Euro Rebounds Versus Dollar After Obama’s Speech

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Euro Rebounds Versus Dollar After Obama’s Speech

After touching the lowest level in 2010 yesterday versus the U.S., the euro advanced on speculations that a White House proposal will shun investors from North America, allowing the euro to gain versus the greenback in foreign-exchange markets this Friday.

The euro posted its first advance versus the dollar since Tuesday as U.S. President Barack Obama speech done yesterday proposing news restrictions and prohibitions for financial institutions in the country to use in hedge funds and other types of investment. which could create a new credit bubble and harm the economy as a whole. The euro pared much of its previous days losses versus the pound after a U.K. report indicated a worse-than-expected advance in retail sales in the country, forcing the pound down versus most of the main traded currencies.

Even if the economic health of several Euroland member countries remain rather complicated, the pessimism is strong everywhere, and that allowed the euro to pare some of its losses, according to currency strategists. The euro’s advance is unlikely to follow during the next week, as Greece budget deficit is far from a solution, and other countries are likely to have the same issues in the near future.

EUR/USD traded at 1.4165 as of 17:41 GMT from a previous rate of 1.4091 yesterday. EUR/GBP traded at 0.8779 from 0.8694.

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South Korean Won Biggest Loser in Asia on Risk Aversion

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South Korean Won Biggest Loser in Asia on Risk Aversion

The South Korean currency, one of the best performers in 2009 among Asian emerging markets, had a severe weekly decline as risk aversion remained predominant after China’s statements regarding new regulations on its economy.

After China announced it will take further measures to control inflation in the country, which can be understood with implied slower economic growth, the South Korean currency declined versus most of its main trading partners currencies, as was the worst performer in the Asian region this week in foreign-exchange markets.

USD/KRW ended the week at 1,152.50 from an opening rate of 1,136.2 this Friday.

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Yen More Attractive on Renewed Risk Aversion

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Yen More Attractive on Renewed Risk Aversion

The yen ended the week with a very positive performance versus most of the main traded currencies as a new wave of risk aversion brought traders to purchase assets in the Asian country, since the yen is well-known for being the safest refuge currency for times of uncertainty in trading markets.

The yen climbed significantly this week versus the U.S. dollar after a White House statement proposing new regulations for banking institutions in the country fueled speculations that investments will decrease in the U.S., forcing investors to abandon dollar-priced assets to search for safety in Japan. The euro remained unattractive allowing the yen to post a weekly advance as Greece’s financial crisis continue to raise concerns among traders regarding the Eurozone economic future. The pound also dropped versus the yen despite inflation positive figures, as retail sales unexpectedly fell in the end of the week.

Risk aversion is coming from different directions, China and U.S. statements regarding financial restrictions had a huge impact in market sentiments, that’s behind yen’s rally this week. If new tightening policies become a rule globally, the yen will certainly rally further.

USD/JPY closed the week at 89.80 from as high as 91.86 on Thursday. EUR/JPY closed at 126.91 from as high as 129.48 on Thursday.

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Pound Bullish Before GDP Report

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Pound Bullish Before GDP Report

The pound rose in the beginning of this week’s trading session before a gross domestic report to be published tomorrow in the U.K., which according to forecasts will show positive figures, making the Great Britain to leave the worst recession since the Second World War.

The U.K. currency is rallying on hopes that forecasts for a GDP report will be confirmed tomorrow, showing an quarterly advance of 0.4 percent, which would revert a negative trend for the British economy that made the pound to rank among the worst bets in currency markets during most of 2009. Despite speculations regarding tomorrow’s GDP data, the pound also gained today as Rightmove Plc published a positive real estate report expecting house prices to grow until the next year based on the economic recovery forecasts for the U.K. during the current year.

Analysts explain the pound’s renewed attractiveness based on two distinct factors, one is the economic recovery outlook expected for 2010 in the British Isles, and at the same time, currencies like the euro are losing appeal as the early recovery in the region could have cooled down, allowing the pound to touch higher levels.

EUR/GBP declined to 87.38 as of 15:06 GMT from a previous rate of 0.8789 when markets opened yesterday. GBP/USD climbed to 1.6172 from 1.6086.

