Yen Weakens on U.S. Economy Recovery Speculations

The yen had a week of losses against the euro and the dollar, as the first signs of economic recovery appear in China and in the U.S.
The dollar rose against the yen after Chrysler LLC filed for bankruptcy and will ally the Italian Fiat SpA with the investment of federal funds, as President Barack Obama confirmed this Thursday. The euro has posted favorable news about the Eurozone consumer confidence and companies like Siemens AG reported earnings, making the European currency to hit a two-week high against the yen. Concerns that the swine flu could take pandemic catastrophic dimensions also eased after the disease was found to be not so lethal, which increased optimism on global markets this week.
Investors are hopeful and certain that solid evidences from an economic recovery in China and in the United States are pushing the markets up, which due to the consequences of the global financial turmoil, had several months of consecutive losses since last year, when the recession started. Analysis indicate that the yen, an investment considered as a refuge, is very likely to lose popularity, as risk appetite will be triggered by better economic conditions.
The EUR/JPY strengthened from 129.55 to 131.72 and the USD/JPY is on its way to hit the 100 mark, being traded at 99.34 from 97.30 in the intraday comparison.

Gold Fields Revises Down Q1 Operational Guidance - Update

For the first quarter, the company cut down the attributable production to be approximately 798 thousands ounces, from its previous guidance of 820 thousands ounces. However, it expects the cash costs to be in line with its earlier guidance of approximately R154,000/kg or US$618/oz. Notional Cash Expenditure or NCE, which includes all operating costs as well as sustaining and project capital, is expected to be approximately 6% better than previous guidance, at R227,000 /kg or US$910/oz. The first-quarter, gold production in South Africa operation is expected to be up by 2% with approximately 492 thousand ounces. The cash cost is expected to be R154,000/kg or US$618/oz, compared to a previous guidance of R157,000/kg or US$610/oz. The NCE for the South Africa operation is down to R213,000/kg or US$857/oz, from a previous guidance of R221,000/kg or US$860/oz. For the international operations, the company expects the first-quarter gold production to be approximately 306 thousand equivalent ounces. The cash costs and NCE for the international operations are expected to be approximately US$616/oz and US$983/oz respectively, compared with the previous guidance of US$570/oz and US$1,060/oz. CEO, Nick Holland said that despite the rehabilitation work in South Africa and international growth projects scheduled for completion, the company is in line to achieve the short term target of a run rate of approximately 1 million attributable equivalent ounces of gold, during the third quarter next year, at an NCE of approximately US$725/oz at R/US$8.00. Thursday, the stock closed at $8.31 on the New York Stock Exchange. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

