Euro up against dollar on German economic strength
The 17-nation euro is higher against the dollar, helped by a survey showing business confidence in Germany, Europe's largest economy, continued to rise in January.
The euro bought $1.3540 in morning European trading on Friday, up from $1.3469 the night before in New York.
The British pound is unchanged at $1.5910 while the dollar is down to 82.81 Japanese yen from 83.04 yen the night before in New York.
The euro gained traction after the closely-watched Ifo index showed that confidence among German businesses rose again in January.
The German economy enjoyed strong growth last year due to a rebound in international trade, which boosted the country's high-value exports. Analysts expect Germany to remain Europe's principal engine of growth in 2011 as well.
Friday, January 21, 2011
FOREX-Euro hits 2-month high vs dollar
The euro hit a two-month high above $1.36 on Friday and its break of important technical levels suggested more gains to come now that anxiety about a euro zone debt crisis has started to wane.
The euro has outperformed the dollar in eight of the last 10 sessions, and Friday's breach of $1.3570 took it above the 50 percent retracement of its November-to-January slide. it was last up 0.9 percent at $1.3594 EUR=EBS.
Traders said a solid break of $1.36 would target $1.3626 next week, followed by the 100-week moving average at $1.3640 and then $1.3736, the 61.8 percent retracement of a decline that started when the euro was above $1.42 in November.
"Markets are clearly buying into the view that the European debt crisis is being resolved with modest pain," said Steven Englander, head of G10 FX strategy at Citigroup in New York.
The euro also hit a five-week high around 112.44 yen after a break above a closely watched Japanese technical indicator around 112 yen EURJPY=R, with a close above there seen as bullish. The dollar slipped 0.3 percent to 82.73 yen JPY=.
Recent strong debt auctions in Spain and Portugal and talk that officials were considering letting a European rescue fund purchase government debt from troubled euro zone countries heartened investors, narrowing euro zone credit spreads and boosting European bank shares along with the euro.
NOT A SURE BET
Few investors expect the Federal Reserve, which meets next week, to alter its commitment to loose monetary policy or its plan to buy $600 billion in Treasury debt by mid-2011.
The European Central Bank, by contrast, recently warned of rising euro zone price pressures, sparking speculation that it could lift lending rates before the Fed does. Traders said that could add to euro momentum next week.
UK inflation is also above the Bank of England's target, though policymaker Adam Posen said Friday that did not mean a rate hike was imminent. Sterling was up 0.5 percent at $1.5995 GBP=D4 Friday, though it slipped to 84.96 pence per euro EURGBP=, 0.3 percent weaker on the day
To be sure, after two weeks of nearly uninterrupted gains, the euro may be vulnerable to a correction.
"The situation in Europe is still largely unresolved," said Jason Polit, an analyst at Charles Schwab Private Client in Phoenix. "Some sort of bailout for one or more of the peripheral economies will likely occur eventually and that will put downward pressure the euro."
Investors have worried about debt levels in Spain and Portugal, with the latter often tagged as likely to require a bailout similar to those extended to Greece and Ireland.
However, Spanish government bond yields fell Friday, with the spread over German Bunds narrowing to its tightest since mid-November, and Portuguese bond spreads also narrowed.
Polit, who manages around $235 million in assets for clients, said he was still playing it safe, reducing allocations in emerging markets and focusing more on developed markets with manageable debt levels, such as Germany.
The euro hit a two-month high above $1.36 on Friday and its break of important technical levels suggested more gains to come now that anxiety about a euro zone debt crisis has started to wane.
The euro has outperformed the dollar in eight of the last 10 sessions, and Friday's breach of $1.3570 took it above the 50 percent retracement of its November-to-January slide. it was last up 0.9 percent at $1.3594 EUR=EBS.
Traders said a solid break of $1.36 would target $1.3626 next week, followed by the 100-week moving average at $1.3640 and then $1.3736, the 61.8 percent retracement of a decline that started when the euro was above $1.42 in November.
"Markets are clearly buying into the view that the European debt crisis is being resolved with modest pain," said Steven Englander, head of G10 FX strategy at Citigroup in New York.
The euro also hit a five-week high around 112.44 yen after a break above a closely watched Japanese technical indicator around 112 yen EURJPY=R, with a close above there seen as bullish. The dollar slipped 0.3 percent to 82.73 yen JPY=.
Recent strong debt auctions in Spain and Portugal and talk that officials were considering letting a European rescue fund purchase government debt from troubled euro zone countries heartened investors, narrowing euro zone credit spreads and boosting European bank shares along with the euro.
