Oct. 20 (Bloomberg) -- The euro climbed toward $1.50 on optimism the global economic recovery is gathering momentum. Australia’s dollar touched a 14-month high after its central bank said “very low” interest rates were no longer necessary.
The euro rallied to the strongest level since August 2008 against the dollar before reports this week that economists said will show the U.S. housing market and German business confidence improved, boosting demand higher-yielding assets. The yen rose against 15 of its 16 major counterparts after Japanese Finance Minister Hirohisa Fujii repeated his reluctance to intervene in the foreign-exchange market to halt the currency’s gains.
“A mood of euphoria is at work as prospects improve for corporate profits and the economy,” said Mitsuru Saito, Tokyo- based chief economist at Tokai Tokyo Securities Co. “Given also the likelihood that the Federal Reserve will maintain its accommodative monetary stance, riskier assets will continue to fare well at the expense of funding currencies.”
The euro rose to $1.4971 as of 6:44 a.m. in London from $1.4965 in New York yesterday. It earlier touched $1.4994, the strongest since August 2008. The yen climbed to 90.14 per dollar from 90.55, and advanced to 134.96 per euro from 135.51.
Australia’s currency climbed to 93.11 cents, the highest since August 2008, before trading at 92.78 U.S. cents from 92.92 cents yesterday. New Zealand’s dollar was at 75.30 U.S. cents from 75.67 cents, after touching 75.76 cents, the strongest since July 2008.
‘Possibly Imprudent’
A “very expansionary setting of policy was no longer necessary, and possibly imprudent,” Reserve Bank of Australia officials said in minutes of their Oct. 6 meeting released today in Sydney. The risks in waiting to raise borrowing costs “had increased,” policy makers said.
Central bank Governor Glenn Stevens and his board raised the benchmark rate by a quarter percentage point to 3.25 percent at the meeting and signaled they may raise rates again as soon as next month.
Benchmark interest rates of 0.1 percent in Japan and as low as zero in the U.S. make the yen and dollar favorite funding currencies for so-called carry trades, in which investors borrow where interest rates are relatively low and buy assets in nations where returns are higher. The risk in such trades is that currency-market moves can erase profits.
The dollar slid as Asian stocks extended a global equity rally, sapping demand for the U.S. currency as a shelter from recession. The MSCI Asia Pacific Index gained 1.1 percent after the Dow Jones Industrial Average climbed 1 percent yesterday.
Corporate Earnings
Analysts surveyed by Bloomberg estimate profits for companies in the Standard & Poor’s 500 Index will rise 65 percent in the last three months of the year after falling for nine quarters, the longest streak since the Great Depression.
Earnings at U.S. companies will probably exceed analysts’ third-quarter estimates, extending a rally in stocks to year-end, Nomura Holdings Inc. wrote in a note dated Oct. 16. Thirty-four of the 41 companies in the S&P 500 that reported since Oct. 7 surpassed analysts’ projections, according to Bloomberg data.
U.S. housing starts rose to an annual rate of 610,000 in September from 598,000 in August, according to a Bloomberg News survey of economists before the Commerce Department report today.
The Ifo institute’s business climate index, based on a survey of 7,000 executives, climbed to 92 in October from 91.3 the previous month, according to a separate survey. The Munich- based institute will release the report Oct. 23.
Fed Signals
Demand for the dollar also weakened after the Federal Reserve signaled in a statement yesterday that it will keep borrowing costs down while assessing ways to drain money from the banking system.
The Fed said it’s working with market participants to assess the use of reverse repurchase agreements to withdraw some of the record amounts of cash it added to the financial system.
“This work is a matter of prudent advance planning by the Federal Reserve, and no inference should be drawn about the timing of monetary-policy tightening,” the statement said.
Gains in the euro were limited on speculation the 16-nation region’s finance ministers will reiterate concern about the currency’s recent strength at a two-day meeting ending today.
Luxembourg Treasury Minister Jean-Claude Juncker, who is leading the meeting, said yesterday the ministers “discussed exchange rates extensively,” adding that “it’s a problem which worries us.” Juncker and European Central Bank President Jean- Claude Trichet will travel to China with European Union Monetary Affairs Commissioner Joaquin Almunia before the end of the year to discuss currencies, Juncker said.
‘Too Strong’
“Policy makers may express worries that the euro is too strong, especially against China’s renminbi,” said Tsutomu Soma, a bond and currency dealer at Okasan Securities Co. Ltd. in Tokyo. “Further euro appreciation will likely hurt the euro- zone’s exports more.”
