Yen plunges after G7 coordinated intervention, euro up versus dollar

The yen plunged on Friday against major currencies after a coordinated intervention made by the world’s financial powers G7 to curb the currency’s surge after a huge earthquake and tsunami hit the country. European Central Bank, Bank of Canada, Federal Reserve, Bank of France, Bundesbank and Bank of England confirmed market intervention to stop yen’s strong climb. The dollar climbed to 81.98 JPY from record lows of 78.99 JPY. The greenback was later loosing ground against the yen and bought only 81.16 JPY, although still up 2.76%. The single currency was up 3.6% around 116.70 JPY, after reaching a high of 115.53 JPY from lows of 110.72 JPY. The British pound was up 2.71% at 131.30 JPY. After Bank of Japan stepped in the market and sold the yen against the dollar aggressively to stop the rally that severly hits exporters, ECB and the most important central banks joined in. Investors are still waiting though massive repatriation flows to help the country recover after the devastating earthquake and tsunami, so markets are suspicious about the actual effect of the intervention. The euro rose strongly against the dollar and reached new four-month high of 1.4145 USD, up 0.9%. The British pound bounced back from lows of 1.6059 USD to buy 1.6190 USD.

Yen keeps falling against the dollar after G7 intervention, euro holds strong versus dollar The Japanese yen slipped further against the dollar on Monday, as the G7 coordinated intervention reached its target, while high expectations before the EU summit and of a ECB rate hike support the euro versus the dollar. The dollar was up 0.59% against the yen, trading at 81.27 JPY. The greenback fell last week to a record low of 76.25 JPY, but a coordinated intervention of the G7 countries on Friday helped the dollar suddenly recover the lost ground and trade again above 80 JPY. After the huge earthquake and tsunami hit Japan killing more than 20,000 people according to the latest estimations, markets were expecting a big flow of repatriation funds to help repair the damages that pushed the yen higher, atlhough it is thought there was also high speculation that supported the yen. The euro also managed to extend gains against the yen and bought 115.14 JPY, up 0.49%, after falling below 110 JPY last week. Against the dollar, the euro was flat, trading in the range 1.4140 USD and 1.4180 USD, suported also by high expectations of EU leaders to reach a final agreement on bolstering the rescue fund’s lending capacity at the summit planned to begin on 24th March. Also, hawkish comments from ECB and high expectations of a rate hike at the central bank’s meeting in April supported the euro.

Yen slightly recovers some lost ground as dollar slips across borders The Japanese yen gained some ground against the dollar, although it was still down versus other currencies, as the greenback fell across borders. The dollar was ratracing from highs of 81.33 JPY to buy 81.02 JPY, but the currency was still up 0.28% against the yen on fears following a coordinated market intervention from important central banks if the yen rallies again. The greenback fell last week to a record low of 76.25 JPY. After a huge earthquake and tsunami hit Japan, killing more than 18,000 people according to the latest estimations,the yen was pushed higher by markets expectations of a big flow of repatriation funds to help repair the damages. But analysts have been saying though that the yen's rise was also highly speculative. A coordinated intervention of the G7 countries on Friday helped the dollar suddenly recover the lost ground and trade again above 80 JPY. The euro also managed to extend gains against the yen and bought 114.97 JPY, up 0.34%, after reaching a high of 115.18 JPY following the fall below 110 JPY last week. The single currency rose against the dollar and approached the 1.42 USD level for the second time on Monday after trading at 1.4195 USD during the Asian session. It had been trading in the range 1.4140 USD and 1.4180 USD for most part of the European session. The euro is supported by high expectations of EU leaders to reach a final agreement on bolstering the rescue fund’s lending capacity at the summit planned to begin on 24th March. Also, hawkish comments from ECB and high expectations of a rate hike at the central bank’s meeting in April supported the euro. The British pound gained 0.40% against the dollar and reached a high of 1.6290 USD. The Australian dollar has been showing strength on Monday, boosted by a pick up on risk appetite, breaching above 1.0000 USD resistance area and reaching highs of 1.0070 USD. It extended its recovery from Thursday's low at 0.9700 USD. The dollar index, which tracks the greenback's value against a basket of other major currencies, was down 0.30%, at 75.49.

