FOREX NEWS-Dollar falls on speculation of aggressive Fed cut
Tue Dec 4, 2007 4:22pm EST
(Adds details, updates prices)
By Lucia Mutikani
NEW YORK, Dec 4 (Reuters) - The dollar fell against the yen and the euro on Tuesday on speculation the Federal Reserve could cut interest rates aggressively next week to calm market concerns over the credit turmoil and tightening liquidity.
This follows a surprise interest rate cut by the Bank of Canada, which heightened expectations the Bank of England could also ease monetary policy this week and backed the view that central banks were becoming more worried by the credit crisis.
The BoC cited expectations of more global financial market difficulties linked to the U.S. subprime mortgage market rout for its decision to cut its overnight lending rate 25 basis points to 4.25 percent.
"We have seen the U.S. dollar sell off against the euro, yen and the Swiss franc as expectations for a 50 basis points cut at the December 11 FOMC meeting have increased," said David Powell, currency strategist at IDEAglobal in New York.
Interest rate futures are pricing in a roughly 50 percent implied chance of a half percentage point Fed cut, while a 25 basis points cut to 4.25 percent has been fully factored in.
An aggressive cut would not only further reduce the appeal of dollar-denominated assets but leave the market more worried than it already was about the U.S economy, analysts said.
Late in New York, the euro was up 0.7 percent at $1.4765 <EUR=>. The dollar fell 0.7 percent to 109.73 yen <JPY=> and dropped 0.9 percent to 1.1160 against the Swiss franc <CHF=>, with investors reducing exposure to risk as liquidity tightens ahead of the year-end.
"Risk appetite remains very cautious at the moment. There isn't a really strong compelling reason for investors to hold too much risk right now going into year-end, when liquidity typically tightens up," said Mike Moran, senior currency strategist at Standard Chartered Bank in New York.
The surprise BoC decision sent the Canadian dollar <CAD=> tumbling. The U.S. dollar jumped to a near 11-week high of C$1.0152 and was last at C$1.0122, up 1.2 percent on the day.
The high-yielding Australian dollar was knocked lower ahead of a verdict on interest rates by that country's central bank on Wednesday. It fell 0.8 percent to US$0.8732 <AUD=>.
Analysts do not expect Australia's monetary authorities to follow their Canadian counterparts.
"While it is likely too risky for the RBA (Australia) to follow suit, the BoE and ECB (European Central Bank) could just as easily surprise markets on Thursday with 25 basis points rate cuts of their own," said Michael Woolfolk, senior currency strategist at Bank of New York.
The Bank of England's rate decision is due on Thursday. Sterling <GBP=> traded down 0.3 percent at $2.0587.
"We still believe the Fed will go 25 rather than 50, clearly because 50 basis points might get the market even more concerned than it actually is on the downside risks to growth," said Standard Chartered's Moran.
Liquidity in some credit markets is now at its tightest in years, as banks' risk aversion and reluctance to lend are exacerbated by a seasonal lack of liquidity.
One-month interbank lending rates in the euro (Euribor) rose to near seven-year highs on Tuesday, while one-month sterling London interbank rates (Libor) fixed at a 9-year high. (Editing by James Dalgleish)
Reuters journalists are subject to the Reuters Editorial Handbook which requires fair presentation and disclosure of relevant interests.
Forex Trading News
Daily Forex Market News Forex news reports can be found on the forex research
headlines page below. Here you will find real-time forex market news reports
provided by respected contributors of currency trading information. Daily forex
market news, weekly forex research and monthly forex news features can be found
Forex News Real-time forex market news reports and features providing
other currency trading information can be accessed by clicking on any of the
headlines below. At the top of the forex blog page you will find the latest
forex trading information. Scroll down the page if you are looking for less
recent currency trading information. Scroll to the bottom of fx blog headlines
and click on the link for past reports on forex. Currency world news reports
from previous years can be found on the left sidebar under "FX Archives."
Actionable trading levels delivered to YOUR charts in real-time.
Mon 9 July 2018 AA 12:00 EZ- Draghi EU Parliament Testimony Tue 10 July 2018 AA 08:30 GB- Ind/Prod Output, Trade AA 09:00 DE- ZEW Survey Wed 11 July 2018 A 12:30 US- PPI A 14:00 CA- Bank Of Canada Decision A 14:30 US- EIA Crude Thu 12 July 2018 AA 12:30 US- CPI Fri 13 July 2018 A 14:00 US- Prelim University of Michigan
John M. Bland, MBA co-founding Partner, Global-View.com
Global-View Affiliate Program
We are starting an affiliate program to market some of our products.
