LATEST NEWS >> Forex News
  • Pound Weaker Versus Euro Before Europe-Crisis Summ
    goendeavor.com | Nov 11, 2011 05:54:20
    The pound weakened versus the euro for the first day in four amid optimism Europe’s leaders will find a solution to the euro-region debt crisis at a summit today in Brussels.

    U.K. government bonds advanced after data showed an index of factory orders fell and optimism plunged to the lowest level in 2 1/2 years this month. Sterling was little changed against the dollar as leaders prepared to debate the shape of Greece’s second bailout, the recapitalization of banks and the retooling of the 440 billion-euro ($612 billion) rescue fund into a more potent weapon against the region’s turmoil.

    “It’s highly uncertain what will happen,” said John Hydeskov, chief analyst at Danske Bank A/S in London. “In sterling against the euro there’s still this very narrow range between 87 and 88 pence. Eighty-eight is likely to be broken but it may take some time.”

    The pound was 0.2 percent weaker at 87.07 pence per euro at 12:06 p.m. London time. Sterling was little changed at $1.5985, after strengthening to $1.6042, the highest level since Sept. 8. The euro bought $1.3915, a 0.1 percent gain.

    The pound has strengthened 2 percent in the past three months, paring a 12-month decline to 3.3 percent, according to Bloomberg Correlation-Weighted Indexes.
    Gilts Gain

    “If tonight’s EU summit provides the conclusive and specific solution to the debt crisis that everyone is hoping for, I would expect euro-dollar to rally sharply and the pound would follow that upwards,” said Elizabeth Gregory, a Geneva- based market strategist at Swissquote Bank SA. “If we don’t get any solution, there’s going to be a devastating effect. The euro’s going to collapse through $1.35 levels and I think the pound is going to get dragged down too.”

    Gilts gained, pushing the 10-year yield four basis points lower to 2.47 percent. The 3.75 percent security due September 2021 rose 0.395, or 3.95 pounds per 1,000-pound face amount, to 111.160. The two-year note rate rose three basis points to 0.55 percent.

    The factory orders gauge declined to minus 18 in October, its weakest reading in a year, from minus 9 the previous month, the Confederation of British Industry said in a report in London today. A quarterly measure of sentiment fell to minus 30, the lowest since April 2009, from minus 16 in July. 
  • Merkel Puts Rescue Fund to German Vote
    goendeavor.com | Nov 11, 2011 05:54:12
    German lawmakers are set to back a planned increase in the European rescue fund’s capacity, strengthening Chancellor Angela Merkel’s hand before a Brussels summit that aims to quell the euro-area debt crisis.

    With contagion threatening Italy, European leaders are also tightening the screws on Prime Minister Silvio Berlusconi to bring concrete reforms to today’s summit as part of a package of measures needed to stem the risk posed to the global economy.

    Merkel will address lawmakers on the crisis at noon in the lower house in Berlin, the Bundestag, before her government puts plans to bulk up the 440 billion-euro ($612 billion) rescue fund to a vote. The coalition ensured cross-party support after persuading the main opposition Social Democrats and Greens to sign up to a motion that includes a cap on German guarantees.

    “The chancellor will travel to Brussels today bolstered by a clear and very broad mandate from the German Bundestag,” Peter Altmaier, the deputy parliamentary leader and chief party whip of Merkel’s Christian Democratic Union, said in an interview on Deutschlandfunk radio.

    German backing to increase the effectiveness of the European Financial Stability Facility is just one piece in the crisis-fighting jigsaw puzzle being assembled. Agreement is still missing on how to bolster the EFSF, reductions in Greece’s debt load and recapitalizing banks. 
  • U.S. Durable Goods Orders Probably Fell on Aircraf
    goendeavor.com | Nov 11, 2011 05:54:05
    Orders for durable goods probably fell in September as a slump at aircraft makers masked gains for companies like Caterpillar Inc. (CAT) that show manufacturing is supporting the expansion, economists said before a report today.

    Bookings for equipment meant to last at least three years dropped 1 percent after decreasing 0.1 percent in August, according to the median forecast of 79 economists surveyed by Bloomberg News. Demand excluding the volatile transportation category rose 0.4 percent, according to the survey.

    Growing economies overseas and a 14 percent drop in the value of the dollar since June 2010 are propelling American exports to record levels, helping companies like Caterpillar weather a protracted U.S. housing slump that is restraining the recovery. A second report from the Commerce Department today may show sales of new houses barely budged from a six-month low.

