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Euro Gains Even After Weak Data

By , May 23, 2013 9:46 am

Euro sign monumentThe eurozone continues to show weak data readings, and many expect the recession in the eurozone to last through the rest of the year. However, even so, the euro is still gaining against the US dollar. Even with the current “risk off” environment, euro is heading higher.

The latest Purchasing Managers’ Composite index reading from Markit shows that a rise from 46.9 to 47.7 is being seen for May. However, even though there is a rise, the index is still solidly in contraction mode. The eurozone is considered to be in contraction until it reaches the 50.0 level.

Germany appears to be stagnating, and France continues to struggle.

Even with this news, the euro is gaining against the US dollar today. Some think that it might be more of an indication of dollar weakness than of euro strength. However, if the ECB decides to make more drastic moves to boost the eurozone economy, things could change and the euro could weaken.

For now, though, euro is higher, even though there is a bit of a ”risk off” feeling today with stocks lower and other risk assets out of favor.

At 14:37 GMT EUR/USD is up to 1.2908 from the open at 1.2858. EUR/GBP is up to 0.8562 from the open at 0.8544. EUR/JPY is down to 131.1860 from the open at 132.6450.

If you have any questions, comments or opinions regarding the Euro, feel free to post them using the commentary form below.

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UK Pound Falls after Retail Sales Data

By , May 22, 2013 9:16 am

Stack of coins on 10-pound and 20-pound billsAfter showing signs of mild recovery, the latest economic data out of the United Kingdom is proving disappointing. The result of the latest retail sales data is a lower pound, and speculation that things might not be turning around after all.

Instead of gaining by 0.1 per cent, as many economists had expected, retail sales in the United Kingdom fell by 1.3 per cent, reports the Office for National Statistics. This represents a rather large drop — especially when a small gain was expected.

The news comes on the heels of disappointing inflation data. The latest UK economic data indicates that maybe a recovery isn’t on that firm of footing after all. It’s not helping that the latest Bank of England minutes show that, once again, Mervyn King‘s efforts to expand the bond purchase program have failed. As a result, further economic stimulus isn’t forthcoming.

Pound hit a seven-week low against the euro today, and is the second-worst performer among the most developed currencies. Only the yen has performed worse than the pound in terms of major developed currencies. Things aren’t likely to improve dramatically for the pound anytime soon.

At 14:46 GMT GBP/USD is down to 1.5090 from the open at 1.5154. EUR/GBP is up to 0.8563 from the open at 0.8518. GBP/JPY is up to 155.9280 from the open at 155.2750.

If you have any questions, comments or opinions regarding the Great Britain Pound, feel free to post them using the commentary form below.

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Swiss Franc Mixed After IMF Report

By , May 21, 2013 7:39 pm

A fan of Swiss francsThe Swiss franc fell against the euro today, extending yesterday’s drop. The currency recovered a bit against the US dollar following the decline on the previous session and advanced versus the euro.

The IMF released its assessment of the Switzerland economy, which was fairly optimistic. It said that “the Swiss economy has been relatively stable” and predicted:

The economy is expected to regain momentum only gradually, in line with a baseline scenario of subdued global recovery.

Yet the IMF also discussed several issues. One of them was a potential introduction of negative interest rates:

The negative interest rate is a policy that may raise special issues and even have drawbacks, particularly when countries want to use it to stimulate credit and economic activity.

Nevertheless, the IMF considered negative rates to be a positive thing overall.

USD/CHF was down from 0.9699 to 0.9695 as of 1:05 GMT today after rising from 0.9667 to 0.9699 yesterday. EUR/CHF advanced from 1.2518 to 1.2529 — the highest since January 1. CHF/JPY rose from 105.59 to 105.78.

If you have any questions, comments or opinions regarding the Swiss Franc, feel free to post them using the commentary form below.