CURRENCIES: Dollar Up Vs Yen On Upbeat U.S., Weak Japan Data

CURRENCIES: Dollar Up Vs Yen On Upbeat U.S., Weak Japan Data By William L. Watts The dollar fell against most major counterparts Friday, but gained ground versus the yen, as it was helped by better-than-expected U.S. manufacturing data and weak Japanese economic data. The dollar index (DXY), a measure of the greenback against a trade-weighted basket of six major currencies, slipped to 84.54, down from 84.764 in North American trade late Thursday. But the dollar rose to 99.11 yen versus the Japanese currency, up from 98.55 yen. The factory sector contracted again in April, but the pace of decline slowed, according to the Institute for Supply Management index released Friday. Separately, consumer sentiment improved more than expected earlier in April, according to the University of Michigan's latest survey. "Today's U.S. reports provided an array of upside surprises that have reinforced the view that the pace of GDP decline will moderate significantly into [the second quarter], while the [first-quarter] GDP figures now face a likely small upward bump," said Mike Englund, chief economist at Action Economics, in a note. Earlier, Japanese reports had already put the yen under the pressure. "In Asia, the green shoot story has been much talked about of late, but the latest economic data out of Japan captured a severely struggling economy," wrote strategists at Brown Brothers Harriman. "In March, unemployment climbed to the highest in four years, wages fell at the quickest pace in six years, while inflation fell for the first time in 18 months." The Japanese government reported Friday that the country's core consumer-price index fell 0.1% in March, the first year-over-year decline since late 2007, raising concerns of a potential deflationary spiral. The nation's unemployment rate, meanwhile, rose to 4.8%, the highest level in four years. Traders said activity in foreign-exchange markets was subdued due to May Day holidays in Asia and continental Europe. London markets were open Friday but will be closed on Monday. The euro rose to $1.3268 versus the dollar in quiet trade, up from $1.3224 late Thursday. The British pound rose 1% to $1.4917 from $1.4783. Sterling extended gains after the purchasing-managers index for the U.K. manufacturing sector indicated that activity at factories continued to shrink in April, but at a slower-than-expected pace. The purchasing-managers index produced by Markit Economics and the Chartered Institute of Purchasing and Supply rose to 42.9 in April from an upwardly revised 39.5 in March, continuing a recovery from a record low of 34.9 in February. The reading remains well below the neutral 50 mark, however. A reading of less than 50 indicates a majority of purchasing managers saw declining activity. A figure of more than 50 signals expansion. Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=rX4niQXJjYgIJl3Wiwfg5g%3D%3D. You can use this link on the day this article is published and the following day.

Low volume and range trading characterized Friday

FXstreet.com (Córdoba) – The Dow Jones Industrial Average transit between gains and losses during the trading session and finally ended up 0.5%; for the week gained 1.7%. In Forex activity was characterized by low volume and range trading; with no mayor moves across the board. USD/JPY ended the American session lower but above 99.00. GBP/USD rose after starting at a session low at 1.4825. The pair moved in an up trend constantly but with quiet moves topping at 1.4920. EUR/USD rose slightly for the day spending most of the session in a range between 1.3250 and 1.3275. During the week the pair was able to recover early losses as risk aversion eased. This movement also favored GBP and CHF, who also gain against the dollar for the week.

Forex: EUR/USD: Euro bottomed at 1.3210 and approaches 1.3275 level

FXstreet.com (Barcelona) - Decline from 1.3385 high yesterday has bottomed at 1.3210 support level and the EUR/USD has been moving on a range from the mentioned support to 1.3260 during today’s Asian session, to rise towards 1.3270 resistance ahead of the European opening.If the Euro breaks resistance level at 1.3275/85, next resistances could be located at 1.3295, and above there 1.3345 (Apr 29 high). On the downside, support levels stand at 1.3210, and below there, 1.3190 (Apr 3’0 low) and 1.3160/65. EUR/GBP has risen from 0.8920 low yesterday to reach a session high at 0.8985 during today’s Asian session. Resistance levels stand at 0.8995 and 0.9020. On the downside, support levels lie at 0.8925 and 0.8880.

Forex: GBP/USD: The Pound consolidating above 1.4765

FXsteet.com (Barcelona) - GBP/USD reached yesterday a fresh two-week high at 1.4950 to decline, on correction, to 1.4700 intra-day low. During today’s Asian session, the Pound has moved from 1.47645 to 1.4800.Immediate resistance level lies at 1.4800/15 area, and above here, 1.4870 and yesterday’s high at 1.4950. On the downside, immediate support stands at 1.4690/1.4700, and below here, 1.4628 and 1.4600.GBP/JPY has been moving from 145.60 to 146.55 levels during today’s Asian session. Resistance levels stand at 147.10 and 147.50. On the downside, support levels stand at 144.55 and 143.65.

