The Currency Converter

Archive for the ‘US Dollar’ Category

US Dollar Rate News: The Dollars recent rally appears to have run out of steam

Thursday, December 9th, 2010

There is little in terms of fresh updates on either the eurozone or US economies today but given last Friday’s disappointing non-farm payrolls report, markets will be keeping a close eye on weekly jobless claims.

The dollar’s recent rally appears to have run out of steam in tandem with a pause in the sharp uptrend in US Treasury yields, which had been a major driver of dollar gains earlier this week. A view is emerging that the sell-off in treasuries, on raised growth expectations after the deal struck between Obama and Republicans to extend tax cuts, may have been overdone.

The dollar is suffering from improved risk appetite following overnight news of surprisingly strong Australian employment data. This saw the Australian Dollar jump by nearly 1% at one stage. The New Zealand dollar, though, is lagging following a surprisingly dovish statement from the Reserve Bank of New Zealand following its meeting at which rates were left on hold at 3.0%, as had been widely expected.

Against the dollar, sterling pushed higher, rising 0.2 percent to $1.5787 after trading lower earlier in the session, with traders citing real money and sovereign demand for the UK currency. Gains were limited, however, as the dollar benefited broadly from a jump in U.S. bond yields after a proposed extension in U.S. tax cuts fuelled concerns about inflation.

The dollar later rose against most other currencies yesterday on the back of a spike in U.S. Treasury yields causing funds to flock in the direction of the Greenback. Also a proposed extension in U.S. tax cuts raised growth expectations for the U.S. economy and pushed U.S. Treasury yields to their highest level in at least six months as they fuelled fears about inflation and Washington’s control of the budget deficit. That also drove 10-year gilt yields to four-month highs although gilts underperformed U.S. Treasuries, tempering sterling gains.

Written by James Rowe

US Dollar Exchange Rate News: The US economy grew at a modest annual rate

Tuesday, December 7th, 2010

In a rare television interview, Federal Reserve Chairman Ben Bernanke said that the Fed could end up buying more than the $600 billion in US government bonds it has committed to purchase if the US economy fails to respond or unemployment stays too high. But he also did not rule out stopping short of the total.

He added that the Fed will regularly review the policy and could adjust the amount of buying up or down depending on the economy’s path. Bernanke stated that the Fed’s actions are aimed at supporting what is still a fragile economic recovery, dismissing critics who argue the policy will lead to future inflation.

“This fear of inflation I think is way overstated,” Bernanke said in the interview aired on Sunday. “What we’re doing is lowering interest rates by buying Treasury securities,” he said, “and by lowering interest rates, we hope to stimulate the economy to grow faster. The trick is to find the appropriate moment when to begin to unwind this policy. And that’s what we’re going to do.”

Bernanke said it would take four to five years for the country’s unemployment rate, which rose to 9.8% in November to come down to what he called more “normal” levels of around 5% to 6%.

The US economy grew at a modest 2.5% annual rate in the three months ending September 2010 and more vigorous growth is needed to bring down unemployment. The interview follows Friday’s worse-than-expected US employment report. The increase in the unemployment rate to 9.8% has fuelled speculation that there could be further QE or QE3, which seems a little premature given the Fed is only 1 month into QE2.

Written by Tony Redondo

US Dollar: A likely negative forecast for the Dollar exchange rate

Friday, December 3rd, 2010

The spotlight that has been shining brightly over the Eurozone this week will shift onto the US this afternoon as the release of November’s non-farm payrolls report is announced. The report is forecast to show that payroll was up 140’000 over the month; however this is not expected to make a real difference to the overall unemployment rate which is expected to remain unchanged at 9.6%. After racking up strong earnings growth in 2010, major U.S. manufacturers are expect to set the stage for a slower-paced 2011 when they meet with analysts and investors to lay out their expectations for the coming year. Among others, General Electric, United Technologies and 3M are all set to provide 2011 forecasts shortly. Profit margins across the sector swelled this year as companies that cut costs to the bone during the brutal recession experienced a rebound in sales that helped the Standard & Poor’s capital goods industry index to rise about 14%, more than twice the gains of the broader US Stock market. Analysts expect 2011 profits to rise next year, but not at the same pace as 2010. It is likely that the forecast for the dollar will be negative as the slow recovery and difficult sets of fundamental undermine the currency during these difficult times.

US Dollar Rate News: Unemployment data weakened the Dollar throughout the day

Thursday, December 2nd, 2010

In the Us Non-farm productivity and poorer than expected unemployment data weakened the Dollar throughout the day’s trading. A commission set up by president Obama says US debt is the greatest threat to security, and urges sweeping spending cuts and tax reform. The National Commission on Fiscal Responsibility and Reform laid out an ambitious plan to cut the US budget deficit to 2.3pc of gross domestic product by 2015 from 9pc this year. The commission, which was appointed by President Obama, argues that savings need to be found in both defence and non-defence spending, as well as healthcare programmes such as Medicaid. “Our challenge is clear and inescapable: America cannot be great if we go broke,” the report, titled ‘The Moment of Truth’, said. Americans are counting on Congress to “put politics aside, pull together not pull apart, and agree on a plan to live within our means and make America strong for the long haul.”
Tomorrows Non-farm payrolls could see the further volatility depending upon the outcome.

