Japanese Yen Declines Further Against Majors [USD/JPY]
4/2/2008 11:41:27 AM The Japanese currency declined further against its major counterparts during early New York trading on Wednesday. Currently, the yen is trading near 101.27 versus the franc, 102.78 against the greenback, 203.77 against the pound, 160.50 versus the euro and 100.98 against the loonie.
Tuesday, April 01, 2008 10:48:47 AM - Jobless data from the Euro zone and manufacturing sector survey results from several European were the major news on Tuesday.
Eurozone
The Eurostat reported that the jobless rate in euro area stood at 7.1% in February, same as in January. The jobless rate matched analysts` expectations. The unemployment rate was 7.6% in the previous year. In Germany, the statistical office Destatis also announced that Germany`s ILO jobless rate stood at 7.4% in February, down from 7.6% seen in January. Economists had expected the rate to reach to 7.5%.
Separately, the Federal Labor Office reported that the seasonally adjusted German jobless rate declined to 7.8% in March from 8% in February. Economists had expected the rate to ease slightly to 7.9%. The number of people out of work fell 55,000, bigger than the 45,000 decline forecasted. The unadjusted jobless rate fell to 8.4% from 8.6% in the prior month.
German February retail sales data came in much weaker than expected. The statistical office Destatis said Tuesday that retail sales declined 1.6% month-on-month in February, while economists had forecasted a 0.5% rise. On a yearly basis, retails sales fell 0.3%, in line with expectations. Further, the statistical office downwardly revised the growth numbers for January retail sales. The monthly increase for January was downgraded to 0.9% from the earlier estimate of 1.6%, while the annual rise was lowered to 0.3% from 0.6%.
A survey from the Royal Bank of Scotland and NTC Economics indicated that manufacturing activity in the euro zone eased in March as the output showed the weakest growth in two-and-a-half years. The final RBS/NTC manufacturing Purchasing Managers` Index, or PMI, stood at 52 in March, unchanged from the flash reading, but fell from February`s 52.3. The latest reading was the lowest since October 2007 and the second weakest in the previous two-and-a-half-years. A PMI reading above 50 suggests expansion in manufacturing sector, while a level below 50 indicates contraction.
According to the survey, trends among the big-four euro nations in March varied substantially. German manufacturing sector recorded solid growth, hitting a seven month-high. In contrast, France showed modest growth and manufacturing activity contracted in both Spain and Italy. Outside of the big four, the Netherlands, Austria and Greece continued to record growth in March. The PMI reading stayed firmly above 50 no change in all these three nations. However, the PMI for Ireland registered the steepest contraction for four-and-a-half years.
In other news, European Central Bank council member Christian Noyer reportedly said in a speech in Prague that a solid anchoring of inflation expectations remains a pre- requisite for rate cuts in times of heightened financial uncertainty and downside risks to growth. Interpreting Noyer`s comments, some analysts said the policymaker might be hinting at the possibility of rate cuts in future.
Elsewhere, the OECD area annual inflation dipped to 3.4% in February from 3.5% in January, the Paris-based think tank said.
Rest of the Europe
UK`s seasonally adjusted CIPS/NTC PMI, for manufacturing sector remained unchanged from February`s reading of 51.3 in March. Economists had expected a reading of 51. With the latest reading, the indicator remained above the neutral 50-mark for the thirty-second month in a row.
A monthly report from the Land Registry showed that England/Wales house price inflation stood at 5.3% in February. In January, house prices were up 6.4%. On a monthly basis, house prices remained static in February. In London, prices fell 0.4% month-on-month. At the same time, the annual price growth in London remained higher than any other region at 10.6%.
The Royal Institution of Chartered Surveyors released a report late Monday afternoon, which provides more grounds for pessimism regarding the state of the British economy generally and the housing sector, particularly. A survey carried out by the organization showed that 1% more surveyors saw a rise in workloads than those who saw a decline for the first quarter of 2008 as compared to the same quarter in 2007.
The Office for National Statistics announced that UK`s net rate of return by private non-financial corporations in the fourth quarter of 2007 was 15.5%, compared to 15.4% in the third quarter. The annual net rate of return in 2007 was 15.2% versus 14.5% in 2006. Switzerland`s PMI reading tumbled to its lowest level since August 2005 in March. A report from the Credit Suisse showed that SVME Purchasing Managers Index, or PMI, declined sharply to 55.3 in March from 60.5 in February. Economist had expected the reading to fall to 60.
Among others, the Russian VTB Manufacturing PMI, remained unchanged from February`s 54.6 in March. Indicating significant slowdown in the Turkish manufacturing sector, the seasonally adjusted ABN AMRO PMI registered a new low of 45.8 in March. The ABN AMRO Poland Manufacturing PMI dropped to 52.4 in March from February`s 53.1. Czech Republic`s ABN AMRO March Manufacturing PMI stood at 57.4, moving up for fifth straight month.
In Estonia, industrial production was up 2% on a monthly basis in February, the statistical office said.
Statistics Sweden said the number of new cars in Sweden declined 18.4% year-over-year in March to 24,980.