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Stocks Push Loonie Further Down

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Stocks Push Loonie Further Down

The Canadian dollar continued its last week trajectory this Monday as markets that have strong correlation with its price operated on the red globally, forcing the loonie down versus virtually all of 16 main traded currencies in the beginning of this week.

Since risk aversion declined two weeks ago with a Chinese statement announcing lending restrictions in the country and followed by a White House speech concerning the same tendency in the U.S. last week, the Canadian dollar declined significantly and today aggravated its drop as commodities and stocks did not manage to rebound from last days’ retraction. The crude oil was very volatile today, trading near $75 a barrel in New York, and it has been having a great part of responsibility behind the loonie’s actual rates, since Canada is one of the main energy providers for the U.S., and the new financial regulations trend coming from China and the United States are impacting commodities market sentiment, as traders expect economic growth to accelerate at a slower pace since bank loans will not be granted so easily as they used to be.

Analysts stress on the correlation between commodities and the Canadian dollar rates, at the same time that they suggest that the loonie would be undervalued for the moment. The speculations of parity with the U.S. dollar have definitely disappeared for the moment, and now traders are analyzing how low can the loonie trade within the present conditions.

USD/CAD traded at 1.0592 from a previous rate of 1.0578 when markets opened yesterday. AUD/CAD traded at 0.9568 from an opening rate of 0.9556.

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Yen Climbs on Market Sentiment Pessimism

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Yen Climbs on Market Sentiment Pessimism

The yen continued to profit from a favorable scenario for refuge currencies as traders are increasingly concerned regarding the economic trends for 2010, as requirements for bank loans are becoming stricter, fact which could slow down the growth pace in most of the world’s wealthiest nations.

Risk aversion remained high in the beginning of this Wednesday’s sessions as the International Monetary Fund insisted on statements stressing on the weakness of the current global economic situation, after it announced last week that Greece may need a bail out from the institution to reorganize its public accounts. The yen traded at the highest level in 9 months versus the euro as the European Central Bank is increasing its concerns regarding some Eurozone members growing budget deficits, as its the case in most of southern European nations using the single currency.

The global economic scenario took a grimmer trajectory then what most forecasts expected for the beginning of 2010, and as lending restrictions to avoid new credit bubbles are likely to become a global trend, the yen have good odds of gaining versus high-yielding currencies, as the expected acceleration for GDP figures in the first quarter of the current year has significant chances of becoming a global frustration.

EUR/JPY traded at 125.81 as of 01:20 GMT from a previous intraday rate of 128.11.

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Brazil Real Remains Near 2010 Record Low

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Brazil Real Remains Near 2010 Record Low

The Brazilian real continued to be influenced by bearish equities and commodities markets and did not manage to pare gains after falling during the most of the time last week.

Brazil is one of the main metallic commodity exporters in the world, and uncertainty brought by U.S. and Chinese statements regarding new financial regulations for loans in both countries still impacted market , decreasing demand for raw materials and riskier assets globally, forcing the real to trade near the lowest price in 2010 reached last Friday.

USD/BRL closed today at 1.8240 from an opening rate of 1.8155.

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Canadian Dollar Reaches 2010 Record Low on Risk Aversion

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Canadian Dollar Reaches 2010 Record Low on Risk Aversion

The Canadian dollar continued to decline today reaching the lowest level in five weeks as risk aversion rose globally, fueled by China’s new restrictive loans policy, which is likely to decrease appeal for currencies like the loonie, extreme related to commodities and stocks performance.

As China’s announcements regarding new tightening lending conditions for financial institutions started to affect bank loans in the country, risk aversion continued to move the loonie rates down as Canada’s economic growth for 2010 will rely on the global economic recovery, since the country’s raw materials production is mainly directed to exporting markets. The crude oil, one of the main sources of revenue for the Canadian trade balance, posted another drop today as traders fear that lending limitations in China may slow down the economy and consequently the demand for energy globally, forcing energetic commodities down as well this Tuesday.

Forecasts for the global economy are getting more uncertain by the day, and the Canadian dollar has been affected by this shift in market sentiment. Even if some currency specialists judge the current loonie rates as below their real value, the Canadian dollar may touch new record lows as long as demand for commodities decline.

USD/CAD traded at 1.0621 as of 23:32 GMT from a previous rate of 1.0543 yesterday. CAD/JPY traded at 84.33 from 85.48.

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