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Forex outlook:
The dollar rose to the strongest in more than a week against the euro and touched a two-month high versus the yen as a private report showed U.S. services industries hit the expectations. The data reduced the likelihood of a rate cut by the Federal Reserve. The services report ``is bad news for dollar bears,'' said Richard Franulovich, a senior currency strategist in New York at Westpac Banking Corp. ``The data is destroying the argument that U.S. growth is weak but, People are waiting for the payroll number tomorrow, and we are expecting a soft number.'' The dollar rose 0.18 percent to $1.3568 per euro at 12:42 p.m. in New York, and reached $1.3550, the highest since April 24. It has rebounded from a record low of $1.3681 per euro set April 27. The U.S. currency advanced 0.15 percent to 120.33 yen after touching 120.43, the strongest since Feb. 27, when stocks tumbled in a global rout. The labor department will release the payroll data today at 12:30 (GMT) witch tend to be bearish for the U.S dollar, ``The market is bearish on the dollar,'' said Boris Schlossberg, senior currency strategist in New York at DailyFX.com in New York. ``There is evidence that the jobs data will be weak.''
A rally in Asian stocks encourage the carry traders to act and weakened the yen earlier to a record low against the Euro. Carry trader investors buy higher- yielding assets funded by loans in Japan.. ``It's about risk appetite and investors wanting to put carry trades back on,'' said Michael Metcalfe, head of macro strategy in London at State Street Global Markets. Markets in Japan and China are closed today and tomorrow for holidays.
Gold: rebounded from a one-month low due to speculation the dollar will continue to drop against Euro. Gold is sold in dollars, and five of the past six bear markets in the U.S. currency have led to a higher gold price. ``There is a belief that this bull market is not done yet, and further gains are expected,'' said Paul McLeod, vice president of the precious-metals department of Commerzbank Securities in New York. ``The expectation is that the dollar will still weaken. Gold is looking for a foundation for the next rally.'' Gold futures for June delivery rose $2.60, or 0.4 percent, to $677.70 an ounce at 8:58 a.m. on the Comex division of the New York Mercantile Exchange.
Crude Oil: the black gold fell after speculations that U.S inventories are sufficient to meet demand from refineries that are increasing gasoline output. . Prices for the motor fuel fell earlier after Belgian refiners announced that workers agreed to a new proposal to resolve a labor dispute and avert a strike. ``Crude is not the issue that has us concerned, gasoline is,'' said Peter Beutel, president of Cameron Hanover Inc., a New Canaan, Connecticut, energy consultant. ``Gasoline stocks should be rebounding as refiners increase output but that's not happened yet. The increase in refining rates hasn't been big enough.'' Crude oil for June delivery fell 45 cents, or 0.7 percent, to $63.23 a barrel at the 2:30 p.m. close of floor trading on the New York Mercantile Exchange. Prices touched $62.74 a barrel, the lowest since April 20. |