Euro slips from fresh new highs against weak dollar, yen stable on intervention fears

The euro dipped after reaching fresh highs against a weak dollar on expectations ECB will increase rates in April and as EU summit approaches, while the dollar hovers around the 81 JPY level against the yen. The euro rose steadily versus the dollar to reach a four-and-a-half-month high of 1.4249 USD, but later slipped to 1.4211 USD, flat on the day. Markets are expecting European Central Bank (ECB) to raise interest rates at its next monetary policy meeting in April from the current level of 1%, following a second round of hawkish comments coming from the central bank officials. ECB policymaker Juergen Stark reinforced the central bank's tough stance on inflation pressures, saying the euro zone's near-term inflation outlook had not been changed by the earthquake, tsunami and nuclear disasters in Japan.The remarks came a day after simillar comments coming from ECB President Jean-Claude Trichet and other policy makers, which gave another advantage to the euro in front of the dollar in terms of yield differential. Also, an EU Summit is scheduled for 24th and 25th of March and it should bring a final agreement on measures to tackle the debt crisis and enlarging the current bailout fund. As it was widely expected. European finance ministers reached an agreement on Monday on the establishment of a new fund that will be able to lend around 500 billion euros ($710 billion) to troubled euro-zone countries beginning in 2013. The Japanese yen was gaining ground against the weaker dollar, but fears of other market interventions from Bank of Japan are keeping the pair above 80.00 JPY level. The dollar fell from 81.30 JPY to 80.82 JPY, to buy later 80.96 JPY, down 0.16%. The euro lost ground during Asian session against the yen to 114.96 JPY to recover during European hours and climb to 115.55 JPY before slipping to 115.23 JPY. The British pound was boosted by inflation data, as markets consider it a further sign that the Bank of England should soon raise interest rates kept at a record level of 0.5% since March 2009. UK inflation rate rose above expectations of 4.2% in February and reached a 4.4% level, while core CPI, which excludes volatile prices also increased to 3.4%, above market forecast of 3.1%. The sterling reached a one-year high versus the dollar and broke the 1.64 USD level to trade at 1.6401 USD, before edging down to steady around 1.6375 USD, still up 0.45%. The dollar index, which tracks the greenback’s value against a basket of other major currencies, fell to 75.25, its weakest point since December 2009, but later recovered as the euro lost ground and rose to 75.39. The Australian dollar continued its climb against the greenback and reached 1.0128 USD. It was buying later 1.0118 USD, up 0.58%.

Euro suddenly climbs versus dollar, sterling falls on BoE minutes

The euro was suddenly rising against dollar after a slip before the parliamentary vote in Portugal on a new pack of austerity measures that might bring down the government, while the sterling dipped after BoE minutes that failed to support its rally. Portugal prepares on Wednesday for a crucial parliamentary vote on a new pack of austerity measures that opposition parties have already said they will not support. Prime minister Jose Socrates said he will resign in case the pack is not approved. Markets are also preparing for an important EU Summit to take place on Thursday and Friday, which should bring the conclusions of last months rescue fund negotiations . The euro was trading at 1.4213 USD, up 0.01%, suddenly climbing from a low of 1.4146 USD. On Monday, the euro managed to reach a four-and-a-half-month high of 1.4249 USD, as the dollar weakened across borders and European Central Bank (ECB) officials reiterated their stance on tackling inflation through a possible rate hike at April’s meeting. The British pound dipped following the Bank of England minutes that showed the Committee approved with six votes against three to maintain the Bank Rate at the current record level of 0.5%, and eight votes to one to keep the assets buying programme at 200 billion pounds. The sterling fell to 1.6282 USD and steadied further around 1.63 USD, down 0.44%. Just a day before, the sterling had managed to breake the 1.64 USD level and buy 1.6401 USD, reaching a 13-month high versus the dollar. The euro and the dollar were both recovering some lost ground against the Japanese yen after a drop in risk appetite had helped the yen climb although fears of a possible market intervention still persist. The dollar bought 80.90 JPY, down 0.08%, after falling as low as 80.68 JPY. The euro was down 0.05%, at 115.00 JPY, but recovering from lows of 114.20 JPY. The dollar index, which tracks the greenback’s value against a basket of other major currencies, was flat at 75.44

