Dollar Falls on China’s & Europe’s Manufacturing

US DollarThe US dollar declined today, along with other safe currencies, as manufacturing growth in Europe and China was somewhat higher than was predicted by forecasters, reducing demand for the currency as a safe haven.

HSBC Flash China Manufacturing PMI was at 49.8 in August, somewhat higher than the median forecast of 49.7 and the highest level in two months. Flash Eurozone Manufacturing PMI was at 49.7 this month, a little higher than expected (49.6), but lower than July figure — 50.4. The Standard & Poor’s 500 Index rose 1.5 percent, while the Stoxx Europe 600 Index went up 1.6 percent.

EUR/USD rose from 1.4357 to 1.4483 today as of 10:33 GMT and posted the high of 1.4499 during the day. GBP/USD climbed from 1.6450 to 1.6544, while reached the intraday high of 1.6572 earlier.

If you have any questions, comments or opinions regarding the US Dollar, feel free to post them using the commentary form below.

Earlier News About the US Dollar:

    * Dollar Rises While Traders Afraid of Recession (2011-08-18)
    * Good Week for Dollar Even After FOMC Statement (2011-08-13)
    * Week Begins with Fall of EUR/USD & USD/JPY (2011-08-08)
    * Future of the US Dollar with AA+ Rating (2011-08-07)
    * Dollar Declines as Stock Markets Continue Their Fall (2011-08-05)

Decline of UK Service Industries Hurts Pound

Great Britain poundThe Great Britain pound tumbled today as the Services Purchasing Managers’ Index slumped in August, confirming a bad state of Britain’s economy and reducing attractiveness of the UK currency as a haven from problems in continental Europe.

The Services PMI dropped from 55.4 in July to 51.1 in August, only a little above the level of 50.0 that indicates no change. The report said:

    Respondents primarily blaming a weaker underlying trend in new business and general economic uncertainty. There were a few reports that the rioting and public disorder seen in some areas of the country in early August had adversely affected activity.

GBP/USD slumped from 1.6150 to 1.6076, following the jump to 1.6185, and GBP/JPY tumbled from 124.20 to 123.64 today as of 14:01 GMT.

If you have any questions, comments or opinions regarding the Great Britain Pound, feel free to post them using the commentary form below.

Earlier News About the Great Britain Pound:

    * Pound Profits from Terrible US Payrolls (2011-09-02)
    * Forecast: Fundamentals Aren't Favorable for Pound (2011-08-30)
    * Pound Goes Down as UK Economy Slows (2011-08-26)
    * GBP Falls vs. EUR with Consumer Confidence & Retail Sales (2011-08-25)
    * Pound Rises as Inflation Accelerates (2011-08-16)

Euro Sinks After Merkel’s Party Loses Election

EuroThe euro plunged today, falling for the fifth consecutive session against the US dollar and the Japanese yen, after Germany’s ruling party lost election.

German Chancellor Angela Merkel’s Christian Democratic Union lost election in all six German states. The results of the elections ignited worries that now Germany will be even more opposed to paying bailouts with money of its taxpayers. The Stoxx Europe 600 Index of shares lost 2.8 percent, falling for the second day.

EUR/USD slipped from 1.4161 to 1.4121 and EUR/JPY fell from 108.92 to 108.56 as of 12:50 GMT today.

If you have any questions, comments or opinions regarding the Euro, feel free to post them using the commentary form below.

Earlier News About the Euro:

    * Euro Ends Rally as ECB Expected to End Interest Rates Hikes (2011-08-30)
    * Euro Falls for Second Day vs. Dollar (2011-08-25)
    * Euro Drops as Europe's Economic Growth Slows (2011-08-16)
    * Euro Weakens as Investors Shun European Bonds (2011-08-02)
    * Euro Slids for Second Day on Debt Crisis Concern (2011-07-28)

Third Week of Gains for Aussie, Can Rally Be Sustained?

Australian dollarThe Australian dollar rallied for almost the whole week, posting the third week of gains against the US dollar in the longest run of weekly gains since April, but by the end of the week fundamentals became unfavorable for the currency.

The Australian dollar was rising on the speculation the Reserve Bank of Australia won’t cut the interest rates. Futures on interest rates indicate only 20 percent probability that RBA Governor Glenn Stevens will cut the bank’s main rate on September 6. Most traders believe that there is 80 percent chance the central bank will maintain the key rate unchanged this month. Australia’s Cash Rate is considered the biggest target lending rate among developed nations.

