Now already make rectracement. I look continue make new high..
Friday, March 28, 2008
Thursday, March 27, 2008
GJ Update...
I'm Still look at H4 chart at fibo 50.. My target is 203.01 but the critical line is 201.01 must be break 1st.. Today already break yesterday high (archive my 1st target).. My 2nd target 200.90 & 3rd target 203.01 ... My chart look good signal to go 203.01..
GJ update
Posible today movement.. I look good signal to break yesterday high.. I still need MACD H1 cross to confirmation
Tuesday, March 25, 2008
GJ Updated
Posible movement for GJ today... I will expect GJ retrace to fibo 50.. My 1st target 198.88 2nd 197.55.. Today pivot 199.04
Monday, March 24, 2008
Low liquidity is expected for all Forex sessions
Banks around the world will be closed in observance of Easter Monday. US and Japanese banks will remain open. Low liquidity is expected for all Forex sessions.
Friday, March 21, 2008
Look out for holiday volatility
From my point of view there are a number of opportunities that are beginning to appear but with so much volatility, I am holding back a little. The real issue I am worried about is the Easter break. Several Western markets will be closed on Good Friday and a lot of traders are out for the Monday after Easter weekend. Considering the volatility this week, that may make for some very weird price action in the next day or two as traders prepare to be out that will make it tough to take longer positions.
However, in preparation of some trading opportunities I am looking for a potential break to the downside on the AUD/USD below the 23.6% retracement level that could take prices all the way to the lows of December and January. I will show a similar setup potentially appearing on the GBP/USD. finally, we are getting some contrary movement between longer term bond yields and the USD/CHF. That may be creating a nice environment for additional downside moves on the USD/CHF. I would wait for a bounce down from resistance at 1.0200 before getting to serious about that one but it could be another short term opportunity.
However, in preparation of some trading opportunities I am looking for a potential break to the downside on the AUD/USD below the 23.6% retracement level that could take prices all the way to the lows of December and January. I will show a similar setup potentially appearing on the GBP/USD. finally, we are getting some contrary movement between longer term bond yields and the USD/CHF. That may be creating a nice environment for additional downside moves on the USD/CHF. I would wait for a bounce down from resistance at 1.0200 before getting to serious about that one but it could be another short term opportunity.
Wednesday, March 19, 2008
GJ Updated
Posible movement today H1 Chart.. I look GJ going to 197.60 before go to 203.xx to complete retracement..
Tuesday, March 18, 2008
Financial Crisis To Overshadow UK Inflation Data
UK consumer prices are likely to rise strongly for February, particularly under the influences of higher food and energy prices. The annual headline consumer inflation rate is expected to increase to 2.5% from 2.2% the previous month while the core rate is expected to increase to 1.4% from 1.3%.
The higher inflation rate will reinforce Bank of England inflation fears, especially as there will be another short-term inflationary push from the impact of Sterling weakness. Looking at the inflation data in isolation, a high figure would lessen the chances of a further near-term Bank of England interest rate cut which would support Sterling
The UK economy and currency are, however, also being drive to a large extent by credit and growth fears. Fears over both will continue to increase in the short term as financial market turmoil increases.
In view of the UK dependence on financial services, growth forecasts will be downgraded further while fears over the housing sector are liable to increase sharply. Given financial pressures alone, there will be increasing pressure for the central bank to cut interest rates in the near term.
These conflicting pressures will put the Bank of England in a very difficult position in the short term which will tend to undermine confidence in the economy and Sterling.
The UK currency will gain ground initially if the inflation rate is higher than expected, especially if there is an increase in the core rate to 1.5% or higher.
Nevertheless, given the UK financial-sector risk, any Sterling rally on the inflation data is liable to be reversed rapidly.
The higher inflation rate will reinforce Bank of England inflation fears, especially as there will be another short-term inflationary push from the impact of Sterling weakness. Looking at the inflation data in isolation, a high figure would lessen the chances of a further near-term Bank of England interest rate cut which would support Sterling
The UK economy and currency are, however, also being drive to a large extent by credit and growth fears. Fears over both will continue to increase in the short term as financial market turmoil increases.
In view of the UK dependence on financial services, growth forecasts will be downgraded further while fears over the housing sector are liable to increase sharply. Given financial pressures alone, there will be increasing pressure for the central bank to cut interest rates in the near term.
