.MSCIEF> fell 0.5 percent.

The dollar has been supported by an improving U.S. economic landscape that contrasts with the euro zone, where most economies are either teetering on the brink of or in recession.

The euro was up 0.37 percent at $1.3245, and the U.S. Dollar Index <.DXY> down 0.36 percent at 79.448.

The relationship between risk appetite and the dollar has become more complicated, according to Chris Fernandes, vice president, senior foreign exchange adviser for the capital markets division at Bank of the West in San Ramon, California.

"Whereas in the past the dollar would tend to fall as risk appetite was rising, the dollar is now benefiting from pro-risk developments, as U.S. economic data has generally bested expectations recently," he said.

Brent oil was up $1.84 at $124.98 a barrel, underpinned by worries that military conflict with Iran will hit supplies and create an oil price spike.

U.S. light sweet crude oil rose $1.30 to $106.65 a barrel. The Reuters/Jefferies CRB Index <.CRB> of leading commodity prices was up 0.6 percent at 314.04.

Mar 23, 2012 10:29

OctaFX.Com News Updates

[OctaFX_Farid]

Euro hits 3-week high vs dollar; Aussie steadies

NEW YORK (Reuters) -NEW YORK (Reuters) - The euro rose to a three-week high against the dollar on Friday after three straight days of losses while the Australian dollar stabilized from its recent plunge as concerns over a slowdown in China and the euro zone eased slightly.

Despite the dollar's weakness it remains supported by an improving economic landscape in the United States that contrasts starkly with other countries across the Atlantic that are teetering on the brink of recession or actually in one.

New U.S. home sales data on Friday backed the view the housing sector is on a stable path to recovery.

"This could probably be position-squaring in euro/dollar after the selling we had seen the last few days," said Brian Kim, currency strategist, at Royal Bank of Scotland in Stamford, Connecticut.

"There has really been no bad news out of Europe overnight, so people I think are just preparing for next week's European finance ministers' meeting where they will discuss increasing the euro zone bailout fund."

Overall, worries about faltering global growth in the euro zone and China, which had hit stocks and riskier currencies a day earlier, eased off slightly, tempering demand for safer bets such as the dollar and the yen.

The relationship between risk appetite and the dollar has become more complicated, according to Chris Fernandes, vice president, senior foreign exchange advisor for the capital markets division, at Bank of the West in San Ramon, California.

"Whereas in the past the dollar would tend to fall as risk appetite was rising, the dollar is now benefiting from pro-risk developments, as U.S. economic data has generally bested expectations recently," he said.

The recent dollar rally, however, has been tempered by the prospect of the Federal Reserve launching a third round of quantitative easing, which is still on +the table, said Fernandes, who helps oversee almost $10 billion in assets under management.

If the Fed unleashes a third round of quantitative easing, that would be negative for the dollar, as it is tantamount to printing money and dilutes its value.

The greenback has gained 7 percent against the yen since the start of this year. The euro has jumped 9.6 percent versus the Japanese currency, with gains picking up after the Bank of Japan surprisingly eased policy by announcing more quantitative easing in February.

The euro last traded at $1.3264, up 0.5 percent, retreating from a three-week high of $1.3293 hit earlier in the global session, but up from Thursday's low of $1.3133. It is on track for a second consecutive weekly gain.

A key level of resistance for the currency pair is $1.33 and a break of that level would likely move it up towards $1.3500.

"I believe we may be in for a bit of range-trading right now in the major currency pairs, with the EUR/USD moving between $1.3000-1.3500, and the USD/JPY having a bit more upside, looking at 82.00-85.00," said Bank of the West's Fernandes.

The greenback was down 0.2 percent at 82.34 yen.

Euro zone finance ministers are moving closer to agreeing a combined rescue fund of around 700 billion euros ($924 billion) in Copenhagen next week and anything higher would probably be too ambitious, euro zone diplomats said on Friday.

A larger euro zone rescue fund would go a long way toward reassuring markets a viable firewall is in place should Portugal, Italy or Spain continue to struggle.

"I am still favoring a stronger EUR, but we may not see this come to fruition until the second half of this year," said Bank of the West's Fernandes.

The Australian dollar, meanwhile, was up 0.6 percent at US$1.0454 after hitting a two-month low of US$1.0336 the previous session.

Mar 23, 2012 11:49

OctaFX.Com News Updates

[OctaFX_Farid]

Euro zone seeks middle ground on rescue fund size

BRUSSELS (Reuters) - Euro zone finance ministers are moving closer to agreeing a combined rescue fund of around 700 billion euros ($924 billion) in Copenhagen next week and anything higher would probably be too ambitious, euro zone diplomats said on Friday.

The EU's top economic official, Olli Rehn, is pushing for a big fund capable of bailing out indebted euro zone countries such as Italy and Spain, should they be cut off from the markets, despite resistance in Germany, the bloc's paymaster.

So far, Germany has refused to countenance any combination of the various rescue funds.

In a final push to press Berlin and others to go further, the European Commission circulated a document to member states this week in Brussels, proposing an increase to as much as 940 billion euros.

But three diplomats said that was unrealistic, as the European Central Bank has already injected 1 trillion euros in stimulus to banks, and EU governments have committed to tough economic reform and fiscal discipline to calm financial markets.

"Officials are moving towards the middle ground of giving the combined fund a lending capacity of 700 billion," said one euro zone diplomat who had seen the Commission report that was also obtained by Reuters.

Finance ministers and central bankers will discuss the size of a bailout firewall in Copenhagen next Friday. That would likely be made up of the European Financial Stability Facility (EFSF) that had been due to be wound up next year, and the European Stability Mechanism (ESM) permanent fund that was set to replace it.

The 440 billion euro EFSF and the 500 billion euro ESM now have a combined lending ceiling of 500 billion euros, which means that in the 12 months from July, when they will co-exist, they would not be able to lend beyond that limit.

Last week, senior euro zone officials told Reuters that the 17-nation currency area is likely to agree on a combined fund of almost 700 billion euros in a trade-off between German opposition to more funds and the need to reassure investors.

"The signals we are getting is that Germans are going to come on board," said another diplomat.

WHAT BERLIN WANTS

Under the Commission's central proposal, the two funds would be allowed to add up to 940 billion euros, transferring the EFSF's remaining firepower into the ESM.

That means the lending capacity of the ESM would be 740 billion euros, taking out existing emergency loans to Portugal, Greece and Ireland.

"The markets would be most likely to consider the new lending capacity sufficient and the brunt of the stabilization effort would no longer fall on the ECB," the report said.

The Commission hopes that would help motivate other major global powers such as the United States and China to give more funds to the International Monetary Fund to deal with any further fallout from the debt crisis.

Two other proposals sketched out by the EU's executive include one that would allow the EFSF and ESM to operate independently of one another until the EFSF is wound down next year. That would also equate to a joint-lending capacity of 740 billion euros but only until the EFSF is closed.

A third alternative would be to disband the EFSF ahead of 2013, making the ESM responsible for all lending. This model would see total lending capacity at 500 billion euros.

"The question is what Germany might want in return to agreeing to a bigger firewall, be it more austerity from member states, or a German in one of the top posts soon to be vacant in the EU," said a third diplomat.

European governments are jostling for four coveted jobs, including the post of coordinating policy between euro zone finance ministers, known as the president of the Eurogroup.

Germany has put forward its finance minister, Wolfgang Schaeuble, for the influential post, sources told Reuters this month, although that move may also be a negotiating ploy.