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Israel warns Syria after attack near border

By , May 21, 2013 7:33 pm

Israel warns Syria after attack near border
By: ap on: 21.05.2013 [18:36 ] (115 reads)

Israel warns Syria after attack near border

Israeli patrol hit, vehicle damaged

The Associated Press

Posted: May 21, 2013 8:11 AM ET

Last Updated: May 21, 2013 11:10 AM ET

Nahlah Ayed: How Syria’s war is reshaping the Middle EastSyria’s civil war: key facts, important playersSyria in crisis: News, photos and video about the conflict
Israeli soldiers march during a military exercise in the Israeli controlled Golan Heights, near the border with Syria. Syria claimed it destroyed an Israeli vehicle that crossed the ceasefire line in the Golan Heights.Israeli soldiers march during a military exercise in the Israeli controlled Golan Heights, near the border with Syria. Syria claimed it destroyed an Israeli vehicle that crossed the ceasefire line in the Golan Heights. (Ariel Schalit/Associated Press)
Israel’s military chief issued a stern warning to Bashar Assad on Tuesday, saying the Syrian leader would “bear the consequences” of any more attacks on Israeli forces near the Syrian border.

Lt. Gen. Benny Gantz issued his threat hours after an Israeli jeep came under fire during a patrol in the Israeli-controlled Golan Heights. Syria claimed it destroyed an Israeli vehicle that crossed the cease-fire line in the Golan Heights overnight.

The Israeli military said the vehicle suffered light damage. It said that the Israeli troops reported a “direct hit” from the return fire but provided no further details.
Nahlah Ayed: How Syria’s war is reshaping the Middle East
Syria’s civil war: key facts, important players
Syria in crisis: News, photos and video about the conflict

It was the latest in a string of incidents in which gunfire and mortar shells have struck the Golan in recent months. Israel believes that most of the fire has been spillover from the Syrian civil war, but that several cases, including Tuesday’s were intentional.

That was bolstered by the fact that it was the first time the Syrian army has acknowledged firing at Israeli troops across the frontier in what appeared to be an attempt by Assad’s regime to project toughness following three Israeli airstrikes near Damascus this year.

“Assad encourages and directs the widening of different operations against Israel, including the Golan Heights,” Gantz told a conference at the University of Haifa.

He said in Tuesday’s incident, the Israeli patrol was targeted several times by a “clearly marked Syrian position.” He rejected Syrian claims that the vehicle had veered into Syrian territory.

“We will not allow the Golan Heights to become a comfortable space for Assad to operate from,” Gantz said. “If he deteriorates (the situation on) the Golan Heights, he will have to bear the consequences.”

Israel has warily watched the Syrian civil war, fearing the more than two-year-old conflict could spill across its borders.

Israel is concerned that Assad, in a bid of desperation, will try to escalate tensions on the border to draw in Israel and divert attention away from his struggles against rebel groups seeking his ouster. Israel also fears that Assad’s sophisticated weapons could be transferred to Iranian-backed Hezbollah militants in Lebanon or fall into the hands of the rebels, including Islamic extremists connected to al-Qaida who are among their ranks who Israel believes will turn their attention to the Jewish state if they topple Assad.

Tensions have been rising between Israel and Syria in recent weeks, particularly following the airstrikes, which targeted alleged Syrian arms shipments bound for Hezbollah. Israel has not confirmed carrying out the attacks.

The strikes marked a sharp escalation of Israel’s involvement in the Syrian civil war and raised fears that the conflict could turn into a full-fledged regional war.

Syria vowed to retaliate and Assad said Syria is “capable of facing Israel” and would not accept violations of its sovereignty. Firing at an Israeli target seems to be in line with the tougher rhetoric that followed the airstrikes.

Gantz visited the area after the incident and told soldiers stationed there and told them to “stay alert during these challenging times.”

http://www.cbc.ca/news/world/story/2013/05/21/syria-israel-vehicle.html

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“Useful Enemies”: U.S. Admitted Not Just Nazis After WWII, But Their Sadistic Collaborators

By , May 21, 2013 6:59 am

Why did the United States feel the need to admit Baltic and Eastern Europeans who at times exceeded the Nazis in brutality?

Useful EnemiesLost count of the sordid episodes in America’s past? In Useful Enemies: John Demjanjuk and America’s Open-Door Policy for Nazi War Criminals (Delphinium Books, 2013), Richard Rashke chronicles one that few of us know much about. Many Americans have heard of Operation Paperclip, the program run by the Office of Strategic Services (the predecessor to the CIA). After World War II, the United States made the cold calculation to recruit Nazi scientists both to secure their help in the Cold War and to keep Russia from acquiring their expertise.

