Aussie Struggles on the Forex Market

Australian dollar is struggling on the Forex market, especially against the US dollar. Concerns about what’s happening in Europe are affecting risk appetite, and sending Forex traders away from riskier assets like the Aussie and to low beta currencies like the US dollar and the Japanese yen.

Risk appetite is playing a big role in the Australian dollar’s performance today. Concerns that the Greece might actually leave the eurozone are increasing, and there are worries that Spain can’t handle its debt. This risk appetite is leading to losses by high beta currencies like the Australian dollar against low beta currencies like the US dollar and the Japanese yen. Australian dollar is, however, higher against the euro, since the euro is in such a bad state.

The Aussie’s case isn’t being helped by the situation with gold, either. Gold prices are falling right now, and the Australian dollar is a commodity currency that derives a significant amount of support from the precious metal. Aussie also gets help from China, since Australia is one of China’s major trading partners. However, China hasn’t been seeing such stellar growth recently. The result is that Aussie is having trouble finding support against some of its counterparts.

At 13:12 GMT AUD/USD is down to 0.0082 from the open at 1.0019. EUR/AUD is down to 1.2859 from the open at 1.2869. AUD/JPY is down to 79.59 from the open at 80.18.

US Dollar Gains Against Euro in Forex Trading

US dollar is heading higher against the euro in Forex trading right now, gaining as concerns about Spain and Greece come into sharper focus. Greenback is also higher against the Canadian dollar and other commodity currencies as oil prices and gold prices drop. UK pound, though, is gaining against the US dollar, as is the Japanese yen.

US dollar is turning in a mixed performance today, gaining against the euro and many commodity currencies as Forex traders look for safe haven against the volatility brought on by troubles continuing in Greece and Spain. In Greece, difficulties about forming a government, and the future of the austerity measuresagreed to for the bailout, are causing uncertainty. In Spain, the financial sector continues to struggle, and doubts remain about Spain’s ability to repay its debts. All of this is weighing on risk appetite and the euro, as well as keeping commodities down and prompting the greenback to gain against the Canadian dollar and the Australian dollar

However, there are other currencies gaining against the dollar. Great Britain pound is showing some strength, and the Japanese yen is higher as risk appetite grows. Concerns are that a higher pound will hurt the British economy, while Japanese leaders fret about the economic impact of a higher yen.

At 12:30 GMT EUR/USD is down to 1.2856 from the open at 1.2901. GBP/USD is up to 1.6077 from the open at 1.6066. USD/JPY is lower at 79.8045, down from the open at 79.9900. USD/CAD is up to 1.0052 from the open at 1.0002. AUD/USD is down to 0.9974 from the open at 1.0014.

Euro at 3-Month Low as Greece May Leave Eurozone

The euro fell today, reaching the lowest level in more than three months against the US dollar, as speculation that Greece may leave the eurozone drove away investors from the shared 17-nation currency.

Greece is still unable to form a coalition government after a week of talks and negotiating. Even if the a government would be formed, the country may still leave the currency union as the Hellenic Republic is reluctant to implement austerity measures that are very unpopular among Greeks. Experts say that in the long term an exit of Greece from the eurozone may benefit both the country and the euro, but in the short term an impact could be very negative.

EUR/USD fell from 1.2901 to 1.2866 as of 8:50 GMT today, while the intraday minimum of 1.2860 was the lowest since January 23. EUR/JPY was down from 103.17 to 103.04.

Pound Gains, Threatens Economy of UK

The Great Britain pound rose today as the safe haven role of the currency helped it to profit from speculation that Greece may leave the eurozone. The strength of the sterling caused worries that it may hurt the UK economy.

The pound gains appeal as the Swiss franc loses it due to the euro-peg. Economists are worried, though, that a strong currency may harm efforts to bring the United Kingdom out of recession. Ian Stannard, the head of European currency strategy at Morgan Stanley, explained:

The U.K. economic backdrop may not be brilliant, but it’s enjoying a haven status because of the political uncertainty in the euro zone. The advantage of sterling over a traditional haven like the Swiss franc is that its asset market is more liquid. The downside is that the strength of the pound may backfire as it hurts exports.

GBP/USD rose from 1.6063 to 1.6072 and GBP/JPY went up from 128.49 to 128.70 as of 8:18 GMT today.