NOT A SURE BET
Few investors expect the Federal Reserve, which meets next week, to alter its commitment to loose monetary policy or its plan to buy $600 billion in Treasury debt by mid-2011.
The European Central Bank, by contrast, recently warned of rising euro zone price pressures, sparking speculation that it could lift lending rates before the Fed does. Traders said that could add to euro momentum next week.
UK inflation is also above the Bank of England's target, though policymaker Adam Posen said Friday that did not mean a rate hike was imminent. Sterling was up 0.5 percent at $1.5995 GBP=D4 Friday, though it slipped to 84.96 pence per euro EURGBP=, 0.3 percent weaker on the day
To be sure, after two weeks of nearly uninterrupted gains, the euro may be vulnerable to a correction.
"The situation in Europe is still largely unresolved," said Jason Polit, an analyst at Charles Schwab Private Client in Phoenix. "Some sort of bailout for one or more of the peripheral economies will likely occur eventually and that will put downward pressure the euro."
Investors have worried about debt levels in Spain and Portugal, with the latter often tagged as likely to require a bailout similar to those extended to Greece and Ireland.
However, Spanish government bond yields fell Friday, with the spread over German Bunds narrowing to its tightest since mid-November, and Portuguese bond spreads also narrowed.
Polit, who manages around $235 million in assets for clients, said he was still playing it safe, reducing allocations in emerging markets and focusing more on developed markets with manageable debt levels, such as Germany.
Wednesday, January 19, 2011
BEFORE THE BELL: US Stock Futures Slightly Mixed
U.S. stock index futures were trading slightly mixed Wednesday after investors digested strong earnings data from Apple Inc. and awaited results from Goldman Sachs Group Inc.
The Dow Jones Industrial Average rose 5 points to 11816, while the S&P 500 futures fell 0.8 points to 1293.90. Nasdaq 100 futures rose 0.25 point to 2331.
Strategists said investors continue to show a hearty, underlying appetite for risk, which bodes well for equities.
"Overall, any weakness tends to be short-lived," said David Jones, chief market strategist at IG Index, with investors gunning for the 12,000 level on the Dow Jones Industrial Average.
Strategists at Lloyds TSB said in a note: "All in all, the 'risk-on/reflation' trade seems in rude health, across asset classes, and keeps defying our expectation for a correction in [the first quarter]."
After Tuesday's closing bell, Apple Inc. (AAPL) said first-quarter net income jumped to $6 billion, or $6.43 a share from $3.38 billion, or $3.67 a share, for the same period last year. Revenue jumped more than 70% to $26.74 billion on strong holiday sales of the iPhone and iPad.
Apple shares fell by more than 2% in Tuesday's regular session, a day after the company announced that Chief Executive Steve Jobs would be going on another medical leave. Apple shares rose 1% in U.S. premarket trade on Wednesday.
Shares of International Business Machines Corp. (IBM) gained 2.4% in premarket trade. The firm said late Tuesday that its second-quarter net income nearly doubled to $143.7 million, or 62 cents a share. Revenue rose 50% to $383.6 million.
Bank of New York Mellon Corp. (BK) said Wednesday that fourth-quarter profit from continuing operations fell 3.1% to $690 million, or 55 cents a share, including restructuring charges of 4 cents. Analysts surveyed by Factset Research had produced a consensus forecast of 57 cents a share.
Ahead of Wednesday's opening bell, Goldman Sachs Group Inc. (GS) is expected to post fourth-quarter earnings of $3.76 a share, according to a survey of analysts by FactSet Research.
Wells Fargo & Co. (WFC) is also expected to report ahead of the open. The consensus estimate is for earnings of 61 cents a share.
The Wall Street Journal reported that Citigroup Inc.'s (C) chief executive officer, Vikram Pandit, plans to name John Havens as president and chief operating officer as part of a structural overhaul. Havens has led the bank's institutional clients group for the past three years.
The Commerce Department is scheduled to release December housing starts data at 8:30 a.m. EST. The Dow Jones forecast is for a drop of 0.2% to a seasonally-adjusted 554,000. Starts rose 3.9% in November to a 555,000 rate.
European stocks were mostly lower in late morning trade, with losses for ASML Holding NV (ASML.AE, ASML) weighing on the technology sector in the wake of the firm's results.
Most Asian markets advanced Wednesday, cheered by results from Apple and IBM, while a weaker dollar lifted commodity-sector shares.
U.S. stocks ended higher on Tuesday as upbeat manufacturing data boosted the energy and materials sectors, more than offsetting a sub-par earnings report from Citigroup and worries about the health of Apple's CEO Steve Jobs.