These conflicting pressures will put the Bank of England in a very difficult position in the short term which will tend to undermine confidence in the economy and Sterling.
The UK currency will gain ground initially if the inflation rate is higher than expected, especially if there is an increase in the core rate to 1.5% or higher.
Nevertheless, given the UK financial-sector risk, any Sterling rally on the inflation data is liable to be reversed rapidly.
Monday, March 17, 2008
GJ Update..
Good morning everybody.. I hope not to late for post my calculations today.. GJ make strongest sliding from last Friday. GJ make new low to 194.89 from 205.XX.. 1000 pips drop already.. From H1 chart i look GJ make retracement 38-50%.
Friday, March 14, 2008
Dollar down again, hits new low vs. euro
NEW YORK (AP) - Widespread concern about the outlook for the U.S. economy pushed the dollar to record lows against the euro and to 12-year lows against the yen Thursday, while gold and oil prices also surged.
The euro rose to a new high of $1.5625 following a report that showed U.S. retail sales fell in February, beating a day-old record of $1.5559. It later fell back to $1.5587 in late New York trading, still above the $1.5526 it bought in New York on Wednesday.
The dollar dropped below 100 Japanese yen for the first time since November 1995. It traded as low as 99.75 yen before recovering some ground to change hands at 102.04 yen, unchanged from Wednesday.
Analysts agreed that the dollar was likely to remain weak amid financial market jitters.
News from Carlyle Capital Corp. that it expected creditors to confiscate its remaining assets -- investment-grade mortgage-backed securities -- sent the fund's shares plummeting and rattled markets around the globe.
'The latest blow to the dollar and world bourses intensified in early European trade when Carlyle Capital Corp. said ... it expected creditors to seize all of the fund's remaining assets after unsuccessful negotiations to prevent its liquidation,' said Ashraf Laidi, chief foreign exchange strategist for CMC Markets in New York.
That caused a wide sell-off on markets from Tokyo to London and prompted currency traders to sell their dollars.
Michael Woolfolk, senior currency strategist at the Bank of New York, said he expects the dollar to keep dropping ahead of the Federal Reserve's meeting next week. Speculation has been growing that the Fed might cut rates by as much as three-quarters of a percentage point.
'Other currencies have rallied too far, too fast,' Woolfolk said. 'The Fed has turned a blind eye to inflation, and as the expectations fall for the U.S. economy and global equities, we will continue to see that undermine the dollar.'
The yen's strength is bad news for Japan's economy, which has been showing signs of weakening, because it makes exporters' products more expensive abroad and erodes the value of their overseas earnings.
Japanese leaders quickly cautioned against instability in currency markets, but made no mention of any intervention to stem the dollar's slide.
The dollar's decline also pushed oil higher, with prices hitting a new intraday high of $111 before settling at $110.33 a barrel on the New York Mercantile Exchange. Meanwhile, April gold futures touched $1,000 an ounce for the first time.
In other late New York trading, the dollar fell against the British pound, which edged up to $2.0292 compared to $2.0243 on Wednesday night. The dollar slipped to 1.0143 Swiss francs from 1.0182 Swiss francs, but rose to 1.0141 Canadian dollars from 1.0096 Canadian dollars.
AP writers Matt Moore in Frankfurt, Germany; Yuri Kageyama in Tokyo; Robert Wielaard in Brussels, Belgium; and Pablo Gorondi in Budapest, Hungary, contributed to this report.
Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
The euro rose to a new high of $1.5625 following a report that showed U.S. retail sales fell in February, beating a day-old record of $1.5559. It later fell back to $1.5587 in late New York trading, still above the $1.5526 it bought in New York on Wednesday.
The dollar dropped below 100 Japanese yen for the first time since November 1995. It traded as low as 99.75 yen before recovering some ground to change hands at 102.04 yen, unchanged from Wednesday.
Analysts agreed that the dollar was likely to remain weak amid financial market jitters.
News from Carlyle Capital Corp. that it expected creditors to confiscate its remaining assets -- investment-grade mortgage-backed securities -- sent the fund's shares plummeting and rattled markets around the globe.