The euro has gained 16 percent against the dollar and the renminbi in the past six months, making the region’s exports more expensive to overseas buyers and threatening the recovery from the worst recession since World War II.
The yen rose after finance minister Fujii said the devaluation of currencies can hurt the global economy. The recent strength in the currency is due to the weaker dollar, stemming from an accommodative monetary policy, Fujii said today in Tokyo.
Japan’s currency also advanced as exporters bought it to hedge sales generated outside the country, according to Yuki Sakasai, a Tokyo-based foreign exchange strategist at Barclays Bank Plc.
“The yen benefited from exporters’ selling of the currencies of its counterparts, but the underlying bias for the yen to weaken remains intact, given the emerging optimism,” Sakasai said.
Large Japanese manufacturers expected the yen to average 94.50 per dollar in the 12 months to March 2010, according to the Bank of Japan’s quarterly Tankan survey released Oct. 1. The forecast in the previous report was for a rate of 94.85.
To contact the reporters on this story: Yasuhiko Seki in Tokyo at yseki5@bloomberg.net; Ron Harui in Singapore at rharui@bloomberg.net.
Last Updated: October 20, 2009 01:47 EDT
Tuesday, October 20, 2009
European Finance Chiefs Urge Strong Dollar After Euro’s Gains
Oct. 20 (Bloomberg) -- European finance chiefs expressed “worries” about foreign-exchange movements and backed a U.S. commitment to prevent the dollar from sliding too much after the euro rose to a 14-month high against the American currency.
“We discussed exchange rates extensively,” Luxembourg Treasury Minister Jean-Claude Juncker told a press conference late yesterday after leading a meeting of euro-area finance ministers in Luxembourg. “It’s a problem which worries us.”
The euro has gained almost 20 percent against the dollar since February, making the region’s exports more expensive to overseas buyers and threatening the recovery from the worst recession since World War II. U.S. Treasury Secretary Timothy Geithner said on Oct. 3 that it is “very important” for the U.S. to have a strong dollar.
“We all note with considerable attention the statements made by American authorities as regards their support in favor of a strong dollar,” European Central Bank President Jean- Claude Trichet told reporters in Luxembourg after attending the meeting. He also echoed the Group of Seven statement that “excessive volatility and disorganized developments in the exchange market was bad for economic development.”
The dollar traded at $1.4973 per euro as of 9:35 a.m. in Tokyo, compared with $1.4965 in New York yesterday, after earlier declining to $1.4981, the weakest since August 2008.
“We want a strong dollar; we need a strong dollar,” French Finance Minister Christine Lagarde said after the meeting. “We must remain disciplined” on the message, she said.
‘Solid and Stable’
“We reaffirm a shared interest with our partners of the major floating currencies that we have a solid and stable currency system,” Trichet said. “The eurogroup and the ECB will echo this position, which has been recently repeated by the American authorities.”
Trichet and Juncker will travel to China with European Union Monetary Affairs Commissioner Joaquin Almunia before the end of the year to discuss currencies, Juncker said. The trio went to Beijing two years ago to push Chinese leaders for a faster “pace of appreciation” of the yuan, a plea that was rebuffed at the time by Premier Wen Jiabao.
Juncker yesterday said it was too early to talk about what they would say to their Chinese counterparts this time. “We’re not pre-announcing a message,” said Juncker, who also serves as Luxembourg’s prime minister.
Juncker reiterated that the European economy is still too weak to remove record-low interest rates and government spending programs. Governments are spending billions of euros to boost the economy, while the ECB is lending banks as much money as they want for up to a year and purchasing covered bonds in an effort to get credit flowing again.
‘Positive and Negative’
“There are clear signs of recovery, but there’s still a balance between the positive and negative signs,” Juncker said. If new European Commission forecasts due next month show a “genuine recovery,” then stimulus measures should “be gradually withdrawn” starting in 2011, he said.
The euro-area economy barely contracted in the second quarter as Germany and France returned to growth. The region’s gross domestic product will expand 0.3 percent in 2010, the International Monetary Fund forecast on Oct. 1, as it trimmed its estimate for this year’s contraction to 4.2 percent from the 4.8 percent it projected in July.
The finance ministers’ meeting was delayed and then displaced by farmers demonstrating against agricultural policies at the usual meeting venue in Luxembourg. The meeting was moved to a chateau about 10 kilometers (6 miles) away after at least 1,500 farmers and about 400 tractors marched through Luxembourg’s streets to the conference center where the officials normally meet.
