 | ARGENTINA | Peso | ARS | 3.973871 | 3.978274 | +0.1108% |  |
 | AUSTRALIA | Dollar | AUD | 1.083210 | 1.081075 | -0.1971% |  |
 | AUSTRIA | Euro | EUR | 0.786863 | 0.785860 | -0.1275% | |
 | BELGIUM | Euro | EUR | 0.786863 | 0.785860 | -0.1275% | |
 | BRAZIL | Real | BRL | 1.724539 | 1.719675 | -0.2820% | |
 | CANADA | Dollar | CAD | 1.033836 | 1.034076 | +0.0232% | |
 | CHILE | Peso | CLP | 496.0446 | 496.2099 | +0.0333% | |
 | CHINA | Yuan | CNY | 6.782568 | 6.768206 | -0.2117% | |
 | CZECH REP. | Koruna | CZK | 19.43063 | 19.40258 | -0.1444% | |
 | DENMARK | Krone | DKK | 5.835730 | 5.828291 | -0.1275% | |
 | EUROPEAN UNION | Euro | EUR | 0.786863 | 0.785860 | -0.1275% | |
 | FINLAND | Euro | EUR | 0.786863 | 0.785860 | -0.1275% | |
 | FRANCE | Euro | EUR | 0.786863 | 0.785860 | -0.1275% | |
Sunday, September 12, 2010
Currency Rates Per 1.00 US Dollar
FOREX-Dollar firm as U.S. yields support, yen retreats
Dollar firm vs yen and Swiss franc on higher U.S. yields
* Yen in retreat from 15-year peak on dollar
* Chinese data supports growth-linked currencies
(Adds quote, updates prices, changes dateline, pvs TOKYO)
LONDON, Sept 10 (Reuters) - The dollar rebounded against the yen and the Swiss franc on Friday after a rise in U.S. bond yields, although the bounce lacked conviction as worries about a U.S. recovery remained strong.
Chinese trade data showed higher-than-expected imports for August, pushing currencies such as the Australian dollar higher against the low-yielding yen, which is often used to fund investments into higher-yielding currencies.
The dollar was off this week's 15-year low against the yen JPY=, helped by a rise in U.S. Treasury yields on Thursday on U.S. jobs data and a widening in the U.S.-Japan yield spread.
"Rising U.S. yields have been driving the dollar against the yen," said Gareth Berry, currency strategist at UBS.
U.S. initial claims for jobless benefits fell to their lowest in two months. Payrolls data last week showed fewer job losses than expected in the world's largest economy.
Berry said it was too early to judge whether the U.S. economy was headed for a double-dip. "We need a succession of good data out of the U.S. for the markets to have a stronger conviction about the dollar," he said.
Traders said comments from Bank of Japan Governor Masaaki Shirakawa that Japan needs to raise the foreign exchange issues at international meetings also pushed the yen lower. [ID:nTKX006985]
The dollar rose 0.4 percent to 84.12 yen JPY=. It briefly touched a high of 84.28 yen. The next target will be its high of 85.23 yen hit after the U.S. payrolls data last Friday.
The dollar hit a 15-year low of 83.34 yen this week, intensifying speculation that Japanese authorities might step in to curb yen gains if the move accelerates towards 80 yen. Japanese Prime Minister Naoto Kan reiterated on Friday that authorities would take decisive steps on the yen if needed. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ PDF presentation on the yen: r.reuters.com/mam52p TAKE-A-LOOK on Japan politics [nPOLJP] ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
LEADERSHIP RACE TO SWAY YEN
Attention is also turning to a ruling party leadership race on Sept. 14 in which Kan faces a challenge from powerbroker Ichiro Ozawa.
A Reuters poll showed a win by Ozawa in the vote, which would also decide who is prime minister, would likely give a short-term boost to stocks but weaken Japanese government bonds and the yen. [ID:nTWKAKE617]
Ozawa has said Japan should intervene to weaken the yen, and while some analysts say intervention would be difficult without support from Washington, others say Tokyo under Ozawa would be more likely to take action if the yen strengthens.
"So the chances of intervention will rise as compared to the period under Kan," said Masafumi Yamamoto, chief FX strategist Japan at Barclays Capital in Tokyo.
The dollar was lower against a basket of currencies .DXY =USD, having failed to hold above the index's 55-day moving average at 82.80.
It rose against the Swiss franc, jumping 0.6 percent to 1.0210 francs CHF=, well above this week's nine-month low of 1.0060 francs. Traders said Dubai World's announcement of formal agreement to restructure liabilities was helping risk demand and prompting unwinding of positions in the safe-haven Swissie.
