The Chilean currency had a weakening performance today, as the copper, one of the main exports of the South American nation declined, damping demand for the peso.
Chile is the world’s main copper producer, and today, most of metallic commodities dropped, as deposits are rising, causing a less intense demand to correct the price of Chile’s main metal export. Due to copper’s performance, the Chilean currency traded in a one-week low versus the U.S. dollar.
USD/CLP traded at 533.15 as of 18:55 GMT but reached 536.87 hours later, the lowest price in seven days.
If you want to comment on the Chilean peso’s recent action or have any questions regarding this currency, please, feel free to reply below.
South African Rand Climbs on Corporative Fusion Speculations
The South African Rand climbed sharply today as a stake in one of the main South African mobile operators may be purchased by an Indian group, injecting money in the country and raising confidence for the rand outlook.
Bharti Airtel Ltd. is the main mobile-phone operator in India, and would be interested in purchasing a stake in MTN, the leading mobile telecommunications company in Africa, Headquartered in the rand’s nation, helping the South African currency to reach an eleven-month high versus the U.S. dollar, since, if this fusion will be confirmed, investments of over $7 billion are expected to be done in the country’s telecommunications industry.
USD/ZAR traded at 7.6645 as of 19:10 GMT from a opening rate today of 7.7365.
If you want to comment on the South African rand’s recent action or have any questions regarding this currency, please, feel free to reply below.
Bharti Airtel Ltd. is the main mobile-phone operator in India, and would be interested in purchasing a stake in MTN, the leading mobile telecommunications company in Africa, Headquartered in the rand’s nation, helping the South African currency to reach an eleven-month high versus the U.S. dollar, since, if this fusion will be confirmed, investments of over $7 billion are expected to be done in the country’s telecommunications industry.
USD/ZAR traded at 7.6645 as of 19:10 GMT from a opening rate today of 7.7365.
If you want to comment on the South African rand’s recent action or have any questions regarding this currency, please, feel free to reply below.
Asian Market Update
Korea Q2 GDP leaps to 5-year high, Samsung and Hynix earnings top forecasts; Asia equities shrug weak Microsoft, Amazon top line
Asian equity markets are looking to cap a strong week of gains with a final Friday rally, as bullish bias overcame soft revenue reports from Microsoft, Amazon and American Express. All three US giants shed over 5% after reporting afterhours, while front-month S&Ps traded about 0.5% lower below $965 on expectations of profit-taking. Asian bourses are undeterred however, with basic materials and tech leading the chase of the strong market hours session on Wall St. With just 90 minutes to go, Nikkei225 and S&P/ASX are both up about 1% and Korea's Kospi is up 0.4% above 1,500 despite solid economic and corporate results.
South Korea's Q2 Preliminary GDP offered more evidence of the economy on the mend, coming in at 2.3% on q/q basis - the highest rate of growth since Q4 of 2003. The figure also topped 2.2% consensus estimates, marking the primary economic event in an otherwise data-light session. Recall Korea has narrowly dodged a recession in Q1 with a final 0.1% print, helped by one of the most generous stimulus packages as measured on a relative to historic GDP levels basis. Once again however, local officials remained remarkably cautious following the strong Q2 growth data. Bank of Korea's Kim warned that domestic demand could still slow because of ongoing challenges presented by the slumping jobs market. In turn, the local finance ministry suggested that despite the data, it was not yet appropriate to consider an exit strategy from the fiscal stimulus.