The protests were aimed at a meeting of agriculture ministers that took place at the same conference center before the finance chiefs were scheduled to meet. The agriculture officials, whose meeting wasn’t disrupted, agreed to extend the period for intervention buying of butter and skimmed-milk powder until the end of February to bolster milk prices.
To contact the reporters on this story: Brian Swint in London at bswint@bloomberg.net; Stephanie Bodoni in Luxembourg at sbodoni@bloomberg.net.
Last Updated: October 20, 2009 00:15 EDT
“We discussed exchange rates extensively,” Luxembourg Treasury Minister Jean-Claude Juncker told a press conference late yesterday after leading a meeting of euro-area finance ministers in Luxembourg. “It’s a problem which worries us.”
The euro has gained almost 20 percent against the dollar since February, making the region’s exports more expensive to overseas buyers and threatening the recovery from the worst recession since World War II. U.S. Treasury Secretary Timothy Geithner said on Oct. 3 that it is “very important” for the U.S. to have a strong dollar.
“We all note with considerable attention the statements made by American authorities as regards their support in favor of a strong dollar,” European Central Bank President Jean- Claude Trichet told reporters in Luxembourg after attending the meeting. He also echoed the Group of Seven statement that “excessive volatility and disorganized developments in the exchange market was bad for economic development.”
The dollar traded at $1.4973 per euro as of 9:35 a.m. in Tokyo, compared with $1.4965 in New York yesterday, after earlier declining to $1.4981, the weakest since August 2008.
“We want a strong dollar; we need a strong dollar,” French Finance Minister Christine Lagarde said after the meeting. “We must remain disciplined” on the message, she said.
‘Solid and Stable’
“We reaffirm a shared interest with our partners of the major floating currencies that we have a solid and stable currency system,” Trichet said. “The eurogroup and the ECB will echo this position, which has been recently repeated by the American authorities.”
Trichet and Juncker will travel to China with European Union Monetary Affairs Commissioner Joaquin Almunia before the end of the year to discuss currencies, Juncker said. The trio went to Beijing two years ago to push Chinese leaders for a faster “pace of appreciation” of the yuan, a plea that was rebuffed at the time by Premier Wen Jiabao.
Juncker yesterday said it was too early to talk about what they would say to their Chinese counterparts this time. “We’re not pre-announcing a message,” said Juncker, who also serves as Luxembourg’s prime minister.
Juncker reiterated that the European economy is still too weak to remove record-low interest rates and government spending programs. Governments are spending billions of euros to boost the economy, while the ECB is lending banks as much money as they want for up to a year and purchasing covered bonds in an effort to get credit flowing again.
‘Positive and Negative’
“There are clear signs of recovery, but there’s still a balance between the positive and negative signs,” Juncker said. If new European Commission forecasts due next month show a “genuine recovery,” then stimulus measures should “be gradually withdrawn” starting in 2011, he said.
The euro-area economy barely contracted in the second quarter as Germany and France returned to growth. The region’s gross domestic product will expand 0.3 percent in 2010, the International Monetary Fund forecast on Oct. 1, as it trimmed its estimate for this year’s contraction to 4.2 percent from the 4.8 percent it projected in July.
The finance ministers’ meeting was delayed and then displaced by farmers demonstrating against agricultural policies at the usual meeting venue in Luxembourg. The meeting was moved to a chateau about 10 kilometers (6 miles) away after at least 1,500 farmers and about 400 tractors marched through Luxembourg’s streets to the conference center where the officials normally meet.
The protests were aimed at a meeting of agriculture ministers that took place at the same conference center before the finance chiefs were scheduled to meet. The agriculture officials, whose meeting wasn’t disrupted, agreed to extend the period for intervention buying of butter and skimmed-milk powder until the end of February to bolster milk prices.
To contact the reporters on this story: Brian Swint in London at bswint@bloomberg.net; Stephanie Bodoni in Luxembourg at sbodoni@bloomberg.net.
Last Updated: October 20, 2009 00:15 EDT
Thursday, October 15, 2009
Are gold prices the start of a Bull or Bubble?