GBP Falls vs. USD & JPY, Gains vs. EUR Over This Week

The Great Britain pound fell against the US dollar and the Japanese yen this week as growing concerns about the health of the UK economy reduced appeal of the currency. The sterling is still perceived as refuge from Europe’s crisis, therefore it gained versus the euro.

Britain’s economy has entered a recession, significantly hurting prospects for the sterling. The Bank of England refrained from expanding stimulus during its last policy meeting, but most economists agree that the country needs quantitative easing. The pound is supported by its status of a safe haven, but such role looks tenuous considering the economic condition of Britain. Anyway, the problems of Europe allowed added to Britain’s strength against commodity currencies of countries that depend on European demand for their exports.

The pound was drifting down against the greenback and the yen since the end of March and it extended this trend for this week. The euro rose on Friday, but that did not help the shared 17-nation currency to erase its losses versus the sterling. The Canadian dollar was more successful, ending the week almost flat after falling for six consecutive trading sessions.

GBP/USD slid from 1.6133 to 1.6070 and GBP/JPY fell from 128.78 to 128.43. EUR/GBP was down from 0.8062 to 0.8033, while during the week it has reached 0.7994 — the lowest since 2008. GBP/CAD climbed from 1.6067 to 1.6201, but retreated to 1.6076 by the weekend.

Australian Dollar Falls as China Signals About Slowing Growth

The Australian dollar slipped, falling to the lowest level this year against its US peer, as negative macroeconomic data hurt prospects for Australia’s exports and general pessimistic sentiment on the Forex market reduced appeal of growth-related currencies.

The National Bureau of Statistics reported that China’s consumer price index fell from 3.6 percent in March to 3.4 percent in April, being in line with forecasts. Industrial production, on the other hand, frustrated forecasters, falling from 11.9 percent to 9.3 percent, while an increase to 12.1 percent was predicted. Other fundamental reports, including retail sales, were also worse than expected. China is the main trading partner of Australia, therefore its fundamentals have a great impact on the Aussie.

The FX market in general also was not supportive for the Australian currency as traders preferred to stick to safer investments. JPMorgan Chase & Co. announced a $2 billion loss, sparking fear among investors. The MSCI Asia Pacific Index of equities slid 1 percent and posted the second week of losses.

AUD/USD was down from 1.0075 to 1.0019 — the lowest rate since December 20. AUD/JPY dropped from 80.50 to 80.08. EUR/AUD went up from 1.2829 to 1.2887.

Swedish Krona Declines with Industrial Production

The Swedish krona fell today after a report showed that nation’s industrial production declined significantly more than expected and as risk aversion damped demand for European currencies.

Industrial production fell 5.2 percent in February from January, compared to the median forecast of 0.3 percent. Annual decline was 7.1 percent, while an advance by 0.5 percent was predicted by analysts. The krona is also hurt by concerns about the crisis in Europe. The Stoxx Europe 600 Index of shares was down as much as 1.2 percent today.

USD/SEK was up from 6.7515 to 6.7794 as of 14:09 GMT today.

Crude Oil Prices Drag Ruble Down

The Russian ruble was down today, falling for the third day, as prices for crude oil, the main nation’s export, declined amid concerns about the global economic recovery.

Futures on crude oil fell $0.16 to $102.30 per barrel in New York, following yesterday’s decline by 0.8 percent. The ruble depends on the performance of crude as the commodity is the main export good of Russia. Oil was falling on concerns that the global economic slowdown will hurt demand for fuel.

USD/RUB rose from 29.5680 to 29.6700 as of 14:37 GMT today.

US Dollar Heads Higher on Safe Haven Demand

US dollar is heading higher as uncertainty in the financial markets creates a demand for safe haven currencies. Greenback is heading higher against the euro and the UK pound. While the pound has been struggling most of today anyway, this development is new to the euro, a currency that had been seeing some strength earlier.

Right now, the US dollar is gaining favor as stocks retreat and uncertainty rises. Concerns about the eurozone are leading the list of worries resulting in risk aversion. Indeed, worries about Spain and Italy are cropping up again, especially in light of economic data that indicates that the eurozone might be headed for recession.

