July 17, 2013
Dollar Rises Against Euro as Traders Reassess Bernanke Comments.
The dollar gained versus the euro as traders reassessed Federal Reserve Chairman Ben S. Bernanke’s statement to Congress that central-bank bond purchases “are by no means on a preset course.” The Bloomberg Dollar Index, which tracks the greenback against 10 other major currencies, rose after briefly dropping on speculation Bernanke was signaling stimulus would be maintained. Brazil’s real led gains by emerging-market currencies. Sterling rose from a four-month low against the euro after minutes of the Bank of England’s last meeting showed policy makers unanimously voted against expanding stimulus. “Interpreting the statement as more dovish than what he’s said recently was a little off-base,” Eric Viloria, senior currency strategist at Gain Capital Group LLC in New York, said in a telephone interview. “He’s just reiterating what he’s said in the past, which is that policy is going to remain highly accommodative. But there’s accommodation everywhere, and the Fed is actually looking to reduce.” The dollar appreciated 0.2 percent to $1.3137 per euro at 1:02 p.m. New York time after gaining as much as 0.6 percent and losing 0.1 percent. The greenback rose 0.3 percent to 99.43 yen. Europe’s shared currency gained 0.2 percent to 130.62 yen. The Bloomberg Dollar Index increased 0.1 percent to 1,031.29 in its first advance in three days, after dropping 0.1 percent to 1,029.34, the lowest level since June 21.
Real, Won:
The Brazilian currency climbed versus all of its 16 most-traded counterparts, erasing an earlier loss, after Bernanke’s testimony. The real strengthened 1.1 percent to 2.2299 per dollar after declining 0.5 percent to 2.2645. South Korea’s won slid on speculation importers bought dollars to take advantage of a two-day advance in the currency. The won fell 0.3 percent to 1,121.57 per dollar. The Israeli shekel weakened after the Bank of Israel bought dollars to stem a rally that took the currency to a two-month high. It declined 0.6 percent to 3.5796 per dollar. JPMorgan Chase & Co.’s Global FX Volatility Index, a measure of currency fluctuations, declined to 10.21 percent, the lowest since June 6. It reached a one-year high of 11.96 percent on June 24. Bernanke’s remarks highlighted the Federal Open Market Committee’s desire to assure that the economy and labor markets have sufficient momentum before reducing its monthly bond purchases. Bernanke Testimony:
If the economy improved faster than expected, and inflation rose back “decisively” toward the central bank’s 2 percent target, “the pace of asset purchases could be reduced somewhat more quickly,” the 59-year-old Fed Chairman said in prepared testimony. The Fed would also be prepared to increase the pace of purchases “for a time, to promote a return to maximum employment in a context of price stability.” The Fed is scheduled to issue its Beige Book regional economic report at 2 p.m. New York time. The policy-setting Federal Open Market Committee next meets on July 30-31. Bernanke’s testimony for his semi-annual report on monetary policy was issued at 8:30 a.m. in a change to past procedure to give lawmakers a chance to review it before the 10 a.m. hearing, according to a statement from the House committee. He will testify to the Senate Banking Committee tomorrow. The Fed buys $85 billion of Treasuries and mortgage debt each month as part of its third round of quantitative-easing stimulus to cap borrowing costs, a program that tends to debase the currency. It has held the benchmark interest-rate target at zero to 0.25 percent since 2008 to support the economy. ‘Didn’t Happen’
“The expectations were that he would clarify or specifically say when the Fed would start tempering, but that didn’t happen,” Charles St-Arnaud, a foreign-exchange strategist at Nomura Holdings Inc. in New York, said in a telephone interview. “He was slightly more hawkish on the tapering side, but on the flip side he seems to be more worried about the economy.” The pound reversed declines after minutes of the Bank of England’s July 3-4 meeting showed officials Paul Fisher and David Miles dropped their call to expand the central bank’s 375 billion-pound ($570 billion) quantitative-easing program instituted in 2009. They rallied to Governor Mark Carney’s policy of a “mixed strategy” involving guidance on the path of interest rates, ending months of split decisions within the nine-member Monetary Policy Committee. The pound rose 0.7 percent to 86.24 pence per euro after touching 87.11, the weakest level since March 13. Sterling gained 0.5 percent to $1.5238. “It’s encouraging to see further signs of confidence from the BOE,” said Neil Jones, head of European hedge-fund sales at Mizuho Bank Ltd. in London. “Not before time, the green shoots are visible in a market positioned short the pound.” A short position is a bet an asset’s value will fall.
Read More
http://sweetfutures.com/2013/market-update-with-mike-kuta-the-squawk-trader-2/
The risk of trading futures and options can be substantial. Trading foreign exchange carries a high degree of risk, and may not be suitable for all investors. All information, publications, and reports, including this specific material, used and distributed by Sweet Futures 1, LLC shall be construed as a solicitation. Sweet Futures 1 does not distribute research reports, employ research analysts, or maintain a research department as defined in CFTC Regulation 1.71. This website contains information obtained from sources believed to be reliable, but its accuracy is not guaranteed by Sweet Futures 1. Past performance is not necessarily indicative of future results.