Actual Link
By Nico Isaac
Mon, 12 Oct 2009 11:30:00 ET
By Nico Isaac
Mon, 12 Oct 2009 11:30:00 ET
When prices in a financial market go from Sea Level to Outer Space in a relatively brief time, two scenarios are at work -- and they both start with the letters “B-U.” When a precious metal goes from being a popular long-term investment of buy-and-holders to the quick, get-away “vehicle” of day-traders, two scenarios are at work -- and they both start with letters “B-U.” And when the majority of mainstream pundits see a "new paradigm" in which prices continue to rise indefinitely, two scenarios are at work – and, you guessed it, they both start with the letters “B-U.” Enter: the recent Gold Rush of 2009, when ALL of the above conditions apply. Everyone from hedge funds to housewives now hustle to hitch their asset wagon to the rising gold star. Which begs this question: Which of the possible two scenarios are at work: B-U-ll --- Or B-U-bble? Here’s the difference: A genuine bull market is driven by a self-sustaining internal dynamic that's reflected by a host of technical indicators. A Bubble, on the other hand, is the result of untenable psychology that could shift at any moment and bring prices plummeting down. It goes without saying into which category the mainstream experts put Gold: namely, a new bull market that has years, if not decades more to soar. “Gold Will Hit $2,000 an ounce,” reads an October 8 Market Watch. And -- “Gold Has More Upside… The metal’s bull run is just getting started,” adds a same day Barron’s. (Is Gold A Safe Haven? The current Financial Forecast Service takes the precious metal rally apart piece by piece to see whether a genuine bull exists underneath. Get the entire story today, absolutely risk-free) I found hundreds of news items which agree about the long-term potential for gold’s uptrend. But not a single one could tell me why the rally would continue, other than because the experts say so. To know whether a diamond is real, it must cut glass. And, to know whether the bull market in gold is real, it must encompass at least one of these FOUR traits: Right now, the Gold market can NOT check off a single one of these items. Case in point: Supply: Demand for gold from jewelry makers – which comprises 60%-70% of the market – has plummeted to its lowest level in 20 years. “Safe haven” appeal: From its March 2009 bottom, the U.S. stock market has soared 50% right alongside rallying gold prices. Inflation: As the October 2009 Elliott Wave Financial Forecast (EWFF) notes: An increase in money supply is only inflationary if it is used to RAISE the total amount of credit. This is NOT happening, as both bank credit and consumer credit levels are contracting for the first time since World War II. A gold rally in other currencies: Again, the October 2009 EWFFpresents the following close-up of Spot Gold prices VERSUS Gold denominated in foreign currencies such as the Canadian dollar, the Australian dollar, the euro, franc, pound, and yen since 2007.
Friday, October 9, 2009
Asian Central Banks Intervene as US Dollar Sags
Published: Thursday, 8 Oct 2009 | 7:29 PM ET
By: Reuters
Asian central banks bought U.S. dollars early in the global session on Thursday to weaken their own currencies, traders said, as the slumping greenback threatens smaller export-driven economies.
Asian central banks said to be intervening in currency markets overnight by buying dollars included South Korea, Hong Kong, Taiwan, Thailand, the Philippines and possibly, Indonesia, according to analysts.
Emerging market Asian nations, already struggling with the tepid U.S. recovery and weak demand for their exports from the world's largest economy, have been doubly hurt because their currencies appreciated against the dollar, prompting repeated intervention.
"Stronger currency hurts exports and growth, and so emerging market policymakers are doing their best to prevent excessive gains" in their currencies, said Win Thin, senior currency strategist at Brown Brothers Harriman & Co.
"If (their currencies have) too much strength and the U.S. recovery falters, it's bad for emerging market growth."
There was also an indication that Russia bought as much as $4 billion this week, including $1.4 billion overnight, several market participants said.
Russia was reportedly one of "at least six central banks buying dollars,"said Michael Woolfolk, senior currency strategist at BNY Mellon.
Despite the apparent buying, the ICE Futures U.S. dollar index, a measure of the greenback against six other major currencies, fell 0.9 percent to 75.798, a 14-month low. It retraced some of its losses during the morning before falling again.
Reaction in individual pairs was mixed. At current prices, the dollar is down 0.6 percent against the Russian rouble, 0.2 percent against the Thai baht and 0.3 percent against the Korean won.
The dollar was up 0.1 percent against the Taiwanese dollar and Indonesian rupiah but
remained flat against the Phillipine peso and Hong Kong dollar.
Chatter about Russia and other central banks buying dollars to depreciate their own currencies is nothing new. Asian central banks have been rumored to be buying dollars for several months. The interventions or central bank concerns were reported by Reuters overnight.
"Central banks are keeping policies loose to ensure themselves against the risk of a double-dip recession, and each one of them would prefer its currency to weaken, as insurance against a local double-dip," said Marco Annunziata, chief economist at UniCredit Group in London.
