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Posts tagged: Dollar

Aussie Falls to Lowest since 2009 vs. US Dollar

By , January 29, 2015 6:51 am

Australian 100-dollar billThe Australian dollar fell today, sinking to the lowest level since July 2009 against its US counterpart and reaching the lowest since March 17, 2014, versus the Japanese yen. The currency declined due to Australia’s economic data that was not particularly good.

Australia’s import prices grew 0.9 percent in the December quarter of the last year from the previous three months. While the reading was not as bad as the preceding quarter’s drop by 0.8 percent, it was far below the predicted growth by 1.5 percent. The Aussie dipped after the report and also felt pressure from yesterday’s data that showed slowing inflation.

AUD/USD dipped from 0.7886 to 0.7784 as of 12:12 GMT today. AUD/JPY edged down from 92.69 to 91.92, touching the low of 91.65 intraday.

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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Dovish RBNZ Statement Sends NZ Dollar Down

By , January 28, 2015 5:14 pm

All NZD denominationsThe New Zealand dollar crashed today after the Reserve Bank of New Zealand announced its monetary policy decision. While the central bank did not change interest rates, the statement sounded rather dovish.

The RBNZ decided to keep its main interest rate at 3.5 percent during today’s policy meeting. Yet the statement sounded rather negative for the NZ dollar as Governor Graeme Wheeler was unhappy about the strength of the currency, saying:

While the New Zealand dollar has eased recently, we believe the exchange rate remains unjustified in terms of current economic conditions, particularly export prices, and unsustainable in terms of New Zealand’s long-term economic fundamentals. We expect to see a further significant depreciation.

Regarding the policy outlook, Wheeler explained:

In the current circumstances, we expect to keep the OCR on hold for some time.

The kiwi crashed against other most-traded currencies after the announcement, even reversing its rally against the euro.

NZD/USD sank from 0.7444 to 0.7329 as of 22:25 GMT today, reaching the lowest level since March 2011. NZD/JPY dropped from 87.46 to 85.98, touching the weakest rate since October 31. EUR/NZD rallied from 1.5275 to 1.5389, bouncing from the daily low of 1.5417.

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

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Dollar Rises Even as Fed Talks About Patience

By , January 28, 2015 2:30 pm

Focus on hundred dollarsThe US dollar rallied against the majority of its most-traded peers today after the Federal Reserve released statement of its first monetary policy meeting this year. The biggest loser was the Canadian dollar, while the Japanese yen was able to hold ground against the greenback and demonstrated an upward bias.

The US currency managed to rally even as the Fed reiterated that it “can be patient in beginning to normalize the stance of monetary policy”. Overall, the statement can be considered rather neutral, saying:

The Committee continues to see the risks to the outlook for economic activity and the labor market as nearly balanced. Inflation is anticipated to decline further in the near term, but the Committee expects inflation to rise gradually toward 2 percent over the medium term as the labor market improves further and the transitory effects of lower energy prices and other factors dissipate.

It looks like policy makers are not in a hurry to start raising interest rates as the following words suggest:

The Committee currently anticipates that, even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run.

Yet prospects for monetary tightening from the Fed, even not a close one, were enough to propel the dollar higher as major other central banks prefer to either keep rates stable or even to cut them.

EUR/USD dropped from 1.1378 to 1.1292 as of 20:22 GMT today even though the currency pair attempted to rally immediately after the Fed announcement. USD/CAD rallied from 1.2395 to 1.2513, reaching the highest level since April 2009. At the same time, USD/JPY declined from 117.84 to 117.57, retreating from the daily high of 118.25.

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

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Pound Drops After GDP Disappoints, Resilient vs. Dollar

By , January 27, 2015 8:35 am

Focus on 5-pound noteThe Great Britain pound fell against some of its major counterparts today as economic growth of the United Kingdom disappointed market participants. Surprisingly enough, the sterling was able to gain on the US dollar.

The Office for National Statistics reported that UK gross domestic product rose 0.5 percent in the fourth quarter of 2014 from the previous three months. The growth was below the market expectations of 0.6 percent and previous quarter’s expansion by 0.7 percent. Despite the negative data, the pound was resilient enough to hold its ground versus the dollar, which was not particularly strong.

