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Posts tagged: Speculation

QE Speculation Weighs on EUR/USD

By , September 2, 2014 4:34 am

A fan of 500-euro billsEuro is mixed today, dropping against the US dollar, even as it gains against the UK pound and Japanese yen. One of the reasons that the euro is struggling against the dollar is the speculation that the ECB will have to implement quantitative easing.

So far, efforts by the ECB to stimulate the (once again) flagging eurozone economy are falling short. The central bank has used negative deposit rates, and other methods to stimulate the economy, to no avail. Efforts to weaken the euro to help encourage the economy haven’t been all that successful, either.

As a result, some speculate that policymakers are ready to do something more drastic. Mario Draghi has said for months that the ECB is willing to do what it takes, and some think that the eurozone is at the point where “what it takes” happens to be quantitative easing.

Many are watching for this week’s ECB announcement to see if QE is on the table in the near future. With the speculation, the 18-nation currency is losing ground to the dollar.

At 10:30 GMT EUR/USD is down to 1.3114 from the open at 1.3129. EUR/GBP is higher, though, gaining to 0.7934 form the open at 0.7905. EUR/JPY is up to 137.6535 from the open at 136.9970.

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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US Dollar Continues to Gain on Fed Speculation

By , July 30, 2014 9:42 am

US dollar banknotes and coinsUS dollar is higher again today, strengthening as economic data points to improvement, and on speculation that the Fed will take steps to tighten monetary policy sooner than expected.

As the Fed concludes its two-day policy meeting today, many Forex traders and others are looking for clues that monetary policy will be tightened. Expectations for an improved labor market are high, and the latest consumer confidence readings and consumer spending indications are that things are getting better in the United States. GDP is also on the rise, and that is helping matters for the US dollar as well.

With these improvements, many expect that Fed Chair Janet Yellen will hint at higher interest rates sooner rather than later, and that is lending strength to the greenback against its major counterparts, particularly the euro. Policy divergence is the main driver of US dollar strength today, and that is unlikely to change for some time — at least until other economies start to improve as well.

At 14:07 GMT the US dollar index is higher, gaining to 81.4580 from the open at 81.2010. EUR/USD is down to 1.3378 from the open at 1.3409. GBP/USD is also lower, moving down to 1.6904 from the open at 1.6944. USD/JPY is higher, gaining to 102.6220 from the open at 102.1180.

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 Drops with Speculation on Next Week’s ECB Meeting

By , February 27, 2014 8:11 am

A fan of 500-euro billsEurozone lending continues to be a problem, and that has some thinking that the ECB will have no choice but to ease monetary policy further when they meet next week. It’s also not helping that China is slowing down, and that it appears that Germany isn’t going to be able to kickstart the economy all on its own.

The latest numbers on lending in the eurozone paint a picture of a credit situation that is still very clogged. Lending to firms and households in the 18-nation currency region dropped in January, even though the European Central Bank has been taking steps to increase liquidity. The latest inflation figure also comes in at right around 0.8 per cent, which is well below the ECB target of 2 per cent.

With all of this disappointment in how things are going with the eurozone economy, there is a great deal of speculation that the ECB will have to take more steps to stimulate the economy at its next meeting. That has the euro weakening. Also putting pressure on the euro is general risk aversion, brought on by the slowdown in China.

At 13:57 GMT EUR/USD is down to 1.3673 from the open at 1.3686. EUR/GBP is down to 0.8204 from the open at 0.8209. EUR/JPY is down to 139.5555 from the open at 140.0915.

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

Forex News

US Dollar Drops, Even With Taper Speculation

By , December 16, 2013 7:47 am

Packs of US 100-dollar billsThe US dollar is heading lower today, dropping even though there is speculation that the Federal Reserve will announce the beginning of its taper this week. The thought of low interest rates and the fact that the US economy might not be quite ready for taper are weighing on the greenback right now.

Members of the FOMC at the Federal Reserve plan to have their last two-day meeting of the year this week. Many expect that the beginning of the taper will be announced at this time. However, instead of prompting the gains by the US dollar, the news has been met with a lower greenback.

