Currency Bits

Yen's currency exchange rate 'losing steam'

Sun, 5 Sep 2010 17:52 GMT

The currency exchange rate for the yen is expected to lose some of its current strength. Negative global data helped push the Japanese currency to near a 15-year high against the US dollar in the last month. A reported decline in UK house prices and a slow return to job growth in the US were among the factors concerned. Hiroshi Yanagisawa, a dealer in Tokyo at FX Prime Corp, told the news source: "Worries about the global economy are rife. The yen is likely to shine as risk appetite wanes".

Analysts have suggested that this behaviour is typical of the yen during times of economic turbulence. This is because the country's trade surplus means that it is not reliant on overseas capital. According to Bloomberg, the yen has climbed a total of 16 per cent over the course of this year. Click here to see how much you can save with HiFX's Foreign Exchange services.

RBA May Extend Rate Pause, Averting Damage to Gillard ‎

Mon, 2 Aug 2010 06:50 GMT

Australia’s central bank may keep its benchmark interest rate unchanged for a third month after inflation slowed, averting an increase in mortgage costs that risked damaging Prime Minister Julia Gillard’s election campaign. Consumer prices rose the least in three years last quarter, giving scope to extend the rate pause after six increases since early October.

Gillard, level with or behind opposition leader Tony Abbott in some polls ahead of the Aug. 21 vote, is relying on holding electorates in western Sydney and the state of Queensland that have large numbers of households with mortgages.

“The Reserve Bank doesn’t need to touch rates, and it can stay on the sidelines for a number of months,” said Craig James, a senior economist at Commonwealth Bank of Australia. “You’ve got inflation at normal levels so this time around the bank can feel pretty relaxed.”

Australian, New Zealand Dollar Falls Affecting China’s Growth

Fri, 16 Jul 2010 06:56 GMT

The demands for exports from South Pacific nations will decrease in China, as a consequence of the fall of Australian and New Zealand Dollar.

China’s growth domestic product became 10.3 percent in the second quarter and the industrial production was slower than it was forecasted in June. Profits have been reported by JPMorgan Chase & Co., the U.S.’s second-largest bank and Spain is auctioning debt, today.

Currency shifts cloud Infineon's outlook

Wed, 14 Jul 2010 06:50 GMT

The euro-dollar exchange rate is on a run-away roller coaster and taking German chip vendor Infineon Technologies AG along for a spin. Just as the automotive and diversified semiconductor supplier was beginning to enjoy double-digit revenue growth and operational relief after dumping its profit-challenged DRAM unit, currency-related economic events beyond its control are piling on, adding to the problems the company must maneuver through in an expanding but still precarious market.

In the next several quarters and perhaps for the next few quarters, wide and unpredictable swings in exchange rates will force Infineon—and other technology companies whose financial results are reported in euro while portions of costs and sales are recorded in U.S. dollar—to engage in complex currency hedging while simultaneously managing through a tight demand and supply environment.

Australian Dollar Drops Amid Concerns Over Global Growth

Tue, 13 Jul 2010 07:38 GMT

The Aussie Dollar receded from near a three-week rise in the midst of concerns over worldwide expansion and that its newest increases might have arrived too quickly.

New Zealand's currency dropped before reports this week in all probability were to reveal that U. S. retail sales went down in June for the second month and inflation retreated.

Both currencies were last week's largest beneficiaries amongst their 16 most-traded equivalents against the greenback.

Aussie dollar higher on equities

Thu, 8 Jul 2010 06:27 GMT

The Australian dollar opened almost two US cents higher today, boosted by strong equity markets and an energised euro.

At 0700 AEST, the Australian dollar was trading at $US0.8643/44, up from Wednesday's close of $US0.8482/84.

Since the previous day's close at 1700 AEST, the local unit traded between $US0.8665 and $US0.8450.

Dollar Loses While World Economy Turns Around

Wed, 7 Jul 2010 07:28 GMT

On average the dollar lost 1.77 percent against the Australian dollar, .80 percent against the euro and was barely lower than the Japanese yen. Investors perceived weakness after the Institute for Supply Management (ISM) reported that the non-manufacturing business activity index fell from 55.4 in May to 53.8 in June.

The dollar lost .90 percent against the Canadian dollar, .14 percent against the Swiss franc and .78 percent against the euro (survey #1 results).The Aussie dollar gained 1.77 percent against the Hong Kong dollar, .865 percent against the Canadian dollar, 1.656 percent against the Swiss franc, and 1.719 percent against the British pound sterling.

Dollar gets a boost from rates decision

Tue, 6 Jul 2010 06:34 GMT

The Australian dollar is trading higher this afternoon after the Reserve Bank left interest rates on hold. In recent trade, the dollar was trading at 84.1 US cents, up from 83.6 US cents before the decision was announced. At Monday’s close, the dollar was buying 84.58 US cents.

Earlier, Royal Bank of Scotland foreign exchange strategist Greg Gibbs said the Australian dollar was following the direction of weaker equity markets in Asia.'It is coming down with equity markets on further concerns developing over the global economy,'' Mr Gibbs said.

Australia Dollar Rises on Stock Gains, Optimism Over Job Growth

Mon, 5 Jul 2010 06:55 GMT

The Australian dollar rose, ending a five-day drop against the yen, as Asian stocks advanced and signs the nation’s labor market is improving spurred demand for higher-yielding assets. Australia’s currency reversed earlier losses versus the greenback after an industry report showed job advertisements climbed for a second month in June and economists said data this week will show employment increased for a fourth month. Economists say the Reserve Bank of Australia will keep its benchmark interest rate at 4.5 percent tomorrow, compared with as low as zero in the U.S. and 0.1 percent in Japan.

“Stock markets are in positive territory and that’s giving some guidance to future growth,” said Richard Grace, chief currency strategist in Sydney at Commonwealth Bank of Australia, the nation’s largest lender. “The relative health in the local economy is probably providing some support” for the Australian dollar.

Watch out: yuan may fall as volatility picks up

Sat, 3 Jul 2010 07:36 GMT

Now that China is staying true to its word and letting the yuan trade a bit more freely, analysts and investors outside the mainland may not be prepared for one potential outcome: a yuan drop. China is showing a determination to let the yuan be more volatile against the dollar within its daily 0.5 percent trading band and go with the market flow, contrary to some expectations for another steady rise as happened between 2005 and 2008.

That means there are no guarantees that the yuan will appreciate against the dollar over time, and Beijing is set to stick firmly to its position on yuan flexibility no matter how much it disappoints critics -- most prominently U.S. lawmakers.

The fundamentals arguing for substantial yuan appreciation have changed since the financial crisis: China is running smaller trade surpluses, and economists see the potential for the shrinking current account surpluses to turn into deficits in coming years.