Euro down against stronger dollar on bailout fund increase delay, sterling slips on BoE minutes The euro fell as EU delayed increasing bailout fund decision until the end of June and ahead of a crucial Portuguese parliamentary vote that might bring down the government, while the dollar strenghtened across borders. Euro zone rescue fund (European Financial Stability Facility, EFSF) effective capacity will be increased only after the end of June when a final decision will be taken by EU leaders, a document shows. The news strongly dissapointed markets as it was widely expected conclusions to be reached at the EU summit at the end of this week. Also, markets are waiting for a parliamentary vote in Portugal on a new pack of austerity measures that might bring down the government in a delicate period for the country. While the Portuguese prime miniter Jose Socrates said that he will resign if the measures are not approved, all the opposition parties said they will vote against. Portugal is still seen as a possible third country from euro zone to ask for a bailout after Greece and Ireland. The euro slipped 0.64%, to 1.4103 USD, pushed down by the reports and a stronger dollar. But recent hawkish comments that reiterated European Central Bank’s (ECB’s) stance on tackling price pressures capped the fall. ECB officials have been continuously reinforcing expectations of a rate hike at the central bank’s monetary policy meeting in April. The British pound dipped following the Bank of England minutes that showed the Committee approved with six votes against three to maintain the Bank Rate at the current record level of 0.5%, and eight votes to one to keep the assets buying program at 200 billion pounds. The sterling fell to 1.6217 USD to buy 1.6229 USD soon after, still down 0.88%. Just a day before, the sterling had managed to break the 1.64 USD level and buy 1.6401 USD, reaching a 13-month high versus the dollar. A stronger dollar helped counterbalance the increasing risk aversion that supported a climb for the Japanese yen in first part of the day, despite persisting fears of a possible market intervention. The dollar bought 81.02 JPY, up 0.02%, after falling as low as 80.68 JPY. But the weakened euro was falling versus the yen and was down 0.52%, at 114.35 JPY, after managing for a very short period to break the 115.00 JPY barrier. The Swiss franc was also supported by increasing risk aversion and the euro lost 0.62%, at 1.2748 CHF, down from day’s high of 1.2832 CHF. The dollar rebounced after hitting lows of 0.8976 CHF and came back to 0.9032 CHF levels. The dollar index, which tracks the greenback’s value against a basket of other major currencies, was at 75.84, up 0.54%. The Australian dollar was slipping against the dollar to buy 1.0084 USD, down 0.26%, after managing for a short period to reach a high of 1.0122 USD from lows of 1.0062 USD.

Euro up despite Portuguese political crisis, sterling hit by retail sales

The euro bounced up after retreat due to increasing concerns about Portugal political instability, while the sterling slipped on weaker than expected UK retail sales data. The euro is still supported by high expectations of a rate hike at ECB’s next monetary policy meeting in April, although the Portuguese political crisis puts pressure on the currency. Portugal’s parliament rejected a new pack of austerity measures on Wednesday, triggering the prime-minister Jose Socrates’ resignation in a delicate period for the country. EU summit to take place on Thursday and Friday is focused on the perihpheral crisis, as Portugal is now seen even more possible to become the third euro zone country to ask for a bailout, after Greece and Ireland. Also, news that a final decision on increasing the rescue fund’s (European Financial Stability Facility, EFSF) capacity has been delayed until end of June from this week’s EU summit, as initially announced, weighed on the euro. But yield differential between euro and dollar that favours the single currency, as rates as expected to rise in the euro zone in contrast with Fed’s policy, is keeping a high demand for euro. Even so, markets are still suspicious about the long-term effect of a rate hike and a tighter monetary policy, taking into consideration the current financial state of some of the euro zone countries that still need support. The euro fell to a low of 1.4049 USD in early European trading, but started to gradually recover and traded at 1.4123 USD, up 0.25%. The euro climbed also against the safe-haven Swiss franc, recently boosted by increasing risk aversion. The single currency bought 1.2859 CHF, up 0.48%, after reaching a high of 1.2879 CHF. The dollar also gained some ground versus the Swiss franc and was trading at 0.9101 CHF, up 0.25%, but down from highs of 0.9123 CHF. The sterling fell against the dollar after UK retail sales data came below expectations. Retail sales fell 1% in February in contrast with March, while forecast was showing a 0.6% shrink. Without auto fuel, retial sales fell with 0.8%, still above expectations of 0.6%. In annual terms, retail sales increased in February with 1.2%, below an estimation of 2.4%, and, without auto fuel, sales grew with1.3%, still less than expected, 2.4%. Aside from the economical data that hit the sterling, a Moody’s report saying that UK triple-A rating is endangered by growth prospects put even more pressure on the currency, that fell from a high of 1.6267 USD to 1.6147 USD. It was later buying 1.6178 USD, down 0.4%. The dollar index, which tracks the greenback’s value against a basket of other major currencies, was up 0.02%, at 75.81. Against the Japanese yen, the dollar was steady and has been trading around the 81 JPY in the recent days, following the G7 market intervention to stop the yen’s rally. The dollar was buying 80.92 JPY, up 0.05%.