DATA SNAP:Indonesia Mar Trade Surplus $3.27B;$2.68B Expected

DATA SNAP:Indonesia Mar Trade Surplus $3.27B;$2.68B Expected JAKARTA (Dow Jones)--Indonesia's trade surplus increased sharply to $3.27 billion in March from $2.52 billion in February, the Central Statistics Agency said Friday. Imports in March fell 33.4% on year to $5.27 billion, while exports declined 28.9% to $8.54 billion, the agency said. In February imports tumbled 42.0% on year, while exports fell 32.9%. Including imports to so-called bounded zones where imported commodities are reprocessed for exports, the trade surplus was $2.01 billion, up from $1.26 billion in February. A Dow Jones Newswires poll of 11 regional economists yielded a median forecast for a trade surplus of $2.68 billion, excluding imports to bounded zones. "On a on-month basis, exports rose 20.6%, due to the significant increase in the volume of resource-based exports," the agency's chairman Rusman Heriawan told reporters in a press briefing. He said the prices of commodities also increased during the month, which helped to boost the value of Indonesia's coal exports by $444 million and that of crude palm oil exports by $217 million in March from a month earlier. -By Farida Husna, contributing to Dow Jones Newswires; 62 21 39831277; I-Made.Sentana@dowjones.com Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=rX4niQXJjYgIJl3Wiwfg5g%3D%3D. You can use this link on the day this article is published and the following day. (END) Dow Jones NewswiresMay 01, 2009 03:24 ET (07:24 GMT)Copyright 2009 Dow Jones & Company, Inc.

GLOBAL MARKETS: London Stocks Flat With Europe Closed

GLOBAL MARKETS: London Stocks Flat With Europe Closed
By Kimberly Vlach
Of DOW JONES NEWSWIRES
LONDON (Dow Jones)--London stocks were little changed Friday in very quiet trade as European equity markets remained closed for the May Day holiday, leaving investors in the U.K. to start the new month with some profit-taking and sector rotation following April's stellar run. "In the near term, we believe the rotation out of defensives into cyclicals may continue, provided we don't get a significant relapse in economic newsflow or stock market performance," said strategists at Morgan Stanley. London's FTSE 100 index was almost unchanged at 4244.17 at 0755 GMT, while the Frankfurt and Paris markets were closed. Morgan Stanley said a sustained and solid economic - and stock market - recovery is unlikely and that it prefers defensive stocks in the medium- to long-term horizon. European corporate announcements were thin, with only U.K.-listed companies reporting. Rentokil Initial reported first-quarter revenue growth but a drop in operating profit, adding it expects earnings growth to start in the third quarter. Its shares rose 14% to 75.8 pence. Pan-European telecoms operator Colt Telecom Group reported a doubling of first-quarter pretax profit before exceptional items, helped by currency movements and an increasing proportion of high margin data revenue. Its shares were 2.7% higher at 97 pence. And Informa PLC launched a GBP242 million rights issue to cut its debt levels and said it was changing its corporate structure to take advantage of favorable Swiss taxes. Its shares were 14% higher at 340 pence. On Wall Street Thursday, the Dow Jones Industrial Average closed down 0.2% at 8168.12 and the Standard & Poor's 500 index finished 0.1% lower at 872.81. Much of the afternoon slide came after President Barack Obama said Chrysler will file for Chapter 11 bankruptcy protection. While the move was expected, trading desks noted it provided a reminder that economically sensitive companies remain on a weak footing, even after many have paced a more than month-long surge for the market. On Friday in Asia, Japan's Nikkei 225 index closed 1.7% higher but Australia's S&P/ASX 200 index finished 0.2% lower. Hong Kong, China and Korea were closed for public holidays. Those who were investing the in the markets mostly shrugged off the Chrysler news, as well as further updates on the spread of swine flu. The World Health Organization said Thursday that a new flu strain continued to spread, particularly in Mexico and the U.S., but refrained from declaring a global pandemic even as more countries confirmed cases. Amid a growing debate around the globe about travel restrictions, the United Nations public-health agency raised the number of confirmed cases of the A/H1N1 virus to 236 from the 148 reported Wednesday. "Despite the attention given to swine flu and the odd looks at colleagues who cough or sniffle, markets have remained focused on facts and figures. Measures of risk continue to show that fear is dissipating, helping bolster risk appetites," said analysts at RBC Capital Markets. Elsewhere, in the currency markets, the small increase in risk appetite benefited the euro and sterling against the dollar and the yen. The euro climbed to $1.3275 at 0745 GMT from $1.3230 at the Thursday New York close. But the dollar firmed to Y99.33 from Y98.63. In the sovereign debt market, trading activity was restricted due to the May Day holiday and a closed bund futures market. However, gilts opened higher Friday, as traders looked to square positions ahead of the holiday weekend. June gilts were up 0.54 at 121.14 at 0750 GMT, with the 10-year gilt up 0.45 at 108.77, yielding 3.44%. Spot gold eased to $883.65 per troy ounce from $899.15 in late New York business Thursday, and July Nymex light, sweet crude oil futures dipped to $50.55 per barrel from $51.12. -By Kimberly Vlach, Dow Jones Newswires; +44-20-7842-9352; kimberly.vlach@dowjones.com
Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=rX4niQXJjYgIJl3Wiwfg5g%3D%3D. You can use this link on the day this article is published and the following day. (END) Dow Jones NewswiresMay 01, 2009 03:59 ET (07:59 GMT)Copyright 2009 Dow Jones & Company, Inc.