Part of the reason for continued dollar weakness, even with this speculation, is the expectation that interest rates will remain between 0 and 0.25 per cent through next year. Additionally, there are some concerns that the US economy isn’t recovered quite enough to handle the taper. Dollar weakness is seen going forward, and that is impacting the greenback today.

At 14:14 GMT the US dollar index is down to 80.0520 from the open at 80.1980. EUR/USD is up to 1.3771 from the open at 1.3732. GBP/USD is also higher, moving up to 1.6312 from the open at 1.6293. USD/JPY is lower, dropping to 103.0625 from the open at 103.2850.

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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US Dollar Gains Ground on Boost from Fed Speculation

By , December 2, 2013 9:05 am

Benjamin Franklin's portrait on a hundred-dollar billOnce again, speculation about what’s next for the Federal Reserve is driving the US dollar in Forex trading. This time, it’s speculation that the Fed could actually begin tapering its asset purchases by the end of the year.

US dollar is getting a boost today, heading higher against most of its major counterparts as speculation begins anew that the Federal Reserve could decide to start tapering its asset purchase program by the end of the year.

Indeed, after a round of reasonably positive economic data, there are thoughts that the Federal Reserve will see at least some reason to start stepping down its asset purchases. Even if the Fed does begin its taper by the end of the year, the reality is that the Fed probably won’t take drastic steps, and the step down won’t be that big. Forex traders are also speculating on what happens when Janet Yellen takes over as Chair.

However, just the thought that a taper might be coming is enough to help boost the US dollar against other currencies today. It’s not a big boost, but it’s enough for now.

At 15:29 GMT the US dollar index is up to 80.8930 from the open at 80.6390. EUR/USD is down to 1.3548 from the open at 1.3581. GBP/USD is down to 1.6370 from the open at 1.6372. USD/JPY is up to 1022.9200 from the open at 102.5145.

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

Forex News

US Dollar Slightly Higher on Speculation of “Octaper”

By , September 20, 2013 8:43 am

Ulysses S. Grant on US 50-dollar billUS dollar is a little bit higher today. Some traders are looking at the recent and positive US data, and others are considering the Federal Reserves somewhat surprising decision earlier this week to put off the taper. But what seems to be offering the most help to the US dollar right now is the possibility of the Fed beginning its asset purchase program in October.

Even though the Federal Reserve decided not to begin tapering its asset purchase program at its meeting earlier this week, recent data suggests that policymakers can’t hold off for too much longer. In fact, there is speculation that October could be the month.

This speculation is being driven, in large part, by comments from James Bullard, the president of the St. Louis Federal Reserve. Bullard said that the decision to put off tapering was a close one, and that it’s possible that between now and the October meeting, there might be more evidence of an improving US economy.

The information has resulted in small gains across the board for the greenback.

At 13:48 GMT the dollar index is up to 80.4450 from the open at 80.3530. EUR/USD is down to 1.3522 from the open at 1.3530. GBP/USD is down to 1.6005 from the open at 1.6033. USD/JPY is up to 99.5600 from the open at 99.4570.

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

Forex News

US Dollar Lower on Speculation that QE Will Continue

By , June 19, 2013 9:23 am

Benjamin Franklin's portrait on a hundred-dollar billGreenback is lower today, struggling as Forex traders await the outcome of the two-day Federal Reserve policy meeting underway right now. Right now, there is speculation that quantitative easing will continue, and that is undermining the US dollar.

One of the questions that many investors, Forex traders, and even “regular” folks want answered is this: When does the Federal Reserve plan to taper off its asset purchase program?

There are hopes that Ben Bernanke will have something to say about the situation later today when he emerges from a two-day Federal Open Market Committee meeting. Speculation has been running rampant about whether the asset purchase program will be ended sooner, or whether it will be ended later.

Right now, bets are leaning toward the idea that the quantitative easing program will last a little bit longer. The result of this speculation is a lower dollar today. QE debases a currency in the hopes that it will kickstart the economy. With the US economic recovery flagging a bit, there are some that think the asset purchase program needs to go a little bit longer. And that means a potentially weaker dollar.