Send me an email if you would be interested or if you know someone who would like to be an affiliate. Generous commissions payout for those accepted.
Put the word "affiliate" in the email subject line.
Veteran FX Trader, Max McKegg, forecasts all the Major currencies and the Australasians; providing Daily and Medium Term Trading forecasts to subscribers, who include large Banks the world over, as well as individual traders in more than 30 different countries.
looking for your first broker or do you need of a new one? There are
more critical things to consider than you might have thought.
We were trading long before there were online brokers. Global-View
has been directly involved with the industry since its infancy. We've
seen everything and are up-to-data with recent regulatory changes.
The Global-View Forex Forum is the hub for currency trading on the web. Founded in 1996, it was the original forex forum and is still the place where forex traders around the globe come 24/7 looking for currency trading ideas, breaking forex news, fx trading rumors, fx flows and more. This is where you can find a full suite of forex trading tools, including a complete fx database, forex chart points, live currency rates, and live fx charts. In addition, there is a forex brokers directory where you can compare forex brokers. There is also a forex brokers hotline where you can ask for help choosing a forex broker that meets your individual fx trading needs. Interact on the same venue to discuss forex trading.
The forex forum is where traders come to discuss the forex market. It is one of the few places where forex traders of all levels of experience, from novice to professionals, interact on the same venue to discuss forex trading. There is also the GVI Forex, which is a private subscription service where professional and experienced currency traders meet in a private forex forum. it is like a virtual forex trading room. This is open to forex traders of all levels of experience to view but only experienced currency tradingprofessionals can post.
Currency trading charts are updated daily using the forex trading ranges posted in the Global-View forex database. You will also find technical indicators on the fx trading charts, e.g. moving averages for currencies such as the EURUSD. This is another forex trading tool provided by Global-View.com.
The forex database can be used to access high, low, close daily forex ranges for key currency pairs, such as the EURUSD, USDJPY, USDCHF, GBPUSD, USDCAD, AUD, NZD and major crosses, including EURJPY, EURGBP, EURCHF, GBPJPY, GBPCHF and CHFJPY. Data for these currency trading pairs dating back to January 1, 1999 can be downloaded to an Excel spreadsheet.
Forex chart points are in a currency trading table that includes; latest fx tradinghigh-low-close range, Bollinger Bands, Fibonacci retracement levels, daily forex pivot points support and resistance levels, average daily forex range, MACD for the different currency trading pairs. You can look on the forex forum for updates when one of the fx trading tools is updated.
Global-View also offers a full fx trading chart gallery that includes fx pairs, such as the EURUSD, commodities, stocks and bonds. In a fx trading world where markets are integrated, the chart gallery is a valuable trading tool. Look for updates on the Forex Forum when the chart gallery is updated.
Global-View.com also offers a forex blog, where articles of interest for currency trading are posted throughout the day. The forex blog articles come from outside sources, including forex brokers research as well as from the professionals at Global-View.com. This forex blog includes the Daily Forex View, Market Chatter and technical forex blog updates. In additional to its real time forex forum, there are also Member Forums available for more in depth forex trading discussions.
WARNING: FOREIGN EXCHANGE TRADING AND INVESTMENT IN DERIVATIVES
CAN BE VERY SPECULATIVE AND MAY RESULT IN LOSSES AS WELL AS PROFITS. FOREIGN
EXCHANGE AND DERIVATIVES TRADING IS NOT SUITABLE FOR MANY MEMBERS OF THE
PUBLIC AND ONLY RISK CAPITAL SHOULD BE APPLIED. THE WEBSITE DOES NOT TAKE
INTO ACCOUNT SPECIAL INVESTMENT GOALS, THE FINANCIAL SITUATION OR SPECIFIC
REQUIREMENTS OF INDIVIDUAL USERS. YOU SHOULD CAREFULLY CONSIDER YOUR FINANCIAL
SITUATION AND CONSULT YOUR FINANCIAL ADVISORS AS TO THE SUITABILITY TO YOUR
SITUATION PRIOR TO MAKING ANY INVESTMENT OR ENTERING INTO ANY TRANSACTIONS.