Forex: USD/JPY: Dollar breaks above 99.00

FXstreet.com (Barcelona) - The Dollar continues appreciating against the Yen and The Pair has broken above 99.15 previous two-weeks high reaching 99.30; 0.75% above its day opening level.Tim Salem, collaborator at FXstreet.com points out to 99.20 as a key level on the upside: “If Breached, Appreciation sees 99.21 Dynamic Resistance followed by 99.68 and 100.04 in the Near-Term. Failure to hold the Double-Top will define the Formation, as Price Depreciates to the Dynamic Static Support Area of 97.72. 97.50 Confluence supports the Hourly 200SMA and Violation here sees Bearish Momentum under Resumption with 96.91 Static Support Contact.”EUR/JPY rally from 124.30 low on April 28 has reached 1.32.00 so far although the pair remains beloeww the mentioned level. Above 132.00, next resistance levels come at 132.44 and 132.65/85. Support levels lie at 131.50 and 129.75.

Pounds Weakens After UK Treasury Advisor Declarations

The pound had a bad start this week after former U.K. Treasury adviser Roger Bootle said that a depression might be coming for the national economy as house prices decline.

French April Business Confidense Rises More Than Expected

The International Monetary Fund (IMF) warned Tuesday that total losses from the ongoing global economic downturn could reach $4 trillion and the global financial system "remains under severe stress".Though the IMF had predicted total losses from the credit crunch to hit $1 trillion a year ago, the lender in its latest Global Financial Stability Report (GFSR) estimates losses incurred by banks alone would be over $2.7 trillion."In this GFSR, estimates for write-downs have been extended to include other mature market-originated assets and, while the information underpinning these scenarios is more uncertain, such estimates suggest write-downs could reach a total of around $4 trillion, about two-thirds of which would be incurred by banks," the IMF said in its Global Financial Stability Report.The IMF report blamed the worsening base-case scenario for economic growth for losses suffered by banks, adding that the shrinking economic activity has put further pressure on banks' balance sheets as asset values continue to degrade, threatening their capital adequacy and further discouraging fresh lending.

Singapore Inflation Continues to Ease in March

Consumer prices in Singapore continued to rise at a slower pace in March, reflecting a fall in transport and communication costs amid the weakening economy.Thursday, Singapore's Department of Statistics said the consumer price index rose 1.6% year-on-year in March, slower than the 1.9% acceleration in the preceding month. The increase matched economists' expectations. This is the sixth consecutive month that inflation has eased.In March, transport and communication prices, having a weight of 22% in the index, fell 5.4%, while costs of education and stationery declined 0.4%.On the other hand, cost of housing, having a weight of 21% in the index, rose 5.5%. Price of food, with the highest weight of 23%, increased 4.6%. Price of clothing, footwear, healthcare and recreation and other activities also showed a rise in March.