Mar 22, 2012 00:49

OctaFX.Com News Updates

[OctaFX_Farid]

Euro up versus dollar, yen as Bernanke fans QE hopes

NEW YORK (Reuters) - The euro advanced against the dollar and the yen on Monday as weaker-than-expected U.S. data and Federal Reserve Chairman Ben Bernanke's cautious comments on the job market spurred hopes for more easing ahead, boosting riskier assets.

The single currency hit a better than three-week high against the greenback and jumped more than 1 percent against the yen.

Bernanke's warning that the U.S. economy needs to grow faster to get the unemployment rate down boosted hopes early in the session that the bank could yet conduct another round of quantitative easing.

Disappointing home sales data reinforced that outlook later on Monday, with contracts to purchase previously owned U.S. homes unexpectedly falling in February.

"All this left the market with the nagging thought that the Fed is not quite done with economic stimulus," said Boris Schlossberg, director of FX Research at GFT in Jersey City, New Jersey. "I think they have not in any way, shape or form eliminated that possibility."

News from Europe also helped the single currency, with German Chancellor Angela Merkel giving veiled approval to an expected increase in the region's financial firewall this week, with finance ministers meeting in Copenhagen on March 30-31.

The euro advanced 0.41 percent to $1.3325 on Monday and touched its highest since March 1. Against the yen the single currency jumped as high as 110.54 yen before more recently trading at 110.37 yen, up 1.01 percent.

The dollar also slid against the Swiss franc, off 0.39 percent to 0.9042 francs.

Still, analysts said the region's debt crisis is far from over. A number of events this week could help clarify how well policymakers are managing those problems, including bond auctions in Italy and Spain's budget on Friday. Italy is seeking to raise up to 7.5 billion euros amid renewed pressure on peripheral euro zone debt.

Worries are also growing about Spain after a government setback in regional elections, making Prime Minister Mariano Rajoy's task of pushing through harsh spending cuts more difficult.

"Really we've made a big stride but we haven't actually solved the problems" in the euro zone, said Camilla Sutton, chief currency strategist at Scotia Capital. The euro could see recurring bouts of selling through the year as those worries persist, she added.

DOLLAR FIRMER AGAINST YEN

The dollar advanced against the Japanese currency, gaining 0.62 percent to 82.82 yen.

Traders said they would prefer to buy the dollar and sell the yen, with repatriation inflows ahead of the Japanese fiscal year-end on March 31 unlikely to change the bearish sentiment toward the Japanese currency over the medium term.

"We are expecting the dollar/yen pair to trade in a 80-85 yen range with a risk of an upside break. A lot will depend on whether the economies outside the U.S. also pick up," said Paul Robson, currency strategist at RBS Global Banking.

"As long as the U.S. economy shows signs of outperforming the others, the dollar would be supported."

The growth-linked Australian dollar was up 0.64 percent at $1.0525 after a fall last week.

Mar 22, 2012 00:49

OctaFX.Com News Updates

OctaFX is proud to offer top-notch service level to its customers. Please stay tuned for the news and updates from OctaFX!

[OctaFX_Farid]

Dollar falls against euro after Bernanke commentsDollar falls against euro after Bernanke says US job market is still weak

NEW YORK (AP) -- The dollar fell sharply against the euro Monday after Federal Reserve Chairman Ben Bernanke said that the U.S. job market is still weak despite recent signs that it is improving.

Traders interpreted Bernanke's comments to mean that the Fed will keep interest rates near zero. Lower interest rates tend to weigh on a currency by reducing the returns investors get from holding it.

Bernanke's comments were made during a speech at the National Association for Business Economics.

The euro rose to $1.3333 in afternoon trading from $1.3263 late Friday.

The central bank has kept interest rates near zero since cutting them during the financial crisis in December 2008. The Fed keeps rates low in order to help the economy recover.

Despite improvements in the job market, Bernanke said that he doesn't expect the unemployment rate to keep falling. Employers added an average of 245,000 jobs a month from December through February. And the unemployment rate was at 8.3 percent in February, down from 9 percent during the same month a year ago.

In other trading, the British pound rose to $1.5926 from $1.5871. The dollar fell to 0.9034 Swiss franc from 0.9086 Swiss franc and to 99.22 Canadian cents from 99.85 Canadian cents.

The dollar rose to 82.77 Japanese yen from 82.49 yen.

Mar 26, 2012 15:49

OctaFX.Com News Updates

[OctaFX_Farid]

Euro gains versus dollar, yen; Bernanke triggers new quantitative easing talk

NEW YORK (Reuters) - The euro advanced against the dollar and yen for a second straight day on Monday as weaker-than-expected U.S. data and Federal Reserve Chairman Ben Bernanke's cautious comments on the job market spurred expectations for more policy easing.

The single currency hit a better than three-week high against the greenback and jumped more than 1 percent against the yen. Still, analysts said the euro zone's debt crisis was far from over and the currency could come under pressure this week.

Bernanke's warning that the U.S. economy needs to grow faster to get unemployment down led investors to take on more risk on hopes the central bank could conduct another round of quantitative easing.

Disappointing home sales data reinforced that outlook later on Monday, with contracts to purchase previously owned U.S. homes unexpectedly falling in February.

"All this left the market with the nagging thought that the Fed is not quite done with economic stimulus," said Boris Schlossberg, director of FX Research at GFT in Jersey City, New Jersey. "I think they have not in any way, shape or form eliminated that possibility."

News from Europe also helped the single currency, with German Chancellor Angela Merkel giving veiled approval to an expected increase in the region's financial firewall this week, with finance ministers meeting in Copenhagen on March 30-31.

The euro advanced 0.5 percent to $1.3331 on Monday and touched its highest since March 1. Against the yen the single currency jumped as high as 110.54 yen before more recently trading at 110.44 yen, up 1.1 percent.

The dollar also slid against the Swiss franc, off 0.5 percent to 0.9035 francs. The dollar's session trough against the Swiss franc was the lowest since March 2, according to Reuters data

A number of events this week could help clarify how well policymakers are managing problems in the euro zone. They include bond auctions in Italy and Spain's budget on Friday. Italy hopes to raise up to 7.5 billion euros amid renewed pressure on peripheral euro zone debt.

Worries are also growing about Spain after a government setback in regional elections, making Prime Minister Mariano Rajoy's task of pushing through harsh spending cuts more difficult.

"Really we've made a big stride but we haven't actually solved the problems" in the euro zone, said Camilla Sutton, chief currency strategist at Scotia Capital. The euro could see recurring bouts of selling through the year as those worries persist, she added.

DOLLAR FIRMER AGAINST YEN

The dollar advanced against the Japanese currency, gaining 0.6 percent to 82.81 yen.

Traders said they would prefer to buy the dollar and sell the yen, with repatriation inflows ahead of the Japanese fiscal year-end on March 31 unlikely to change the bearish sentiment toward the Japanese currency over the medium term.

"We are expecting the dollar/yen pair to trade in a 80-85 yen range with a risk of an upside break. A lot will depend on whether the economies outside the U.S. also pick up," said Paul Robson, currency strategist at RBS Global Banking.

"As long as the U.S. economy shows signs of outperforming the others, the dollar would be supported."

The growth-linked Australian dollar was up 0.5 percent at $1.0514, recouping some of last week's 1.2 percent decline.

