FOREX NEWS-Dollar hits fresh lows as rate cuts in view
Fri Oct 26, 2007 7:17am EDT
(Changes byline, adds quotes, updates prices)
By Simon Falush
LONDON, Oct 26 (Reuters) - The dollar fell to fresh record lows against the euro and a basket of currencies on Friday as investors, faced with a run of weak U.S. economic data, anticipated a Federal Reserve interest rate cut next week.
U.S. crude oil's rise to record highs above $92 a barrel (CLc1: Quote, Profile, Research) and gold's climb to 28-year peaks <XAU=> also hurt the dollar, boosting the currencies of commodity-rich countries such as the Australian dollar which hit a 23-year high against the greenback <AUD=>.
The Aussie was also helped by expectations that the Reserve Bank of Australia will raise rates next month. In contrast, weak U.S. durables goods data on Thursday reinforced bets for a growth-boosting Fed cut on Oct. 31 from 4.75 percent.
"The dollar's downtrend remains in place." said Lena Komileva, G7 market economist at Tullett Prebon. "In the short run weak U.S. data has led to reinforced expectations of an interest rate cut from the Fed which is bad for the dollar while stronger equities have helped risk currencies."
The euro had risen as high as $1.4377 <EUR=>, the highest since its 1999 launch, according to Reuters data. By 1034 GMT, it had trimmed gains slightly to trade at $1.4364.
Eurogroup Chairman Jean-Claude Juncker said in a newspaper interview published on Friday that he preferred a strong euro to a weak one, adding that the European currency was not yet at alarm-causing levels.
Euro zone money supply annual growth for September came in at 11.3 percent, a slightly slower rate of growth than for August but still well over the ECB's 4.5 percent target.
Analysts said this would add to the European Central Bank's dilemma over the next move for euro zone interest rates.
"There is bound to be a big split in ECB ranks now. (The M3 data) will add to hawks' campaign for higher rates but the hawks should be looking to weaker growth momentum as the more important driving force for next year," said Bear Stearns in a client note.
The dollar index -- which tracks its progress against six major currencies -- fell to 77.035 (.DXY: Quote, Profile, Research), the lowest since its post-Bretton Woods inception over 30 years ago.
The Aussie climbed as high as US$0.9144 <AUD=>, while the New Zealand dollar was up a third of a percent at US$0.7648 <NZD=>.
The rise in high-yielding commodity currencies, coupled with gains in Asian equity markets, helped boost risk appetite and encourage investors to put on carry trade bets funded by cheap borrowing in the Japanese yen.
The yen fell 0.2 percent to 114.37 per dollar <JPY=> and half a percent to 164.33 per euro <EURJPY=>.
The yen reacted little to data showing Japanese core consumer prices fell 0.1 percent in September as expected, an eighth straight month of annual decline. [ID:nT87023]
Friday's calendar features the final reading from the October Reuters/University of Michigan U.S. consumer sentiment survey at 1400 GMT and a speech by Fed Governor Frederic Mishkin on financial instability and the Fed's role in providing liquidity at 2015 GMT.
Countrywide's third quarter earnings report may give the dollar further direction, analysts said. Countrywide is expected to post a loss of $700 million to 1.8 billion.
"Quite how bad it states delinquencies, falling demand etc could influence market sentiment," ING said in a note to clients.
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."
Elevate Your Trading With The Amazing Trader!
The Amazing Trader includes:
Actionable trading levels delivered to YOUR charts in real-time.
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.