The rally of the Aussie looked unstoppable until the US non-farm payrolls came out, sending markets in disarray and destroying risk appetite as they came out even worse than most pessimistic forecasts. The Australian currency managed to stay above this week’s opening, but erased three days of gains against the dollar and the yen. What’s worse, it looks like the growth-linked currency may continue to fall next week as risk-aversion style of thinking is returning to markets.

AUD/USD opened at 1.0583, jumped to 1.0764 and closed at 1.0641 this week. EUR/AUD slid from 1.3692 to 1.3346. AUD/JPY jumped from 81.23 to 82.81 during this week before closing at 81.71.

If you have any questions, comments or opinions regarding the Australian Dollar, feel free to post them using the commentary form below.

Earlier News About the Australian Dollar:

    * Australian Retails Sales Go Up, Aussie Follows (2011-09-01)
    * Building Permits in Australia & New Zealand Rise, Aussie & Kiwi Gain (2011-08-30)
    * Aussie Recovers on Stevens' Speech (2011-08-26)
    * Australia's Dollar Weakens on Germany's Consumer Confidence (2011-08-25)
    * Australia Dollar Receives Help from Commodities (2011-08-17)

US Dollar Suffers From Terrible Nonfarm Payrolls

US DollarThe US dollar fell against other major currencies, including the Great Britain pound and the Japanese yen, today after the non-farm payrolls showed that job creation in the US stalled. The currency also slipped against the euro, but later rebounded.

US non-farm payrolls showed no employment growth in August. That’s much worse than the market expectations (growth by 74,000) and the worst reading since September 2010, when employment declined by 95,000. Average hourly earnings dropped 0.1 percent, while markets counted on an increase by 0.2 percent. The poor economic report renewed speculations that the Federal Reserve needs third round of asset purchases, known as quantitative easing, to bolster the economic recovery in the United States.

The Dollar Index managed to rise 0.3 percent to 74.683 today from 74.479 yesterday. The dollar trimmed losses versus the pound and the yen, as well as rebounded versus the euro. The Standard & Poor’s 500 Index plunged as much as 2.3 percent.

GBP/USD climbed from 1.6177 to 1.6253 before trading at 1.6220 as of 19:40 GMT today. USD/JPY fell from 76.91 to 76.80 and touched low of 76.52 intraday. Meanwhile, EUR/USD tumbled from 1.4257 to 1.4199.

If you have any questions, comments or opinions regarding the US Dollar, feel free to post them using the commentary form below.

Earlier News About the US Dollar:

    * US Manufacturing Expands, Dollar Profits (2011-09-01)
    * USD Gains vs. EUR & CHF, Falls vs. JPY (2011-08-30)
    * Fundamentals are Bad for US Dollar, But Week Wasn't Bad (2011-08-27)
    * Dollar Drops After Bernanke Speech & GDP Report (2011-08-26)
    * Will Bernanke Announce QE3? Will Dollar Decline? (2011-08-25)

Franc Jumps as US Payrolls Show Zero Growth

Swiss francThe Swiss franc climbed today against the US dollar, extending its rally for the third day, after the non-farm payrolls showed that US employers weren’t adding jobs last month.

US non-farm payroll employment showed no change in August, while the unemployment rate remained at 9.1 percent. Analysts predicted an increase of payrolls by 74,000. July value was revised down from 117,000 to 85,000. It’ll be interesting to see how the Federal Reserve will react to such disastrous economic data and what steps it’ll take.

USD/CHF plunged from 037954 to 0.7811 as of 13:45 GMT today. Earlier, the currency pair reached 0.7711, the lowest level since August 12.

If you have any questions, comments or opinions regarding the Swiss Franc, feel free to post them using the commentary form below.

Earlier News About the Swiss Franc:

    * Franc Rallies as SNB Doesn't Intervene (2011-09-01)
    * Franc Falls as Bernanke Improves Sentiment on Markets (2011-08-26)
    * Franc Gains as Markets Return to Risk Aversion (2011-08-24)
    * Franc Falls for Second Day on Risk Sentiment (2011-08-24)
    * Franc's Rally Fails on Euro-Peg Speculation (2011-08-23)

Market Sentiment Improves, South Korean Won Gains

South Korean wonThe South Korean won gained today as the comments of Federal Reserve Chairman Ben S. Bernanke last Friday increased risk appetite among Forex market participants, bolstering appeal of higher-yielding currencies.

Bernanke made comments on August 26 about ability of the US to support growth of its economy in the long run. Markets reacted positively and traders began search for higher-yield. South Korean trade balance surplus widened to $4.94 billion in July from $2.03 billion in June.