In Korea's corporate sector, chipmakers Samsung and Hynix bolstered the case for tech leading the regional export economies out of recession. Hynix reported Q2 net loss of KRW50.7B - more than half below the loss of KRW108.8B expected - while sales topped estimates of KRWT1.54e at KRW1.7T. Hynix saw its NAND memory prices rise 23% q/q and shipments improve 40% for the reporting quarter. Looking forward, Hynix saw more favorable business conditions in the second half with a 20% DRAM price increase even as shipments were only forecasted to rise in the single digits. Samsung Q2 results appeared even more impressive, with net profit rising to KRW2.3T v KRW1.7T expected and sales coming in at KRW21T v KRW20T expected. Recall Q1 Net profit was KRW619B and Sales were seen at KRW18.6T. Specifically, Q2 chip sales were KRW5.05T v KRW4.5T expected and LCD sales came in at KRW4.6T v KRW4.5T expected. Looking to Q3, Samsung expected DRAM prices to continue rising in low teens, TV panel prices to rise mid-single digits, and NAND prices to remain flat. Despite the results, the company did say it would stay cautious on the remainder of 2009 amid potential headwinds from rising won and competition.
Outside Korea, Japan's finance minister Yosano cheered strong exports figures released in the prior session. Among notable Nikkei names, Fujitsu picked up 6% after a 1-yr price target upgrade from Goldman Sachs, and Advantest rallied 5% after Japanese press speculated the company's chip-testing equipment topped ¥10B in the current quarter. In Sydney, Australia's trade minister warned that trade relations with China were threatened by ongoing detainment of Rio Tinto workers. Separately, a US think tank speculated that Rio Tinto's Hu is most likely to be deported as persona non grata rather than stand trial. Other regional officials continued to down play Australia's rift with China however. According to local press, West Australian Premier Colin Barnett assured Chinalco president Xiong Weiping of special attention extended to Chinese investors, with the feature also noting that despite its failed bid for Rio Tinto, Chinalco is still looking to invest in Australia's mining resources. In Aussie equities, Woodside Petroleum rallied 1.5% on more crude strength even though Q2 sales came in at A$938M, shy of A$1.09B in the prior quarter.
In currencies, USD consolidated the sharp gains seen against European and commodity majors in late US hours. EUR/USD traded between 1.4140-80, down from 1.4280 intraday peak. GBP/USD remained just below 1.65 and USD/CHD traded around 1.0740, while in commodity FX, USD/CAD pared some of the post-BOC outlook drop, retesting the upside of 1.09. AUD/USD bounced higher from 0.8110 to 0.8150, and NZD/USD was in a thin 0.6520-60 range. Japanese Yen traded slightly firmer, with uSD/JPY falling to 94.60 from 95.20 session high.
Crude oil prices are lower, but have moved off of their worst levels. Oil prices are tracking the weakness in S&P 500 Futures, following the results from technology heavyweight Microsoft. Spot gold prices are little changed and trading around $950/oz, as the EUR/USD currency pair has been range bound for most of the session.
Asian equity markets are looking to cap a strong week of gains with a final Friday rally, as bullish bias overcame soft revenue reports from Microsoft, Amazon and American Express. All three US giants shed over 5% after reporting afterhours, while front-month S&Ps traded about 0.5% lower below $965 on expectations of profit-taking. Asian bourses are undeterred however, with basic materials and tech leading the chase of the strong market hours session on Wall St. With just 90 minutes to go, Nikkei225 and S&P/ASX are both up about 1% and Korea's Kospi is up 0.4% above 1,500 despite solid economic and corporate results.
South Korea's Q2 Preliminary GDP offered more evidence of the economy on the mend, coming in at 2.3% on q/q basis - the highest rate of growth since Q4 of 2003. The figure also topped 2.2% consensus estimates, marking the primary economic event in an otherwise data-light session. Recall Korea has narrowly dodged a recession in Q1 with a final 0.1% print, helped by one of the most generous stimulus packages as measured on a relative to historic GDP levels basis. Once again however, local officials remained remarkably cautious following the strong Q2 growth data. Bank of Korea's Kim warned that domestic demand could still slow because of ongoing challenges presented by the slumping jobs market. In turn, the local finance ministry suggested that despite the data, it was not yet appropriate to consider an exit strategy from the fiscal stimulus.
