Euro Gains as Optimism About Global Growth Boosts Risk Appetite
Wednesday, February 9, 2011
Feb. 9 (Bloomberg) -- The euro strengthened against most of its major peers amid speculation data today will show the U.S. job market is improving, bolstering optimism about the global economy after German figures showed rising exports.
The dollar declined for a third straight day against the European single currency. The yen fluctuated between gains and losses as Moody's Investors Service said the outlook for Japan's sovereign credit rating was stable. New Zealand's dollar weakened against of all its major counterparts after Finance Minister Bill English said it was "possible" the economy slipped into recession in the second half of last year.
"Broadly, there has been increasing confidence," said Adam Cole, head of global currency strategy at Royal Bank of Canada in London. "What we've seen the past couple of days has been more about broad dollar direction, and markets having slightly better appetite for risk."
The euro appreciated 0.2 percent to $1.3657 at 8:40 a.m. in London. The common currency rose 0.3 percent to 112.60 yen from 112.23 yen, the highest in almost a week. The yen slipped 0.3 percent to 82.58 per dollar.
German exports rose 0.5 percent from November, a second month of gains, the Federal Statistics Office said today. Economists had forecast an increase of 1 percent, according to the median of 16 estimates in a Bloomberg News survey.
Bernanke Testimony
The number of Americans filing first-time claims for jobless benefits fell to 410,000 last week from 415,000 the prior week, a separate survey forecast ahead of the report tomorrow.
U.K. factory output rose 0.4 percent in December from November, according to estimates before tomorrow's report.
Losses by the dollar were tempered before Federal Reserve Chairman Ben S. Bernanke testifies today at a hearing of the House Budget Committee.
"Bernanke is likely to emphasize fiscal tightening," analysts led by Hans-Guenter Redeker, London-based global head of foreign-exchange strategy at BNP Paribas SA, wrote yesterday. "While this would normally be negative for a currency, it will prove positive for the dollar in this case, given concerns over sovereign risk."
U.S. President Barack Obama has increased the nation's publicly traded debt to a record $8.97 trillion, double the 2007 level, as he boosts spending to sustain the economy's expansion.
The yen pared losses after Moody's senior vice-president Thomas Byrne said the Japanese government's domestic investor base gave it safety similar to debt sold by top-rated nations. The comments eased speculation Moody's would indicate concern over Japan's debt levels.
Yen Short Covering
Standard & Poor's downgraded Japan's credit rating for the first time in nine years last month.
"Moody's comments weren't as bad as expected, spurring some covering of yen shorts," said Marito Ueda, a senior managing director in Tokyo at FX Prime Corp., a foreign-exchange margin company. "The yen had been sold earlier on speculation that Moody's may be pessimistic about Japan's rating." A short position is a bet on an asset price's decline.
New Zealand's currency fell after Finance Minister English said the nation's recovery is going to face some challenges. The economy may have contracted in the fourth quarter of 2010, entering its second recession in two years, he said.
Talking Down Kiwi
Gross domestic product in New Zealand shrank 0.2 percent in the three months through Sept. 30, and a report last week showing a decline in fourth-quarter employment added to evidence of a second-straight quarterly contraction.
"English's comments continue a tried and tested tradition of kiwi leaders trying to talk the New Zealand dollar down," said Adrian Foster, Hong Kong-based head of financial-market research for Asia at Rabobank Groep NV.
The so-called kiwi fell 0.5 percent to 77.15 U.S. cents, and weakened 0.4 percent to 63.60 cents against the yen.
Australia's dollar was within 1 percent of this year's high versus the greenback before a report tomorrow forecast to show the nation had its longest stretch of job growth since 2007.
Employers in Australia added 17,500 workers in January, an 11th month of gains, according to economists surveyed by Bloomberg News. The unemployment rate was unchanged at 5 percent, the lowest since January 2009, the survey showed.