'The latest blow to the dollar and world bourses intensified in early European trade when Carlyle Capital Corp. said ... it expected creditors to seize all of the fund's remaining assets after unsuccessful negotiations to prevent its liquidation,' said Ashraf Laidi, chief foreign exchange strategist for CMC Markets in New York.
That caused a wide sell-off on markets from Tokyo to London and prompted currency traders to sell their dollars.
Michael Woolfolk, senior currency strategist at the Bank of New York, said he expects the dollar to keep dropping ahead of the Federal Reserve's meeting next week. Speculation has been growing that the Fed might cut rates by as much as three-quarters of a percentage point.
'Other currencies have rallied too far, too fast,' Woolfolk said. 'The Fed has turned a blind eye to inflation, and as the expectations fall for the U.S. economy and global equities, we will continue to see that undermine the dollar.'
The yen's strength is bad news for Japan's economy, which has been showing signs of weakening, because it makes exporters' products more expensive abroad and erodes the value of their overseas earnings.
Japanese leaders quickly cautioned against instability in currency markets, but made no mention of any intervention to stem the dollar's slide.
The dollar's decline also pushed oil higher, with prices hitting a new intraday high of $111 before settling at $110.33 a barrel on the New York Mercantile Exchange. Meanwhile, April gold futures touched $1,000 an ounce for the first time.
In other late New York trading, the dollar fell against the British pound, which edged up to $2.0292 compared to $2.0243 on Wednesday night. The dollar slipped to 1.0143 Swiss francs from 1.0182 Swiss francs, but rose to 1.0141 Canadian dollars from 1.0096 Canadian dollars.
AP writers Matt Moore in Frankfurt, Germany; Yuri Kageyama in Tokyo; Robert Wielaard in Brussels, Belgium; and Pablo Gorondi in Budapest, Hungary, contributed to this report.
Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Thursday, March 13, 2008
Tuesday, March 11, 2008
Yen Bulls Test Bank of Japan's Indifference to Rally
March 10 (Bloomberg) -- For the first time in more than a decade, foreign exchange traders are confident that the Bank of Japan won't intervene in the currency market, paving the way for the yen to extend its biggest rally since 2000.
Japanese authorities sold the currency on all four occasions since 1995 when the yen approached the 100 mark in a bid to support exporters from Toyota Motor Corp. to Sony Corp. When the yen strengthened to a eight-year high of 101.43 last week, Finance Minister Fukushiro Nukaga stopped short of signaling that officials are concerned, only saying the government needs to watch currency moves ``carefully.''
An attempt to influence exchange rates would bring Japan into conflict with the U.S., which relies on a weak dollar to underpin an economy on the verge of a recession. Citigroup Inc. and Royal Bank of Scotland Group Plc, the third- and fourth- biggest traders, say Nukaga will let the yen break 100 because it's 40 percent weaker than its peak in 1995 on a trade-weighted basis.
``When I intervened, the U.S. agreed to it,'' said Eisuke Sakakibara, dubbed ``Mr. Yen'' for his ability to influence the foreign exchange market as Japan's top currency official from 1997 to 1999. ``The U.S. now welcomes a gradual decline in the dollar and Treasury takes the position of Detroit. This is affecting how Japan is responding now.''
Japan increasingly relies on Asia for growth, making the country less sensitive to a U.S. slowdown. Shipments to the U.S. accounted for about 20 percent of exports last year, down from about 30 percent in 2000. Asia consumes half of Japan's exports.
Tables Turned
Japan's economy, the world's second largest, may expand 1.5 percent this year, matching the growth rate in the U.S., the International Monetary Fund said on Jan. 29. It would be the first time Japan won't lag behind the U.S. since 1991.
``Compared to the U.S., growth in Japan is relatively robust,'' Sakakibara said. ``The tables have turned.''
U.S. officials probably won't support dollar purchases unless the yen breaks 90 and heads toward 80, said Sakakibara. Central banks intervene in the foreign exchange market when they buy or sell currencies to influence exchange rates.
The yen gained 0.4 percent to 102.24 at 12:51 a.m in Tokyo. Naoyuki Shinohara, currently Japan's top currency official, told reporters today he's ``carefully'' watching the market, reiterating Nukaga's comments.