Mar 26, 2012 18:35

OctaFX.Com News Updates

[OctaFX_Farid]

OECD pushes for $1.3 trillion eurozone crisis fund

OECD head urges euro countries to boost crisis fund to $1.3 trillion-plus to aid growth

BRUSSELS (AP) -- The 17 countries that use the euro need to build a €1 trillion ($1.3 trillion) firewall to help the struggling currency union return to growth, the head of the Organization for Economic Cooperation and Development said Tuesday.

Angel Gurria, the secretary-general of the Paris-based international development body, said existing plans for a €500 billion ($664 billion) European rescue fund were not enough to restore market confidence in the eurozone.

"The mother of all firewalls should be in place," Gurria he told a news conference in Brussels, where he was flanked by Olli Rehn, the EU's economic affairs commissioner, who has also been pushing for a larger bailout fund.

A permanent bailout fund of at least €1 trillion would give governments the breathing space to focus on kickstarting growth and restoring the competitiveness of their economies, Gurria added.

As well as shoring up the financial defenses, the OECD chief pointed to a raft of economic reforms that individual countries should enact. According to the organization's annual report for the eurozone, which was released Tuesday, vulnerable states may need more than €1 trillion in aid over the coming two years and Gurria said eurozone finance ministers should take a decision to boost their bailout funds at their meeting in Copenhagen on Friday.

Germany, the bloc's largest economy, signaled on Monday that it would support an increase to around €700 billion ($929 billion), but only until some €200 billion in loans already promised to Greece, Ireland and Portugal have been paid back.

That falls below the recommendation of the International Monetary Fund and the European Commission, the European Union's executive. Both organizations believe a much bigger firewall will keep a lid on the pressure on Italy and Spain, the eurozone's third- and fourth-largest economies, which have a combined debt load of more than €2.5 trillion.

"I am of the view that when you are dealing with markets you should overshoot," Gurria said.

Germany's proposal may also not be enough to convince other large non-euro economies, such as China and the U.S., to give the IMF more resources, money that could be used to further protect Europe.

Asked about the chances that Gurria's €1 trillion goal could actually be achieved on Friday, Rehn declined to give a clear answer.

"I am confident that we can reach a convincing decision," he said, adding that discussions between euro states were still ongoing.

Countries like Germany fear that easy access to financial support could stop countries from implementing reforms. They also point to the recent stabilization in financial markets. Credit for that has been given to the European Central Bank, which has pumped more than €1 trillion in cheap long-term loans into European banks.

The OECD's Gurria warned of the perils of overconfidence.

"We can still clearly not draw too much comfort from these signs of healing," he said, noting that there had been other brief moments of respite in Europe's two-year-old debt crisis.

He warned that funding costs in several euro countries remain unsustainable, and — in what appeared to be a clear reference to Spain — have been creeping up again in recent weeks.

Gurria also suggested that the ECB could intervene more aggressively in the bond markets of struggling countries if market pressures resurface — a step that the central bank has been reluctant to take so far.

Mar 27, 2012 08:56

OctaFX.Com News Updates

[OctaFX_Farid]

Stocks hit 8-month high, dollar bounces back

NEW YORK (Reuters) - World stocks touched an eight-month high on Tuesday, while the dollar rebounded from the previous day's losses a day after the Federal Reserve signaled it would continue its loose monetary policy.

The U.S. dollar strengthened against the euro and the yen after Fed Chairman Ben Bernanke's dovish comments sent it tumbling in the previous session.

U.S. stocks were little changed after a more than 1 percent rally lifted the S&P 500 to a four-year high on Monday.

"Bernanke yesterday talked about the need for aggressive monetary policy and the dollar took a pretty good whack, so it's probably clawing some of that back," said Art Hogan, managing director of Lazard Capital Markets in New York.

Bernanke said Monday accommodative monetary policy would stay in place to support demand and, over time, drive down long-term unemployment. He stopped short of signaling the start of a new round of asset purchases by the Fed.

The S&P 500 is on track to close its best quarter since 2009 and its fourth straight month of gains. MSCI's main global stock index (.MIWD00000PUS) was up 0.2 percent after hitting its highest level since August 1.

"Last week markets tried to price in a global economic slowdown but we're now seeing a slowdown, but not one that is unexpected," Hogan said. "We still believe there's a soft landing in China, Europe has stabilized and the U.S. continues to chug along at a sustainable rate."

In morning trading, the Dow Jones industrial average (DJI:^DJI - News) dipped 4.80 points, or 0.04 percent, to 13,236.83. The S&P 500 Index (.INX) shed 0.14 point, or 0.01 percent, to 1,416.37. The Nasdaq Composite (NAS:^COMP) gained 4.30 points, or 0.14 percent, to 3,126.87.

The pan-European FTSEurofirst 300 (FSI:^E3X) fell 0.5 percent, while U.S. dollar-denominated Nikkei futures jumped 1.2 percent.

A private sector report showed U.S. consumer confidence dipped in March but was nearly in line with forecasts, while inflation expectations rose to the highest in 10 months.

U.S. Treasuries prices added slight gains after the data, with the 10-year yield again below its 200-day average and at its lowest in two weeks.

The benchmark 10-year U.S. Treasury note was up 13/32, with the yield at 2.2068 percent.

Lower yields contributed to record-setting dollar amounts of U.S. corporate note and bond sales this quarter.

With four days left, data from Thomson Reuters unit IFR show $274.5 billion were priced in investment grade deals, eclipsing the previous record for a first quarter of $272.3 billion in 2007 -before the credit crisis.

This is the best quarter ever for high yield deals. At $88 billion, the amount beats the previous record of $85.3 billion set in the last quarter of 2010.

Mar 27, 2012 15:36

OctaFX.Com News Updates

OctaFX is proud to offer top-notch service level to its customers. Please stay tuned for the news and updates from OctaFX!

[OctaFX_Farid]

Dollar gains, snapping two day drop versus euro

NEW YORK (Reuters) - The dollar gained against the euro on Tuesday, snapping two straight sessions of losses as data tempered concerns of more stimulus from the Federal Reserve.

The greenback's rally came a day after comments from Federal Reserve Chairman Ben Bernanke raised expectations that the Fed could yet embark on a third round of quantitative easing.

On Monday, Bernanke said "further significant improvements in the unemployment rate will likely require a more rapid expansion of production and demand from consumers and businesses, a process that can be supported by continued accommodative policies." He made those comments to the National Association for Business Economics.

Until markets have more clarity on the Fed's plans, though, trading could stay constrained, analysts said.

"From our perspective, people are misinterpreting the Bernanke speech," said Mark McCormick, a G10 currency strategist with Brown Brothers Harriman in New York.

"I think people have taken it as sign of quantitative easing coming down the line, but I think that exaggerates the key takeaway," he added, with Bernanke not necessarily signaling more QE.

The euro slid 0.2 percent to $1.3334 in New York on Tuesday.

A U.S. report showed home prices were unchanged in January from December, the first time since July the seasonally adjusted S&P/Case-Shiller 20-city index has not declined and a sign that the battered housing market is slowly stabilizing.

A report from industry group The Conference Board showed the index of consumer attitudes eased to 70.2 from an upwardly revised 71.6 the month before, roughly in line with economists' expectations for 70.3.

The details of the report were mixed as consumer expectations fell, but their assessment of their current situation rose to the highest level since September 2008.

"The economy is doing a lot better than many people thought, and the market is going to run with that, but the Fed will not stand around while U.S. yields back up significantly," said Neil Mellor, currency strategist at Bank of New York Mellon in London.

"There will be a cat-and-mouse game between the market and Bernanke. I think the dollar will be in a range for some time."

The euro zone's sovereign debt crisis could still weigh on the single currency, as well.