    The outlook for manufacturing is “generally positive, but a bit disappointing relative to the beginning of the year when the gains were much more broadly based,” said Scott Brown, chief economist at Raymond James & Associates Inc. in St. Petersburg, Florida. “Growth is still positive, albeit relatively lackluster.”

    Estimates for overall orders ranged from a 2.5 percent decline to a 1 percent increase. Forecasts for bookings excluding transportation ranged from a decline of 1 percent to an increase of 1.7 percent. The Commerce Department’s report is due at 8:30 a.m. in Washington.
    Home Sales

    Purchases of new houses increased in September to a 300,000 annual rate from 295,000 pace in August that was the weakest since February, economists surveyed project the government’s report at 10 a.m. will show.

    Boeing Co. (BA), the largest U.S. aircraft maker, said it received orders for 59 airplanes in September, down from 127 the prior month. The drop will probably be reflected in the headline reading for durable goods. Industry data, nonetheless, may not correlate with the government statistics on a month-to-month basis.

    Other indicators have shown manufacturing, which accounts for about 12 percent of the economy, continues to grow. The Institute for Supply Management’s factory index climbed to 51.6 last month from 50.6 in August. A level greater than 50 signals expansion. Industrial production advanced in September on growing demand for automobiles and computers, according to figures from the Federal Reserve. 
  • Latin America’s Most Volatile Currency Erodes Ce
    goendeavor.com | Nov 11, 2011 05:53:57

    Surging volatility in the Mexican peso is driving auction demand for the country’s shortest-term bills to a 16-month low.

    Cetes, as the 28-day securities are known, drew bids of 18.8 billion pesos ($1.4 billion) for the 6.5 billion pesos offered in yesterday’s auction, the central bank said on its website. The bid-to-cover ratio, a gauge of demand that measures the number of bids divided by bids accepted, was 2.89, the lowest since June 2010. The zero-coupon bills yielded 4.37 percent, up from 4.35 percent a week ago. Similar-maturity U.S. government debt yields 0.01 percent.

    Concern Europe’s debt crisis will deepen the global economic slowdown is making the peso Latin America’s most volatile currency, reducing the allure of Mexico’s fixed-income assets. One-month historical volatility on the peso, which measures the magnitude of the currency’s fluctuations, has soared to 20.8 percent from 7.69 percent in August, according to data compiled by Bloomberg.

    “Foreigners are basically out of the market at the moment and that has to do with the volatility in the peso,” Alejandro Urbina, who oversees $800 million in emerging-market assets at Silva Capital Management, said in a telephone interview from Chicago. “That ends up causing a reduction in liquidity.”

    The yield on Mexico’s benchmark peso bonds due in 2024 rose two basis points, or 0.02 percentage point, in the past week to 6.55 percent, according to data compiled by Bloomberg.

  • Yen Strengthens to Record on U.S. Growth
    goendeavor.com | Nov 11, 2011 05:53:45
    The yen rose to a post-World War II high versus the dollar as concern U.S. growth is slowing and European leaders will fail to resolve the region’s debt crisis boosted demand for the safety of Japan’s currency.

    The Dollar Index dropped to a six-week low before U.S. reports that economists said will show durable goods orders fell in September and new-home sales stagnated, adding to speculation policy makers will resume asset purchases. Australia’s dollar weakened against all its major counterparts after a government report showed inflation slowed. Switzerland’s franc gained.

    “There’s strong safe-haven demand for the yen,” said Lee Hardman, a foreign-exchange strategist at Bank of Tokyo- Mitsubishi UFJ Ltd. in London. “The upward pressure on the yen caused by the turmoil is transferring to yen-dollar on the back of building expectations of more quantitative easing from the Fed and on the outlook for the U.S. economy.”

    The yen rose 0.3 percent to 75.89 per dollar at 7:04 a.m. in New York, after strengthening to a record 75.72. Japan’s currency gained 0.2 percent to 105.61 per euro. The dollar was little changed at $1.3916 per euro after weakening to $1.3960 yesterday, the lowest since Sept. 8. The franc advanced 0.2 percent to 87.66 centimes per dollar.
    Federal Reserve Bank of New York President William C. Dudley said Oct. 24 the central bank has the option of starting a third round of asset purchases, known as quantitative easing. The Fed’s Open Market Committee will gather for its next meeting on Nov. 1-2