FOREX-Dollar rallies as widening debt fears weigh on euro
The U.S. dollar rallied on Friday while the euro slid to a new two-month low as growing fears about the euro zone's debt crisis prompted investors to embrace safety and shun risk.
Mounting speculation that Portugal will need to follow Ireland in seeking financial aid unsettled nervous investors.
Investors rattled by Ireland's debt problems have pushed the borrowing costs of Portugal and Spain, seen as the next weakest euro zone peripheral states, to record highs.
European officials denied "absolutely false" reports Portugal was under pressure to seek a bailout and Spain ruled out on Friday needing help to manage its finances, despite fears of a spreading euro debt crisis. [ID:nLDE6AP08Y]
Nevertheless, with so much uncertainty, investors are hesitant adding euros to their positions.
The euro EUR= fell 0.85 percent to $1.3247, having dropped to as low as $1.3200 on trading platform EBS, its lowest since late September, and taking out option barriers at $1.3250 along the way. Traders cited reports of major Asian sovereign demand placed into $1.3200.
The dollar rose as high as 84.18 JPY=EBS on trading platform EBS, the strongest level since late September. It was last at 84.10 yen, up 0.63 percent, rising further from a 15-year low of 80.21 yen hit at the beginning of this month.
Against the yen EURJPY=, the euro was at 111.27, down 0.3 percent on the day.
Camilla Sutton, chief currency strategist at Scotia Capital in Toronto, said the dollar is being buoyed by European contagion fears rise and that Irish bond holders face risk.
"The escalation of problems in Europe is a crisis of confidence, which is notably difficult to quantify and project forward," she said in research note. "The pieces are in place for markets to settle yet it appears that fears are only rising."
"Risks for near-term USD trading are high, and though we continue to expect the USD to weaken in 2011, we would not be surprised to see further upward pressure on the dollar," she said.
Pressure on the euro has intensified as the spiraling debt crisis threatens to ensnare bigger countries such as Spain and Italy, while a small number of experts -- mostly not market participants -- have even begun to speculate about the euro zone's very existence.
"Peripheral issues are unlikely to go away in the short term and the euro will remain under pressure into the end of the year," said Manuel Oliveri, currency strategist at UBS in Zurich.
"Our data shows there are noticeable bond outflows from Spain and Italy, which suggests investors are becoming more unsettled," said Simon Derrick, head of currency research at Bank of New York Mellon.
Technical analysts highlighted the break of support at $1.3232, the 61.8 percent retracement of the euro's August to November rally, adding the 200-day moving average at $1.3131 was the next key level to watch.
AUSTRALIAN DOLLAR TUMBLES
The Australian dollar tumbled after its central bank quashed of an imminent rise in interest rates and the yen hit a seven-week low against the dollar, with fresh sabre-rattling by North Korea helping the U.S. currency.
The Australian dollar fell sharply as Reserve Bank Governor Glenn Stevens dampened any prospect of an imminent interest rate hike, saying rates were just right and the bank might not move on policy for some time.
The Aussie was down 1.6 percent to $0.9663 AUD=D4. For an analysis of the outlook for commodity currencies
The dollar index .DXY, which tracks the greenback's performance against a basket of six major currencies, rose to a two-month high of 80.522.
Friday, November 26, 2010
WORLD FOREX: Euro Gains After Reassurance From ECB Official
The euro gained against the dollar in thin trading Thursday as a key official with the European Central Bank repeated assurances Europe will stand together to protect the common currency.
German Bundesbank President Axel Weber, also an influential voice on the ECB's governing council, said euro-zone countries have no alternative to protecting the euro.
"The euro is among the world's most stable currencies," Weber said at a conference in Berlin sponsored by a German newspaper. Weber also said Spain is highly unlikely to need euro-zone aid.
While Weber's support for the euro echoed earlier comments from European leaders, they were enough to trigger gains in the common currency in the thin trading flows resulting from the Thanksgiving Day holiday in the U.S., said Dave Bradley, director of foreign exchange at Scotia Capital in Toronto.
Further waning of trading flows later on Thursday could prevent the euro from extending its short-term gains, he said. "After Europe goes home, it's going to be very quiet this afternoon," Bradley said.
Late Thursday morning, the euro was at $1.3370 from $1.3327 late Wednesday, according to EBS via CQG. It touched a high of $1.3378 in late-morning trading. The dollar was at Y83.65 from Y83.62, while the euro was at Y111.85 from Y111.43. The U.K. pound was at $1.5772 from $1.5766. The dollar was at CHF0.9993 from CHF0.9966.
The ICE Dollar Index, which tracks the dollar against a trade-weighted basket of currencies, was at 79.640 from 79.800.
Other developments were supportive for the euro Thursday, with other market watchers attributing some of the euro's gains to buying against the yen.
The Wall Street Journal also reported that the European Commission is pushing to double the size of Europe's EUR440 billion bailout fund for indebted euro-zone countries, according to people familiar with the situation.
The proposal by the European Union's executive arm has run up against opposition from Germany, the EU's biggest economy, which is unwilling to expand the size of the fund, the report said.
The dollar rallied against the Swiss franc earlier Thursday, moving above parity with that currency for the first time since Sept. 21, before ceding some of its gains.
Market positioning is helping drive the greenback's gains against the Swiss franc, and it could continue to push higher against that currency, said Elsa Lignos, G10 foreign exchange strategist at RBC Capital Markets in London.
The dollar reached a high of CHF1.0021 against the franc Thursday, according to EBS via CQG.