Euro extends gains, dollar down after economic data

The euro rebounced after Portuguese crisis pressures and Moody’s downgrade of Spanish banks pushed down the single currency, while the dollar slipped on below-expectations economic data. The US initial jobless claims fell to 382,000 from 387,000 and below expectations of 383,000, but continuing claims fell below market’s expectations. Also, US durable goods offers fell with 0.9% in February, while the market was forecasting an increase of 1.2%, following the previous month jump of 3.6%. Except transportation, durable goods fell with 0.6%, below an estimation of a 2% rise. The dollar index, which tracks the greenback’s value against a basket of other major currencies, was flat at 75.80. The Australian dollar, which has been rising steadily against the greenback, slipped to 1.0172 USD, up 0.45%, after climbing to a high of 1.0188 USD. Against the Japanese yen, the dollar was steady and has been trading around the 81 JPY in the recent days, following the G7 market intervention to stop the yen’s rally. The dollar traded on Thursday in the close range of 80.75 JPY and 81.05 JPY and was buying 80.93 JPY, down 0.07%, during the early American trading hours. The euro is still supported by high expectations of a rate hike at ECB’s next monetary policy meeting in April, although the Portuguese political crisis puts pressure on the currency. Portugal’s parliament rejected a new pack of austerity measures on Wednesday, triggering the prime-minister Jose Socrates’ resignation in a delicate period for the country. EU summit to take place on Thursday and Friday is focused on the peripheral crisis, as Portugal is now seen even more possible to become the third euro zone country to ask for a bailout, after Greece and Ireland. Also, news that a final decision on increasing the rescue fund’s (European Financial Stability Facility, EFSF) capacity has been delayed until end of June from this week’s EU summit, as initially announced, weighed on the euro. Rating agency Moody’s announced that it has downgraded 30 Spanish banks by one or more notches, but the biggest players, Santander and BBVA, were not affected. Despite negative news, yield differential between euro and dollar that favors the single currency, as rates as expected to rise in the euro zone in contrast with Fed’s policy, is keeping a high demand for euro. Even so, markets are still suspicious about the long-term effect of a rate hike and a tighter monetary policy, taking into consideration the current financial state of some of the euro zone countries that still need support. The euro fell to a low of 1.4049 USD in early European trading, but started to gradually recover and hit a high of 1.4149 USD, before starting to lose ground at the American trading session opening to 1.4124 USD, still up 0.23%. The currency traded at its four-and-a-half-month high versus the dollar on Monday, 1.4249 USD. The Swiss franc recovered earlier lost ground. The single currency reached a high of 1.2879 CHF before slipping to 1.2816 CHF, still up 0.08%. The dollar was trading at 0.9068 CHF, down 0.11%, down from a high of 0.9123 CHF. The sterling fell against the dollar after UK retail sales data came below expectations. Retail sales fell 1% in February in contrast with March, while forecast was showing a 0.6% shrink. Without auto fuel, retail sales fell with 0.8%, still above expectations of 0.6%. In annual terms, retail sales increased in February with 1.2%, below an estimation of 2.4%, and, without auto fuel, sales grew with 1.3%, still less than expected, 2.4%. Aside from the economical data that hit the sterling, a Moody’s report saying that UK triple-A rating is endangered by growth prospects put even more pressure on the currency, that fell from a high of 1.6267 USD to 1.6147 USD. It was later steady around the 1.6170 USD level, down 0.46%.

Euro slips against a a stronger dollar, after a steady first part of trading day

The euro fell before the London market opening on Friday, after a steady first part of the day with calm currency markets as investors were waiting for signals coming from the EU Summit.