Forex-yen gains on export data, dollars dips vs euro

NEW YORK, April 22 (Reuters) - The dollar fell against the yen on Wednesday, partly due to signs of a modest recovery in Japanese exports, while the British pound plunged after the government forecast a surge in borrowing this year.
The euro also gained on the dollar, but retreated from a session peak above $1.30 as Wall Street stocks fell in late trade, boosting some safe-haven flows into the greenback.
Nagging worries about the financial system kept investors from taking on too much risk, however, undermining higher-yielding currencies such as the New Zealand dollar and boosting the yen, which typically firms when anxiety rises.
The International Monetary Fund said the world economy was in a deep recession and slashed its global growth forecast, while Morgan Stanley reported a second straight quarterly loss. For more, see [ID:nN21500818]"Investors are trying to decide which way to jump," said Wells Fargo currency strategist Nick Bennenbroek. "The question is whether to bet on a more sustained recovery in financial markets or position for a renewed risk aversion."

Pound Weakens After Former UK Treasury Adviser Declarations

The pound had a bad start this week after former U.K. Treasury adviser Roger Bootle said that a depression might be coming for the national economy as house prices decline.

Singapore Inflation Continues To Ease In March

Consumer prices in Singapore continued to rise at a slower pace in March, reflecting a fall in transport and communication costs amid the weakening economy.

Thursday, Singapore's Department of Statistics said the consumer price index rose 1.6% year-on-year in March, slower than the 1.9% acceleration in the preceding month. The increase matched economists' expectations. This is the sixth consecutive month that inflation has eased.

In March, transport and communication prices, having a weight of 22% in the index, fell 5.4%, while costs of education and stationery declined 0.4%.

On the other hand, cost of housing, having a weight of 21% in the index, rose 5.5%. Price of food, with the highest weight of 23%, increased 4.6%. Price of clothing, footwear, healthcare and recreation and other activities also showed a rise in March.

Excluding the accommodation costs, consumer prices were up 0.4% in March.

FOREX-Yen gains on export data, dollar dips vs euro

* Yen gains as unease lingers but export data offers hope

* Euro gains on dollar as stocks shake off earlier losses

* Sterling tumbles as UK forecasts surge in borrowing (Updates prices, adds details)

By Steven C. Johnson

NEW YORK, April 22 (Reuters) - The dollar fell against the yen on Wednesday, partly due to signs of a modest recovery in Japanese exports, while the British pound plunged after the government forecast a surge in borrowing this year.

The euro also gained on the dollar, but retreated from a session peak above $1.30 as Wall Street stocks fell in late trade, boosting some safe-haven flows into the greenback.

Nagging worries about the financial system kept investors from taking on too much risk, however, undermining higher-yielding currencies such as the New Zealand dollar and boosting the yen, which typically firms when anxiety rises.

The International Monetary Fund said the world economy was in a deep recession and slashed its global growth forecast, while Morgan Stanley reported a second straight quarterly loss. For more, see [ID:nN21500818]

"Investors are trying to decide which way to jump," said Wells Fargo currency strategist Nick Bennenbroek. "The question is whether to bet on a more sustained recovery in financial markets or position for a renewed risk aversion."

Unexpected Drop in Inflation Rate Pushes Canadian Dollar Down

The Canadian dollar had the second day of losses against the greenback after a report indicating that the inflation slowed during the last month.

The one-year inflation rate was 1.2% the past month, falling from the February’s annualized rate of 1.4%, this fact can be considered unexpected, since forecasts were indicating stability regarding the inflation. The current recession and credit crisis striking Canada are influencing consumer demands, which in order to maintain their budgets balanced, are less likely to spend, and, as a consequence, there is a decrease in prices.

Traders are focused on next week events, when the Bank of Canada will decide its interest rate policy. Analysts are expecting the rates to be unchanged, and, according to the currency fundamentals, optimistic forecasts prevail for the mid-term future. Despite the good predictions for the Canadian dollar, economists are expecting the inflation to shrink, which could bring more uncertainties and instability to the country’s economy as a whole.