While Germany signaled for the first time on Monday its willingness to increase the resources available for tackling the euro-zone debt crisis, several key events remain this week.

Those include a meeting of euro-zone finance ministers in Copenhagen on Friday and Saturday and Spain's budget presentation on Friday.

The meeting of finance ministers "could result in some near- term volatility," said Omer Esiner, chief market analyst with Commonwealth Foreign Exchange in Washington, D.C. "It's hard to push the euro up further from these levels without some catalyst."

YEN STEADIES AFTER DROP

Traders and analysts said moves in U.S. Treasuries would be key for the dollar. If demand for Treasuries gained steam and bond yields fell in the wake of Bernanke's comments, the dollar could face more pressure.

The greenback was up 0.4 percent against the yen at 83.15 yen, though below a recent 11-month high. Against Japan's yen, the single currency rose 0.2 percent to 110.86 yen.

The Japanese currency was seen as vulnerable to more selling, and has been under heavy pressure since Japan announced monetary easing measures last month.

With the fiscal year ending on March 31, which is Saturday, expected repatriation flows have done little to support the yen so far, said Joe Manimbo, a market analyst with Western Union Business Solutions in Washington, D.C.

"That suggests next week the yen could come under pressure, since it didn't benefit from expected month- and year-end flows," he added.

Mar 27, 2012 17:22

OctaFX.Com News Updates

[OctaFX_Farid]

Gold slips 1 percent as dollar strengthens

LONDON (Reuters) - Gold prices slid more than 1 percent on Thursday as a break higher in the dollar and a drop in oil prices pushed gold through key support near the $1,655 an ounce level, prompting further liquidation.

Spot gold was down 0.6 percent at $1,652.84 an ounce at 1508 GMT, off a low as $1,647.29 an ounce. The metal is on track for a third session of losses after a rally early in the week, sparked by Federal Reserve hints that accommodative monetary policy is set to persist, petered out.

"We have a forecast for an average price for the year of $1,450, so we are not surprised that gold prices are struggling to go higher," Nic Brown, head of commodity research at Natixis, said. "We think as time goes on the likelihood is that prices will probably soften further."

Gains in the dollar exerted strong pressure on gold. The euro fell against the U.S. unit as concerns about contagion from the euro zone debt crisis resurfaced ahead of Spain's budget on Friday. A stronger dollar tends to weigh on gold, which is priced in the U.S. currency. (FRX/)

Oil prices fell nearly $2 a barrel, European shares slipped and safe-haven German bunds inched higher, suggesting little appetite for assets seen as higher risk. A broadly successful sale of Italian bonds did little to soothe worries over the euro zone crisis.(GVD/EUR)

Gold is likely to need significant fresh support from a move in the wider financial markets, as well as a drop in the dollar, to push it to fresh highs, analysts said.

"We have suspected that it would take much more than a pure dollar correction for sustained gains to $1,700 and beyond, especially now that bullion is strongly correlated to the broader equity market, and risk sentiment in general," VTB Capital said in a note.

"It comes as little surprise, with the VIX volatility index - the global risk gauge - rallying to 2.5-week highs, that gold followed other precious metals with the broader market back in risk averse mode."

SUBSTANTIAL SUPPORT

Physical demand for gold among key Asian buyers was mixed.

"In the near-term there is substantial support still coming out of China. Until Chinese investors have a solid alternative to precious metal, it's likely that demand coming out of China will remain very strong," said Natixis' Brown.

But gold demand from India, the world's biggest buyer of the yellow metal, remains muted as jewelers' protests entered their thirteenth day, dealers said.

"If you see a significant decline in Indian demand for gold, that is a major negative for the gold market," Brown said.

U.S. gold futures for June delivery were down $5.30 an ounce at $1,655.20.

Swiss bank UBS cut its 2012 gold price forecast to $1,680 an ounce from $2,050 previously, which it said partly reflects the metal's performance in the first quarter.

"The view that the U.S. economic recovery is looking more sustainable is becoming increasingly accepted," it said. "As acute macro stresses abate, investors are looking at other asset classes and to the growth story once again. Gold is moving off the

centre-stage position it occupied for most of last year."

Nonetheless, the threat of a fresh downturn in the U.S. economy and of further credit stress, as well as ongoing official sector buying, higher oil prices and the low interest rate environment, will still underpin gold, it added.

Silver was down 0.7 percent at $31.78 an ounce. The gold/silver ratio, or the number of silver ounces needed to buy an ounce of gold, rose back towards 52, near a two-month high.

Spot platinum was down 0.3 percent at $1,625.70 an ounce, while palladium was down 0.1 percent at $641.97.

Mar 29, 2012 15:17

OctaFX.Com News Updates

[OctaFX_Farid]

Euro drops, yen rises; Spanish budget ahead

NEW YORK (Reuters) - The euro slid against the dollar and the yen on Thursday as investors dumped the single currency, nervous about Spain's budget presentation at the end of the week and ongoing concerns about the euro-zone sovereign debt crisis.

The single currency has declined steadily in recent sessions after touching a near four-week high earlier this week on comments from U.S. Federal Reserve Chairman Ben Bernanke, who indicated supportive monetary policy will remain in place.

But with several key risk events for the euro zone in the next few days, investors are squaring positions, said Nick Bennenbroek, head of currency strategy at Wells Fargo Bank in New York.

"We've had a few good days for the euro," he said.

With a broader bias to sell euros still pervading the market, investors are now booking profits on some of those advances, he added.

The euro fell 0.3 percent to $1.3273 and touched its lowest since in three sessions in earlier trade.

Events in the next few days include Spain's budget presentation, which will show how far the government will tighten its belt, and a meeting of euro-zone finance ministers, where policymakers are expected to increase the combined lending ceiling of their two bailout funds.

Spain's budget "is a very dicey game," said Karl Schamotta, senior markets strategist with Western Union Business Solutions in Calgary.

An austere document could spur relief in bond markets.

"However, the reality is that that will slow growth and cause problems for them down the road," he said. "If the budget is on the softer side, we could see bond markets capitulating and participants concerned that we are not seeing enough resolve."

For trading, that means volatility ahead, Schamotta said.

Italian and Spanish bond yields were already rising on Thursday despite a broadly successful sale of Italian bonds, as investors switched into low-risk German debt.

Focus on the euro-zone bailout fund's size increased after European Central Bank governing council member Jens Weidmann, who is also the Bundesbank chief, warned that raising the firewall around stricken euro-zone members would only buy time.

Traders said automatic, stop-loss sell orders were triggered on the euro's break below $1.33 after the European Commission's economic sentiment index dipped by 0.1 percent, with sentiment in industry becoming markedly worse.

Analysts said the euro was unlikely to break out of its recent range of roughly $1.30 to $1.35.

YEN RISES BROADLY

The euro fell 0.9 percent on the day to 109.27 yen. The Japanese currency gained broadly on demand linked to the end of Japan's financial year and as European and U.S. equity markets followed Asian bourses into negative territory.

Wednesday was the last day for spot trading in Japan's business year that will end on March 31. But real-money flows from Tokyo kept major currencies under pressure against the yen, with exporters selling the dollar in large amounts, market players said.

The dollar fell 0.66 percent to 82.30 yen and touched a near three-week low, triggering reported stop-loss orders on the break of 82.35/40. But many strategists said the dollar should reassert itself against the yen as long as upcoming U.S. data does not support a recent rise in concerns about growth.