The Dow Jones Industrial Average rose 50.55 points to close at 11837.03, while the S&P 500 ended with a gain of 1.78 points at 1295.02. The Nasdaq 100 finished with a 0.2% gain at 2328.79.
The Dow last week posted its seventh consecutive weekly gain, with Tuesday's advance taking the index to its highest level since mid-2008.
The U.S. dollar was weaker versus most major rivals, slipping 0.5% versus the Japanese currency to trade at 82.26 yen. The euro rose 0.6% against the dollar to $1.3476.
Gold futures rose $4.70 to $1,373.10 an ounce. Nymex crude-oil futures gained 56 cents to trade at $91.94 a barrel in electronic trade.
U.S. stock index futures were trading slightly mixed Wednesday after investors digested strong earnings data from Apple Inc. and awaited results from Goldman Sachs Group Inc.
The Dow Jones Industrial Average rose 5 points to 11816, while the S&P 500 futures fell 0.8 points to 1293.90. Nasdaq 100 futures rose 0.25 point to 2331.
Strategists said investors continue to show a hearty, underlying appetite for risk, which bodes well for equities.
"Overall, any weakness tends to be short-lived," said David Jones, chief market strategist at IG Index, with investors gunning for the 12,000 level on the Dow Jones Industrial Average.
Strategists at Lloyds TSB said in a note: "All in all, the 'risk-on/reflation' trade seems in rude health, across asset classes, and keeps defying our expectation for a correction in [the first quarter]."
After Tuesday's closing bell, Apple Inc. (AAPL) said first-quarter net income jumped to $6 billion, or $6.43 a share from $3.38 billion, or $3.67 a share, for the same period last year. Revenue jumped more than 70% to $26.74 billion on strong holiday sales of the iPhone and iPad.
Apple shares fell by more than 2% in Tuesday's regular session, a day after the company announced that Chief Executive Steve Jobs would be going on another medical leave. Apple shares rose 1% in U.S. premarket trade on Wednesday.
Shares of International Business Machines Corp. (IBM) gained 2.4% in premarket trade. The firm said late Tuesday that its second-quarter net income nearly doubled to $143.7 million, or 62 cents a share. Revenue rose 50% to $383.6 million.
Bank of New York Mellon Corp. (BK) said Wednesday that fourth-quarter profit from continuing operations fell 3.1% to $690 million, or 55 cents a share, including restructuring charges of 4 cents. Analysts surveyed by Factset Research had produced a consensus forecast of 57 cents a share.
Ahead of Wednesday's opening bell, Goldman Sachs Group Inc. (GS) is expected to post fourth-quarter earnings of $3.76 a share, according to a survey of analysts by FactSet Research.
Wells Fargo & Co. (WFC) is also expected to report ahead of the open. The consensus estimate is for earnings of 61 cents a share.
The Wall Street Journal reported that Citigroup Inc.'s (C) chief executive officer, Vikram Pandit, plans to name John Havens as president and chief operating officer as part of a structural overhaul. Havens has led the bank's institutional clients group for the past three years.
The Commerce Department is scheduled to release December housing starts data at 8:30 a.m. EST. The Dow Jones forecast is for a drop of 0.2% to a seasonally-adjusted 554,000. Starts rose 3.9% in November to a 555,000 rate.
European stocks were mostly lower in late morning trade, with losses for ASML Holding NV (ASML.AE, ASML) weighing on the technology sector in the wake of the firm's results.
Most Asian markets advanced Wednesday, cheered by results from Apple and IBM, while a weaker dollar lifted commodity-sector shares.
U.S. stocks ended higher on Tuesday as upbeat manufacturing data boosted the energy and materials sectors, more than offsetting a sub-par earnings report from Citigroup and worries about the health of Apple's CEO Steve Jobs.
The Dow Jones Industrial Average rose 50.55 points to close at 11837.03, while the S&P 500 ended with a gain of 1.78 points at 1295.02. The Nasdaq 100 finished with a 0.2% gain at 2328.79.
The Dow last week posted its seventh consecutive weekly gain, with Tuesday's advance taking the index to its highest level since mid-2008.
The U.S. dollar was weaker versus most major rivals, slipping 0.5% versus the Japanese currency to trade at 82.26 yen. The euro rose 0.6% against the dollar to $1.3476.
Gold futures rose $4.70 to $1,373.10 an ounce. Nymex crude-oil futures gained 56 cents to trade at $91.94 a barrel in electronic trade.
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