Rashke explains that, even though the United States enacted the Displaced Persons Act and a special Displaced Persons Commission (DPC) to determine which European organizations’ members were to be denied U.S. visas

… it is safe to say that the United States used, protected, and opened the door to several thousand former SS and SD officers, Gestapo agents and chiefs, Abwehr intelligence officers, Nazi propagandists and scientists, Einsatzkommandos, Waffen SS volunteers, Vlasov’s army soldiers, Nazi quislings, and ethnic cleansers.

Vlasov’s army was the Russian Liberation Army composed of Russian prisoners of war opposed to communism. Einsatzkommandos were members of Nazi mobile killing squads known as Einsatzgruppen. The Waffen, Raschke writes, was

… defined as criminal by the Nuremberg International Military Tribunal and … by the DPC. [Its] battalions were made up of mostly non-fighting German volunteers. Besides fighting the Soviet army, Waffen SS volunteers executed Soviet POWs and assisted the Nazi Einsatzgruppen in rounding up, robbing, and killing Jews, Gypsies, and communists.

But

In September 1950, the DPC made a controversial decision that opened America’s door for a group of Latvian and Estonian Waffen SS who had survived the war. … A brief review of the scope and brutality of Estonian and Latvian collaboration with the Nazis helps explain the angry reaction of the Jewish community to the … decision and the impact the ruling had on U.S. immigration policy. [The Latvian and Estonian Waffen SS] were brutal. They raped and forced women to work as sex slaves, then killed then when they were worn-out; they tossed babies in the air for target practice; and they buried wounded victims alive.

Then, Rashke explains, in 1950, Congress passed the Lodge Act, which gave the U.S. military the authority to recruit immigrants into the U.S. Army to help fight the Cold War. It wasn’t just the military, but the FBI, the State Department, and the CIA which helped itself to not only Nazis, but Eastern European Nazi collaborators such as members of Croatia’s Ustasha, Hungary’s Arrow Cross, and the Romanian Iron Guard. 

These included Andrija Artukov, known as the “Himmler of Croatia,” and Viorel Trifa, an Iron Guard leader responsible for the murder of thousands of Romanian Jews. Once in the United States, Trifa was made a bishop by the the Ukranian Orthodox church. A loyal anti-communist, he became a watchdog for J. Edgar Hoover in the Romanian community. Meanwhile, although Nicolae Malaxa, another Iron Guard leader, was a communist agent, he was allowed to emigrate and stay because he was also operating undercover for the National Intelligence Agency. Rashke writes

How America welcomed … major war criminals stands in stark contrast to how it hounded minor war criminal John Demjanjuk.

If you haven’t followed Demjanjuk’s case, like I hadn’t, Useful Enemies is suspenseful. What led to Demjanjuk being singled out? In 1973 Rep. Elizabeth Holtzman (D-NY), a member of the House Subcommittee on Immigration, got a call from an Immigration and Naturalization Service (INS) bureaucrat who told her that the INS was in possession of a list of Nazi war criminals living in America who it was making no attempt to deport. 

When the files were released to Rep. Holtzman, she found Artukovic and Trifa especially troublesome. The FBI moved to protect the two, but when Rep. Holtzman secured Russia’s cooperation in rooting out Nazi collaborators, Secretary of State Kissinger authorized an overture to Moscow and the INS released its list to the public. One of the names on the list was Iwan (John) Demjanjuk. He was a Russian solder captured by the Germans and enlisted into the Trawniki corps of Russian POWs, who were used to round up and kill Jews in concentration camps.

It appears that, once the United States was finally ready to make amends for its inaction on Nazis and Nazi collaborators, it fingered someone low on the food chain. But to give the devil its due, it thought he was more of a predator – a guard and gas chamber operator at Treblinka known as Ivan the Terrible whose sadism was off the charts – than he turned out to be.

