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Posts tagged: Gains

Scotland Rejects Independence, Pound Erases Gains

By , September 19, 2014 7:29 am

The Great Britain pound wiped out its earlier gains after the results of a referendum showed that people of Scotland decided to remain in the United Kingdom. The currency was rising previously as traders were counting exactly on this outcome.

Scotland rejected independence as 55 percent of the Scotsmen voted ‘no’ against 45 percent that voted ‘yes’. So why the pound has fallen even though Forex market participants were buying the currency earlier counting on exactly this result? Perhaps, traders were following the “buy the rumor, sell the fact” strategy. Or perhaps they turned attention to the state of the UK economy that may be hurt by the weakness of European economy.

GBP/USD slid from 1.6393 to 1.6340 as of 12:07 GMT today after jumping to 1.6524 earlier. GBP/JPY sank to 177.73 following the surge from 178.13 to 180.71.

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 Rallies After Fed Meeting, Keeps Gains

By , September 17, 2014 10:48 pm

A sheet of new hundred-dollar billsThe major event this week was the monetary policy meeting of the Federal Reserve that ended yesterday. While the Fed did not present clear timing for a start of monetary tightening and the tone of the statement was not much more hawkish than it has been before, the US dollar rallied nevertheless and continued to rise today.

The Fed trimmed its bond-purchasing program by another $ 10 billion and central bank’s chief Janet Yellen said at the press-conference after the gathering that quantitative easing will likely be ended next month. The statement kept the wording that suggested interest rates will remain low for a “considerable time”. This led to speculations that an interest rate hike will not happen as soon as dollar bulls were hoping for. The Fed also released its plans for eventual normalization of monetary policy, but Yellen said:

Let me underscore that our release of this information is not meant to convey any change in the stance of policy.

The dollar was not very strong ahead of the policy meeting, especially after a report revealed that consumer prices fell last month unexpectedly, but the currency rallied after the policy announcement. While the statement was not that positive for the greenback (though not negative either), there were two policy makers who thought that the economy fares well and the pledge to keep borrowing costs low for a prolonged time is unnecessary.

EUR/USD fell from 1.2865 to 1.2859 as of 5:05 GMT today after touching the low of 1.2835 — the weakest rate since July 2013. GBP/USD slipped from 1.6273 to 1.6258. USD/JPY rallied from 108.36 to 108.79 — the highest level since September 2008.

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 Reverses Gains as Current-Account Deficit Widens

By , September 16, 2014 7:37 pm

Many 100-dollar billsThe New Zealand dollar dipped, reversing yesterday’s rally, as a report released today revealed that the nation’s current account deficit widened last quarter. It was the first decline this week after two sessions of gains.

New Zealand’s current account balance demonstrated a gap of NZ$ 2.0 billion in the June quarter, up from NZ$ $ 1.4 billion in the March quarter. On an annual basis, the deficit shrank from 2.7 percent to 2.5 percent of gross domestic product.

The kiwi was rising together with its counterparts against the US dollar at the start of this week. Unlike some other commodity currencies, it was unable to maintain rally. The New Zealand dollar entered a downtrend at the end of July after the Reserve Bank of New Zealand announced a pause in the interest rate hike cycle, eroding support for the currency and making it vulnerable to any negative news.

NZD/USD dropped from 0.8200 to 0.8175, and NZD/JPY declined from 87.84 to 87.61 as of 2:36 GMT today. EUR/NZD advanced from 1.5798 to 1.5844.

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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Canadian Dollar Keeps Huge Gains

By , September 16, 2014 7:35 pm

Canadian coins on Canadian dollar billsThe Canadian dollar was little changed today following yesterday’s big jump. The rally was caused by both domestic fundamentals and developments on the global markets that were largely beneficial for the loonie.

Canadian manufacturing sales jumped 2.5 percent in July to a new record. Bank of Canada Governor Stephen Poloz voiced hope for revival of exports, particularly energy products. As an echo of such outlook, prices for crude oil, the major Canada’s export commodity, rose to the highest level in two weeks.

