Sponsored Links
Thursday in Asia, the U.S. dollar and the Japanese yen declined against their key counterparts as investors risk appetite lessened demand for safe-haven currencies.
Benchmark interest rates are 0.1 percent in Japan and as low as zero in the U.S., compared with 3.75 percent in Australia and 2.5 percent in New Zealand, making the yen and dollar favored targets for investors seeking to fund carry trades.
Most Asian stocks rose today despite a lack of positive cues from Wall Street.
Tokyo stocks surged up, with the key Nikkei index topping the 9,800 level for the first time in over two weeks, as a weakening yen eased worries over its recent sharp appreciation and lifted exporters such as automakers. The benchmark Nikkei 225 index is currently up 277.52 points or 3.11% at 9,907.71.
Among other Asian markets, Australia's S&P/ASX 200 rose 0.2%, South Korea's Kospi Composite gained 0.6%, New Zealand's NZX-50 was 0.2% higher, Hong Kong's Hang Seng climbed 0.7% and Taiwan's main index was up 0.3%.
The yen that closed yesterday's trading at 87.41 against the US dollar fell to an 8-day low of 87.93 in Asian deals on Thursday. If the Japanese currency weakens further, it may target the 89.5 level.
The Japanese currency had risen to a 14-year high of 84.84 per dollar on November 27 as the dollar slid in reaction to remarks, contained in the recently released minutes of the Federal Open Market Committee's last meeting, which were widely interpreted to mean that the Fed is not averse to letting the greenback depreciate in an orderly fashion.
This prompted players such as hedge funds and bank traders to aggressively sell dollars for yen. It also encouraged investors to dump dollars to buy higher-yielding currencies and commodities like gold, a strategy known as the dollar carry trade.
Earlier last week, speculation mounted in the market that the Bank of Japan would intervene to limit the currency's gains.
The yen that bounced between 85.9 and 87.0 against the dollar earlier this week began weakening on Tuesday as the Bank of Japan announced an emergency meeting.
At the meeting, the Bank of Japan unveiled a 10 trillion yen ($115 billion) program in which it will offer three-month loans to commercial banks at 0.1 percent. Governor Masaaki Shirakawa said the bank is prepared to provide more funds if necessary amid government pressure for policy action after the yen's surge.
The yen has lost more than 3% against the dollar since it reached a 14-year high of 84.84 last week.
During Asian deals on Thursday, the yen slipped to an 8-day low of 146.72 against the pound. This may be compared to yesterday's close of 145.42. On the downside, 151.2 is seen as the next target level for the Japanese currency.
After hitting a 7-month high of 139.37 against the pound on November 27, the yen has declined 5%.
The yen plummeted to an 8-day low of 132.70 against the euro and a 2-week low of 88.02 against the Swiss franc in Asian deals on Thursday. The next downside target level for the yen is seen at 133.6 against the euro and 90.0 against the franc. The euro-yen and the franc-yen pairs were worth 131.53 and 87.26, respectively at yesterday's close.
The Japanese currency has depreciated 4% against the euro as well as against the franc, from multi-month highs of 126.92 and 84.30, hit respectively on November 27.
The U.S. dollar also fell along with the Japanese yen in Asian deals today on signs the global economy is recovering.
Encouraging economic reports from across the world also prompted investors to bet on higher-yielding assets. Reports showed today that China's services activity recorded a robust growth in November and Australia's retail sales increased modestly in October, reversing the decline in the previous month.
Additionally, the ANZ Bank reported that annual commodity prices in New Zealand marked the first positive annual rise since August 2008.
The US dollar tumbled to 1.5097 against the euro during Asian deals on Thursday. This may be compared to Wednesday's New York session closing value of 1.5045. On the downside, the next likely target for the greenback is seen around the 1.515 level.
The Singapore-based DBS bank said in a note on Wednesday that Eurozone officials appear more worried about USD weakness than the Dubai debt crisis.
DBS pointed out the Eurozone officials are frustrated that the EUR is bearing the brunt of currency adjustment for global imbalances, a problem they attribute to deficits in the US and surpluses in China.
The research group also noted the EU chairman Jean-Claude Juncker's comment, who said on Tuesday that the IMF agreed with their assessment that the EUR is overvalued. The research group expects this comment to resurface at the Q&A session after the ECB meeting on Thursday.
According to the DBS research group, talks alone is unlikely to deter USD bears from pushing EUR higher. The group noted the EUR is still considered as the best amongst the G3 currencies with the highest policy interest rate.
The US dollar slumped against the U.K. currency and hit as low as 1.6688 by 10:25 pm ET. If the dollar slides further, 1.675 is seen as the next target level. At yesterday's close, the pound-dollar pair was quoted at 1.6630.
Against its Swiss counterpart, the dollar declined to 0.9992 during Thursday's early Asian trading. The next downside target level for the dollar is seen at 0.992. The dollar-franc pair closed Wednesday's North American session at 1.0022.
The dollar's decline sent gold higher, as investors sold greenbacks to buy the metal. In Asian deals, Gold surged to a new record high of $1,224.65 an ounce.
Meanwhile, oil prices rose today with NYMEX crude for January delivery rising 30 cents to $76.90 a barrel at 10:44 pm ET, after settling down $1.77 at $76.60 on Wednesday. Brent crude was up 48 cents at $78.36 per barrel.
Traders are now likely to focus on the busy European session, in which the French third quarter ILO unemployment rate, Euro-zone October retail sales and the preliminary GDP report for the third quarter are expected.
The services PMI reports from the major European economies for the month of November are also due for release.
At 7:45 am ET, the Frankfurt-based ECB is scheduled to announce its decision on interest rates. The ECB is expected to keep rates unchanged at 1% but may signal its first step towards unwinding some of the emergency measures taken last year to prop up the economy.
Still, with recent debt woes in Dubai lurking in the background, there were expectations that the ECB could delay its plans to withdraw some of its liquidity operations. Any such move could weigh on the euro.
Across the Atlantic, the U.S. Labor Department is scheduled to release its customary weekly jobless claims report for the week ended November 28 and the final report on third quarter non-farm productivity and unit labor costs at 8:30 am ET.
At 10:00 am ET, the ISM is scheduled to release the results of its non-manufacturing survey data.
0 komentar:
Post a Comment