"There's definitely a lot of month-end and quarter-end rebalancing, but the bigger story we are seeing is some bond buying and equity selling in the last 24 hours," said Geoff Kendrick, currency strategist at Nomura.

The growth-linked Australian dollar fell 0.5 percent to USD$1.0339, hurt by concerns about slower growth in China.

Mar 29, 2012 16:10

OctaFX.Com News Updates

[OctaFX_Farid]

Euro slides versus dollar, yen on European manufacturing

NEW YORK (Reuters) - The euro slid against the dollar and yen on Monday as weak European manufacturing data prompted investors to compare the outlook for the euro zone with the improving economy.

The euro remained vulnerable to renewed bouts of selling after the regional manufacturing survey, analysts said, as investors took a cautious view of prospects for the global economy even after strong Chinese factory data.

A report on business activity in the U.S. manufacturing sector came in above the consensus forecast further contrasting the U.S. against the euro zone.

"PMIs out of Europe are another reminder of the extent economies have gone down," said Omer Esiner, chief market analyst with Commonwealth Foreign Exchange in Washington, D.C. "Strong U.S. data this week is likely to see the dollar strengthen on rising yield appeal."

The euro fell 0.3 percent against the dollar to $1.3311, though still within a cent of the recent one-month high of $1.3385, according to Reuters data. Analysts said that peak will provide resistance after the euro has repeatedly failed to breach it.

Traders said negative sentiment towards euro zone assets arose on reports the Bundesbank would not accept the bonds of several countries, including Portugal, as collateral. Germany's central bank later denied the reports.

"There's an increasing risk of a more prolonged recession in Europe and economic fundamentals argue in favor of a further downward adjustment in the euro," said Lee Hardman, currency analyst at BTM-UFJ in London.

YEN GAINS

The low-yielding yen, which tends to fall when risk appetite increases, recouped earlier losses, with the dollar down 0.9 percent at 82.09 yen and the euro down 1.1 percent at 109.26 yen.

"It seems like investors remain cautious with service sector data from China still to come this week and nothing to indicate an imminent policy response from the Chinese to the slowdown in their economy," said Valentin Marinov, head of European G10 currency strategy at Citi in London.

"It's a week ahead of the long weekend with thin liquidity, making investors reluctant to express strong views and which limits the scope for meaningful returns ahead of Easter."

The Japanese currency was undermined by a weaker-than-expected reading of the Tankan survey of sentiment at big Japanese manufacturers, which put the spotlight on whether the Bank of Japan will ease monetary policy further as early as next week.

The Australian dollar was up around 0.8 percent for the day at $1.0416, though off a high of $1.0449 touched earlier in the global session.

The currency tends to benefit from any signs of improvement in the Chinese economy due to Australia's strong trade links with the country. But many analysts have recently expressed concerns it is overvalued.

"The Chinese recovery is modest ... We like to sell Aussie on any rally," said George Saravelos, G10 currency strategist at Deutsche Bank in London.

Apr 02, 2012 16:03

OctaFX.Com News Updates

[OctaFX_Farid]

A look at the unemployment rates in the eurozone

A glance at the various rates of unemployment across the 17-nation eurozone

Eurostat, the EU's statistics office, estimates that unemployment across the 17-country eurozone rose to 10.8 percent in February, a new record since the euro launched in 1999.

Here's how the countries compare:

Spain 23.6 percent

Greece 21.0 percent+

Portugal 15.0 percent

Ireland 14.7 percent

Slovakia 14.0 percent

Estonia 11.7 percent+

France 10.0 percent

Cyprus 9.7 percent

Italy 9.3 percent

Slovenia 8.7 percent

Finland 7.4 percent

Belgium 7.2 percent

Malta 6.8 percent

Germany 5.7 percent

Luxembourg 5.2 percent

Netherlands 4.9 percent

Austria 4.2 percent

Apr 02, 2012 16:40

OctaFX.Com News Updates

OctaFX is proud to offer top-notch service level to its customers. Please stay tuned for the news and updates from OctaFX!

[OctaFX_Farid]

OctaFX.Com - IMF chief against any breakup of Eurozone

IMF managing director does not want to see weaker European countries split from Eurozone

WASHINGTON (AP) -- The managing director of the International Monetary Fund says her global lending organization wants the Eurozone to stay together, not be broken up by the departure of some of its weaker nations.

Christine Lagarde told the annual meeting of The Associated Press that the IMF has no agenda "to breakup that zone."

There has been talk that Greece, one of the 17 nations that use the euro, might at some point leave. Lagarde was asked if such countries, even Spain and Italy, might be better off outside the zone.

"To your question, I think the answer is no," she said.

Apr 03, 2012 16:07

OctaFX.Com News Updates

Edited April 3, 2012 by OctaFX_Farid

[OctaFX_Farid]

OctaFX.Com -Dollar dips versus euro ahead of Fed minutes, ECB

NEW YORK (Reuters) - The dollar slipped against the euro ahead of the release of U.S. Federal Reserve meeting minutes on Tuesday, though investors were reluctant to make big bets a day ahead of the European Central Bank meeting.

At least for the next few hours, the market focus in pre-Easter trade remains the Fed's meeting minutes from March which may provide clues on U.S. policymakers' inclination to take further steps to ease policy, which would weigh on the dollar.

For now, the minutes are expected to suggest a standby approach, with the Fed likely to warn that premature tightening would be risky, while keeping an open-minded, but uncommitted view on further easing.

Fed officials on Monday signaled little appetite for further monetary steps to stimulate U.S. growth in an economy that is gradually strengthening. However, Fed Chairman Ben Bernanke said last week that more stimulus would remain an option.

The ECB policy meeting is on Wednesday with analysts saying a hawkish message from the bank on the need to get back to concentrating on quelling inflation instead of helping Europe's economy and financial system out of crisis may give the euro a brief boost.

"We get a peek at the Fed minutes but (are) not expecting any surprises there," said John Doyle, currency strategist at Tempus Consulting in Washington. "After that we are holding for the Europeans."

The euro was last trading up 0.1 percent at $1.3337, with the session low at $1.3298 and the session peak at $1.3367.

Analysts said the gains in the shared currency came after investors failed to push the unit below $1.3300 and hold it there, forcing anyone betting against the euro

to step back in to buy to prevent further losses.

ON HOLD

To be sure, many investors are still looking to sell the euro as concerns grew about a fragile outlook for the euro zone and high debt levels in Spain. Italian and Spanish debt yields rose on Tuesday amid concerns about the euro zone's ability to keep budget deficits under control.

Spain's public debt ratio is expected to hit 79.8 percent of gross domestic product in 2012, a document detailing the country's 2012 budget showed on Tuesday.

Since the euro's mid- to late-March rally from $1.3000 to just below $1.34 fizzled out, the currency has stayed in a relatively tight $1.3250-$1.3400 range. Many analysts expect it to move lower if it breaks below that area.

The euro was last little changed against the Swiss franc at 1.2031 francs, but still near a two-month low as traders pushed the shared currency closer to the 1.20 franc floor set by the Swiss National Bank last year.

YEN SWINGS

Against the yen, the dollar was last up 0.1 percent at 82.18 yen, recovering from a drop to a low at 81.54 yen, its weakest since March 9.

Analysts said the broader trend for the yen to weaken remains intact following the Bank of Japan's unexpected easing of monetary policy in February. Speculation that the Fed could tighten its own policy faster than previously expected - and raise the return for holding dollars - have also weighed on the Japanese currency.