USD/KRW fell from 1,080.10 to 1,073.50 today as of 13:46 GMT.

If you have any questions, comments or opinions regarding the South Korean Won, feel free to post them using the commentary form below.

Earlier News About the South Korean Won:

    * Korean Won Falls on Anticipation of Crisis (2011-08-19)
    * Korea's Won Retreats After Rally (2011-08-12)
    * South Korea Holds Interest Rates, Won Goes Lower (2011-08-11)
    * South Korean Won Suffers from Europe's Troubles (2011-07-12)
    * Higher South Korea's Inflation Leads to Gains for Won (2011-07-01)

Rand Advances with Stocks & Metals

South African randThe South African rand rallied today, rising to the highest level in more than a week against the US dollar, as stocks and metals advanced after the speech of Federal Reserve Chairman Ben S. Bernanke last week.

Bernanke said last Friday that the Fed has means to support growth of the US economy, improving market sentiment. The main South African stock index jumped 1.7 percent as prices on the London Metal Exchange increased for a fourth day. South Africa’s economy itself performs not that good, though, and many investors still convinced that the nation’s central bank will cut interest rates.

USD/ZAR fell from 7.1300 to 7.0810 today as of 9:56 GMT and touched 7.0680 — the lowest level since August 17.

If you have any questions, comments or opinions regarding the South African Rand, feel free to post them using the commentary form below.

Earlier News About the South African Rand:

    * Rand Weakens on Prospect of Interest Rates Cut (2011-08-22)
    * Rand Near Monthly High vs. USD on Rate Difference, US Uncertainty (2011-07-26)
    * Rand Weakened by Credit Rating Outlook for Greece (2011-07-05)
    * Rand Weakens with Commodities on US Growth Forecast (2011-06-23)
    * South African Rand Falls on Greek Crisis, Trims Losses (2011-06-20)

Fundamentals are Bad for US Dollar, But Week Wasn’t Bad

US DollarThe fundamentals this week were negative for the US dollar, weakening the currency against some major counterparts, but performance of the greenback wasn’t that bad, considering all the pressure to the downside.

There were plenty of bad new for the dollar this week. Bad housing data, rising unemployment claims and slower that expected growth of the US economy. The week ended with the speech of Ben Bernanke, who hinted at possibility of additional stimulus without detailing an actual plan.

The dollar was dragged down by the unfavorable fundamentals and fell against the euro and commodity currencies (including the currencies of Canada, Australia and New Zealand). On the other hand, the dollar gained against the franc and rallied versus the yen before losing its gains by the end of the week as there aren’t many choices for investors who need a safe currency, but afraid of interventions of Japan and Switzerland. The pound also fell against the greenback as Britain has its own problems that erase attractiveness of the nation’s currency.

Next week may also be hard for the dollar. Analysts predict another unfavorable report about hosing and are pessimistic about employment data.

EUR/USD climbed from 1.4376 to 1.4498, while during the week it dropped to 1.4327. USD/CHF climbed from 0.7904 to 0.8058 and reached the daily high of 0.8157. AUD/USD surged from 1.0380 to 1.0569.

If you have any questions, comments or opinions regarding the US Dollar, feel free to post them using the commentary form below.

Earlier News About the US Dollar:

    * Dollar Drops After Bernanke Speech & GDP Report (2011-08-26)
    * Will Bernanke Announce QE3? Will Dollar Decline? (2011-08-25)
    * Dollar Gains Before Bernanke Speech (2011-08-24)
    * Dollar Falls on China's & Europe's Manufacturing (2011-08-23)
    * Dollar Rises While Traders Afraid of Recession (2011-08-18)

Pound Goes Down as UK Economy Slows

Great Britain poundThe Great Britain pound weakened against the Japanese yen and slowed its advance versus the US dollar after the report showed the UK economy grew with slower pace in the second quarter.

The revised figure for growth of UK gross domestic product in the second quarter of 2011 was 0.2 percent, the same as in the preliminary estimate. It indicates slower expansion, compared to 0.5 percent growth in the first quarter. The report also mentioned that several special events affected Britain’s economy in Q2: the additional April public holiday, the royal wedding and the aftereffects of the Japanese tsunami.

GBP/JPY fell from 126.12 to 125.68 today as of 9:24 GMT and touched the daily low of 125.41 earlier. GBP/USD climbed from 1.6278 to 1.6332.

If you have any questions, comments or opinions regarding the Great Britain Pound, feel free to post them using the commentary form below.