GBP/USD advanced from 1.5075 to 1.5185 as of 14:35 GMT today. Meanwhile, GBP/JPY slid from 178.54 to 178.33.

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

Earlier News About the Great Britain Pound:

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Dollar Gains to Highest Since 2003 vs. Euro

By , January 22, 2015 2:17 pm

Packs of US 100-dollar billsThe US dollar climbed to the highest level since 2003 against the euro today after the European Central Bank made a move, announcing an expansion of its asset purchase program. The currency also gained against other major counterparts.

While initially it looked like the gains of US currency against the euro might be limited, the rally accelerated and the greenback jumped as much as 2.1 percent against the currency of the eurozone and touched the strongest rate since November 2003. The dollar also rallied to the highest since July 2013 versus the Great Britain pound. The sterling was soft as poor Britain’s economic data reinforced the view that the Bank of England will not raise interest rates anytime soon.

Turning to the news from the United States, US economic data was mixed. The housing report showed an increase of housing starts but a drop of building permits. Unemployment claims fell last week but were still above the forecast level. Nevertheless, the impact of the ECB announcement allowed the dollar to ignore any negative factor that might have impacted it.

EUR/USD sank from 1.1609 to 1.1376 as of 18:41 GMT today. GBP/USD dropped from 1.5140 to 1.5030. USD/JPY advanced from 117.96 to 118.23 after falling to 117.25 earlier during the trading session.

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

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NZ Dollar Extends Decline for Third Session

By , January 22, 2015 8:51 am

Rolled bills on the plain banknotesThe New Zealand dollar dipped to the lowest level since June 2012 against its US peer today despite positive domestic macroeconomic data. While the currency bounced against the greenback, it retained losses versus the Japanese yen.

BusinessNZ Performance of Manufacturing Index climbed from 55.6 in November to 57.7 in December, demonstrating healthy growth of the sector by the end of the year. The data was not able to support the New Zealand dollar that declined for the third day. While the currency halted the drop versus its US counterpart, the kiwi is struggling to stay close to the opening level and is in danger of resuming its rally to the downside.

NZD/USD traded at about 0.7546 as of 15:05 GMT today after dropping from 0.7551 to 0.7512 intraday. NZD/JPY declined from 89.06 to 88.62.

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

Earlier News About the New Zealand Dollar:

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Dollar Retains Support as Safe Haven

By , January 20, 2015 9:30 pm

Focus on hundred dollarsThe US dollar backed off a little today following yesterday’s gains. The currency remains strong as signs of slower global growth support demand for the greenback in its role of a safe haven.

There were plenty of reasons for investors to seek safety. One of them was the downward revision of the global growth forecast by the International Monetary Fund. Another was the lackluster growth of the Chinese economy. While the quarterly data was not terrible, China’s economic expansion for the whole 2014 was the slowest since 1990.

The situation in the eurozone also feeds the need for safety. With prospects for quantitative easing from the European Central Bank and concerns about Greece, traders feel that they need a haven.

EUR/USD ticked up to 1.1562 as of 2:14 GMT today following the drop from 1.1604 to 1.1548 yesterday. GBP/USD gained from 1.5142 to 1.5150. USD/JPY down to 118.46 after yesterday’s jump from 117.56 to 118.79 (1.1 percent).

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

Earlier News About the US Dollar:

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New Zealand Dollar Fragile After Disappointing CPI

By , January 20, 2015 9:28 pm

Many 100-dollar billsThe New Zealand dollar managed to eke out some gains against its US counterpart and the euro today following yesterday’s big drop. The currency remained extremely fragile, though, and continued to fall against the Japanese yen.

New Zealand’s Consumer Price Index dropped 0.2 percent in the fourth quarter of 2014 even though forecasters promised no change. The reading was also noticeably worse the the previous quarter’s increase by 0.3 percent. The NZ dollar sank after the report.

Poor domestic data was not the only reason for the New Zealand currency to fall. The general market sentiment also did not play in favor of the kiwi. With traders seeking safety, riskier growth-related currencies had limited demand.

NZD/USD edged up to 0.7648 as of 3:35 GMT today following the drop from 0.7776 to 0.7633 (1.8 percent) during the previous trading session. EUR/NZD dipped to 1.5097 following the rally from 1.4902 to 1.5108 (1.4 percent). NZD/JPY declined from 90.65 to 90.37.