The euro was up 0.2 percent at $1.2718 EUR=, with support expected at its 100-day moving average at $1.2657. It was up 0.5 percent against the yen at 106.95 yen.
The Australian dollar pushed higher against the greenback staying close to a four-month high of $0.9278 struck on Thursday, with Chinese import data boding well for domestic demand and trading partners including Australia. [ID:nTOE689024]
* Yen in retreat from 15-year peak on dollar
* Chinese data supports growth-linked currencies
(Adds quote, updates prices, changes dateline, pvs TOKYO)
LONDON, Sept 10 (Reuters) - The dollar rebounded against the yen and the Swiss franc on Friday after a rise in U.S. bond yields, although the bounce lacked conviction as worries about a U.S. recovery remained strong.
Chinese trade data showed higher-than-expected imports for August, pushing currencies such as the Australian dollar higher against the low-yielding yen, which is often used to fund investments into higher-yielding currencies.
The dollar was off this week's 15-year low against the yen JPY=, helped by a rise in U.S. Treasury yields on Thursday on U.S. jobs data and a widening in the U.S.-Japan yield spread.
"Rising U.S. yields have been driving the dollar against the yen," said Gareth Berry, currency strategist at UBS.
U.S. initial claims for jobless benefits fell to their lowest in two months. Payrolls data last week showed fewer job losses than expected in the world's largest economy.
Berry said it was too early to judge whether the U.S. economy was headed for a double-dip. "We need a succession of good data out of the U.S. for the markets to have a stronger conviction about the dollar," he said.
Traders said comments from Bank of Japan Governor Masaaki Shirakawa that Japan needs to raise the foreign exchange issues at international meetings also pushed the yen lower. [ID:nTKX006985]
The dollar rose 0.4 percent to 84.12 yen JPY=. It briefly touched a high of 84.28 yen. The next target will be its high of 85.23 yen hit after the U.S. payrolls data last Friday.
The dollar hit a 15-year low of 83.34 yen this week, intensifying speculation that Japanese authorities might step in to curb yen gains if the move accelerates towards 80 yen. Japanese Prime Minister Naoto Kan reiterated on Friday that authorities would take decisive steps on the yen if needed. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ PDF presentation on the yen: r.reuters.com/mam52p TAKE-A-LOOK on Japan politics [nPOLJP] ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
LEADERSHIP RACE TO SWAY YEN
Attention is also turning to a ruling party leadership race on Sept. 14 in which Kan faces a challenge from powerbroker Ichiro Ozawa.
A Reuters poll showed a win by Ozawa in the vote, which would also decide who is prime minister, would likely give a short-term boost to stocks but weaken Japanese government bonds and the yen. [ID:nTWKAKE617]
Ozawa has said Japan should intervene to weaken the yen, and while some analysts say intervention would be difficult without support from Washington, others say Tokyo under Ozawa would be more likely to take action if the yen strengthens.
"So the chances of intervention will rise as compared to the period under Kan," said Masafumi Yamamoto, chief FX strategist Japan at Barclays Capital in Tokyo.
The dollar was lower against a basket of currencies .DXY =USD, having failed to hold above the index's 55-day moving average at 82.80.
It rose against the Swiss franc, jumping 0.6 percent to 1.0210 francs CHF=, well above this week's nine-month low of 1.0060 francs. Traders said Dubai World's announcement of formal agreement to restructure liabilities was helping risk demand and prompting unwinding of positions in the safe-haven Swissie.
The euro was up 0.2 percent at $1.2718 EUR=, with support expected at its 100-day moving average at $1.2657. It was up 0.5 percent against the yen at 106.95 yen.
The Australian dollar pushed higher against the greenback staying close to a four-month high of $0.9278 struck on Thursday, with Chinese import data boding well for domestic demand and trading partners including Australia. [ID:nTOE689024]
Bank of Jamaica (BOJ) review delays forex insurance policies
It has been 11 months since Cabinet issued a directive allowing the marketing of foreign-currency, denominated insurance products, but the Bank of Jamaica (BOJ) has stalled the plan saying last week that the matter remained under review.
The Cabinet decision was relayed back in early October 2009 before the current central bank governor, Brian Wynter, took office.
The Financial Services Commission then invited companies to start applying for approval of their products, saying they would be free to issue forex policies once they got its seal of approval.