"People have been buying into the idea that the yen could weaken and perhaps we have seen the strongest period for the yen," said Dag Muller, technical analyst at SEB in Stockholm. "But in the near term, the yen could succumb to more of a correction from short-term exaggerated levels."

The Australian dollar was down 0.4 percent at US$1.0366, cutting earlier gains, after the Reserve Bank of Australia kept interest rates unchanged at 4.25 percent and suggested a bias toward easing.

Apr 03, 2012 16:19

OctaFX.Com News Updates

[OctaFX_Farid]

OctaFX.Com -Dollar rises against euro ahead of Fed minutes

Dollar rises against euro as traders await Federal Reserve minutes of March meeting

NEW YORK (AP) -- The dollar is rising against the euro before the release of the Federal Reserve's minutes from its March meeting.Traders are waiting to see whether the Fed is optimistic about the economy.

The Fed said in a statement after the meeting that it expects the job market to improve. The statement boosted the dollar.

But last week, Fed Chairman Ben Bernanke warned that the job market is still weak, pushing the dollar lower against the euro. Traders had interpreted the comments to mean that the Fed will keep short-term interest rates near zero. Lower interest rates tend to weigh on a currency by reducing the returns investors get from holding it.

Apr 03, 2012 16:43

OctaFX.Com News Updates

[OctaFX_Farid]

OctaFX.Com - The Basics Of Currency Trading

The investment markets can quickly take the money of investors who believe that trading is easy. Trading in any investment market is exceedingly difficult, but success first comes with education and practice. So, what is currency trading and is it right for you?

SEE: Top 7 Questions About Currency Trading Answered.

The currency market, or forex (FX), is the largest investment market in the world. Each day, it accounts for roughly $1.5 trillion of daily trading compared to only $25 billion of daily volume on the New York Stock Exchange (NYSE). The market may be large, but until recently the volume came from professional traders, but as currency trading platforms have improved more retail traders have found forex to be suitable for their investment goals.

How Does It Work?

Currency trading is a 24-hour market that is only closed from Friday evening to Sunday evening, but the 24-hour trading sessions are misleading. There are three sessions that include the European, Asian and United States trading sessions. Although there is some overlap in the sessions, the main currencies in each market are traded mostly during those market hours. This means that certain currency pairs will have more volume during certain sessions. Traders who stay with pairs based on the dollar will find the most volume in the U.S. trading session.

Currency is traded in various sized lots. The micro lot is 1,000 units of a currency. If your account is funded in U.S. dollars, a micro lot represents $1,000 of your base currency, the dollar. A mini lot is 10,000 units of your base currency and a standard lot is 100,000 units.

Pairs and Pips

All currency trading is done in pairs. Unlike the stock market, where you can buy or sell a single stock, you have to buy one currency and sell another currency in the forex market. Next, nearly all currencies are priced out to the fourth decimal point. A pip or percentage in point, is the smallest increment of trade. One pip typically equals 1/100 of 1%.

Retail or beginning traders often trade currency in micro lots, because one pip in a micro lot represents only a 10 cents move in the price. This makes losses easier to manage if a trade doesn't produce the intended results. In a mini lot, one pip equals $1 and that same one pip in a standard lot equals $10. Some currencies move as much as 100 pips or more in a single trading session making the potential losses to the small investor much more manageable by trading in micro or mini lots.

Far Less Products

The majority of the volume in currency trading is confined to only 18 currency pairs compared to the thousands of stocks that are available in the global equity markets. Although there are other traded pairs outside of the 18, the eight currencies most often traded are the U.S. dollar (USD), Canadian dollar (CAD), euro (EUR), British pound (GBP), Swiss franc (CHF), New Zealand dollar (NZD), Australian dollar (AUD) and the Japanese yen (JPY). Although nobody would say that currency trading is easy, having far less trading options makes trade and portfolio management an easier task.

What Moves Currency?

An increasing amount of stock traders are taking interest in the currency markets because many of the forces that move the stock market also move the currency market. One of the largest is supply and demand. When the world needs more dollars, the value of the dollar increases and when there are too many circulating, the price drops.

Other factors like interest rates, new economic data from the largest countries and geopolitical tensions, are just a few of the events that may affect currency prices.

The Bottom Line

Much like anything in the investing market, learning about currency trading is easy but finding the winning trading strategies takes a lot of practice. Most forex brokers will allow you to open a free virtual account that allows you to trade with virtual money until you find strategies that work for you.

Apr 05, 2012 15:43

OctaFX.Com News Updates

[OctaFX_Farid]

OctaFX.Com - Dollar rises to 3-week high against euro

Dollar rises to 3-week high against euro on fears about Europe's debt crisis

NEW YORK (AP) -- Growing fears about Europe's debt crisis pushed the dollar to a three-week high against the euro Thursday. The euro also fell against the Swiss franc, dropping below a ceiling set by the Swiss National Bank last year.

The yield on Spain's benchmark 10-year bond jumped to 5.74 percent Thursday, its highest point since November. A month ago, the rate was below 4.9 percent. Rising yields are a sign that investors are less confident in the country's finances.

The higher the yield on a country's bonds, the more expensive it becomes to borrow money. Greece, Portugal and Ireland needed a bailout after their borrowing rates rose above 7 percent.

Concerns about Spain's finances rose this week after weak demand at its bond auction Wednesday.

The euro fell to $1.3057 in afternoon trading Thursday from $1.3139 late Wednesday. The euro fell as low as $1.3034, its lowest point since March 15.

The Swiss franc briefly rose against the euro Thursday above the 1.20 level that the Swiss National Bank capped it at in September. The Swiss franc is considered a safe-haven currency and tends to rise when traders are worried about the global economy. Last year, the Swiss franc rose so much that the SNB said it would spend whatever it would take to stop the euro from falling below 1.20 francs. On Thursday, it fell to 1.1993 francs before quickly moved recovering.

The SNB wants to limit the franc's strength to protect Swiss companies. Last year, exporters were hurt as the value of the franc increased. A strong franc hurts exporters by making their goods more expensive for foreign buyers.

In other trading, the dollar rose to 0.9206 Swiss franc from 0.9161 Swiss franc. The British pound fell to $1.5820 from $1.5889.

The dollar fell to 82.35 Japanese yen from 82.58 yen and to 99.37 Canadian cents from 99.64 Canadian cents.

Apr 05, 2012 15:46

OctaFX.Com News Updates

[OctaFX_Farid]

OctaFX.Com -Euro dips, bonds rise on euro zone worries

NEW YORK (Reuters) -

The euro hit a three-week low against the dollar and bonds edged higher on Thursday as Spain's debt burden fueled worries about further problems for euro zone economies and curtailed investors' appetite for riskier assets.

Global stocks dipped, while energy and gold prices climbed.

A poor Spanish bond auction on Wednesday added to worries that the impact of the European Central Bank's one trillion euro injection of cheap three-year funds into the banking system may be coming to an abrupt halt.

Spanish 10-year government bond yields rose as high as 5.86 percent on Thursday, dragging Italian rates in their wake as investors fled to the relative safety of German and U.S. debt.

The moves follow two days of losses in stocks and other markets following the release Tuesday of minutes from the last Federal Reserve meeting, which suggested the Fed was less keen to launch further economic stimulus.

"The whole European situation seems to be reheating ... and there is more safe-haven type buying," said Sean Murphy, a Treasuries trader at Societe Generale in New York.

The worries added a safety bid for bonds, with the benchmark 10-year U.S. Treasury note up 13/32, with the yield at 2.1752 percent.