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

Earlier News About the New Zealand Dollar:

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New Zealand Dollar Falls Despite Supportive Domestic Data

By , January 20, 2015 5:10 am

Many 100-dollar billsThe New Zealand dollar went down today even though domestic macroeconomic data was positive for the currency. It was the third consecutive daily decline against the US dollar.

New Zealand Institute of Economic Research reported that its business confidence index rose from 19 in the third quarter of 2014 to 23 in the fourth quarter. Unlike the Australian dollar, the New Zealand currency was unable to benefit from positive data. Some market experts blamed the Chinese data for the lackluster kiwi’s performance, though reports from the Asian country were not bad strictly speaking.

NZD/USD dropped from 0.7776 to 0.7735 as of 9:59 GMT today, reaching the low of 0.7707 intraday. EUR/NZD advanced from 1.4902 to 1.4991.

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

Earlier News About the New Zealand Dollar:

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Forecast: US Dollar in 2015

By , January 19, 2015 7:22 am

Panoramic view on many US hundred-dollar billsThe US dollar demonstrated exceptional performance in 2014. Can the greenback maintain its amazing rally in 2015 or correction is in order?

Fundamentally, the dollar has a strong bullish case in the form of expected monetary tightening from the Federal Reserve. Consequently, it leaves the US currency vulnerable to any changes of the Fed’s stance. Still, the monetary policy outlook should drive the greenback higher though some might argue that the factor is already priced in and may have muted impact in the future.

Talking about monetary policy, divergence between policies of various central banks should affect the performance of the dollar against different currencies. In particular, easing bias of the European Central Bank and the Bank of Japan should help the dollar to maintain an edge on the euro and the yen.

Turning away from central banks, another important consideration is the market sentiment. The dollar, being considered a safe currency, usually profits from fear and risk aversion. Such feelings were abound by the end of 2014 as the drop of crude oil prices dragged down riskier assets, including many currencies. Geopolitical tensions between Russia and the Western countries also played part in the greenback’s rally. Depending on how events will unfold in 2015, they can have beneficial or detrimental impact on the US currency’s performance. Most experts believe that oil prices bottomed out and should not fall further. Yet without a major rally low energy prices are likely to continue spoiling traders’ mood.

Are there any negative factors that may affect the dollar? In fact, the bullish outlook of most market participants is in its own way a bad sign. Some specialists argue that it is unwise to join the herd as it is too late to enter the market when everyone runs in one direction. It even may be prudent to think about going in the opposite direction as market rarely go in one direction for long without reversing at least temporarily.

Saying that, it is important to note that the majority of market analysts are still bullish on the dollar though they think that correction is likely to happen sometime in 2015. The problem is in predicting exact timing of such correction. Some specialists think that that it will happen in the first half of the year, and the currency will resume its rally in the second. Others argue that the dollar will continue to rise in the first half, falling in the second.

The Bank of Nova Scotia said:

The collapse in oil prices has had a significant impact on global economic and financial market conditions. The USD is expected to appreciate with support from both fundamentals and flows. The financial market implications of the oil price shock will likely be a near-term stimulant for the USD.

The bank made following predictions for dollar currency pairs by the end of 2015: EUR/USD falls to 1.13, USD/JPY rises to 126, GBP/USD hangs near 1.51, USD/CAD advances to 1.20, and AUD/USD drops to 0.78.

Action Forex made similar predictions, saying:

Hinging on rate hike expectations, the US dollar is expected to strengthen against major currencies in 2015.

National Bank Financial Inc., a division of National Bank of Canada, issued somewhat different forecasts, though not vastly so. It predicted that EUR/USD will fall to 1.15, USD/JPY will climb to 128, GBP/USD will be at 1.50, and AUD/USD will stay at 0.80. While the forecast was bullish for the most part, it mentioned some obstacles that the dollar may encounter in its attempts to maintain the rally:

While the outlook is promising for the U.S. dollar, the latter could nonetheless meet some resistance in 2015. For instance, oil prices could stabilize somewhat, giving a breath of fresh air to commodity currencies. The Fed could also decide to be less aggressive than planned in raising interest rates despite solid GDP growth if the core PCE deflator remains soft, perhaps due to the persistence of low wage inflation or low imported prices (courtesy of the USD’s appreciation in the last couple of years).

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

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