But the BOJ Act places jurisdiction of the foreign exchange market in the central bank, which has not yet given its go-ahead.
The BOJ told Sunday Business that it was a regulatory issue, and that the mattered was being studied. Requests for clarification on whether implementation would require legislative amendment were not forthcoming up to press time.
The bank is also reviewing lifting restrictions on forex financial products.
The BOJ said Wednesday that prior to the 2009 directive, just one entity, which it did not name, was allowed to trade forex insurance products, and that the situation remained the same.
Sale of insurance products is governed by the Insurance Act and its regulations, but where such products are denominated in foreign currency, issuers are directed to seek the approval or sign-off of the Bank of Jamaica before dealing them to clients, in conformity with Section 22A(2) and (3) of the BOJ Act.
On Thursday, the Insurance Association of Jamaica said it was not bothered by the delay in carrying through the Cabinet directive.
"We are still awaiting details from the Financial Services Commission and the Bank of Jamaica on how the framework will work," said Orville Johnson, executive director of the Insurance Association of Jamaica.
But, he added: "It is not a big deal right now because of the stability of the currency."
Last October, when Information Minister Daryl Vaz announced the Cabine decision,he said the Government had concluded after careful consideration that the forex products "would have limited impact on the foreign exchange market and could assist businesses that require such insurance".
Then, the Insurance Association of Jamaica cheered the announcement, saying members had been lobbying for the policy change for years.
Cabinet's decision restricted the issue of forex products to the general insurance sector.
Equity-linked and bank assurance policies do not qualify.
The Cabinet decision was relayed back in early October 2009 before the current central bank governor, Brian Wynter, took office.
The Financial Services Commission then invited companies to start applying for approval of their products, saying they would be free to issue forex policies once they got its seal of approval.
But the BOJ Act places jurisdiction of the foreign exchange market in the central bank, which has not yet given its go-ahead.
The BOJ told Sunday Business that it was a regulatory issue, and that the mattered was being studied. Requests for clarification on whether implementation would require legislative amendment were not forthcoming up to press time.
The bank is also reviewing lifting restrictions on forex financial products.
The BOJ said Wednesday that prior to the 2009 directive, just one entity, which it did not name, was allowed to trade forex insurance products, and that the situation remained the same.
Sale of insurance products is governed by the Insurance Act and its regulations, but where such products are denominated in foreign currency, issuers are directed to seek the approval or sign-off of the Bank of Jamaica before dealing them to clients, in conformity with Section 22A(2) and (3) of the BOJ Act.
On Thursday, the Insurance Association of Jamaica said it was not bothered by the delay in carrying through the Cabinet directive.
"We are still awaiting details from the Financial Services Commission and the Bank of Jamaica on how the framework will work," said Orville Johnson, executive director of the Insurance Association of Jamaica.
But, he added: "It is not a big deal right now because of the stability of the currency."
Last October, when Information Minister Daryl Vaz announced the Cabine decision,he said the Government had concluded after careful consideration that the forex products "would have limited impact on the foreign exchange market and could assist businesses that require such insurance".
Then, the Insurance Association of Jamaica cheered the announcement, saying members had been lobbying for the policy change for years.
Cabinet's decision restricted the issue of forex products to the general insurance sector.
Equity-linked and bank assurance policies do not qualify.
UPDATE 1-UK coalition defends deep cuts, unions protest
Britain's coalition government defended plans to cut the welfare bill on Sunday and warned that failing to reduce spending would profoundly damage the economy as it recovers from the worst recession since World War Two.
Chief Secretary to the Treasury Danny Alexander said Britain must cut its record peacetime budget deficit or risk slipping into the economic chaos seen in European countries like Greece.
The opposition Labour Party said the pace and scale of the proposed cuts was 'savage' and could harm the economic recovery.
The head of Britain's Trades Union Congress (TUC), an umbrella group, said the public would not accept 'eye-wateringly unfair' measures, while one transport union leader called for coordinated industrial action and civil disobedience.
Other European countries have already seen mass protests over austerity cuts. Over a million people marched in France last week to demonstrate against proposed pension reforms.
Rejecting opposition criticism that the cuts were too severe and would hit the most vulnerable people hardest, Alexander said the 200 billion pound annual bill for unemployment payments and other benefits was too big to be ignored.
'Welfare is an area that we have to look at,' he said in an interview with Sky News. 'Tackling the enormous deficit that Labour left us with is essential to underpinning the economic recovery. If we don't do that...then we would end up in a worse economic position.