The euro has been showing resilience despite euro zone continuing debt problems. Rating agency Standard and Poor’s announced on Thursday that it downgraded Portugal rating by two notches to BBB, warning of a further cut as soon as next week, just hours after Fitch also announced that it cut the country’s rating with two notches and a week after Moody’s announced a similar move. The reports came as Portugal is now facing a political crisis, after the Parliament refused to approve a new pack of austerity measures, triggering prime minister Jose Socrates’ resignation. Although markets are not waiting for the country now to ask for a financial bailout in the short-term, expectations that Portugal will be the next in line for such a program, after Greece and Ireland, have increased.

Also, news that a final decision on increasing the rescue fund’s (European Financial Stability Facility, EFSF) capacity has been delayed until end of June from this week’s EU summit, as initially announced, weighed on the euro.

But the currency proved surprisingly strong. Supported also by recent comments coming from the European Central Bank (ECB) officials that reiterated the view that interest rates could be hiked as soon as April, the euro managed to stay close to its four-and-a-half-month high of 1.4249 USD reached on Monday. With a higher yield advantage in front of the dollar, the euro was trading around the 1.4170 USD level on Friday European morning, after climbing from lows of 1.4049 USD a day before. The single currency fell though to 1.4150, down 0.11%, just before the London opening.

The British pound fell at London market opening to 1.60 USD, %, after trading around the 1.6110 USD level during the first part of the day. The currency has been hit this week by weak retail sales, a Moody’s report warning that slow growth endangers UK’s rating and publishing of Bank of England March meeting minutes.

The dollar index, which tracks the greenback’s value against a basket of other major currencies, was up 0.05%, at 75.70. The Australian dollar started to lose ground and bought 1.0221 USD, still up 0.33%, after reaching a high of 1.0252 USD in its recent rally against the greenback.

Both the dollar and the euro rose against the Swiss franc. The dollar was up 0.67%, at 0.9146 CHF, while euro gained 0.53%, to trade at 1.2940 CHF.

Against the yen, the currencies have been trading in a small range with fears of another market intervention by the Bank of Japan after the G7 coordinated intervention. The Japanese finance minister said that the country will continue to cooperate with the G7 to curb excessive currency moves. The dollar bought 81.20 JPY, up 0.26%, after trading just below the 81.00 JPY level in the last days.

Euro down after Merkel's election loss, dollar up against major currencies

The euro slipped against the dollar following the loss of a key state election by German Chancellor Angela Merkel Christian Democrat Party, adding pressure on the single currency after a period of bad news. Japan’s nuclear crisis lead to a painfull loss for Merkel’s party in the rich region of Baden-Wuerttemberg, attracting 39% of the votes, while the Greens, which too 24.2% of votes will form coalition with the Social Democrats (23.1%). The Christian-Democrats supported the nuclear power in the country where 17 nuclear plants are in operation. The euro fell on Monday to a low of 1.4019 USD and was slowly recovering some lost ground at the European morning trading, although still down from its four-and-a-half-month high of 1.4249 USD hit at the beginning of last week. It was trading at 1.4073 USD, up 0.13%. Merkel’s loss came at the end of a weak of generally bad news for the euro. Portugal’s prime minister resigned after the Parliament rejected its fourth pack of anti-crisis measures triggering the country’s rating downgrade. Also, euro zone leaders delayed the increasing of the region’s rescue fund (European Financial Stability Facility) until end of June, while markets were expecting conclusions to be reached at last week’s EU Summit. Still, the euro’s losses were capped by expectations of a rate hike at European Central Bank’s (ECB”s) next monetary policy meeting in April, as officials have been pointing to this. The dollar has been supported after a series of hawkish comments coming from the Federal Reserve’s officials that signaled a rate hike, although the markets don’t see this possible until the end of this year. The dollar index, which measures the greenback’s value against a basket of other major currencies, was up 0.6%, at 76.06. Against the yen, the dollar was up 0.39% to 81.65 JPY, after hitting a high of 81.84 JPY. The euro also gained ground against the yen, trading at 114.95 JPY, up 0.53%. The British pound fell versus the dollar at European Monday opening and bought 1.5979 USD, up from earlier lows of 1.5966 USD. The Australian dollar was closr to its 29-year high of 1.0294 USD hit last week and bought 1.0292 USD, up 0.29%.