The difference is that while some banks such as Russia had been actively converting those dollars to euros to build up alternative reserves, for now, most banks seem comfortable holding greenbacks.
Analysts say the moves are also protection against a double dip global recession, which would only compound the problems for countries loath to see their currencies appreciate further.
Though some confirmation may come next week with the release of the Treasury International Capital flows report for August, most investors appeared to accept that central bank dollar buying is rational, if only as a hedge against more expensive safe haven flows at a later date.
The risk of course, is that the dollar loses value, making purchases now a bad bet.
"If the U.S. returns to recession after the third or fourth quarters, the dollar will become even cheaper," said Joseph Trevisani, senior market analyst at New Jersey-based FX Solutions from Kuwait City.
"A second recession means prolonged low American interest rates, a weak U.S. economy, perhaps further Federal Reserve market support -- all of which are detrimental to the dollar."Dollar Rises After Bernanke Says Fed Ready to ‘Tighten’ Policy
By Yoshiaki and Ron Harui
Oct. 9 (Bloomberg) -- The dollar rose against the yen for the first time in five days after Federal Reserve Chairman Ben S. Bernanke said the U.S. central bank is ready to “tighten” monetary policy, increasing the appeal of U.S. assets.
The euro advanced against the yen after European Central Bank President Jean-Claude Trichet said yesterday the region’s economy is emerging from a period of “free fall,” damping demand for Japan’s currency as a refuge. The Australian dollar headed for its biggest weekly gain since May amid wagers the central bank will raise interest rates twice more this year after a surprise increase on Oct. 6.
“Bernanke is shifting to a hawkish tone in terms of the timing of exit strategy following moves by other central banks, especially the Reserve Bank of Australia,” said Takeshi Tokita, vice president of foreign exchange sales at Mizuho Corporate Bank Ltd. in Tokyo. “That’s benefiting the dollar.”
The U.S. currency strengthened to 88.74 yen as of 9:31 a.m. in Tokyo from 88.39 yen in New York yesterday. The dollar climbed to $1.4765 per euro from $1.4794. Europe’s single currency rose to 131.01 yen from 130.76 yen.
Australia’s dollar traded at 90.42 U.S. cents from 90.62 cents in New York yesterday when it touched 90.90 cents, the strongest level since Aug. 7, 2008. The currency bought 80.21 yen from 80.10 yen.
The dollar gained against 13 of its 16 most-traded counterparts after Bernanke said in prepared remarks at a conference in Washington “when the economic outlook has improved sufficiently, we will be prepared to tighten.”
Bernanke’s comments echoed those by Kansas City Fed President Thomas Hoenig, who on Oct. 6 said raising interest rates wouldn’t derail the U.S. economic recovery.
‘Incremental Increases’
“Even if we were to start immediately, much time would pass before incremental increases could be considered tight or even neutral policy,” Hoenig said in Denver. “I would not support a tight monetary policy in the current environment, but my experience tells me that we will need to remove our very accommodative policy sooner rather than later.”
Trichet signaled the ECB will keep interest rates at a record low to spur growth.
“The current rates remain appropriate,” Trichet said at a press conference in Venice after policy makers left the main refinancing rate at 1 percent. “Excess volatility and disorderly movements in exchange rates have adverse implications for economic and financial stability,” he said, reiterating the Group of Seven’s statement on currencies.
Australia Rates
The yen dropped against 15 of its 16 major counterparts as the Nikkei 225 Stock Average rose 0.5 percent, following a 0.8 percent increase in the Standard & Poor’s 500 Index in New York yesterday.
Investors are certain Reserve Bank of Australia Governor Glenn Stevens will raise the overnight cash rate target on Nov. 3 by a quarter percentage point, according to Bloomberg calculations based on interbank futures on the Sydney Futures Exchange.
They’re wagering on a 96 percent chance he follows with another increase in December to end the year with a cash rate at 3.75 percent.
To contact the reporters on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net; Ron Harui in Singapore at rharui@bloomberg.net.