The USD/CAD ended the week at 1.2128 rising from 1.2092 in the intraday. The Canadian currency also went down in other markets, being the AUD/CAD traded at 0.8759 from 0.8695 and the CAD/JPY traded at 81.70 from 82.12.

Euro Continues to Fall on ECB Policy Disagreement

For the first time in a month, the euro crossed the 1.30$ resistance line and this slide could also be perceived against all major 16 currencies as contradiction deepens amid ECB policy makers. Lorenzo Bini Smaghi, an ECB board member, affirmed that the current Eurozone interest rate of 1.25% would be very close to the acceptable minimum limit, while 2 other council members said last week, that the rate could be brought to less than 1.0%. This confusion in Europe made the Dollar Index reach the highest level in a month, also helped by eventually favorable news in the U.S. economy.

The disagreement regarding the ECB policy will be a major issue for the currency this week as analysts indicate that confidence in the Eurozone currency has been deeply affected by the lack of objectiveness from the ECB council. The ECB interest rate has been falling consistently and has been cut since the beginning of the global slump, an attempt to ease the recession on the bloc.

The EUR/USD traded at 1.2958 from 1.3025 in Friday. The EUR/JPY fell to 127.88 from 129.45. Similar movements happened with the euro against all major currencies.

Australian Dollar Hits 3-Week Low on American Financial Concerns

Speculations that U.S. banks losses may increase moved the Australian dollar to a level very close to the lowest in 3 weeks.

After the Bank of America Corp. increased its future loan loss provisions 57% to $13.4 billion, the Aussie and the New Zealand dollar, being both high-yielding currencies, immediately feel, as negative numbers coming from the U.S. increase the concerns about the global crisis current status. Despite the news, Glenn Stevens, the Reserve Bank of Australia Governor, is contradictorily optimistic about the situation and affirmed yesterday during a speech that Australia will recover from the crisis as soon as China improve its economy and trade.

Analysts around the world aren’t as optimist as Mr. Stevens, continuing to allege that the situation for the Australian dollar is highly dependent on a confidence recover movement in worldwide markets. The excessive level that main currencies in Oceania reached during the past weeks was perceived by traders, who sold many Australian and New Zealand assets in order to make profit, as uncertainty in the U.S. economy suggests that, for now, avoiding high-yielding currencies would be a good bet.

The AUD/USD fell dramatically from 0.7170 to 0.6990. The NZD/USD went in the same direction, falling from 0.5660 to 0.5540.

Swiss Libor Rate Unchanged at 2.75%

Swiss National Bank chose to keep the national three-month Libor (interest rate) unchanged at 2.75% after it was increased by 0.25% back in September 2007. After this announcement Swiss franc gained a little against all other major currencies except the Japanese yen.

The reason to stop increasing the interest rates further came from two sides: first, Swiss National Bank (SNB) is expecting that GDP growth will be slowed down by the global instability - the fact that wasn’t foreseen in the September economy outlook; second, inflation rate is slowing down, which removes any fundamental base for another rate hike.

With the inflation rate at the expected 0.7% rate for 2007, SNB now has nothing to worry about - over-regulating something that is working fine is not a job for central banks:

The expected downturn in economic growth will result in an improved inflation outlook for 2009 and 2010. However, rising oil prices will temporarily push up inflation in the first half of 2008. Assuming that the three-month Libor remains unchanged at 2.75%, the National Bank expects an average annual inflation rate of 0.7% in 2007, 1.7% in 2008 and 1.5% in 2009. After having passed its peak in the first half of 2008, inflation is likely to stabilise below 2%.

This rate decision wasn’t a surprise for analysts and helped CHF to gain against other currencies. Only Japanese yen, which is growing after the Nikkei Index fell down by more than 2% today, showed more power against franc, gaining almost 0.5% against Swiss currency.