Even though the US economic data isn’t terribly impressive recently (March payrolls came in lower than expected), there is still the idea that the greenback is the most stale currency in the world, backed by the world’s most stable taxpayer base. Right now, as uncertainty sets in and Forex traders and investors wonder what’s next, the US dollar seems like a good bet as a safe haven.

At 15:43 GMT, EUR/USD has turned lower. While the pair opened above the 1.3100 level, at 1.3106, and saw a session high of 1.3146, the current quote is 1.3079. GBP/USD is also lower, falling to 1.5836 from the open at 1.5893. USD/JPY is lower, though, down to 80.9480 from the open at 81.5100.

Yen Climbs Ahead of Italy’s Debt Auction

The Japanese yen climbed to the highest level in more than a month today before retreating a little as Forex market participants feel uncertain as borrowing costs in European nations rise.

The yield for ten-year Italian notes climbed 23 basis points to 5.69 percent yesterday, the highest level since February 17. The yield of Spain’s securities maturing in 10 years reached 5.99 percent yesterday, the highest since December 12. It looks like concerns about Europe’s debt is firmly rooted and aren’t going to disappear despite all efforts to prevent recession.

The MSCI Asia Pacific Index of shares dropped 0.9 percent today. The Standard & Poor’s 500 Index was down 1.7 percent and the Stoxx Europe 600 Index slumped as much as 2.5 percent yesterday.

USD/JPY was at about 80.91 as of 6:27 GMT today, following the drop from 81.51 to 80.67 yesterday. EUR/JPY traded at 106.05 after falling from 106.76 to 105.51. GBP/JPY was down from 129.54 to 127.94 yesterday before trading at 128.61 today.

Euro Heads Higher — For Now

Euro is higher today, gaining as stocks see some improvement, and as risk appetite overall improves. However, even with relief allowing the euro to push through resistance, the 17-nation currency still remains vulnerable, and there are still questions about how well the eurozone can weather more problems.

Right now, the euro is getting a boost as the stock markets show some signs of relief. Alcoa earnings in the United States are helping quite a bit today, after yesterday’s stock market rout. In the eurozone, things have calmed down a bit as well, providing a little bit of hope for Forex traders.

Spanish bond yields have fallen below 6%, and that is one of the most encouraging signs right now for the euro. German bunds continue to offer such low yields that there are few takers. However, if the Spanish situation flares up again, or if Italy become more problematic, German bunds could suddenly look attractive — even with the low yields.

For the time being, the euro is finding support as things calm down and Forex traders show a measure of optimism. However, the situation in Spain is far from resolved, and the euro remains vulnerable to instability due to widespread sovereign debt problems.

At 13:23 GMT EUR/USD is up to 1.3139 from the open at 1.3081. EUR/GBP is higher at 0.8246, up from the open at 0.8246.

Canadian Dollar Gets a Boost from Optimism

Canadian dollar is gaining against the US dollar right now, receiving a boost on general optimism today. Loonie is getting help as investors find optimism after Alcoa earnings, and on the fact that oil prices are heading higher.

Yesterday, there was a lot of gloom on the market as concerns about the eurozone overshadowed just about everything. High beta currencies retreated; commodity currencies couldn’t find support. Today, though, that has largely changed. Alcoa earnings have sparked optimism, and that means that there is a greater demand for riskier assets — and that includes the Canadian dollar.

Also supporting the loonie is the news that oil prices are on the rise. Optimism is helping oil prices, as is the latest inventory report for the United States. The latest inventory report showed that there was a rise in stockpiles, but the increase wasn’t as steep as what’s been seen lately. This news has sparked hope that Americans might be ready to use more oil again.

As a commodity currency tied to oil, higher oil prices (above $102 a barrel now) help the Canadian dollar, especially against the US dollar.

At 14:48 GMT USD/CAD is lower at 1.0017, down from the open at 1.0044. GBP/CAD, though, is higher at 1.5938, up from the open at 1.5932, thanks in large part to the support UK pound receives from higher equities around the world.

Pound Advances with Retail Sales

The Great Britain pound climbed today after a report showed that UK retail sales grew last month, following a decline in the previous month. The report made Britain’s assets more attractive to investors, who were worried about the economic slowdown in the United Kingdom.