Useful Enemies then becomes a gripping courtroom drama. Much of the case revolved around the authenticity of a Trawniki identification card apparently issued to Demjanjuk by Nazi bureaucracy. Over the course of 30 years of trials and a deportation hearing, a climax – no, anticlimax – was reached in1993 when he was found innocent by an Israeli court because the prosecution couldn’t establish that he was Ivan the Terrible. But, deported to Germany, in 2011, Demjanjuk was finally convicted instead for his role as a guard at Sobibor in 2011. (He died in 2012.)

Reading Useful Enemies, your emotions are apt to veer wildly from, in the early going, hoping Demjanjuk is found guilty to, when it becomes increasingly apparent that he’s not Ivan the Terrible, damping down your sympathy for this man. On the one hand, he’s being persecuted, but, on the other, he was obviously complicit in the Nazi war effort.

In the end, as Rashke makes clear:

If Nazis form the first tier of war criminals and Nazi collaborators the second tier, then the FBI, the State Department, the military, and the CIA have created a third tier – those policy makers, leaders, and implementers who hired, used, and protected thousands of men and women who had committed crimes against humanity.

What did the United States get out of this? Some scientific accomplishments from the Nazis granted admittance such as Wernher von Braun, whose work helped land a man on the moon and who was ultimately awarded the National Medal of Science. On the other hand, from the Eastern Europeans, shoddy or false intelligence (not that Nazis deserved to be admitted any more than them!). Just when its moral authority, whether deserved or not, was at an all-time high after World War II, the United States couldn’t get off its war footing and insisted on treating the Soviet Union as a threat on a par with Japan and Germany.

In the end all American immigration policies toward Nazis and their collaborators thought to be useful to the United States did was throw fire on the fuel of the Cold War. It also eroded the moral standing of the United States, as well as dishonored the memories of all those who lost their lives to Nazis and their Eastern European and Baltic collaborators.

From a historical perspective, World War II is a gift (if you can call it that) that never stops giving. Seventy years on, new truths continue to be unearthed. As if our minds hadn’t recoiled enough from the atrocities of World War II, the author turns over a new stone out from which human vermin like the Ustasha, Arrow Cross, and Romanian Iron Guard slither.

Richard Rashke’s voluminous research on U.S. immigration policies will be new to many. But, since it will likely establish itself as the definitive book on the subject, Useful Enemies is the best place to start. 

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AUD/USD Falls After RBA Minutes, Losses Limited

By , May 21, 2013 3:21 am

Various Australian dollar notesThe Australian dollar fell against its US peer today after the Reserve Bank of Australia released the minutes of its last policy meeting. The drop was small, however, and the currency gained against the Japanese yen at the same time.

The RBA minutes were dovish and said:

Conditions in the business sector, as assessed in surveys, generally had remained below average, possibly in part because the exchange rate had remained high despite lower export prices and interest rates.

Policy makers also thought that “the inflation outlook provided scope to ease monetary policy further, should that be necessary to support demand”. All in all, the minutes were negative for the Aussie, but the currency did not look bothered too much by them, most likely because anticipation of additional stimulus was already priced in.

AUD/USD traded at 0.9792 as of 9:36 GMT today after falling from 0.9807 to 0.9748. AUD/JPY advanced from 100.28 to 100.53, while its daily high was at 100.92.

If you have any questions, comments or opinions regarding the Australian Dollar, feel free to post them using the commentary form below.

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Japanese Yen Remains Weak after GDP Reading

By , May 16, 2013 6:21 am

The latest GDP reading for Japan has been released, and it shows an improvement for the first quarter of 2013. This news hasn’t served to strengthen the yen, however. Instead the Japanese currency is down against its major counterparts on expectations of continued easing.

Japanese GDP increased 0.9 per cent for the first quarter of 2013, beating the forecast of an increase of 0.7 per cent. The gain is being attributed to the rise in exports and to an increase in consumer spending. Many believe that this is a sign that the Japanese economy is ready to move out of stagnation.

However, even though Japan saw an improvement in GDP, it is unlikely that things will change much for the currency. The Bank of Japan is still likely to continue its aggressive easing policy. The economic recovery in Japan is far from over, and as a result the plans to double the money base in the coming years is still in full effect.