Loonie At Weekly High Against Aussie And Yen [AUD/CAD]
4/1/2008 12:27:39 PM The Canadian dollar advanced against the aussie and yen during Tuesday afternoon in New York. As of 12:20 pm ET, the loonie hit 1-week high of 0.9278 and 99.29 against the aussie and yen respectively. A beak above 99.38 will make a 2-week high for the loonie-yen pair. Against the dollar and euro, the loonie traded at 1.0264 and 1.6001 during this time.
Japanese Yen Declines Further Against Majors [USD/JPY]
4/1/2008 12:06:57 PM The Japanese currency declined further against its major counterparts in early New York trading on Tuesday. Currently, the yen is trading near 101.71 versus the greenback, 100.70 versus the franc, 201.15 against the pound, 158.88 versus the euro, 99.19 against the loonie and 92.21 versus the Aussie.
Pound Mixed Versus Other Majors
4/1/2008 11:45:38 AM The British pound was mixed against its major counterparts. The sterling rebounded away from a record low versus the euro, and also gained against the yen and Swiss franc. The British currency moved to a fresh four-week low versus the greenback.The pound touched its lowest level in about four-weeks against the U.S. dollar on Tuesday. The sterling moved at 1.9767 in the late morning, just off its low of 1.9728 reached a little earlier. In the U.S., the ISM said that its purchasing managers index edged up to 48.6 in March from 48.3 in February, although a reading below 50 indicates a contraction in the sector.Against the euro, the sterling bounced away from Monday`s record of 0.7982. The British currency was up for the day at 0.7894 in the late morning. The statistical office Destatis said Tuesday that German retail sales declined 1.6% month-on-month in February, while economists had forecasted a 0.5% rise.
The sterling rallied sharply against the Japanese yen on Tuesday and moved to 201.15 in the late morning. The Bank of Japan`s Tankan business confidence survey showed that business confidence in the three months through March among major Japanese manufacturers was 11, down from 19 in the previous survey in December.
The pound also advanced against the Swiss franc, which saw weakness across the board on the day. The pair moved at 1.9988 in the late morning.
Dollar Jumps To 2-month High Versus Loonie [USD/CAD]
4/1/2008 11:14:54 AM The dollar jumped to a 2-month high versus the loonie Tuesday morning, rising to 1.0325 from an early level near 1.02. The dollar advanced as oil prices dipped below $100. The loonie is heavily dependant on oil prices for support.
Dollar In Rally Mode Versus Euro [EUR/USD]
4/1/2008 10:47:01 AM The dollar was in rally mode versus the euro in Tuesday`s late morning dealing, extending its considerable gains from earlier in the session. The dollar soared to 1.5563, having managed to find support yesterday upon testing a record low of 1.5905 from earlier in the month.
4/1/2008 10:35:13 AM The ISM index is not yet at recessionary levels despite significant weakness in some regional manufacturing surveys, Chris Low from FTN Financial remarked on Tuesday. He noted that given the state of the economy (falling payrolls, flat retail sales, etc.) this could indicate that the relationship between manufacturing and the broad economy has changed.
Low remarked that no longer is manufacturing the canary in the coal mine that keels over first when the economy is in trouble. Maybe the weak dollar and export demand are enough to keep manufacturers out of trouble, he suggested, or maybe the ISM index isn`t as good as it used to be. It has been a less-than-reliable-guide to durable orders in this cycle, he noted.
Low wrote, `Construction spending was better than expected in February, but with declines in three consecutive months in private non residential construction spending, we could see the first decline in business fixed investment in structures since the third quarter of 2005.`
Dollar Falls As Paulson Speaks On Finacial Regulation; Milwaukee-area Manufacturing Contracts [EUR/USD]
3/31/2008 10:20:15 AM The dollar softened versus other major currencies Monday morning in New York as Treasury Secretary Henry Paulson unveiled a White House plan to overhaul US market regulation. Paulson said that regulatory changes are needed after markets stabilize.
Saying the Fed should get authority to preserve stability and protect against market disruptions, Paulson proposed to expand the role of the President`s Working Group on Financial Markets to include the entire financial sector rather than just financial markets. He also stressed the need to create a federal commission, the Mortgage Origination Commission, to develop uniform, minimum licensing standards for mortgage market participants.
Just before Paulson`s speech, traders were treated to data showing that manufacturing in the Milwaukee area contracted in March after expanding in February.
Versus the euro, the dollar moved closer to its record low of 1.59 from earlier in March. The buck was range-bound near 1.58 for most of the morning, but slipped to 1.5860 by 10:15 am ET.
The dollar gave back its early gains versus the sterling, falling back to 1.9916 from a weekly high of 1.9812. Against the yen, the dollar fetched 99.38, down very slightly from its early levels.
3/31/2008 9:57:20 AM The dollar saw little movement upon the release of Chicago PMI data Monday morning. The Chicago PMI rose to 48.2 in March from 44.5 in February, beating expectations for 46.7. The PMI index measures the economic health of the manufacturing sector. A reading of less than 50 represents a contraction in manufacturing.
The greenback was at 1.58 versus the euro, 99.62 versus the yen, and 1.9856 versus the sterling.