While it was able to reclaim some lost ground Thursday, the euro remains overshadowed by Europe's continuing sovereign debt crisis as the announcement of Ireland's four-year budget plan Wednesday failed to increase confidence in the country's ability to avoid a debt default.
The Irish austerity proposals, which will cut spending by EUR10 billion, are likely to further reduce the ruling coalition's chances of survival in a general election expected early next year.
The first test of the government's position will come early Friday, when the results of a by-election in County Donegal held Thursday will be declared.
"Ireland is as yet an unresolved problem for policy makers, with an important vacant parliamentary seat election today set to cut the [government] majority to just two, ahead of a critical Dec. 7 budget vote," said currency strategists at ING in London.
"The inability so far to convincingly ring-fence the Irish situation is feeding worry over Portugal and Spain," ING said.
The euro gained against the dollar in thin trading Thursday as a key official with the European Central Bank repeated assurances Europe will stand together to protect the common currency.
German Bundesbank President Axel Weber, also an influential voice on the ECB's governing council, said euro-zone countries have no alternative to protecting the euro.
"The euro is among the world's most stable currencies," Weber said at a conference in Berlin sponsored by a German newspaper. Weber also said Spain is highly unlikely to need euro-zone aid.
While Weber's support for the euro echoed earlier comments from European leaders, they were enough to trigger gains in the common currency in the thin trading flows resulting from the Thanksgiving Day holiday in the U.S., said Dave Bradley, director of foreign exchange at Scotia Capital in Toronto.
Further waning of trading flows later on Thursday could prevent the euro from extending its short-term gains, he said. "After Europe goes home, it's going to be very quiet this afternoon," Bradley said.
Late Thursday morning, the euro was at $1.3370 from $1.3327 late Wednesday, according to EBS via CQG. It touched a high of $1.3378 in late-morning trading. The dollar was at Y83.65 from Y83.62, while the euro was at Y111.85 from Y111.43. The U.K. pound was at $1.5772 from $1.5766. The dollar was at CHF0.9993 from CHF0.9966.
The ICE Dollar Index, which tracks the dollar against a trade-weighted basket of currencies, was at 79.640 from 79.800.
Other developments were supportive for the euro Thursday, with other market watchers attributing some of the euro's gains to buying against the yen.
The Wall Street Journal also reported that the European Commission is pushing to double the size of Europe's EUR440 billion bailout fund for indebted euro-zone countries, according to people familiar with the situation.
The proposal by the European Union's executive arm has run up against opposition from Germany, the EU's biggest economy, which is unwilling to expand the size of the fund, the report said.
The dollar rallied against the Swiss franc earlier Thursday, moving above parity with that currency for the first time since Sept. 21, before ceding some of its gains.
Market positioning is helping drive the greenback's gains against the Swiss franc, and it could continue to push higher against that currency, said Elsa Lignos, G10 foreign exchange strategist at RBC Capital Markets in London.
The dollar reached a high of CHF1.0021 against the franc Thursday, according to EBS via CQG.
While it was able to reclaim some lost ground Thursday, the euro remains overshadowed by Europe's continuing sovereign debt crisis as the announcement of Ireland's four-year budget plan Wednesday failed to increase confidence in the country's ability to avoid a debt default.
The Irish austerity proposals, which will cut spending by EUR10 billion, are likely to further reduce the ruling coalition's chances of survival in a general election expected early next year.
The first test of the government's position will come early Friday, when the results of a by-election in County Donegal held Thursday will be declared.
"Ireland is as yet an unresolved problem for policy makers, with an important vacant parliamentary seat election today set to cut the [government] majority to just two, ahead of a critical Dec. 7 budget vote," said currency strategists at ING in London.
"The inability so far to convincingly ring-fence the Irish situation is feeding worry over Portugal and Spain," ING said.
Samsung brings Wave 525 & 723 phones to India
World's second largest mobile phone manufacture, Samsung has launched its new smartphones, Wave 525 and Wave 723 in India.
The Wave 525 and Wave 723 mobiles are running on Samsung’s own Bada OS. These two mobiles provide high end features with social networking connectivity.
Samsung Wave 525
Samsung Wave 525 has a 3.2-inch capacitive touchscreen and 3.15 mega pixel camera at rear. It supports Wi-Fi, Bluetooth and GPS. This mobile provides an internal memory of 100 MB and can be extended upto 16 GB using micro SD cards. Wave 525 is available in all leading shops at Rs 8,800.
Specifications:
* 3.2-inch capacitive touchscreen (240x400 resolution)
* 3.15 MP camera at rear
* Samsung bada 1.1 OS
* WiFi 802.11b, 802.11g, 802.11n
* Bluetooth
* GPS
* 100 MB internal memory
* 16 GB micro SD support
* FM radio
* MPEG4, H.263, H.264 video player support
* Facebook, Twitter applications
* microUSB
* 3.5mm headphone jacket
* 1200 mAh battery
* Rs 8,800
Samsung Wave 723
This Wave 723 is a 3G phone with all features of a smartphone. It has a 3.2-inch Super AMOLED TFT display and a 5 mega pixel camera with an LED flash. It runs on Samsung Bada OS and support WiFi and GPS.
Specifications:
* 3.2-inch Super AMOLED TFT display
* 5 mega pixel camera with LED flash
* Bada 1.1 OS
* Bluetooth 3.0
* 3G
* TouchWiz UI 3.0
* WiFi 802.11n
* GPS
* Stereo FM radio with RDS
* 90MB phone memory
* 16 GB micro SD support
* microUSB v2.0 connectivity
* 1200mAh battery
Subscribe to:
Posts (Atom)