Written by James Rowe

Currency News: Pound Sterling versus The US Dollar

Friday, November 26th, 2010

The US Dollar is basking in it’s safe haven status this morning after risk averse investors piled their money into the Greenback. With the Thanksgiving Holiday yesterday there is little in the way of any significant news coming out of the States as trading was limited. With questions still surrounding the Euro debt crisis the dollar did however benefit from the market’s hatred of uncertainty and we saw the two month highs versus the euro as it dropped down to below $1.33 and also saw gains versus the pound reaching an overnight 6 high of 1.5688 with both the US Dollar and the Japanese Yen strengthening while investors wait for any significant market change of direction.

Written by Luke Trevail

Exchange Rates: The Pound against the US Dollar

Thursday, November 25th, 2010

GBPUSD traded at $1.5789 having earlier weakened 0.2 percent to $1.5742, its lowest level against the U.S. currency since Oct. 27, as problems in the euro zone prompted some flows into the safe-haven dollar. This combined with the continued geo-political threat in Korea enabled the greenback to continue to make marginal gains. U.S. jobless claims fell to the fewest since 2008. Elsewhere the USD has strengthened as Americans increase spending for the 5th month in a row. They have also filed fewer unemployment claims, both of which suggest that the US economic situation is improving. Stocks have rallied and Treasuries declined as the economic releases yesterday along with the increase in consumer confidence have helped to improve the outlook for the forthcoming holiday season. A North Korean statement after Tuesday’s artillery clash that the South’s action was driving the peninsula to the brink of war earlier prompted investors to seek relatively safer-haven currencies. The dollar also fell 1.2 percent against the South Korean won, erasing some of the 3.2 percent gains made on a volatile Tuesday.

Written by James Rowe

US Dollar Exchange Rate News: The dollar duly made gains against both the pound and the euro

Tuesday, November 23rd, 2010

Having initially tumbled against the euro after news of a bail out of the Irish economy was announced, like the pound, the dollar recovered against the single currency in the afternoon after the call by the junior coalition partners in Ireland for an immediate general election.

The political uncertainty in Ireland and the threat of fear of ‘contagion’ from Ireland to Portugal and Spain drove equity markets down worldwide with the Dow Jones losing over 130 points within 2 hours of its opening. This strengthened the US dollar as investors’ sought the dollar’s ‘safe haven’ status. This was further enhanced by heavy falls in the Asian stock markets overnight with news of what some analysts are suggesting is the most serious skirmish between the two Koreas since the end of the Korean war in the 1950′s.

Meanwhile in a quiet data day, US Federal Reserve chairman Ben Bernanke criticised countries like China for running large trade surpluses. In a speech to the European Central Bank he stated that “Currency undervaluation by surplus countries is inhibiting needed international adjustment”.

He said that by buying dollars, these countries were hurting the economic recovery in the US and the global economy with it. Bernanke also defended the Fed’s policy of “quantitative easing”, which has recently been criticised by China and Germany amongst others.

China, Germany and others have attacked the Federal Reserve in recent weeks for its decision to purchase another 600 billion dollars of US government debt in a bid to stimulate the US economy. They say that the policy will unfairly devalue the dollar in currency markets and that this could lead to inflation and asset bubbles elsewhere in the world. The Chinese also argued the Fed had failed to take account of its responsibility for protecting the value of the dollar as a global reserve currency.

The dollar duly made gains against both the pound and the euro yesterday afternoon.
This afternoon sees the revised GDP data for Q3 published in the US which will be studied by analysts for signs of the economic conditions in the US economy.

Written by Tony Redondo

Currency News: The US Dollar

Monday, November 22nd, 2010

The Dollar declined against all of the 16 most actively traded currencies on Friday, amid a rebound in risk appetite, as global stocks rallied following speculation of a bailout package for Ireland. There appeared to be no U.S economic data released on Friday but the Fed chairman Ben Bernanke defended the Bank’s decision to embark on a second period of quantitative easing through the purchase of Treasuries. Risk appetite was initially weaker following the Chinese move to increase reserve requirements, before the Euro challenged resistance levels around the $1.37 area. There may be a risk of volatile trading conditions over the week with liquidity curved by the U.S Thanksgiving holiday. Media reports suggest that the Irish rescue package would be worth at least €70 billion and will be announced at some point on Monday.

Written by Adam Solomon

The US Dollar Exchange Rate: Dollar takes advantage of broad Euro weakness

Monday, November 15th, 2010

The U.S Dollar took advantage of broad Euro weakness last week, while the U.S currency also broke to a five-week high versus the Japanese Yen, as rising Treasury yields and signs of a pick up in U.S economic growth boosted demand for the Dollar. The greenback actually made gains against all of the 16 most actively traded currencies, before reports that are expected to show that retail sales and consumer prices improved on the month. The prospect of further Dollar gains against the majors looks increasingly likely in this environment, with retail sales expected to increase 0.7% in October. The sustainability of U.S consumer spending will be the driving force of the economy, but the Dollar will also benefit from an increase in risk aversion, following the renewed concerns over the sovereign debt crisis in the Euro-zone.

Written by Adam Solomon