Yen remains weak as quantitative easing remains the main source of economic stimulus. And, since other countries aren’t weakening their currencies nearly as much, the yen is likely to retain its weakness for a while.

At 12:34 GMT USD/JPY has moved a little lower to 102.2400 from the open at 102.2535. EUR/JPY is up to 132.0020 from the open at 131.7650. GBP/JPY is up to 156.0275 from the open at 155.7850.

If you have any questions, comments or opinions regarding the Japanese Yen, feel free to post them using the commentary form below.

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Aussie Soft After Budget Forecast

By , May 14, 2013 6:58 pm

Australian dollar billsThe Australian dollar was soft today after the government forecast that economic growth will slow in the next financial year, adding reasons for the central bank to cut interest rates further.

The Australia Treasury revealed the budget for the 2013–14 financial year today. It predicted that growth of real gross domestic product will slow to 2.75 percent from the current year’s 3 percent. Unemployment is projected to edge up from 5.5 percent to 5.75 percent. The Consumer Price Index may grow 2.25 percent in the next financial year, slower than this year’s 2.5 percent.

The predictions add incentive for the Bank of Australia to ease its monetary policy even more. Such prospect weakened the Aussie (as the Australian currency is nicknamed), but as of now the currency attempts to rebound as the recent drop was perhaps too big and too fast.

AUD/USD fell from 0.9951 to 0.9875 before trading at 0.9901 as of 23:54 GMT today. EUR/AUD was flat at 1.3059 after rising to 1.3117 — the highest rate since February 12. AUD/JPY was down to 100.65, but rebounded to trade near the opening level at 101.20.

If you have any questions, comments or opinions regarding the Australian Dollar, feel free to post them using the commentary form below.

Earlier News About the Australian Dollar:

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Israeli New Shekel Mixed After Bank of Israel Cuts Interest Rates

By , May 14, 2013 5:22 am

Yitzhak Ben-Zvi on 100-shekel noteThe Bank of Israel made an unexpected move yesterday, cutting its benchmark interest rate. The Israeli new shekel dropped versus the euro today, but rose against the US dollar.

The central bank cut its main interest rate by 0.25 percentage points to 1.5 percent. The bank explained its decision by appreciation of the shekel and the similar actions (cutting interest rates) by central banks across the world. Policy makers were also worried about how the start of natural gas production in the Tamar gas field may impact the exchange rate. On top of that, the central bank said it will start foreign-currency purchases to weaken the shekel.

Truth be told, the move was not completely unexpected by analysts as they have anticipated some form of monetary easing. Yet market participants were not expecting the bank to act so soon, therefore yesterday’s announcement has caught them unawares.

USD/ILS fell from 3.6168 to 3.6130 as of 1:45 GMT today. EUR/ILS rose from 4.6930 to 4.7031.

If you have any questions, comments or opinions regarding the Israeli New Shekel, feel free to post them using the commentary form below.

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Polish Zloty Remains Firm After Interest Rate Cut

By , May 9, 2013 7:13 pm

Polish zloty notesThe National Bank of Poland cut interest rates earlier this week, surprising Forex market participants. The Polish zloty remained strong even after the unfavorable policy decision.

The NBP slashed its main interest rate by 0.25 percentage point to 3 percent on May 8. The central bank noted that economic activity was weak both in Poland and across the world, expressing concern that recession in the eurozone continued. The statement, which was released after the policy meeting, said:

In the opinion of the Council, the incoming data indicate that economic growth in Poland remains weak, while inflation decline is stronger than forecasted in the March projection. At the same time, uncertainty about the pace and timing of the expected recovery in the euro area has increased, which can adversely affect economic activity in Poland.

The bank also predicted that inflation will likely remain below the target and such forecasts can be interpreted as a hint on further rate cuts. Usually monetary easing is not helpful to currencies, yet the zloty rallied after the bank’s announcement and continued to be strong today.

USD/PLN fell from the opening of 3.1650 and the daily high of 3.1725 to 3.1622, while EUR/PLN declined from 4.1281 to 4.1240 as of 1:39 GMT today and its intraday maximum was at 4.1336.

If you have any questions, comments or opinions regarding the Polish Zloty, feel free to post them using the commentary form below.

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