GAP
'This year we are spending 150 billion pounds more than we will raise in tax. We have to get that gap under control. If we don't do that then there will certainly be a huge problem with our economy.'
TUC chief Brendan Barber said the government was cutting too much, too quickly and the public would oppose the measures.
'The cuts have only just started to bite,' he told a news conference. 'When their full extent becomes clear, I know the country will join with us in saying 'no' once again to policies that are so eye-wateringly unfair.'
Bob Crow, head of the RMT rail union, said workers should plan industrial action together to cause the maximum disruption.
'We should coordinate that resistance to defend working men and working women. What we need is...a campaign of civil disobedience to stop these cutbacks taking place.'
Britain's Conservative and Liberal Democrat coalition was formed after an inconclusive election in May ended 13 years of Labour party rule.
Centre-right Conservative Prime Minister David Cameron said his priority was to cut a deficit running at around 11 percent of gross domestic product and rebuild the economy.
He has long warned that Britain needs to rein in spending in order to avert a downgrade of its AAA credit rating, which would in turn raise the cost of borrowing for government.
The centrist Liberal Democrat party has publicly supported the austerity steps but commentators say cuts will put pressure on the coalition, which is a rarity in British politics.
Finance minister George Osborne has told ministers to help cut public spending by 25 percent over the next four years. He will announce details of the savings on Oct. 20.
Former Labour work and pensions minister Yvette Cooper said the government's approach was 'deeply unfair'.
'We have got to bring the deficit down, but we should do it in a steady, sensible way and not at such a savage pace that you end up destroying jobs,' she told BBC television.
Chief Secretary to the Treasury Danny Alexander said Britain must cut its record peacetime budget deficit or risk slipping into the economic chaos seen in European countries like Greece.
The opposition Labour Party said the pace and scale of the proposed cuts was 'savage' and could harm the economic recovery.
The head of Britain's Trades Union Congress (TUC), an umbrella group, said the public would not accept 'eye-wateringly unfair' measures, while one transport union leader called for coordinated industrial action and civil disobedience.
Other European countries have already seen mass protests over austerity cuts. Over a million people marched in France last week to demonstrate against proposed pension reforms.
Rejecting opposition criticism that the cuts were too severe and would hit the most vulnerable people hardest, Alexander said the 200 billion pound annual bill for unemployment payments and other benefits was too big to be ignored.
'Welfare is an area that we have to look at,' he said in an interview with Sky News. 'Tackling the enormous deficit that Labour left us with is essential to underpinning the economic recovery. If we don't do that...then we would end up in a worse economic position.
GAP
'This year we are spending 150 billion pounds more than we will raise in tax. We have to get that gap under control. If we don't do that then there will certainly be a huge problem with our economy.'
TUC chief Brendan Barber said the government was cutting too much, too quickly and the public would oppose the measures.
'The cuts have only just started to bite,' he told a news conference. 'When their full extent becomes clear, I know the country will join with us in saying 'no' once again to policies that are so eye-wateringly unfair.'
Bob Crow, head of the RMT rail union, said workers should plan industrial action together to cause the maximum disruption.
'We should coordinate that resistance to defend working men and working women. What we need is...a campaign of civil disobedience to stop these cutbacks taking place.'
Britain's Conservative and Liberal Democrat coalition was formed after an inconclusive election in May ended 13 years of Labour party rule.
Centre-right Conservative Prime Minister David Cameron said his priority was to cut a deficit running at around 11 percent of gross domestic product and rebuild the economy.
He has long warned that Britain needs to rein in spending in order to avert a downgrade of its AAA credit rating, which would in turn raise the cost of borrowing for government.
The centrist Liberal Democrat party has publicly supported the austerity steps but commentators say cuts will put pressure on the coalition, which is a rarity in British politics.
Finance minister George Osborne has told ministers to help cut public spending by 25 percent over the next four years. He will announce details of the savings on Oct. 20.
Former Labour work and pensions minister Yvette Cooper said the government's approach was 'deeply unfair'.
'We have got to bring the deficit down, but we should do it in a steady, sensible way and not at such a savage pace that you end up destroying jobs,' she told BBC television.
China's inflation battle intensifies
Inflation in China accelerated last month, as rising food prices pushed overall prices higher.
The consumer price index increased to 3.5% in August, compared to a 3.3% annual rate in July, China's National Bureau of Statistics reported on Saturday.
The global economy has become increasingly dependent on China's rapid expansion as an engine for growth.
But prices in the fast-growing Chinese economy have been outpacing most western economies; U.S. prices were up only 1.2% over the 12 months ending in July.