The yen has gained 19 percent since June, the second biggest advance among the 16 major currencies behind the Swiss franc. Rather than a referendum on the economy, the rally was fueled by losses in the credit markets, which led investors to sell high-yielding assets around the world financed with cheap loans in Japan. They would need to buy yen to pay back the loans.
Japanese authorities sold the currency on all four occasions since 1995 when the yen approached the 100 mark in a bid to support exporters from Toyota Motor Corp. to Sony Corp. When the yen strengthened to a eight-year high of 101.43 last week, Finance Minister Fukushiro Nukaga stopped short of signaling that officials are concerned, only saying the government needs to watch currency moves ``carefully.''
An attempt to influence exchange rates would bring Japan into conflict with the U.S., which relies on a weak dollar to underpin an economy on the verge of a recession. Citigroup Inc. and Royal Bank of Scotland Group Plc, the third- and fourth- biggest traders, say Nukaga will let the yen break 100 because it's 40 percent weaker than its peak in 1995 on a trade-weighted basis.
``When I intervened, the U.S. agreed to it,'' said Eisuke Sakakibara, dubbed ``Mr. Yen'' for his ability to influence the foreign exchange market as Japan's top currency official from 1997 to 1999. ``The U.S. now welcomes a gradual decline in the dollar and Treasury takes the position of Detroit. This is affecting how Japan is responding now.''
Japan increasingly relies on Asia for growth, making the country less sensitive to a U.S. slowdown. Shipments to the U.S. accounted for about 20 percent of exports last year, down from about 30 percent in 2000. Asia consumes half of Japan's exports.
Tables Turned
Japan's economy, the world's second largest, may expand 1.5 percent this year, matching the growth rate in the U.S., the International Monetary Fund said on Jan. 29. It would be the first time Japan won't lag behind the U.S. since 1991.
``Compared to the U.S., growth in Japan is relatively robust,'' Sakakibara said. ``The tables have turned.''
U.S. officials probably won't support dollar purchases unless the yen breaks 90 and heads toward 80, said Sakakibara. Central banks intervene in the foreign exchange market when they buy or sell currencies to influence exchange rates.
The yen gained 0.4 percent to 102.24 at 12:51 a.m in Tokyo. Naoyuki Shinohara, currently Japan's top currency official, told reporters today he's ``carefully'' watching the market, reiterating Nukaga's comments.
The yen has gained 19 percent since June, the second biggest advance among the 16 major currencies behind the Swiss franc. Rather than a referendum on the economy, the rally was fueled by losses in the credit markets, which led investors to sell high-yielding assets around the world financed with cheap loans in Japan. They would need to buy yen to pay back the loans.
Monday, March 10, 2008
GJ Update
Japan yen look strong.. I will be expect GJ make bearish divergence. GJ already make new high but not to strong for climb up to 208.XX.. I believe gj can go to 205.45 -203.50 if MACD cross down depend H4 & daily chart..
GJ News Update
CEP News) London – UK producer prices for February, due to be published on Monday by the Office for National Statistics, are likely to show that weaker economic activity has yet to weigh on firms’ pricing power.
Jonathan Loynes, chief European economist and director at Capital Economics, believes rising oil prices have been the main factor driving firms’ input prices higher in recent months.
"However, the fall in the pound sterling also appears to be pushing import prices higher. We expect to see more of the same in February, with input prices rising by a fairly hefty 1.5% in month-over-month terms. While, this will nudge the annual growth rate down, but it is small consolation when costs are rising at rates close to 20% per annum," Loynes said.
He feels that more evidence about firms continuing to pass higher costs along the supply chain was likely to emerge on Monday. "The rise in the prices charged balance of the CIPS/RBS to a new record high in February points to a further rise in output price inflation from January’s record high of 5.7%. A 0.5% month-over-month figure would take it to just below 6%, while a 0.4% month-over-month rise would push core output price inflation up from 3.2% to 3.3%," Loynes concluded.
Howard Archer, chief UK economist at Global Insight, was also looking for a further sharp gain in February producers' output prices as manufacturers looked to pass on their sharply higher input costs resulting from elevated oil, commodity and food prices as well as a softer pound.
"Headline annual producer output inflation surged to 5.7% in January, its highest level since mid-1991, and we expect it to have reached 5.9% in February. Annual core output price inflation is seen remaining at 3.2% in February, after rising to this level in January from 2.7% in December and 2.4% in November," Archer said.