Australia's currency traded at $1.0134 from $1.0146.
Wednesday, February 9, 2011
Feb. 9 (Bloomberg) -- The euro strengthened against most of its major peers amid speculation data today will show the U.S. job market is improving, bolstering optimism about the global economy after German figures showed rising exports.
The dollar declined for a third straight day against the European single currency. The yen fluctuated between gains and losses as Moody's Investors Service said the outlook for Japan's sovereign credit rating was stable. New Zealand's dollar weakened against of all its major counterparts after Finance Minister Bill English said it was "possible" the economy slipped into recession in the second half of last year.
"Broadly, there has been increasing confidence," said Adam Cole, head of global currency strategy at Royal Bank of Canada in London. "What we've seen the past couple of days has been more about broad dollar direction, and markets having slightly better appetite for risk."
The euro appreciated 0.2 percent to $1.3657 at 8:40 a.m. in London. The common currency rose 0.3 percent to 112.60 yen from 112.23 yen, the highest in almost a week. The yen slipped 0.3 percent to 82.58 per dollar.
German exports rose 0.5 percent from November, a second month of gains, the Federal Statistics Office said today. Economists had forecast an increase of 1 percent, according to the median of 16 estimates in a Bloomberg News survey.
Bernanke Testimony
The number of Americans filing first-time claims for jobless benefits fell to 410,000 last week from 415,000 the prior week, a separate survey forecast ahead of the report tomorrow.
U.K. factory output rose 0.4 percent in December from November, according to estimates before tomorrow's report.
Losses by the dollar were tempered before Federal Reserve Chairman Ben S. Bernanke testifies today at a hearing of the House Budget Committee.
"Bernanke is likely to emphasize fiscal tightening," analysts led by Hans-Guenter Redeker, London-based global head of foreign-exchange strategy at BNP Paribas SA, wrote yesterday. "While this would normally be negative for a currency, it will prove positive for the dollar in this case, given concerns over sovereign risk."
U.S. President Barack Obama has increased the nation's publicly traded debt to a record $8.97 trillion, double the 2007 level, as he boosts spending to sustain the economy's expansion.
The yen pared losses after Moody's senior vice-president Thomas Byrne said the Japanese government's domestic investor base gave it safety similar to debt sold by top-rated nations. The comments eased speculation Moody's would indicate concern over Japan's debt levels.
Yen Short Covering
Standard & Poor's downgraded Japan's credit rating for the first time in nine years last month.
"Moody's comments weren't as bad as expected, spurring some covering of yen shorts," said Marito Ueda, a senior managing director in Tokyo at FX Prime Corp., a foreign-exchange margin company. "The yen had been sold earlier on speculation that Moody's may be pessimistic about Japan's rating." A short position is a bet on an asset price's decline.
New Zealand's currency fell after Finance Minister English said the nation's recovery is going to face some challenges. The economy may have contracted in the fourth quarter of 2010, entering its second recession in two years, he said.
Talking Down Kiwi
Gross domestic product in New Zealand shrank 0.2 percent in the three months through Sept. 30, and a report last week showing a decline in fourth-quarter employment added to evidence of a second-straight quarterly contraction.
"English's comments continue a tried and tested tradition of kiwi leaders trying to talk the New Zealand dollar down," said Adrian Foster, Hong Kong-based head of financial-market research for Asia at Rabobank Groep NV.
The so-called kiwi fell 0.5 percent to 77.15 U.S. cents, and weakened 0.4 percent to 63.60 cents against the yen.
Australia's dollar was within 1 percent of this year's high versus the greenback before a report tomorrow forecast to show the nation had its longest stretch of job growth since 2007.
Employers in Australia added 17,500 workers in January, an 11th month of gains, according to economists surveyed by Bloomberg News. The unemployment rate was unchanged at 5 percent, the lowest since January 2009, the survey showed.
Australia's currency traded at $1.0134 from $1.0146.