In Korea's corporate sector, chipmakers Samsung and Hynix bolstered the case for tech leading the regional export economies out of recession. Hynix reported Q2 net loss of KRW50.7B - more than half below the loss of KRW108.8B expected - while sales topped estimates of KRWT1.54e at KRW1.7T. Hynix saw its NAND memory prices rise 23% q/q and shipments improve 40% for the reporting quarter. Looking forward, Hynix saw more favorable business conditions in the second half with a 20% DRAM price increase even as shipments were only forecasted to rise in the single digits. Samsung Q2 results appeared even more impressive, with net profit rising to KRW2.3T v KRW1.7T expected and sales coming in at KRW21T v KRW20T expected. Recall Q1 Net profit was KRW619B and Sales were seen at KRW18.6T. Specifically, Q2 chip sales were KRW5.05T v KRW4.5T expected and LCD sales came in at KRW4.6T v KRW4.5T expected. Looking to Q3, Samsung expected DRAM prices to continue rising in low teens, TV panel prices to rise mid-single digits, and NAND prices to remain flat. Despite the results, the company did say it would stay cautious on the remainder of 2009 amid potential headwinds from rising won and competition.
Outside Korea, Japan's finance minister Yosano cheered strong exports figures released in the prior session. Among notable Nikkei names, Fujitsu picked up 6% after a 1-yr price target upgrade from Goldman Sachs, and Advantest rallied 5% after Japanese press speculated the company's chip-testing equipment topped ¥10B in the current quarter. In Sydney, Australia's trade minister warned that trade relations with China were threatened by ongoing detainment of Rio Tinto workers. Separately, a US think tank speculated that Rio Tinto's Hu is most likely to be deported as persona non grata rather than stand trial. Other regional officials continued to down play Australia's rift with China however. According to local press, West Australian Premier Colin Barnett assured Chinalco president Xiong Weiping of special attention extended to Chinese investors, with the feature also noting that despite its failed bid for Rio Tinto, Chinalco is still looking to invest in Australia's mining resources. In Aussie equities, Woodside Petroleum rallied 1.5% on more crude strength even though Q2 sales came in at A$938M, shy of A$1.09B in the prior quarter.
In currencies, USD consolidated the sharp gains seen against European and commodity majors in late US hours. EUR/USD traded between 1.4140-80, down from 1.4280 intraday peak. GBP/USD remained just below 1.65 and USD/CHD traded around 1.0740, while in commodity FX, USD/CAD pared some of the post-BOC outlook drop, retesting the upside of 1.09. AUD/USD bounced higher from 0.8110 to 0.8150, and NZD/USD was in a thin 0.6520-60 range. Japanese Yen traded slightly firmer, with uSD/JPY falling to 94.60 from 95.20 session high.
Crude oil prices are lower, but have moved off of their worst levels. Oil prices are tracking the weakness in S&P 500 Futures, following the results from technology heavyweight Microsoft. Spot gold prices are little changed and trading around $950/oz, as the EUR/USD currency pair has been range bound for most of the session.
Dollar Drops despite Positive Data from U.S
The Dollar’s downtrend continued yesterday as the USD dropped against all the major currencies. The Dollar’s most distinct bearish trend was marked against the GBP, as the pair was traded as high as the 1.6620 level.
Euro fails above $1.40
After a roughly two week stint flirting mostly above the $1.40 level, the Euro has fallen back to a current rate at $1.3834 (June 16). The Euro has steadily dropped from a peak over $1.43 on June 2nd. It has operated on a downward progression from the $1.40 level for the last three days.
US dollar struggles to gain ground on yen
As part of its overall weakness, the US dollar is having a difficult time piercing the 100 yen level. After topping the century mark in early April, and then again in early may, the greenback has steadily fallen back from the level. In mid-May, one dollar was worth 94 yen. After a modest bounce, in the last couple days, the value of a dollar is currently (Jun 19) at 96.57 yen.
TODAY'S FOREX
Eur/usd - 1.3952 ... European Central Bank Governing Council member Axel Weber said there was no need at present for the central bank to bypass the banking channel n buy up corporate bonds and indicated there was no credit crunch in Germany at the moment. Although the single currency weakened fm 1.4051 to as low as 1.3928, downside was limited somewhat as bids by European n sovereign names remain at 1.3910/20 with some stops seen below 1.3900 but more buying interest is located at 1.3880/85. On the upside, offers are reported at 1.4000/05 n 1.4040/50.