Against the dollar, the euro was down 0.7 percent at$1.3052, having hit a three-week low of $1.3038. It also hit its lowest in four weeks against the yen at 106.86 yen before recovering slightly to trade at 107.23 yen, down 1 percent.

Spain's cost of borrowing on markets over 10 years jumped 30 basis points on Wednesday after borrowing costs rose at its bond auction. The yield premium over German benchmarks is now 411 basis points, its highest since late November before the ECB flooded the market with three-year funds.

STOCKS DIP, COMMODITIES GAIN

The MSCI world equity index (.MIWD00000PUS) was last down 0.2 percent, while U.S. stocks were also slightly lower.

Traders cautioned that some of the moves may be exaggerated by thin trading ahead of an extended Easter weekend, and while global stock markets lost more than 1 percent of their value on Wednesday, they remain up almost 10 percent this year.

The Dow Jones industrial average (DJI:^DJI - News) was down 45.75 points, or 0.35 percent, at 13,029.00. The Standard & Poor's 500 Index (MXP:^GSPC - News) was down 3.54 points, or 0.25 percent, at 1,395.42. The Nasdaq Composite Index (NAS:^COMP) was up 6.84 points, or 0.22 percent, at 3,074.93.

For U.S. stocks, offsetting some concern about the euro zone was data showing the number of Americans lining up for new jobless benefits fell to the lowest in nearly four years last week.

Analysts said the claims data and a report on private-sector jobs earlier this week may bode well for the U.S. government's widely watched monthly employment report, which is due Friday.

The U.S. outlook was in sharp contrast with Europe where separate reports showed German industrial output fell more than expected in February and British factory output suffered its biggest monthly fall in almost a year

Spain's IBEX 35 index (MCE:^IBEX - News) touched a 7-month low as concerns mounted about Spain's ability to meet its budget targets, while Europe's FTSEurofirst 300 index (.FTEU3) ended up 0.1 percent.

Banking stocks, many of which have large exposure to the region's lower-rated sovereign debt, edged lower.

UniCredit (CRDI.MI) and Commerzbank (CBKG.DE), which both have exposure to euro zone peripheral debt, were also hard hit, down 3.1 percent and 1.9 percent respectively.

Bucking the softer global trend, non-banking financial sector firms led Chinese shares to their biggest single-day gain since early February, after Premier Wen Jiabao said the monopoly formed by the country's big banks needed to be broken to get money flowing to cash-starved companies.

GOLD, ENERGY CLIMB

Spot gold was up 0.6 percent at $1,628.34 an ounce. Weaker prices tempted some buyers but gains were capped by a stronger dollar and fading hopes of a fresh round of U.S. stimulus.

Market watchers said some hedge funds might have reduced gold holdings due to stronger U.S. economic data and easing of fears about European debt.

"A lot of the gold trade by hedge funds was specifically tied to a new round of Fed stimulus," said Jeffrey Sica, chief investment officer of SICA Wealth Management with more than $1 billion in assets.

In the other market, U.S. crude was up $1.62 at $103.09 per barrel, while Brent crude was up $1.13 at $123.47.

Apr 05, 2012 15:53

OctaFX.Com News Updates

[OctaFX_Farid]

Eurozone March inflation revised up to 2.7 percent

Eurozone inflation in March revised up to 2.7 percent; increase was unexpected

BRUSSELS (AP) -- Inflation in the 17 countries that use the euro was higher than predicted in March, largely because of higher energy and transport costs, official figures showed Tuesday.

Eurostat, the EU's statistics office, said eurozone consumer prices in the year to March rose by 2.7 percent, up from the initial prediction of 2.6 percent. March's rate was the same as the previous month's and indicates that price pressures remain despite mounting fears that the eurozone as a whole will fall back into recession.

The surprise increase in inflation has reined in expectations that the European Central Bank will cut interest rates again any time soon. The bank, which is tasked with keeping inflation just below 2 percent, last cut borrowing costs in December, taking its main rate down to the joint-record low of 1 percent.

With oil prices remaining elevated, analysts said inflation could well remain above target for a while yet, even though Europe's dim growth prospects could weigh on consumer demand and wage increases.

Gustavo Bagattini, European economist at RBC Capital Markets, said he expects inflation to start declining in the second quarter of the year but won't average anything below 2.5 percent.

"This is consistent with our 2012 average forecast of 2.4 percent, which is in line with the ECB's forecast, meaning that the governing council will continue to have to accept a higher rate of inflation temporarily," Bagattini said.

The euro pushed ahead after the figures from $1.3145 to a day's high of $1.3173.

Apr 17, 2012 09:06

OctaFX.Com News Updates

[OctaFX_Farid]

OctaFX.Com - Canadian Dollar Soars on Hawkish BoC Comments

Currencies and equities are trading slightly higher this morning thanks to better than expected economic data from Europe and a relatively healthy Spanish bond auction. The EUR/USD is taking its cue from Spanish bond yields and the steep decline back below 6 percent encouraged investors to dip their toes back into euros. For the time being the 1.30 level continues to hold in the EUR/USD and even though we believe this level will be taken out eventually, a further rise in Spanish bond yields would be needed for that to happen. Mixed U.S. housing market numbers failed to have a lasting impact on the dollar. Housing starts fell for the second month in a row by 5.8 percent. This was the steepest slide in nearly a year and drove starts to a 5 month low. Building permits on the other hand continued to rise by 4.5 percent. Unlike starts, permits have gradually increased for the past 3 months and are now at its highest level since September 2008. The discrepancy between starts and permits is good news because it represents a tremendous amount of backlog and once the recovery gains momentum, housing starts will rise quickly because permits have already been attained by builders.

Meanwhile up North, the Bank of Canada is gearing up for a rate hike. According to the BoC, "removing stimulus may become appropriate." Unlike other parts of the world crippled by high debt levels and slowing growth, Canada has benefitted significantly from the improvement in the U.S. economy and the rise in oil prices. Business and consumer confidence in Canada improved to the point where the BoC felt comfortable enough to raise its 2012 growth forecast to 2.4 from 2 percent and its 2013 forecast from 2.4 to 2.8 percent. Most of Canadian growth is expected to come from domestic demand. Last month, Canada experienced its strongest pace of job growth since 2008 and this improvement in the labor market will translate into stronger consumption. In terms of external factors, the BoC is looking at it from a glass half full point of view - they expect Europe to rise from recession in the second half of the year and they view the U.S. economy has slightly stronger. If not for Europe's troubles, the BoC would have probably raised interest rates today. However don't interpret the BoC comments to mean that a rapid series of consecutive rate hikes will follow. The central bank will raise interest rates gradually to avoid over tightening in what can still be characterized as uncertain global economic conditions. The hawkish comments from the Bank of Canada drove USD/CAD to 0.99 and it should only be a matter of time before USD/CAD slips to a fresh 7 month low.

Apr 17, 2012 09:10

OctaFX.Com News Updates

[OctaFX_Farid]

OctaFX.Com -Spanish bill sale, German ZEW support euro

LONDON (Reuters) - The euro rose against the dollar on Tuesday after Spanish bill sales went through smoothly and a survey showed a rise in German analyst and investor sentiment, easing some of the market's concerns over euro zone debt.

However, analysts said Spain's precarious fiscal position would remain a worry and the most important test would come with an auction of Spanish 10-year debt on Thursday, which could put the euro back under pressure.

Spanish 10-year government bond yields dipped below 6 percent after jumping on Monday on fears its deficit and weak economy may force it to seek international help. Analysts said these concerns would limit the euro's gains with most investors still bearish about the common currency.