Last Updated: October 8, 2009 20:33 EDTThursday, October 8, 2009
U.S. dollar loses strength vs. majors
| ||
The dollar depreciated in markets, as a result of optimism within markets; while we see that the dollar index, which shows the strength of the dollar versus a basked of currencies, dipping to its weakest level in 14 months. Also, as the The ECB announced its interest rate, in which they agreed to leave steady at 1.00%; while Chairman of the central bank is worried that the volatility in markets concerning the euro probable impact on exports. The euro, after its climb, is currently seen losing ground as by his talks; therefore meaning he was not favoring the high euro, yet the labor market is projected to deteriorate lower than expected. The EUR/USD is being traded at 1.4743, while recording a high of 1.4799 and a low of 1.4681, the momentum indicators on the one-hour chart are providing us with a downwards trend, while the pair is traded between the support of 1.4711 and the resistance of 1.4774. The Bank of England today announced its rate decision, in which they decided to leave them steady at 0.50%; while they will continue with their APF program that is scheduled to be finished by next month. The pound, as a result of the announcement, climbed versus the dollar while the pair currently trades at 1.6064 between the support of 1.6017 and the resistance of 1.6095, while recording a high of 1.6092 and a low of 1.5946. The dollar versus yen is seen trading between the support of 88.20 and the resistance of 88.70 at 88.49. The pair recorded a high of 1.6092 and a low of 1.5946. The momentum indicators on the one-hour chart are showing us there is an upside trend. |
Gold Jumps to Record; Oil, Copper Gain on Dollar Drop
Oct. 8 (Bloomberg) -- Gold climbed to a record for a third day and crude oil, copper and rubber all advanced as the dollar’s slump prompted investors to buy commodities as a hedge against potential inflation.
Bullion is heading for a ninth annual gain as the Dollar Index, a six-currency gauge of the dollar’s value, has shed 6.5 percent this year. Oil has gained 57 percent since the start of the year on concern that record government spending to combat the global recession will devalue currencies, spurring inflation.
“There is such a premium in crude right now that comes down to the inflation hedge,” said Jonathan Kornafel, a director at options traders Hudson Capital Energy in Singapore. “There has been more focus on the dollar this week.”
Crude oil for November delivery gained as much as 83 cents, or 1.2 percent, to $70.40 a barrel in electronic trading on the New York Mercantile Exchange. It was at $70.14 at 12:21 p.m. Singapore time. Yesterday, the contract dropped $1.31.
Gold for immediate delivery climbed as high as $1,051.51 an ounce and was at $1,050.32 an ounce at 12:21 p.m. in Singapore. It has risen 16 percent over the past year. Gold for December delivery in New York gained as much as 0.8 percent to $1,052.50 an ounce, also a record.
$2,000 Gold
Gold may top $2,000 an ounce in the next decade, according to investor Jim Rogers. “People are printing money, gold is going up,” Rogers said in an interview, adding that he may increase his holdings. “There are plenty of reasons to buy gold when the time is right,” he said.
“Bullish gold gave support to the price of other commodities, including rubber,” said Kazuhiko Saito, chief analyst at Tokyo-based broker Fujitomi Co. Rubber futures gained as much as 2.1 percent.
Three-month copper on the London Metal Exchange advanced as much as 1.4 percent to $6,180 a ton, as lead, nickel, tin and zinc also climbed. Wheat futures rose 1 percent. “The fear of inflation is telling people to go buy commodities,” including the grain, Darrell Holaday, president of Advanced Market Concepts, said yesterday.
President Barack Obama has increased U.S. marketable debt to a record as he borrows to reignite growth in the world’s biggest economy. That’s boosted speculation the increased money supply will debase the currency and spur inflation. The printing of money and “abandonment of the dollar have taken the smart people over to precious metals,” according to Philip Gotthelf, president of Equidex Brokerage Group Inc.
Federal Reserve
The dollar traded at $1.4762 against the euro at 11:20 a.m. in Singapore, from $1.4691 yesterday. The U.S. currency fell earlier this week on concern the Federal Reserve will be slower to raise interest rates than policy makers in other nations.
A further blow to the dollar came after an Oct. 6 report in Britain’s Independent newspaper said that Arab states may switch to a basket of currencies to set oil prices over the next nine years. The Saudi Central Bank Governor Muhammad al-Jasser denied such a move is being considered.
Australia’s central bank unexpectedly raised its overnight cash rate target to 3.25 percent on Oct. 6, the first Group of 20 nation to boost lending costs since the height of the global financial crisis. The country today reported an unexpected gain in employment, leading to an increase in speculation of a further climb in the benchmark.
Brent crude oil for November settlement gained as much as 88 cents, or 1.3 percent, to $68.08 a barrel on the London-based ICE Futures Europe exchange. It was at $67.85 at 12:23 p.m. in Singapore. Yesterday, the contract fell 2 percent.
To contact the reporters on this story: Christian Schmollinger in Singapore at christian.s@bloomberg.net; Kyoungwha Kim in Singapore at Kkim19@bloomberg.net
Last Updated: October 8, 2009 00:28 EDT
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