Dollar recovering and trading at 88.59
The dollar gained territory against the yen and is trading at 88.59. Earlier, the pair had opened on 88.45 and posted an intraday high of 88.62. Since then, the pair has maintained upward tendencies. The USD/JPY finds support at 88.3087, resistance at 88.9017 and is considered slightly bullish.
According to the Federal Reserve's influential Beige Book, the US economy is improving though at a reduced rate. While the US economy has continued to improve this year, growth has not been even across al sectors. Manufacturing and consumer spending grew while property and construction weakened. The labour markets also remained soft.
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Wednesday, March 3, 2010
Stock market rallies on Greece plan and U.S. data
The U.S. stock market rose on Wednesday after positive developments from Greece and encouraging U.S. economic data.
The S&P 500 Index rose 5.32 points, or 0.48 percent, to trade at 1,123.63 at 12:21 pm. The Dow Jones Industrial Average rose 34.08 points, or 0.33 percent, to trade at 10,440.06.
Rising Commodity Prices
Crude oil futures shook off a 10:30 a.m. EST report of higher than expected U.S. oil inventories.
NYMEX April crude oil futures briefly dipped to trade negative for the day in reaction to the news. However, the oil futures quickly recovered to trade up 1.32 percent. NYMEX April copper futures are also trading up 0.78 percent.
Firms involved in commodities are leading the rally Wednesday. The American Depository Receipts (ADRs) of Royal Dutch Shell (NYSE:RDS.A) rose 1.74 percent and those of BHP Billiton (NYSE:BBL) rose 3.45 percent. Freeport-McMoRan (NYSE:FCX) rose 2.88 percent and Newmont Mining (NYSE:NEM) rose 1.45 percent.
Greece Deficit
Recent comments made by top Greek officials seem to indicate the government's serious commitment its austerity measures.
Greece unveiled additional pay cuts and tax hikes on Wednesday that will cut its budget deficit by $6.54 billion this year.
There is also increasing speculation that the European Union is moving towards a rescue package for Greece. The cost of insuring its sovereign debt and the yields on its bonds fell Wednesday.
U.S. Economic Data
At 8:15 am EST, an ADP report showed that non-farm private payrolls decreased by 20,000 in February. The decrease is the lowest since February 2008.
The report eased investor sentiment ahead of Thursday's unemployment claims and Friday's unemployment rate and non-farm payroll change.
At 10:00 am EST, the Institute for Supply Management reported that the services sector grew for the second consecutive month. The reading beat the median forecast of economists according to Bloomberg and increased from last month.
The U.S. stock market rose on Wednesday after positive developments from Greece and encouraging U.S. economic data.
The S&P 500 Index rose 5.32 points, or 0.48 percent, to trade at 1,123.63 at 12:21 pm. The Dow Jones Industrial Average rose 34.08 points, or 0.33 percent, to trade at 10,440.06.
Rising Commodity Prices
Crude oil futures shook off a 10:30 a.m. EST report of higher than expected U.S. oil inventories.
NYMEX April crude oil futures briefly dipped to trade negative for the day in reaction to the news. However, the oil futures quickly recovered to trade up 1.32 percent. NYMEX April copper futures are also trading up 0.78 percent.
Firms involved in commodities are leading the rally Wednesday. The American Depository Receipts (ADRs) of Royal Dutch Shell (NYSE:RDS.A) rose 1.74 percent and those of BHP Billiton (NYSE:BBL) rose 3.45 percent. Freeport-McMoRan (NYSE:FCX) rose 2.88 percent and Newmont Mining (NYSE:NEM) rose 1.45 percent.
Greece Deficit
Recent comments made by top Greek officials seem to indicate the government's serious commitment its austerity measures.
Greece unveiled additional pay cuts and tax hikes on Wednesday that will cut its budget deficit by $6.54 billion this year.
There is also increasing speculation that the European Union is moving towards a rescue package for Greece. The cost of insuring its sovereign debt and the yields on its bonds fell Wednesday.
U.S. Economic Data
At 8:15 am EST, an ADP report showed that non-farm private payrolls decreased by 20,000 in February. The decrease is the lowest since February 2008.
The report eased investor sentiment ahead of Thursday's unemployment claims and Friday's unemployment rate and non-farm payroll change.
At 10:00 am EST, the Institute for Supply Management reported that the services sector grew for the second consecutive month. The reading beat the median forecast of economists according to Bloomberg and increased from last month.
FOREX-Euro rises after Greece unveils
The euro rose against the dollar on Wednesday after Greece pledged $6.5 billion in pay cuts and tax increases to reduce its deficit, easing worries about the country's debt crisis.
The euro gained roughly half a U.S. cent after Greece's cabinet approved a sweeping new austerity programme on Wednesday, but sentiment remained fragile as markets were wary over whether the package would be enough for Athens to win financial support from Germany and France.
"If the Germans and the French offer support for Greece, the sense of crisis may lift from the markets, and the euro/dollar could see a short-covering relief rally over the next several weeks," said Boris Schlossberg, director of currency research at GFT in New York.
In mid-morning trading, the euro was 0.3 percent higher on the day at $1.3651 EUR=. Stop-losses were seen at $1.3680 with a technical target at $1.3693, traders said.
The dollar fell 0.1 percent to 88.65 yen JPY= after reaching as low as 88.47 yen on electronic trading platform EBS, its lowest since December.
U.S. private employers shed 20,000 jobs in February, fewer than the 60,000 jobs lost in January, data showed on Wednesday. A separate industry report showed the U.S. services sector grew in February at its fastest pace in more than two years.
"The economy is very slowly improving, and this will over time support the dollar," said Joseph Trevisani, chief market analyst at FX Solutions in Saddle River, New Jersey
The euro rose against the dollar on Wednesday after Greece pledged $6.5 billion in pay cuts and tax increases to reduce its deficit, easing worries about the country's debt crisis.
The euro gained roughly half a U.S. cent after Greece's cabinet approved a sweeping new austerity programme on Wednesday, but sentiment remained fragile as markets were wary over whether the package would be enough for Athens to win financial support from Germany and France.
"If the Germans and the French offer support for Greece, the sense of crisis may lift from the markets, and the euro/dollar could see a short-covering relief rally over the next several weeks," said Boris Schlossberg, director of currency research at GFT in New York.
In mid-morning trading, the euro was 0.3 percent higher on the day at $1.3651 EUR=. Stop-losses were seen at $1.3680 with a technical target at $1.3693, traders said.
The dollar fell 0.1 percent to 88.65 yen JPY= after reaching as low as 88.47 yen on electronic trading platform EBS, its lowest since December.
U.S. private employers shed 20,000 jobs in February, fewer than the 60,000 jobs lost in January, data showed on Wednesday. A separate industry report showed the U.S. services sector grew in February at its fastest pace in more than two years.
"The economy is very slowly improving, and this will over time support the dollar," said Joseph Trevisani, chief market analyst at FX Solutions in Saddle River, New Jersey
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