British Retail Consortium reported that retail sales were up 1.3 percent on a like-for-like basis in March from a year ago. The increase followed the drop by 0.3 percent in the previous month. Stephen Robertson, the Director General at BRC, warned against being too exited by the positive data:

    It’s worth remembering the sales comparison is against the weakest month of last year, largely caused by the movement of Easter in the calendar, and we’ll have to see whether this is additional spending or just shopping which has happened earlier than usual. Food sales growth continues to be largely underpinned by food inflation rather than by customers buying more.

He also added that “the overall retail environment is still difficult”.

The pound got additional help from the overall positive sentiment on the Forex market. Fears of the European debt crisis subsided somewhat, making traders more willing to risk, yet uncertainty about prospects for the eurozone make Britain’s assets more attractive as a haven from potential problems in the European Union.

GBP/USD was up from 1.5860 to 1.5903 and GBP/JPY rose from 127.91 to 128.59 as of 21:00 GMT today. EUR/GBP traded at about 0.8238 after earlier it jumped from 0.8244 to 0.8263.

NZD Climbs as Business Confidence Improves, Manufacturing Expands

The New Zealand dollar advanced today, rising for the second trading session, as macroeconomic reports showed that business confidence improved and manufacturing continued to expand, confirming positive developments in the New Zealand economy.

New Zealand Institute of Economic Research reported that business confidence index rose from 0 to 13 in the first quarter of 2012. Business NZ manufacturing index was down from 57.7 in February to 54.5 in March, but is still at the second highest level since May 2011. A figure above 50.0 indicates expansion.

Many analysts point out that the New Zealand currency is torn between opposite forces. Domestic fundamentals are good and positive for the currency, while the global economic environment isn’t particularly favorable to riskier currencies. At the moment, though, news from overseas is good and beneficial for the kiwi.

NZD/USD was up from 0.8179 to 0.8188 and NZD/JPY rose from 66.12 to 66.30 as of 00:51 GMT today. EUR/NZD was near 1.6008 after falling from 1.6018 to 1.5981.

Rand Gains on Fed & ECB Stimulus

The rand rose today, following two days of decline, on signs that the US Federal Reserve and the European Central Bank plan to stimulate their economies, supporting inflow of higher-yielding assets.

Janet Yellen, a member of the Federal Open Market Committee, said that the US economy needs stimulus despite signs of recovery:

    I consider a highly accommodative policy stance to be appropriate in present circumstances. But considerable uncertainty surrounds the outlook, and I remain prepared to adjust my policy views in response to incoming information. In particular, further easing actions could be warranted if the recovery proceeds at a slower-than-expected pace, while a significant acceleration in the pace of recovery could call for an earlier beginning to the process of policy firming than the FOMC currently anticipates.

Earlier, Benoit Coeure, an executive board member of the European Central Bank, said the Bank may resume its program of sovereign-debt purchases.

USD/ZAR fell from 8.0000 to 7.9340 as of 12:28 GMT today.

US Dollar Remains Lower in Currency Trading

US dollar is lower today, falling as warnings about the slow economic recovery in the United States remain intact. The US dollar doesn’t look as attractive as it did a couple of weeks ago, and disappointing economic data in the United States is only confirming that view.

US economic data is showing that recovery continues at a rather slow pace. Last week, initial jobless claims rose to 380,000, once again underscoring the fact that the labor market remains relatively weak in the United States. Additionally March core PPI only rose 0.3%, indicating that the US economic recovery remains slow.

Janet Yellen, the vice chair of the Federal Reserve, warned that interest rates will remain low for quite some time, since employment gains and other economic growth has been so modest. This statement has dashed the hopes of some, who had hoped that interest rates would rise sooner than expected.

Some of this speculation was what made the US dollar so attractive at the beginning of April. The idea of solid US economic growth, as opposed to a slowing eurozone economy, boosted demand for the greenback. Now, though, with Fed officials cautioning traders and investors, it looks as though the US dollar is likely to remain weak.

At 13:26 GMT EUR/USD is higher at 1.3157, up from the open at 1.3110. GBP/USD is up to 1.5951 from the open at 1.5907. USD/JPY is a little bit higher at 80.8900, up from the open at 80.8605.

Swiss Franc Gains, SNB Ready to Maintain Ceiling

The Swiss franc rose today against the US dollar, following gains of the euro. The currency fluctuated against the euro, staying near the cap, but not breaking it.

