RPT-FOREX -Suppressed risk appetite benefits yen, dollar
RPT-FOREX-Suppressed risk appetite benefits yen, dollar
Mon Nov 19, 2007 6:57am EST
(fixes spelling in headline)
By Toni Vorobyova
LONDON, Nov 19 (Reuters) - The yen strengthened on Monday, as investors' appetite for risk was dented by worries of more trouble in the global financial sector and consequent falls in equity markets.
Rising risk aversion helped the dollar gain some ground versus the euro and a basket of major currencies, as investors repatriated money from riskier positions.
Goldman Sachs said it expects Citigroup to announce further writedowns next year and cut its recommendation on the stock to a sell.
But analysts said dollar sentiment remained bearish on expectations of a Federal Reserve rate cut next month, talk of Gulf states possibly abandoning their dollar pegs and discussions among oil producers about the potential for pricing crude against a currency basket rather than in dollars.
Worries about the health of the U.S. economy were fuelled by comments from Minneapolis Fed President Gary Stern, who said that he expected the U.S. housing market to weaken further.
"It appears to be risk aversion that's dominating the markets, partly on the back of the comments from GCC that they will discuss their dollar peg next month, and partly the comments from Fed governor Stern overnight," said Niels From, currency strategist at Dresdner Kleinwort in Frankfurt.
"Normally in a risk averse environment the dollar tends to strengthen a bit. But I believe this safe haven status has diminished and we are not seeing the dollar benefit as much."
By 1122 GMT the dollar was down 0.6 percent against the yen at 110.29 yen, inching back towards an 18-month low of 109.12 yen hit last week <JPY=>.
It was flat against the the Swiss franc at 1.1179 francs <CHF=>, having earlier fallen to a 12-year low of 1.1155 francs.
A fall below 1.11 francs would herald a record low.
European equities fell 0.7 percent (.FTEU3: Quote, Profile, Research), hit by weakness in financial stocks. In currency markets, weakness in equities and a rise in risk aversion translates into a sell off in risky carry trade bets, where purchases of high-yielders are funded by cheap borrowing in the yen or Swissie.
The dollar index, a measure of its value against six major counterparts, was steady on the day at 75.864 (.DXY: Quote, Profile, Research).
The euro was down 0.8 percent against the yen at 161.34 yen <EURJPY=>, and off 0.1 percent against the greenback at $1.4641 <EUR=> -- around a cent below this month's record peaks.
Broadly echoing recent comments from other euro zone policymakers, ECB Governing Council member Klaus Liebscher said on Monday that the strong euro is cushioning the euro zone from the impact of steep oil price rises, but excessive currency volatility is not welcome.
MORE REASONS TO SELL THE DOLLAR?
A light data calendar on Monday features the U.S. NAHB housing market index for September. Post-meeting comments made to reporters from G20 finance ministers and central bankers in Cape Town could also move markets.
G20 policymakers said over the weekend that too much volatility and erratic currency movements were unwelcome, and stressed the need to correct global economic imbalances in the face of rising risks to growth and inflation.
The market showed muted reaction to the communique because it was essentially a repeat of last month's G7 statement, particularly the emphasis that countries running current account surpluses -- namely China -- should allow their currencies to trade more freely.
Gulf countries, meanwhile, continue to debate the merits of maintaining their currency pegs to the dollar, with Saudi Arabia and the United Arab Emirates the latest to say they are considering tweaking their respective policies.
A weekend OPEC summit saw sharp political division over whether to take action against a weak dollar, for example by pricing oil against a basket of currencies [ID:nL18446547].
"All of this leaves the USD rather vulnerable to further falls over coming weeks," Calyon said in a research note, forecasting that the euro would reach $1.50 by year-end. (Editing by Ron Askew)
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.
Mon 18 Dec
10:00 EZ- final HICP Tue 19 Dec
09:00 DE- IFO Survey
13:30 US- Housing Starts/Permits
13:30 US- Current Account Wed 20 Dec
15:00 US- Existing Homes Sales
15:30 US- EIA Crude Thu 21 Dec
03:00 JP- BOJ Decision
13:30 CA- CPI & Retail Sales
13:30 US Weely Jobless
13:30 US- GDP Fri 22 Dec
09:30 US- GB- GDP
13:30 US- core PCE Deflator & Presonal Income
15:00 US- New Homes Sales
15:00 US- final University of Michigan
17:00 US- early Closes Mon 25 Dec
00:00 Christmas Holidays
Potential Trading Opportunities
POTENTIAL PRICE RISK: Medium Mon--10:00 GMT-- EZ- final November HICP. flash data are rarely changed.
POTENTIAL PRICE RISK: HIGH- Medium Tue --09:00 GMT-- DE- IFO Survey. Key report but usually not a market-mover
POTENTIAL PRICE RISK: HIGH- Medium- Tue --13:30 GMT-- US- Housing Starts and Permits. Leading indicators of activity
POTENTIAL PRICE RISK: HIGH-Medium- Wed --15:00-- US- Existing Homes Sales. Top Housing statistic
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.