FOREX NEWS-Dollar hits 1-week highs, firmer tone seen fleeting
Wed Nov 28, 2007 7:03am EST
(Changes byline, updates prices, quotes)
By Meg Clothier
LONDON, Nov 28 (Reuters) - The dollar rose to one-week highs versus the euro, the yen and the Swiss franc on Wednesday, as investors took profits on the U.S. currency's recent slump to multi-year lows and thin volumes accentuated market moves. The more positive tone on the dollar was kick-started on Tuesday after news that Abu Dhabi Investment Authority was buying an equity stake in Citigroup Inc (C.N: Quote, Profile, Research), giving confidence to investors rattled by fears of more credit market troubles as the year-end approaches.
Consequent gains in U.S. stock markets overnight [.N] attracted investors into dollar-denominated assets.
However, analysts said dollar strength was likely to be short-lived given the weak tone in U.S. economic data, prospects for further Federal Reserve interest rate cuts and the trickle of bad news from financial companies hit by the credit crunch.
"I wouldn't say this is a significant move at this stage. It is consistent with (euro/dollar) declines we've seen over the last few months -- where those declines have only lasted a few days," said Steve Barrow, currency strategist at Bear Stearns.
"I don't think this one will be any different."
The euro fell around 0.7 percent to a one-week low of $1.4724 according to Reuters data, more than two cents below record highs struck at the end of last week <EUR=>.
"Having got up close to $1.50 and then come off quite quickly, that's a fairly negative technical sign," Barrow added.
However, German sports car maker Porsche (PSHG_p.DE: Quote, Profile, Research) earlier said it had extended its currency hedging period out to six years because it believed the euro could appreciate to $1.50 or even $1.60.
The dollar rose 1.1 percent versus the Swiss franc <CHF=> by 1151 GMT and hit one-week highs around 110.01 yen <JPY=>.
MORE ON CREDIT WOES
However concerns about the health of the U.S. economy and thus dollar weakness could be reignited by a weak reading from the existing home sales for October at 1500 GMT.
The Federal Reserve's beige book report -- an anecdotal summary of economic conditions nationwide -- is also due.
Fed Governor Donald Kohn speaks later in the day at the Council on Foreign Relations in New York, while Dallas Fed President Richard Fisher will speak on the regional economy.
The Fed is widely expected to cut interest rates by a quarter percentage point in December to 4.25 percent and again next year to stem the economic fallout from the housing debacle, and the reduction in rates has eroded the dollar's yield appeal.
"(The) combination of a broad based tightening in credit conditions and a worsening in housing downturn ... has pushed the risk of a U.S. recession in 2008 to 40-45 percent," Goldman Sachs wrote in a note to clients.
"(And) therefore we believe that an easier policy reaction will be required to counter the downside risks to growth."
Highlighting the ongoing stream of credit hits, No.2 U.S. mortgage lender Wells Fargo said late on Tuesday it would take a $1.4 billion charge in the fourth quarter, mainly on higher losses from home equity loans.
U.S. housing finance company Freddie Mac said it would halve its quarterly dividend and sell $6 billion in preferred stock to bolster capital in anticipation of mortgage-related losses.
Analysts at JPMorgan Chase estimated that losses on collateralised debt obligations backed by subprime mortgages could climb as high as $260 billion.
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.