The Swiss National Bank capped the franc at 1.20 per euro last year and the currency has breached the ceiling only once on April 5. Central bank’s interim chief Thomas Jordan assured that the SNB is ready to buy foreign currency in unlimited quantities to maintain the ceiling. Analysts say that the bank won’t pursue aggressive weakening of the currency, but will rather keep the franc near the cap without breaching it. So far, the SNB was successful with this policy.

USD/CHF was down from 0.9172 to 0.9124 as of 14:22 GMT today. EUR/CHF traded at 1.2019, following the rise from 1.2024 to 1.2034.

Euro Rises In Spite of New Concerns

Euro is gaining today, even though concerns remain about Spain and other countries in the eurozone with high amounts of sovereign debt. Continued worries about the eurozone are not enough to keep the euro down as Forex traders show disappointment with US dollar policy.

Recently, gains for the US economy have led some Forex traders to speculate that the Federal Reserve would move up its timetable for interest rate hikes. This speculation, along with concerns about the eurozone, have kept the euro somewhat weak against the greenback. Now, though, with Fed officials squashing hopes of a hike, the euro is getting a boost.

Even though Spanish bond yields are up again, there are concerns about a eurozone recession, and there is a great deal of uncertainty as to whether or not the eurozone is really capable of staving off a full-blown crisis, there is enough risk appetite right now to support the euro. Additionally, with the euro’s better yield, and no expectation of an interest rate hike for the greenback, it isn’t a surprise that the euro is being preferred right now.

At 14:53 GMT EUR/USD is higher at 1.3174, up from the open at 1.3110. EUR/GBP is up to 0.8257 from the open at 0.8242. EUR/JPY is higher at 106.6350, up from the open at 106.0250.

Australia’s Employment Shows Huge Growth, AUD Surges

The Australian dollar jumped today as employment in Australia demonstrated surprisingly huge growth that was about seven times above forecasts, causing speculation that the nation’s central bank will refrain from an interest rate cut.

The Australian Bureau of Statistics reported that the seasonally adjusted number of employed persons rose by 44,000 in March from February. That’s compared to the much smaller figure of 6,400 predicted by analysts. Australian employment decreased by 15,400 jobs in February. The unemployment rate also provided a pleasant surprise, staying at 5.2 percent, while an increase to 5.3 percent was expected.

The encouraging employment data caused economists speculate that the Reserve Bank of Australia may refrain from cutting interest rates as the nation’s economy looks robust enough and doesn’t need stimulus. On the other hand, the economic slowdown in other parts of the world may still outweigh positive domestic fundamentals. Analysts await for the minutes of the RBA meeting that may give hints about the bank’s intentions regarding the monetary policy.

AUD/USD jumped from 1.0298 to 1.0434 and AUD/JPY climbed from 83.26 to 84.39 as of 23:42 GMT today.EUR/AUD slumped from 1.2724 to 1.2635, reaching 1.2609 intraday — the lowest price since March 21.

Loonie Follows Aussie in Advance

The Canadian dollar jumped yesterday and so far has kept its gains today as stocks and commodities advanced on speculation that the Federal Reserve will maintain its interest rates record low for prolonged time.

The Canadian dollar followed the Australian dollar that jumped on very good employment data, dragging commodities and commodity-related assets along. Signs that the Fed is going to maintain its stimulating monetary policy are also good for riskier currencies. The Standard & Poor’s 500 Index rose 1.4 percent. The S&P/TSX Composite Index added as much as 1.6 percent.

The Bank of Canada will hold a monetary policy meeting next week. It’s expected to maintain the key overnight rate at 1 percent as it was doing since September 2010. Canada was the first among developed nations to raise its interest rates and some analysts say that it may raise the rates again. Others point out that Canada’s monetary policy is tied to that of the United States and the Fed isn’t going to raise its lending rates anytime soon.

USD/CAD slumped from 1.0037 to 0.9942 yesterday and stayed near that level today, while EUR/CAD traded at about 1.3113 as of 1:32 GMT today, following the drop from 1.3156 to 1.3109 yesterday. CAD/JPY jumped from 80.51 to 81.30 on the previous trading session and rose to 81.45 on today’s session.