Thanks.
Got it now.
I see some bad news must have come out, the USD moved up overnight.
In Sterling my gold and silver looks to be holding OK -g- Although now it's off almost 10% off the high.
Really, I expect the gold and silver thing will eventually catch on. Maybe the week after the Chinese buy most of it.
telegraph.co.uk
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bloomberg.com
Dollar May Extend Losses as Stock Rally Curbs Safety Demand
By Molly Seltzer and Oliver Biggadike
March 11 (Bloomberg) -- The dollar may extend its decline against most major currencies after global stocks rallied on a Citigroup Inc. memo saying the bank is having its best quarter since 2007, reducing demand for the greenback as a haven.
Sterling fell yesterday against the euro on a report showing U.K. housing sales dropped to the lowest level since at least 1978. The yen depreciated versus the Brazilian real and Mexican peso before a report forecast to show machinery orders in Japan dropped in January.
“When stocks go back up, people dump the dollar immediately,” said Andrew Busch, a global currency strategist in Chicago at BMO Capital Markets, a unit of Canada’s fourth- largest bank. “Then whenever it starts to look more risky, they sell euros, buy dollars and ask questions later. Risk appetite is playing an extraordinary role in the currency market.”
The dollar traded at $1.2680 per euro at 6:32 a.m. in Tokyo, after declining 0.6 percent yesterday. Europe’s currency was at 125.12 yen after appreciating 0.4 percent. The dollar was at 98.67 yen after dropping 0.2 percent.
Foreign-exchange volatility, a measure of risk implied by option prices, was close to a four-month low, a JPMorgan Chase & Co. index shows. Options traders see currencies of the Group of Seven industrialized nations fluctuating by an annualized 17 percent in the next three months, compared with 27 percent on Oct. 24, the most since the index started in 1992.
“Volatility indexes track fear,” Busch said.
Dollar Index
The Dollar Index, which the ICE uses to track the greenback’s performance against the currencies of six major U.S. trading partners, fell 0.4 percent to 88.688 yesterday after stock gains eroded the demand for safety. The index touched 89.624 on March 4, the highest level since April 2006.
Sweden’s krona and South Africa’s rand were the biggest gainers versus the dollar among the major currencies. The krona appreciated 3.9 percent to 8.8607 yesterday after sliding to a 6 1/2-year low on March 5. The rand advanced 3.5 percent to 10.2788 as higher copper prices spurred local stock gains.
The Standard & Poor’s 500 Index rallied 6.4 percent as Citigroup Chief Executive Officer Vikram Pandit said in a memo obtained by Bloomberg News that the bank’s current share price doesn’t reflect its earnings potential or capital position. The MSCI World Index rose 5 percent.
The yen declined 1.9 percent to 6.47 versus the Mexican peso and 1.7 percent to 42.13 against the Brazilian real as evidence Japan’s economy is sinking deeper into recession undermined demand for the currency.
Business Conditions
Japan’s Cabinet Office reported yesterday that a leading index of business conditions fell to 77.1 in January from a revised 79.4 in the previous month, below the consensus forecast of 77.4 in a Bloomberg News survey of 14 economists. The coincident index, which shows current economic activity, dropped to 89.6 from a revised 92.2.
Machinery orders slumped 4.8 percent in January, according to a separate Bloomberg survey of economists before a Cabinet Office report today.
“Japan’s numbers are just horrific,” said Adam Boyton, a currency strategist in New York at Deutsche Bank AG.
The pound declined as much as 1 percent to 92.48 pence per euro, the weakest level since Jan. 29, after the Royal Institution of Chartered Surveyors said the average number of transactions in a survey of real-estate agents and surveyors fell to 9.5 per respondent in the quarter through February, the lowest level since the data began three decades ago.
Sterling Outlook
Sterling may extend declines against the euro because the Bank of England’s plan to start buying gilts to support the economy will probably narrow the yield advantage of U.K. government bonds over German counterparts, according to Bank of Tokyo-Mitsubishi UFJ Ltd. The difference between yields on 10- year gilts and comparable-maturity German notes decreased yesterday to 0.11 percentage point from 0.19 percentage point on March 9.
“With the Bank of England taking far more aggressive steps than every other central bank, bar possibly the Fed, the pound remains vulnerable to the downside,” wrote Derek Halpenny, the London-based European head of global currency research at Bank of Tokyo, in a note yesterday.
The euro gained against the dollar earlier yesterday as European Central Bank council member Axel Weber said at a press conference in Frankfurt that “the bottom line” for the main rate should be 1 percent. The central bank cut the target to 1.5 percent on March 5, a record low. |