The dollar gained versus the euro as traders reassessed Federal Reserve Chairman Ben S. Bernanke’s statement to Congress that central-bank bond purchases “are by no means on a preset course.” The Bloomberg Dollar Index, which tracks the greenback against 10 other major currencies, rose after briefly dropping on speculation Bernanke was signaling stimulus would be maintained. Brazil’s real led gains by emerging-market currencies. Sterling rose from a four-month low against the euro after minutes of the Bank of England’s last meeting showed policy makers unanimously voted against expanding stimulus. “Interpreting the statement as more dovish than what he’s said recently was a little off-base,” Eric Viloria, senior currency strategist at Gain Capital Group LLC in New York, said in a telephone interview. “He’s just reiterating what he’s said in the past, which is that policy is going to remain highly accommodative. But there’s accommodation everywhere, and the Fed is actually looking to reduce.” The dollar appreciated 0.2 percent to $1.3137 per euro at 1:02 p.m. New York time after gaining as much as 0.6 percent and losing 0.1 percent. The greenback rose 0.3 percent to 99.43 yen. Europe’s shared currency gained 0.2 percent to 130.62 yen. The Bloomberg Dollar Index increased 0.1 percent to 1,031.29 in its first advance in three days, after dropping 0.1 percent to 1,029.34, the lowest level since June 21.
Real, Won:
The Brazilian currency climbed versus all of its 16 most-traded counterparts, erasing an earlier loss, after Bernanke’s testimony. The real strengthened 1.1 percent to 2.2299 per dollar after declining 0.5 percent to 2.2645. South Korea’s won slid on speculation importers bought dollars to take advantage of a two-day advance in the currency. The won fell 0.3 percent to 1,121.57 per dollar. The Israeli shekel weakened after the Bank of Israel bought dollars to stem a rally that took the currency to a two-month high. It declined 0.6 percent to 3.5796 per dollar. JPMorgan Chase & Co.’s Global FX Volatility Index, a measure of currency fluctuations, declined to 10.21 percent, the lowest since June 6. It reached a one-year high of 11.96 percent on June 24. Bernanke’s remarks highlighted the Federal Open Market Committee’s desire to assure that the economy and labor markets have sufficient momentum before reducing its monthly bond purchases. Bernanke Testimony:
If the economy improved faster than expected, and inflation rose back “decisively” toward the central bank’s 2 percent target, “the pace of asset purchases could be reduced somewhat more quickly,” the 59-year-old Fed Chairman said in prepared testimony. The Fed would also be prepared to increase the pace of purchases “for a time, to promote a return to maximum employment in a context of price stability.” The Fed is scheduled to issue its Beige Book regional economic report at 2 p.m. New York time. The policy-setting Federal Open Market Committee next meets on July 30-31. Bernanke’s testimony for his semi-annual report on monetary policy was issued at 8:30 a.m. in a change to past procedure to give lawmakers a chance to review it before the 10 a.m. hearing, according to a statement from the House committee. He will testify to the Senate Banking Committee tomorrow. The Fed buys $85 billion of Treasuries and mortgage debt each month as part of its third round of quantitative-easing stimulus to cap borrowing costs, a program that tends to debase the currency. It has held the benchmark interest-rate target at zero to 0.25 percent since 2008 to support the economy. ‘Didn’t Happen’
“The expectations were that he would clarify or specifically say when the Fed would start tempering, but that didn’t happen,” Charles St-Arnaud, a foreign-exchange strategist at Nomura Holdings Inc. in New York, said in a telephone interview. “He was slightly more hawkish on the tapering side, but on the flip side he seems to be more worried about the economy.” The pound reversed declines after minutes of the Bank of England’s July 3-4 meeting showed officials Paul Fisher and David Miles dropped their call to expand the central bank’s 375 billion-pound ($570 billion) quantitative-easing program instituted in 2009. They rallied to Governor Mark Carney’s policy of a “mixed strategy” involving guidance on the path of interest rates, ending months of split decisions within the nine-member Monetary Policy Committee. The pound rose 0.7 percent to 86.24 pence per euro after touching 87.11, the weakest level since March 13. Sterling gained 0.5 percent to $1.5238. “It’s encouraging to see further signs of confidence from the BOE,” said Neil Jones, head of European hedge-fund sales at Mizuho Bank Ltd. in London. “Not before time, the green shoots are visible in a market positioned short the pound.” A short position is a bet an asset’s value will fall.
Read More
http://sweetfutures.com/2013/market-update-with-mike-kuta-the-squawk-trader-2/
The risk of trading futures and options can be substantial. Trading foreign exchange carries a high degree of risk, and may not be suitable for all investors. All information, publications, and reports, including this specific material, used and distributed by Sweet Futures 1, LLC shall be construed as a solicitation. Sweet Futures 1 does not distribute research reports, employ research analysts, or maintain a research department as defined in CFTC Regulation 1.71. This website contains information obtained from sources believed to be reliable, but its accuracy is not guaranteed by Sweet Futures 1. Past performance is not necessarily indicative of future results.