"We shouldn't read too much into the Spanish bill auction or into the ZEW data - the German Ifo survey (on Friday) and Spanish 10-year auction will be more important,"

said Gavin Friend, currency strategist at nabCapital.

"The target for the euro is $1.32/$1.3225 but I don't see it much above there."

He said the euro would face further tests with the G20 and IMF meeting at the end of this week and the first round of the French presidential election on April 22.

The euro was last flat on the day at $1.3135, having earlier surpassed Monday's high to hit $1.3173, with traders saying stop-loss buy orders were triggered on the breaks above $1.3150-60. They said a U.S. bank and Swiss investors had bought euros.

More gains would see it target the 55-day moving average at $1.3204, with the euro also supported by the German ZEW survey which showed analyst sentiment in Europe's largest economy rising unexpectedly in April to its highest level since June 2010.

The common currency hit a low of $1.2995 on Monday before rebounding as investors who had earlier initiated bearish bets reversed those positions. Analysts said the bounce above $1.30 suggested that level was an important support that could be difficult to breach. Once below there, however, traders could focus on a move towards the January low of $1.2624.

"I think we'll see a test of $1.30 within the next week," said Niels Christensen, currency strategist at Nordea in Copenhagen, adding concerns about Spain's elevated debt, shrinking economy and high unemployment would keep the euro weak.

ANOTHER SPAIN TEST

Investors were relieved as Spain sold 3.2 billion euros of 12 and 18-month bills, although at much higher yields compared with a month ago. Thursday will see a far bigger test when Spain sells 10-year and two-year bonds.

Compounding Spain's fiscal woes, its banks borrowed a record 316.3 billion euros from the European Central Bank in March, almost double February's total, as they remained all but excluded from wholesale credit markets.

The euro was up 0.3 percent at 106.0 yen, recovering from a trough of 104.63 yen on Monday, a level not seen since mid-February.

The euro and other riskier currencies could be helped further if U.S. housing data and industrial output for March, due at 8:30 a.m. EDT (1230 GMT) and 1315 GMT come in on the stronger side of expectations.

The dollar rose 0.3 percent against the safe-haven yen to 80.64 yen, above a seven-week low of 80.29 hit on Monday.

The higher-yielding Australian dollar edged up 0.2 percent at $1.0370 as stock markets recovered. It cut earlier losses after Reserve Bank of Australia policy meeting minutes showed it would consider cutting interest rates in May if data confirmed a benign inflation outlook.

Apr 17, 2012 10:52

OctaFX.Com News Updates

[OctaFX_Farid]

OctaFX.Com - Canadian Dollar Surges as Hawkish BoC Raises Rate Hike Expectations

Although the key rate was kept on hold at 1.00 percent, an increasingly hawkish Bank of Canada has sent the Canadian Dollar surging early in the North American trading session. The shift in rhetoric has boosted rate hike expectations, improving the yield outlook for the world’s tenth largest economy.

The Bank of Canada left key interest rate on hold at 1.00 percent for the thirteenth consecutive meeting today, but the real story lies within the central bank’s statement accompanying the release. The BoC said that higher rates “may become appropriate” in the future as actual economic growth and price pressures have exceeded economists’ forecasts.

Governor Mark Carney said that “In light of the reduced slack in the economy and firmer underlying inflation, some modest withdrawal of the present considerable monetary policy stimulus may become appropriate.” Governor Carney went on to say that “The timing and degree of any such withdrawal will be weighed carefully against domestic and global economic developments.” Market participants have taken this as a sign that the BoC will move to raise rates in the coming months, with the Credit Suisse Overnight Index Swaps now showing that 18.0-basis points are being priced in over the next 12-months (from 0.9-bps ahead of the meeting).

USDCAD 1-min Chart: April 17, 2012

Charts Created using Marketscope – Prepared by Christopher Vecchio

On the more hawkish than expected tone, as market participants have started to price in higher rates in the future, the Canadian Dollar has soared across the board, but most notably against the Euro and the Japanese Yen. The EURCAD has dropped over 95-pips on the rate decision (UPDATE: as of 14:28 GMT, the EURCAD was down over 110-pips post-rate decision). Similarly, the CADJPY jumped over 65-pips (UPDATE: as of 14:28 GMT, the CADJPY was up over 75-pips post-rate decision).

The USDCAD also traded lower, falling over 60-pips immediately (UPDATE: as of 14:28 GMT, the USDCAD was down over 70-pips post-rate decision).

Apr 17, 2012 14:28

OctaFX.Com News Updates

[OctaFX_Farid]

OctaFx -Euro falls for 3rd day on nagging funding worries

NEW YORK (Reuters) - The euro fell for a third straight session against the U.S. dollar on Thursday despite a decent Spanish bond sale as investors remained skeptical about funding issues in the euro zone.

The euro also tracked the rise in credit default swaps and the widening of yield spreads between the safe-haven German bunds and peripheral fixed income debt, suggesting growing nervousness about liquidity in the financial system and sustainability of the region's debt.

"This is all emblematic of the fact that the market remains very nervous about the state of credit in the euro zone," said Boris Schlossberg, director of FX research at GFT Forex in Jersey City.

"Despite the fact that we had a decent Spanish bond auction, there is just basic skepticism not only about the sovereign debt market but also the health of the overall banking system, particularly in Spain."

Spain's Treasury issued 2.5 billion euros in two- and 10-year bonds, at the top end of the targeted amount. Yields on the key 10-year bond were higher, however, reflecting fears that Spain may miss budget deficit targets and about its banking sector.

The euro dropped 0.2 percent to $1.3087 after hitting a session low of $1.3068, reversing gains that took the single currency to $1.3164 following the Spanish auction.

Traders said they were inclined to sell into any euro rallies, with the rise in Spanish and Italian yields undermining any optimism from the auction. Market talk of a French downgrade also undermined sentiment towards the common currency.

The euro also modestly sold off after a report showed that U.S. initial jobless claims were weaker than expected, which slightly dampened risk appetite.

The euro held above strong chart support at $1.30. But an escalation of concerns about Spain's high level of debt, at a time when the economy is faltering, would put the euro back under pressure, potentially taking it towards the 2012 low of $1.2624.

"The market has come to realize that positive bond auctions are not Spain's salvation," said Neil Mellor, currency strategist at Bank of New York Mellon, adding it was only a matter of time before the euro broke below $1.30.

"There are too many negative elements in the euro zone. If $1.30 breaks, we have only got minor levels of support until the January lows. We cannot preclude a sudden move lower."

Many in the market said the euro would head lower in the medium term given the risks that budget and debt problems in Spain will worsen and uncertainty over the outcome of the French presidential election, which polls suggest will result in a leadership change.

Traders cited talk of hedge funds betting the euro will fall to $1.25 soon after the French poll concludes early next month.

The safe-haven Japanese yen, meanwhile, fell, as equities gained and after Bank of Japan Governor Masaaki Shirakawa stressed the central bank's commitment to powerful monetary easing.

The dollar rose 0.3 percent to 81.510 yen, triggering reported stop loss buy orders around 81.60 yen, with traders earlier citing flows related to the launch of a large investment trust by a Japanese investment bank.

The euro was up 0.1 percent at 106.79 yen, although resistance came in around its 50-day moving average at 107.44 yen.

The higher-yielding Australian dollar was steady against the U.S. dollar at US$1.0356.

Apr 19, 2012 10:53

OctaFX.Com News Updates