That has raised some concerns that the Chinese government might take steps to slow down growth in order to keep prices in check.
"China has to be careful," said Robert Brusca of FAO Economics. "Their big objective is domestic stability, and domestic stability requires employment. But they can't let inflation get away from them. So they have a tiger by the tail."
Separately, China reported that the country's industrial output increased 13.9%.
The increases in Chinese consumer prices have been driven by higher food prices, up 7.5% in the last 12 months. Food makes up about a third of the overall consumer price index in China, compared to only 14% of the official mix of prices in the United States. Fresh vegetables have shot up 7.7% in the last month and further price increases are expected due to a poor wheat harvest in Russia.
There is little the Chinese policymakers can do to control food prices other than provide subsidies, said Virendra Singh, director in international economics for Moody's Economy.com.
But he said there is concern that rising food prices could spill over to the rest of the economy as workers demand higher wages.
So his firm is expecting the People's Bank of China to move soon to raise interest rates.
In fact, the August price report got particular attention when China moved up the release of the data by two days, prompting some to speculate the move was done to give financial markets a chance to digest the news and possibly open the way for the People's Bank of China the chance to raise interest rate.
But Jay Bryson, international economist for Wells Fargo Securities, isn't convinced China is getting ready to raise rates because of uncertainty about the strength of the global economic recovery. And he said even if it does raise rates, the impact will be more symbolic than substantial.
"The Chinese have always had a bias toward growth rather than keeping inflation in check," he said. "[A rate hike] could send a signal that these guys are getting serious about inflation."
The Chinese central bank has left rates unchanged since September 2008 when it cut rates to in the face of the global financial meltdown.
There isn't an overnight lending rate in China comparable to the U.S. Federal Reserve's benchmark fed funds rate, which has been near 0% since December 2008.
By comparison, the People Bank of China's one-year lending rate has been at 5.31%, but that relatively lofty rate has done little to slow the economy overall.
China's gross domestic product, the broadest measure of the size of the economy, was up 10.3% in the second quarter compared to a year earlier.
The consumer price index increased to 3.5% in August, compared to a 3.3% annual rate in July, China's National Bureau of Statistics reported on Saturday.
The global economy has become increasingly dependent on China's rapid expansion as an engine for growth.
But prices in the fast-growing Chinese economy have been outpacing most western economies; U.S. prices were up only 1.2% over the 12 months ending in July.
That has raised some concerns that the Chinese government might take steps to slow down growth in order to keep prices in check.
"China has to be careful," said Robert Brusca of FAO Economics. "Their big objective is domestic stability, and domestic stability requires employment. But they can't let inflation get away from them. So they have a tiger by the tail."
Separately, China reported that the country's industrial output increased 13.9%.
The increases in Chinese consumer prices have been driven by higher food prices, up 7.5% in the last 12 months. Food makes up about a third of the overall consumer price index in China, compared to only 14% of the official mix of prices in the United States. Fresh vegetables have shot up 7.7% in the last month and further price increases are expected due to a poor wheat harvest in Russia.
There is little the Chinese policymakers can do to control food prices other than provide subsidies, said Virendra Singh, director in international economics for Moody's Economy.com.
But he said there is concern that rising food prices could spill over to the rest of the economy as workers demand higher wages.
So his firm is expecting the People's Bank of China to move soon to raise interest rates.
In fact, the August price report got particular attention when China moved up the release of the data by two days, prompting some to speculate the move was done to give financial markets a chance to digest the news and possibly open the way for the People's Bank of China the chance to raise interest rate.
But Jay Bryson, international economist for Wells Fargo Securities, isn't convinced China is getting ready to raise rates because of uncertainty about the strength of the global economic recovery. And he said even if it does raise rates, the impact will be more symbolic than substantial.
"The Chinese have always had a bias toward growth rather than keeping inflation in check," he said. "[A rate hike] could send a signal that these guys are getting serious about inflation."
The Chinese central bank has left rates unchanged since September 2008 when it cut rates to in the face of the global financial meltdown.
There isn't an overnight lending rate in China comparable to the U.S. Federal Reserve's benchmark fed funds rate, which has been near 0% since December 2008.
By comparison, the People Bank of China's one-year lending rate has been at 5.31%, but that relatively lofty rate has done little to slow the economy overall.
China's gross domestic product, the broadest measure of the size of the economy, was up 10.3% in the second quarter compared to a year earlier.
Subscribe to:
Comments (Atom)