At 14:23 GMT EUR/USD is up to 1.3393 from the open at 1.3392. GBP/USD is up to 1.5664 from the open at 1.5644. USD/JPY is down to 95.0800 from the open at 95.3265.

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

Forex News

Loonie Down for Third Day on Fed Speculation

By , June 18, 2013 8:55 am

A heap of Canadian dollar billsCanadian dollar is declining against the US dollar for the third day in a row as the Federal Reserve begins its two-day meeting. The expectation that the Fed could begin reducing its asset purchases is lending strength to the greenback against the loonie.

Canadian dollar did get a bit of a boost earlier in anticipation of a speech expected soon from Stephen Poloz, the new governor of the Bank of Canada. However, loonie is losing ground now as Forex traders consider the impact of an improving US economy.

If the Federal Reserve makes an announcement about tapering off its asset purchases, reducing the stimulus efforts because the US economy is on the road to recovery, that means a stronger greenback — and a lower loonie. Right now, Forex traders are considering that possibility.

Traders will also be interested to see what Poloz says, and to gauge what might be next in terms of Bank of Canada policy. The Canadian economy has been flagging a bit, and there is still a housing bubble to worry about. As a result, the loonie’s strength could be waning.

At 14:01 GMT USD/CAD is up to 1.0206 from the open at 1.0185. EUR/CAD is up to 1.3364 from the open at 1.3615. GBP/CAD is down to 1.5931 from the open at 1.6014.

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

Forex News

Speculation Mounts Over Maliki’s Health

By , May 16, 2013 1:23 am

Speculation Mounts Over Maliki’s Health

By Ali Abel Sadah for Al-Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

On May 10, 2013, conflicting news reports about Iraqi Prime Minister Nouri al-Maliki suffering from a health problem were rampant in Baghdad, while speculation about what kind differed.

On that day, the Islamic Supreme Council was holding a memorial service on the anniversary of the martyrdom of its former leader, the late Mohammed Baqir al-Hakim. Maliki was supposed to attend the event and deliver a speech.

Hakim was a Shiite leader who stood out in 2003 as one of the most prominent leaders in the opposition to Saddam Hussein’s regime. In 2004, as he emerged from the gold-domed shrine of Imam Ali Ibn Abi Taleb in Najaf, where he was delivering a speech before his supporters, a massive car bomb exploded.

Iraqi leaders made a point of attending the memorial ceremony and delivering emotive speeches to commemorate Hakim. Maliki, however, was absent because of illness. He sent Ali al-Adib, minister of education and prominent leading member of the Dawa Party on his behalf.

At the podium during the ceremony, which was attended by Al-Monitor, Adib delivered a speech attacking the electoral law, dubbed Saint Lego, saying that “it does not achieve compatibility between blocs.”

The electoral system that was amended last year by the Iraqi parliament has helped minor blocs to achieve electoral gains. The Supreme Council, in addition, benefited from this system during the last provincial elections of April 2013.

Iraq Business News

Yen Gains for Second Day on Speculation Drop Was Overdone

By , January 15, 2013 8:30 pm

Scattered 10,000-yen notesThe Japanese yen gained yesterday and extended its rally today as some Japan’s politicians were speculating that the recent huge drop of the currency was overdone. The yen was also strong on negative fundamental reports from the United States and Europe.

Japanese Economics Minister Akira Amari warned that the weakness of the yen may be not entirely positive for Japan’s economy. Amari said yesterday:

If the yen excessively weakens, this would cause a spike in import prices. It would be a benefit for exports, but would have harmful effects on people’s livelihoods.

Such comments spurred talks that the depreciation of the Japanese currency will be limited.

Some negative data added risk premium to the yen. The German economy shrank 0.5 percent in the fourth quarter of 2012 from the previous quarter. The Empire State Manufacturing Index was almost unchanged at -7.8 this month, still indicating a decline of the sector, while analysts have anticipated an improvement to 1.9.

USD/JPY dropped from 88.78 to 88.33 as of 2:57 GMT today and its intraday low was at 88.04. EUR/JPY declined from 118.10 to 117.34 and GBP/JPY went down from 142.61 to 141.87.

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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