Jonathan Loynes, chief European economist and director at Capital Economics, believes rising oil prices have been the main factor driving firms’ input prices higher in recent months.
"However, the fall in the pound sterling also appears to be pushing import prices higher. We expect to see more of the same in February, with input prices rising by a fairly hefty 1.5% in month-over-month terms. While, this will nudge the annual growth rate down, but it is small consolation when costs are rising at rates close to 20% per annum," Loynes said.
He feels that more evidence about firms continuing to pass higher costs along the supply chain was likely to emerge on Monday. "The rise in the prices charged balance of the CIPS/RBS to a new record high in February points to a further rise in output price inflation from January’s record high of 5.7%. A 0.5% month-over-month figure would take it to just below 6%, while a 0.4% month-over-month rise would push core output price inflation up from 3.2% to 3.3%," Loynes concluded.
Howard Archer, chief UK economist at Global Insight, was also looking for a further sharp gain in February producers' output prices as manufacturers looked to pass on their sharply higher input costs resulting from elevated oil, commodity and food prices as well as a softer pound.
"Headline annual producer output inflation surged to 5.7% in January, its highest level since mid-1991, and we expect it to have reached 5.9% in February. Annual core output price inflation is seen remaining at 3.2% in February, after rising to this level in January from 2.7% in December and 2.4% in November," Archer said.
Friday, March 7, 2008
GJ Quick update...
GJ make double bottom at TF H1.. I thing GJ want to make new high.. If GJ can break yesterday high 207.60, i believe GJ can go to 208.25-209.xx
Thursday, March 6, 2008
Ready For Three More Interest Rate Decisions? BoE, ECB, and BOJ have a headache.
The three main Players in the Dollar Index, the Euro, Pound and Yen, are revealing their Interest Rate decisions on Thursday, and as they make up over 80% of the Dollar Index value, the numbers tomorrow will be critical to determining where the Dollar is free to trade in the coming weeks, and maybe months. The Reserve Bank of Australia increased Rates on Tuesday to 7.25%, and the Royal Bank of New Zealand stayed on hold at 8.25% today.
The UK; the Bank of England may have been taken by surprise by the last few releases that have shown that the UK economy has still not reacted to the impact of recent cuts, and had another example today from the Service side of the economy that showed the highest read since September in the CIPS numbers. There seems little chance that anything other than a 5.25% hold on Rates will be delivered, and virtually no chance of a Rate increase. A Cut will certainly take the Markets by surprise, and will likely have Gbp/Usd testing the 1.9750 area again.
The Euro-Zone; The ECB are looking after an economy that has shown great resolve in dealing with an ever increasing Euro valuation, and in dealing with an economy that has continued to grow despite a slow-down in the US. Wage growth, Service expansion, and Industrial trends are all looking better than many had thought possible, and as such leave very little chance of anything other than a hold at 4%. There was serious Market Chatter of an increase in the latter part of 2007, but that has been tempered by the impacts of the Credit Crisis, and looks as though has been enough to replace a Rate Increase. Wage demands and Commodity Inflation, the ‘Second Round Inflation effects’ are what the ECB is looking to contain, and in reality that could only be done by one of two things; a Rate increase, or a Global slow-down that impacts GDP and Exports from the Euro-Zone. Neither of those look likely in the near-term, and as such it seems that 1.5000 may be a line in the sand that will be harder to break than many first thought.
Japan; The Bank of Japan revealed for the first time in three years that they were seriously worried about maintaining the growth forecasts that had been set in the previous Quarter, in a reaction to the contraction of the US Export market. That has made some think that a Rate cut may be more likely by the Summer than it seemed possible just 2 months ago. Whether that means that March will be the month to cut from 0.5% to 0.25% only time will tell, but one thing looks clear; there will not be a Rate increase in the current environment, most would say. If equity markets can stop the bleeding then the Yen Cross Pairs may have a great base to work higher from now, especially if the Pound and Euro remain holding 5.25% and 4.00%.
I will expect GJ may go down to 205.05 before try to climb up again..