Usd/jpy - 94.88 ... The greenback weakened on renewed cross buying in jpy on risk aversion due the selloff in U.S. equities (Dow Jones index fell by 102 points to 8322). Offers are noted at 95.10/15 n 95.40/45 with stops are tipped at 95.50. On the downside bids are reported at 94.65/70 with stops are located below 94.50.
Eur/usd - 1.3957 ... Although the single currency retreated fm 1.4051 on cross trading, buying interest by European n sovereign names is reported at 1.3940/50 n further out at 1.3905/10 with stops only emerging below 1.3870/75. Trading volume is relatively thin due to current lack of directional movements as investors are focusing on the weekend's G8 summit. On the upside, some offers are tipped at 1.4000/10 n 1.4040/50 with some stops seen abv the latter level.
Gbp/usd - 1.6174 ... The British pound rebounded briefly to 1.6260 on initial firmness in European equities, however, cable found renewed selling interest there n fell again in U.S. morning as both European n U.S. equities turned into negative territories. Offers are now noted at 1.6200/10, 1.6230 n 1.6250/60 with stops building up abv 1.6300. On the downside, bids are reported at 1.6145/50 with stops seen below 1.6090/00.
Eur/usd - 1.3979 ... Despite euro's brief drop to 1.3903, subsequent rebound on short-covering in part due to the bounce in crude oil price n the firmness in global stock markets (European equities rose by more than 1% n Dow Jones futures strengthened by 19 points) lifted the single currency. The release of much stronger-than-expected German industrial production (rose by 4.4% versus the forecast of 0.5%) gave an extra boost to the euro. Bids by European n sovereign names are noted at 1.3940 n 1.3910 with stops seen below 1.3900. On the upside, offers are located at 1.3990/95 with some stops seen abv 1.4000.
Usd/jpy - 94.88 ... The greenback weakened on renewed cross buying in jpy on risk aversion due the selloff in U.S. equities (Dow Jones index fell by 102 points to 8322). Offers are noted at 95.10/15 n 95.40/45 with stops are tipped at 95.50. On the downside bids are reported at 94.65/70 with stops are located below 94.50.
Eur/usd - 1.3957 ... Although the single currency retreated fm 1.4051 on cross trading, buying interest by European n sovereign names is reported at 1.3940/50 n further out at 1.3905/10 with stops only emerging below 1.3870/75. Trading volume is relatively thin due to current lack of directional movements as investors are focusing on the weekend's G8 summit. On the upside, some offers are tipped at 1.4000/10 n 1.4040/50 with some stops seen abv the latter level.
Gbp/usd - 1.6174 ... The British pound rebounded briefly to 1.6260 on initial firmness in European equities, however, cable found renewed selling interest there n fell again in U.S. morning as both European n U.S. equities turned into negative territories. Offers are now noted at 1.6200/10, 1.6230 n 1.6250/60 with stops building up abv 1.6300. On the downside, bids are reported at 1.6145/50 with stops seen below 1.6090/00.
Eur/usd - 1.3979 ... Despite euro's brief drop to 1.3903, subsequent rebound on short-covering in part due to the bounce in crude oil price n the firmness in global stock markets (European equities rose by more than 1% n Dow Jones futures strengthened by 19 points) lifted the single currency. The release of much stronger-than-expected German industrial production (rose by 4.4% versus the forecast of 0.5%) gave an extra boost to the euro. Bids by European n sovereign names are noted at 1.3940 n 1.3910 with stops seen below 1.3900. On the upside, offers are located at 1.3990/95 with some stops seen abv 1.4000.