The Canadian currency was also riding higher on the back of the US dollar’s weakness. The greenback retreated as market participants started to speculate that the monetary policy statement, released today by the Federal Reserve, will not be especially hawkish, keeping the pledge to maintain interest rates low for a “considerable time”.

USD/CAD traded at about 1.0980 as of 1:58 GMT today after sinking from 1.1054 to 1.0968 at the previous trading session. EUR/CAD was near 1.4221 following the slump from 1.4304 to 1.4214. CAD/JPY traded at 97.67, close the highest level since January 7, at the current session after jumping from 96.94 to 97.65 yesterday.

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

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UK Pound Sees Slight Gains

By , September 11, 2014 6:15 am

Banknotes of 5, 10 and 20 poundsUK pound is seeing slight gains today, perhaps in correction for recent difficulties, which are the result of concerns over what’s next for Scotland. Even though the sterling is higher, the gains are precarious, as the Scottish independence vote injects uncertainty into the situation.

There are serious concerns about the UK pound and how it might function if Scotland does vote to break free. Recently, Bank of England Governor Mark Carney warned Scottish stakeholders about some of the difficulties presented in terms of currency.

The Scottish National Party, which advocates independence, insists that Scotland would continue to use the UK pound as its currency, but policymakers in England insist that they won’t allow. Worries that Scotland could degrade the sterling with excessive borrowing and other practices give politicians pause.

Also weighing on the pound, and limiting its gains today, is the fact that the union including Scotland has been in effect for more than 300 years. There are concerns about the economic impact on the rest of the United Kingdom, should Scotland leave. Additionally, there are worries that other countries might leave the union as well.

At 10:41 GMT EUR/GBP is down to 0.7955 from the open at 0.7968. GBP/USD is up to 1.6235 from the open at 1.6211. GBP/JPY is up to 173.9320 from the open at 173.2295.

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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US Dollar Index Holds to Gains

By , September 9, 2014 8:00 am

US dollar index is holding on to some of its earlier gains, even though the greenback isn’t as high against its major counterparts as earlier. Most of the dollar’s strength is coming from other currencies’ weaknesses right now.

The US dollar is trading mixed today, but the dollar index remains higher in general. Dollar index is getting a lot of help from the fact that the yen and the euro are both lower against the greenback today.

Yesterday, the San Francisco Federal Reserve published a report that indicates that interest rates might rise sooner than expected, and that drove gains for the greenback. Today, some of those gains are less dramatic, but the dollar still maintains its strength.

Other currencies are showing weakness today, and that is also helping the greenback maintain its advantage. With ECB officials and others praising recent rate cuts in the eurozone, and with the BOJ expected to keep the yen down, there is a lot of room for the greenback to grow.

At 10:46 GMT the US dollar index is up to 84.3440 from the open at 84.3300. EUR/USD is a little bit lower, dropping to 1.2894 from the open at 1.2895. GBP/USD is higher today, gaining to 1.6142 from the open at 1.6105. USD/JPY is gaining, rising to 106.1785 from the open at 106.0290.

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

Forex News

Euro Makes Small Gains

By , September 5, 2014 8:47 am

One euro coinEuro is eking out some small gains today, following yesterday’s huge drop against all major counterparts. Forex traders aren’t expecting much, though. The big shocker from the ECB is likely to result in general euro weakness for a while.

For months, Forex traders and other have been speculating about what the ECB would do to help boost the eurozone economy. Any move would, of course, weaken the euro, and Forex traders have been preparing for that. However, any move always seemed on the horizon.

Even after Mario Draghi‘s recent remarks in Jackson Hole, few analysts expected such direct action so soon. Yesterday’s rate cut, designed to penalize banks for holding the euro rather than making sure it gets into the economy, has transformed the euro into a funding currency.