The UK; the Bank of England may have been taken by surprise by the last few releases that have shown that the UK economy has still not reacted to the impact of recent cuts, and had another example today from the Service side of the economy that showed the highest read since September in the CIPS numbers. There seems little chance that anything other than a 5.25% hold on Rates will be delivered, and virtually no chance of a Rate increase. A Cut will certainly take the Markets by surprise, and will likely have Gbp/Usd testing the 1.9750 area again.
The Euro-Zone; The ECB are looking after an economy that has shown great resolve in dealing with an ever increasing Euro valuation, and in dealing with an economy that has continued to grow despite a slow-down in the US. Wage growth, Service expansion, and Industrial trends are all looking better than many had thought possible, and as such leave very little chance of anything other than a hold at 4%. There was serious Market Chatter of an increase in the latter part of 2007, but that has been tempered by the impacts of the Credit Crisis, and looks as though has been enough to replace a Rate Increase. Wage demands and Commodity Inflation, the ‘Second Round Inflation effects’ are what the ECB is looking to contain, and in reality that could only be done by one of two things; a Rate increase, or a Global slow-down that impacts GDP and Exports from the Euro-Zone. Neither of those look likely in the near-term, and as such it seems that 1.5000 may be a line in the sand that will be harder to break than many first thought.
Japan; The Bank of Japan revealed for the first time in three years that they were seriously worried about maintaining the growth forecasts that had been set in the previous Quarter, in a reaction to the contraction of the US Export market. That has made some think that a Rate cut may be more likely by the Summer than it seemed possible just 2 months ago. Whether that means that March will be the month to cut from 0.5% to 0.25% only time will tell, but one thing looks clear; there will not be a Rate increase in the current environment, most would say. If equity markets can stop the bleeding then the Yen Cross Pairs may have a great base to work higher from now, especially if the Pound and Euro remain holding 5.25% and 4.00%.
I will expect GJ may go down to 205.05 before try to climb up again..
Wednesday, March 5, 2008
Dollar falls in Europe, Canada, Japan
NEW YORK (AP) - The dollar fell Tuesday, hovering near its all-time low against the euro, after the Bank of Canada cut its interest rate by half a percentage point to 3.5 percent and indicated that more trims will be needed to deal with a deteriorating U.S. economy.
The dollar fell to 1.0042 Canadian dollars in late New York trading, from 1.0074 Canadian cents on Monday.
The euro bought $1.5208, up from $1.5192 on Monday after touching a record high of $1.5266. The British pound rose slightly to $1.9859 from $1.9847, while the dollar fell to 103.14 Japanese yen from 103.96 the day before.
Tuesday marked the first time the Canadian bank reduced borrowing costs by a half point since November 2001 -- two months after the Sept. 11 attacks. The central bank said more rate cuts may be required soon, possibly as early as April.
Meanwhile, Australia's central bank raised its key interest rate Tuesday to the highest level in 12 years to combat inflation, bucking the trend among major central banks to cut rates in hopes of stimulating their economies. The Reserve Bank of Australia's lifted the key rate by a quarter point to 7.25 percent.
Michael Woolfolk, senior currency strategist at the Bank of New York, said traders will be looking for indications about future interest rate moves from the European Central Bank on Thursday, when ECB staff economists will also unveil inflation projections for 2009. While the Federal Reserve has cut rates in an attempt to loosen the credit squeeze, the ECB has so far been reluctant to do so over worries about accelerating inflation.
The dollar was battered Monday by another series of weak economic reports from Washington, while speculation has been growing that the Fed might cut rates by as much as three-quarters of a percentage point this month.
While lower interest rates can jump-start a nation's economy, they can weaken its currency as traders transfer funds to countries where they can earn higher returns.
'There's been a lot of pressure on the dollar this week, and we believe it will continue to pull back,' Woolfolk said. 'But the dollar remains very much out of favor in the current economic environment and will continue to deteriorate over the course of the second quarter of the year.'
Meanwhile, the yen's rise has caused concern in Japan. Japan's economy minister, Hiroko Ota, described the dollar's fall as 'abnormally rapid.'
Since the start of the year, the dollar has fallen more than 7 percent against the yen. That erodes Japanese exporters' overseas earnings and makes their exports more expensive.
In other New York trading, the dollar fell to 1.0363 Swiss francs from 1.0424 Swiss francs.