Earlier News About the Great Britain Pound:

    * GBP Falls vs. EUR with Consumer Confidence & Retail Sales (2011-08-25)
    * Pound Rises as Inflation Accelerates (2011-08-16)
    * Osborne Refuses Review Spending Cuts, Boosting Pound (2011-08-12)
    * Pound Drops with Higher Trade Deficit (2011-08-09)
    * Pound Weakens on Worsening Consumer Sentiment (2011-07-21)

Euro Falls for Second Day vs. Dollar

EuroThe euro fell against the US dollar for the second day and erased gains versus the Swiss franc today as investors are less willing to buy the currency amid signs of problems in Europe and concerns of global economic slowdown.

The decline of consumer confidence in Germany had its negative impact on the shared European currency. GfK stated that German consumer confidence fell from 5.3 to 5.2 this month and wrote in the report:

Economic expectations virtually collapsed in August, and in light of this, there has also been a moderate drop in Germans’ income expectations.

The euro also weakened on the speculation European lawmakers will extend the ban on short sales.

The global weren’t very supportive for the euro either as rising unemployment claims worsened sentiment of traders. Jobless claims in the US rose to 417,000 last week from the previous week’s revised figure of 412,000. Economists anticipated decrease to 403,000.

EUR/USD fell from 1.4412 to 1.4377 today as of 17:39 GMT. During the day the currency pair reached the high of 1.4474 and the low of 1.4327. EUR/CHF traded at 1.4437 today after earlier it dropped from 1.1465 to 1.1407.

If you have any questions, comments or opinions regarding the Euro, feel free to post them using the commentary form below.

Earlier News About the Euro:

* Euro Drops as Europe's Economic Growth Slows (2011-08-16)
* Euro Weakens as Investors Shun European Bonds (2011-08-02)
* Euro Slids for Second Day on Debt Crisis Concern (2011-07-28)
* Euro Posts Weekly Gain After Two Weeks of Losses (2011-07-23)
* Euro Drops as Optimism Caused by EU Summit Wanes (2011-07-22)

Australia’s Dollar Weakens on Germany’s Consumer Confidence

Australian dollarThe Australian dollar fell today against most major currencies, before rebounding, as the report showed consumer confidence in Germany declined this month, reducing appeal of higher-yielding assets.

The drop of German confidence wasn’t very big as the GfK indicator retreated just to 5.2 in August from 5.3 in the month before. The report explained:

    Despite the current crisis on the financial markets, Germans’ willingness to buy is surprisingly robust and increased further in August from an already high level. However, the worsening of the international debt crisis and rising fears of a return to recession for the global economy have clearly left their mark on the economic optimism of Germans.

AUD/USD traded at about 1.0466 today as of 11:16 GMT after dropping from 1.0471 to 1.0428.

If you have any questions, comments or opinions regarding the Australian Dollar, feel free to post them using the commentary form below.

Earlier News About the Australian Dollar:

    * Australia Dollar Receives Help from Commodities (2011-08-17)
    * Aussie Falls as RBA Minutes Don't Exclude Rates Cut (2011-08-16)
    * Australia's Dollar Rallies Despite Rising Unemployment (2011-08-11)
    * Consumer Sentiment Curbs Appeal of Aussie (2011-08-10)
    * Australian Dollar Attempts Stop Decline, Fails (2011-08-09)

Australian Dollar Continues Its Correction on Weak Retail Sales

Australian dollarThe Australian currency continued its downward trend against the Forex majors today, as the retail sales report confirmed the negative outlook for the country’s economy.

The Aussie is currently demonstrating its biggest losing streak against the US currency this year. It also fell for the second day against the euro and for the fifth day against the Japanese yen today.

Aussie Rises on Rate Expectations, US Problems

Australian dollarThe Australian dollar continued its gaining streak today, rising against the other major currencies, as the economic analysts expect rate increases and the global investors avoid US dollar.

The Aussie (which is a nickname for the Australian currency) managed to grow against the US dollar for fifth day, also gaining considerably against the Japanese yen and the euro. While isolated analysts forecast rate cuts in Australia due to the declining commodity prices, the majority of the banks’ research departments predict about three rate hikes (for 25 basis points each by the end of the year). Adding more interest rate differential is definitely going to make the Aussie an attractive investment target.

Aussie Rises on Rate Expectations, US Problems

Australian dollarThe Australian dollar continued its gaining streak today, rising against the other major currencies, as the economic analysts expect rate increases and the global investors avoid US dollar.