Gbp/usd - 1.6172 ... Despite cable's brief drop to 1.6149 after the release of much weaker-than-expected U.K. industrial n manufacturing production data, short-covering lifted the pair n bids are now noted at 1.6150, 1.6120 n 1.6100 with stops building up below 1.6090. On the upside, offers are reported at 1.6240 n 1.6290/95 with stops placed abv 1.6300...
Usd/jpy - 95.34...Dlr has been relatively quiet in Asia with traders citing a lack of fresh news n also thin volume ahead of the G-8 meeting which commences tomorrow. Offers remain at 95.50 with stops placed abv there n also abv 95.70 (more selling interest fm exporters is tipped at 96.00). Bids are lined up at 95.00 n also further out at 94.50 (sizeable). The Nikkei-225 has fallen back into negative territory following a brief foray abv the 9700 lvl (the index is currently down 27 points at 9653)...
Aud/usd - 0.7968...Aussie dipped briefly to 0.7947/50 after RBA left interest rates unchanged at 3.00% as anticipated. The central bank's accompanying statement said the outlook for inflation allows scope for further easing n that economic conditions in Australia are not as weak as expected a few months ago. Bids are reported at 0.7850/60 while a mixture of offers n stops is lined up at 0.8000/10...
Gbp/usd - 1.6257...Cable rebounded strongly fm y'day's low at 1.6095 with some traders citing option-defensive buying around 1.6100 (sizeable stops are building up below the 1.6000 lvl) n although sterling has retreated fm Australian morning high at 1.6298, bids are noted at 1.6230/40 n also 1.6200 (fair-size). On the upside, offers are likely to emerge at 1.6300 with larger orders (some are fm European names) tipped at 1.6340/50...
Eur/usd - 1.3954...Although euro fell to a 2-week low y'day at 1.3876 on risk aversion (latest comments fm European officials have centred on the risks to the global economic recovery), the single currency rebounded in N.Y. with investors encouraged by stronger-than-expected ISM (non-manufacturing) data. Bids are seen nearby at 1.3940/50 n buying interest is also tipped at 1.3900. Stops are building up abv 1.4000 with offers reported at 1.4050/60...
Usd/jpy - 95.30...Dlr retreated fm 95.42 to 95.11 in Australia b4 rebounding on buying fm Japanese investors n further consolidation abv y'day's low at 94.66 is likely in Asia. Bids fm importers are lined up at 95.00/10 n also further out at 94.50 while on the upside, offers at 95.50 are in focus with stops placed abv 95.70. More selling interest (fm exporters) are reported in the region of 96.00-96.20. Nikkei-225 n Dow futures are currently trading in negative territory.
- Tuesday, July 7, 2009
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USD Advances as Equities Tumble
7/7/2009 1:00 PM: EUR/$..1.3948 $/JPY..94.95 GBP/$..1.6146 $/CHF..1.0863 AUD/$..0.7959 $/CAD..1.1630
The dollar advanced against the pound and the euro, rising to session highs by afternoon trading amid further losses in the US equity bourses. The Dow Jones, Nasdaq and S&P 500 were all lower by more than 1.2% as questions over the prospects for a global economic recovery continue to linger. Crude oil extended its losses and remaining mired beneath the $70 per barrel level, tumbling to $62.38 per barrel.
Safe haven flows continued to dictate direction in the foreign exchange market with the Australian dollar, euro and sterling tracking equities lower. Risk aversion will be the key driver of forex flows over the coming weeks as traders digest incoming economic reports to gauge the prospects for an economic rebound.
The dollar advanced against the pound and the euro, rising to session highs by afternoon trading amid further losses in the US equity bourses. The Dow Jones, Nasdaq and S&P 500 were all lower by more than 1.2% as questions over the prospects for a global economic recovery continue to linger. Crude oil extended its losses and remaining mired beneath the $70 per barrel level, tumbling to $62.38 per barrel.
Safe haven flows continued to dictate direction in the foreign exchange market with the Australian dollar, euro and sterling tracking equities lower. Risk aversion will be the key driver of forex flows over the coming weeks as traders digest incoming economic reports to gauge the prospects for an economic rebound.
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