The dollar fell to 1.0042 Canadian dollars in late New York trading, from 1.0074 Canadian cents on Monday.
The euro bought $1.5208, up from $1.5192 on Monday after touching a record high of $1.5266. The British pound rose slightly to $1.9859 from $1.9847, while the dollar fell to 103.14 Japanese yen from 103.96 the day before.
Tuesday marked the first time the Canadian bank reduced borrowing costs by a half point since November 2001 -- two months after the Sept. 11 attacks. The central bank said more rate cuts may be required soon, possibly as early as April.
Meanwhile, Australia's central bank raised its key interest rate Tuesday to the highest level in 12 years to combat inflation, bucking the trend among major central banks to cut rates in hopes of stimulating their economies. The Reserve Bank of Australia's lifted the key rate by a quarter point to 7.25 percent.
Michael Woolfolk, senior currency strategist at the Bank of New York, said traders will be looking for indications about future interest rate moves from the European Central Bank on Thursday, when ECB staff economists will also unveil inflation projections for 2009. While the Federal Reserve has cut rates in an attempt to loosen the credit squeeze, the ECB has so far been reluctant to do so over worries about accelerating inflation.
The dollar was battered Monday by another series of weak economic reports from Washington, while speculation has been growing that the Fed might cut rates by as much as three-quarters of a percentage point this month.
While lower interest rates can jump-start a nation's economy, they can weaken its currency as traders transfer funds to countries where they can earn higher returns.
'There's been a lot of pressure on the dollar this week, and we believe it will continue to pull back,' Woolfolk said. 'But the dollar remains very much out of favor in the current economic environment and will continue to deteriorate over the course of the second quarter of the year.'
Meanwhile, the yen's rise has caused concern in Japan. Japan's economy minister, Hiroko Ota, described the dollar's fall as 'abnormally rapid.'
Since the start of the year, the dollar has fallen more than 7 percent against the yen. That erodes Japanese exporters' overseas earnings and makes their exports more expensive.
In other New York trading, the dollar fell to 1.0363 Swiss francs from 1.0424 Swiss francs.
Tuesday, March 4, 2008
Japan's monetary base up 0.1 percent in February
TOKYO (Thomson Financial) - Japan's monetary base rose 0.1 percent to 87.99 trillion yen in February from a year earlier,
according to preliminary data released by the Bank of Japan on Tuesday.
The monetary base dropped 0.1 percent in January.
Last month's rise, which was the sixth in the past seven months, suggests that the impact of
draining extra funds from the short-term money market is waning.
In March 2006, the monetary base dropped for the first time in more than five years after the BoJ abandoned its policy of flooding the short-term money market with extra liquidity to counter deflation.
The monetary base continued to decline as the central bank steadily drained surplus funds from the short-term money market.
But the BoJ did not raise the overnight call rate until July 2006, to see if financial markets could adjust smoothly to the reduction in liquidity.
Until March 2006, the total funds of Japanese commercial banks kept in current accounts at the central bank amounted to 30 trillion yen, which the central bank gradually reduced to below 9 trillion by August of that year.
The total funds of commercial banks kept in current accounts at the central bank fell 9.3 percent to 7.78 trillion yen in February, declining for the 24th consecutive month.
(1 US dollar = 103.52 yen)
according to preliminary data released by the Bank of Japan on Tuesday.
The monetary base dropped 0.1 percent in January.
Last month's rise, which was the sixth in the past seven months, suggests that the impact of
draining extra funds from the short-term money market is waning.
In March 2006, the monetary base dropped for the first time in more than five years after the BoJ abandoned its policy of flooding the short-term money market with extra liquidity to counter deflation.
The monetary base continued to decline as the central bank steadily drained surplus funds from the short-term money market.
But the BoJ did not raise the overnight call rate until July 2006, to see if financial markets could adjust smoothly to the reduction in liquidity.
Until March 2006, the total funds of Japanese commercial banks kept in current accounts at the central bank amounted to 30 trillion yen, which the central bank gradually reduced to below 9 trillion by August of that year.
The total funds of commercial banks kept in current accounts at the central bank fell 9.3 percent to 7.78 trillion yen in February, declining for the 24th consecutive month.
(1 US dollar = 103.52 yen)
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