The Aussie (which is a nickname for the Australian currency) managed to grow against the US dollar for fifth day, also gaining considerably against the Japanese yen and the euro. While isolated analysts forecast rate cuts in Australia due to the declining commodity prices, the majority of the banks’ research departments predict about three rate hikes (for 25 basis points each by the end of the year). Adding more interest rate differential is definitely going to make the Aussie an attractive investment target.

Export & Import Prices Push Aussie Higher

Australian dollarThe Australian dollar gained today versus the euro and the Japanese yen as the advance of import and export prices prompted the speculation that the central bank will raise interest rates.

Australian import prices rose 0.8 percent in the second quarter, while export prices increased by 6.0 percent. The MSCI Asia Pacific Index of regional shares climbed 1.1 percent. The positive economic data caused most market participants to bet that the next move of the Reserve Bank of Australia will be hike, not cut.

Aussie Goes Lower as China’s Manufacturing Slows

Australian dollarThe Australian dollar fell today after the report showed a slowdown of China’s manufacturing. The slowdown may curb demand for commodities and that, in turn, would hurt Australia’s economy.

The Flash China Manufacturing PMI fell to 48.9 in July from 50.1 in June. The Flash China Manufacturing Output Index dropped to 47.2 this month from 49.8 in the month before. Both indexes were at 28-month low. Hongbin Qu, Chief Economist, China & Co-Head of Asian Economic Research at HSBC, commented on the report:
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&nbsp;&nbsp;&nbsp; Headline flash PMI fell below 50 for the first time since July 2010, suggesting slowing momentum of manufacturing activities. This implies that June’s rebound in industrial production was just temporary. We expect industrial growth to decelerate in the coming months as tightening measures continue to filter through. That said, resilience of consumer spending and continued investment in a massive amount of infrastructure projects should support a nearly 9% rate of GDP growth in the rest of the year.

AUD/USD dropped from 1.0748 to 1.0700 as of 10:35 GMT after reaching the intraday high of 1.0772.

If you have any questions, comments or opinions regarding the Australian Dollar, feel free to post them using the commentary form below.

Earlier News About the Australian Dollar:

&nbsp;&nbsp;&nbsp; AUD/USD Trades Higher After RBA Minutes (2011-07-19)
&nbsp;&nbsp;&nbsp; Aussies Goes Down as Europe Hurts Risk Appetite (2011-07-18)
&nbsp;&nbsp;&nbsp; AUD Fall with Stocks &amp; Commodities on Concerns for Global Growth (2011-07-15)
&nbsp;&nbsp;&nbsp; Aussie Heads Down on Europe Woes &amp; China's Growth (2011-07-11)
&nbsp;&nbsp;&nbsp; Australian Dollar Falls on Bad US Employment (2011-07-09)


This entry was posted on TopForexNews on Thursday, July 21st, 2011 at 10:35 am and is filed under Australian Dollar. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.

Yen Advances, Japan Worried — New Intervention is Coming?

Japanese yenThe Japanese yen advanced today, heading to the highs against the dollar last seen during the post-World War II period, and made the Japanese government even more nervous about the currency’s strength.

Investors seek safer assets after North American and European stocks fell. The Standard &amp; Poor’s 500 Index slid 2.6 percent today and the Stoxx Europe 600 dropped 0.9 percent.

Franc Plunges Heavily on Prospects of Euro-Peg

Swiss francThe Swiss franc slumped today against all major currencies as Swiss National Bank Vice President Thomas Jordan suggested that a short-term peg of the nation’s currency to the euro could be legal.

The SNB was attempting to weaken the Swiss currency for several years. So far such attempts were futile. There is a difference this time, though, as a peg wouldn’t have just one-time effect as the previous interventions, but would put a continuous pressure on the franc. It looks like Switzerland’s central bank is ready for unconventional measures and such measures can help the bank to achieve its goals for making the franc’s strength less threatening to the country’s economy.

Canadian Dollar Receives Hit from US

Canadian DollarCanada’s dollar plunged today as demand for the nation’s assets deteriorated because of pessimistic outlook for the economy of the biggest nation’s trading partner — the US.

The depressed mood caused fall of equities and decline of commodities. The MSCI World Index of stocks slumped 1.9 percent, while the Standard & Poor’s 500 Index fell as much as 2.1 percent.

There are positive sing, though, that may precede a change of the trend. The S&P/TSX Composite Index rose 0.4 percent. Crude oil, the main export of Canada, rallied 3.2 percent to $81.82 per barrel. Yield on the two-year government bonds fell five basis points to 0.81 percent.