It’s quite likely now that the euro will become part of carry trades — but on the other side. Euro is now cheap to borrow, and could be used to purchase higher-yielding assets. It looks as though the yen might have some serious competition.

For now, the euro is a little higher, but it’s still weak.

At 10:23 GMT EUR/USD is up to 1.2959 from the open at 1.2944. EUR/GBP is up to 0.7941 from the open at 0.7926. EUR/JPY is up to 136.2880 from the open at 136.2540.

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

Forex News

Dollar Holds onto Massive Gains

By , September 4, 2014 7:09 pm

Benjamin Franklin's portrait on a hundred-dollar billThe US dollar demonstrated huge gains today, mostly with help from the European Central Bank policy decision, but also due to the string of positive domestic economic indicators that supported the outlook for monetary tightening from the Federal Reserve.

The major driver for the Forex market today was the ECB decision. While all major currencies rallied against the euro, the dollar profited the most from the resulting risk aversion.

News from the USA itself was also supportive for the greenback. The majority of economic reports were better than analysts’ expectations, most notably the services Purchasing Managers’ Index of Institute for Supply Management that demonstrated an increase from 58.7 percent to 59.6 percent last month instead of falling to 57.3 percent as was forecast. The exception among better-than-expected indicators was the employment data that demonstrated unexpected slowdown of employment growth. Nonfarm payrolls will be released tomorrow, and they may add to tightening expectations in case they come out good enough.

EUR/USD tumbled from 1.3150 to 1.2927 as of 23:45 GMT today, trading near the lowest level since July 10. GBP/USD dipped from 1.6461 to 1.6291 — the lowest rate since February 6. USD/JPY soared from 104.79 to 105.65 — the strongest level since October 2008.

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

Forex News

Dollar Pulls Back After Initial Gains

By , September 3, 2014 5:05 am

The all-seeing eye on top of pyramid on one-dollar billUS dollar index is lower, and greenback is down against its counterparts, following earlier gains. After surging a bit earlier in the session, the US dollar is now losing ground, likely due in part to profit taking.

Date out of the United States continues to tell the tale of an economic recovery. The latest manufacturing data showed activity at a high not seen for more than three years. Additionally, construction spending data for July showed an increase. This news helped the US dollar gain ground early on.

Dollar gained especially against the yen, which dropped with help from the hint that the country’s investment portfolio could shake things up a bit, including more foreign currencies.

Greenback hasn’t remained on top, though. The surge in the dollar index has since turned around and the greenback is lower against its counterparts right now. The earlier gains might have been overdone, and there is also probably a bit of profit taking happening as well.

At 10:22 GMT the US dollar index is down to 82.8990 from the open at 82.9940. EUR/USD has moved up to 1.3145 from the open at 1.3133. GBP/USD is up to 1.6477 from the open at 1.6470. USD/JPY is down to 105.0635 from the open at 105.0915.

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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Dollar Gains on Domestic Data, Loses Ground vs. Yen

By , August 28, 2014 6:29 pm

The US dollar rose against some of its major peers, including the euro, with help of positive domestic data. It looks like new from Ukraine limited gains somewhat and actually send the greenback down versus the Japanese yen and even the Great Britain pound.

Economic indicators from the United States were good, particularly the gross domestic product data and the housing report. GDP expanded 4.2 percent according the preliminary data, compared to 4.0 percent in the previous estimate. Pending home sales surged 3.3 percent to the highest level since August 2013.

The dollar did not perform particularly well despite the supportive indicators, perhaps due to escalation of the conflict between Russia and Ukraine. While usually the greenback profits from geopolitical uncertainty, it looks like trader think that the yen is a safe option now.

EUR/USD fell from 1.3192 to 1.3184 as of 23:19 GMT today. GBP/USD rose a little from 1.6575 to 1.6590. USD/JPY declined from 103.87 to 103.71, reaching the low of 103.55 intraday.

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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