Australian, N.Z. Dollars Fall a Second Day as Swine Flu Spreads

April 28 (Bloomberg) The Australian and New Zealand dollars fell for a second day on concern the spread of swine flu from Mexico will hurt tourism and deepen the global recession, spurring investors to sell riskier assets.
Australia’s currency dropped below 70 U.S. cents for the first time in a week after a Wall Street Journal report said U.S. regulators told Bank of America Corp. and Citigroup Inc. that they need more capital. New Zealand’s dollar slid the most in a week versus the greenback and yen. Ten students suspected of having swine flu in New Zealand will likely be confirmed as having the virus, a person familiar with the tests said.
“Higher risk aversion is being prompted by persistent concern over swine flu,” said Sue Trinh, senior currency strategist at RBC Capital Markets in Sydney. “You’ve also got that Wall Street Journal article headlining that Citibank and Bank of America are being pushed by U.S. regulators to raise more capital. That’s definitely causing this next leg down.” read more

Yen jumps on US bank concerns, flu fears

The yen jumped to a seven-week high against the euro and a one-month peak against the dollar on Tuesday, on a report that regulators have told Bank of America (BAC.N) and Citigroup (C.N) they may need to raise more capital.
The yen extended gains as the report intensified investors' aversion to risk, already heightened by fears of a flu pandemic hampering any recovery in the global economy.
Higher yielding currencies such as the Australian and New Zealand dollars came under pressure.

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Mexico Peso Falls on Concern Swine Flu to Deepen Economic Slump

Mexico’s peso sank to the lowest level in almost three weeks against the dollar on concern an outbreak of the deadly swine flu will deepen the country’s recession.
The peso depreciated as much as 3.5 percent, the steepest intraday slide since Nov. 5, and was 2.6 percent lower at 13.6978 per dollar at 8:18 a.m. in New York. The decline was the biggest among 176 currencies tracked by Bloomberg worldwide.
The flu outbreak may reduce demand for pesos from tourists and curb consumer spending at restaurants, theaters and other venues where crowds gather, said Gerardo Margolis, a vice president for emerging markets at TD Securities Inc. in Toronto. The virus may have claimed more than 100 lives so far in Mexico, Health Minister Jose Cordova said.
The spread of the swine flu “has an immediate economic impact and investors will be cautious,” Margolis said. “There will be a drop in consumption and tourism and that affects the currency.”

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FOREX-Yen gains as flu fears stoke risk aversion

The yen strengthened broadly on Monday as concerns that an outbreak of swine flu in Mexico may spread into a global pandemic sent investors seeking currencies perceived as safe havens, while the Mexican peso fell sharply.
The flight to safety also boosted the dollar against currencies other than the yen, and dented currencies seen as higher risk such as the Australian and New Zealand dollars.
European shares fell 1.2 percent .FTSE as investors feared a flu pandemic could snap a nascent global economic recovery, sending the yen -- which typically gains during heightened risk aversion -- to a one-month high versus the dollar.
The Mexican peso fell around 3 percent versus the dollar after more than 100 people were confirmed to have died in Mexico from the swine flu virus, which has spread across North America and as far as New Zealand
The euro fell against the dollar, erasing most of Friday's gains which came after the closely-watched German Ifo survey showed business confidence improving more than expected, which boosted hopes that the euro zone economy may be over the worst. read more

Euro Gains Versus Dollar, Yen as Credit Suisse Posts a Profit

The euro climbed to $1.3029 as of 6:48 a.m. in London from $1.3005 yesterday in New York. It advanced to 127.67 yen from 127.48, after earlier weakening to 126.80. Japan’s currency was little changed at 97.98 per dollar from 98.01.

The euro rose against the dollar and reversed losses against the yen after Credit Suisse Group AG, the biggest Swiss bank by market value, said it returned to profit in the first quarter.
Japan’s currency erased earlier gains on speculation a rebound in Asian equities will prompt investors to purchase higher-yielding assets. The euro strengthened for a third day against the dollar before European reports today that may show the region’s manufacturing and service industries improved for a second month in April, adding to evidence the euro area’s recession is easing.
“Asian stock markets, a gauge for risk-aversion, rebounded following Credit Suisse’s earnings news,” Tomohiro Nishida, a foreign-exchange dealer at Chuo Mitsui Trust & Banking Co. in Tokyo. “The bounce back of stocks triggered buying of the euro and other higher-yielding currencies.” read more

Yen rises vs Dollar on U.S. bank jitters !

The yen rose broadly on Thursday, climbing back towards a three-week high against the dollar touched the previous day, as U.S. stock futures fell and concerns about the banking sector re-emerged after disappointing earnings from Morgan Stanley.
S&P futures fell 0.3 percent SPc1 after U.S. stocks faced a late hour sell-off on Wednesday, with investors concerned about the outlook for banks ahead of the U.S. government's "stress test" results.
The Wall Street Journal reported that U.S. banks will be briefed by regulators as early as Friday on how they performed in the tests before the results are made public later.
Some estimates of banks' likely losses that were used in the stress tests were tougher than expected, the newspaper said. read more

Yen Weakens, Snaps 3-Day Gain

The yen fell for the first time in four days against the euro and the dollar before a government report tomorrow that may show Japan posted a trade deficit last month, damping the currency’s appeal.
Japan’s currency also declined from a five-week high versus the euro as technical indicators signaled its recent gains were excessive. The euro climbed from the lowest in a month against the dollar on speculation a German report today will show investor confidence turned positive for the first time in two years. South Korea’s won slid the most in a week as widening U.S. credit losses tempered demand for emerging-market assets.
“The Japanese economy is in a terrible way and people are very pessimistic,” said Sean Callow, senior currency strategist in Sydney at Westpac Banking Corp., Australia’s biggest bank by market value. “If we get much further deterioration in the trade position, it should be a yen negative.”
The yen weakened to 127.02 per euro as of 7:30 a.m. in London from 126.48 in New York yesterday. It has gained 3.3 percent against the euro in the past week and earlier reached 126.09, the strongest level since March 16. Japan’s currency declined to 98.25 per dollar from 97.89, and dropped to 68.88 against Australia’s dollar from 68.20. read more

Dollar spreads widen on equities slide !

Spreads between dollar interbank costs and other risk-free measures widened in Asia on Tuesday as sliding equity markets and anxiety over government funding for U.S. banks spawned a fresh bout of credit risk.
The widening of spreads on Tuesday was spurred in part by news of a jump in bad loans at Bank of America (BAC.N).
But spreads have been creeping higher since last week against a backdrop of a reversal in the steep stock market rally, worries over banks' solvency and concerns over the outcome of the stress tests the U.S. government is conducting on its banks. read more

Euro’s Decline May Signal Tumble in Stocks !

The euro will probably fall further against the dollar, potentially signaling a decline in U.S. stocks, according to a Citigroup Inc. report that cites trading patterns.
The 16-nation currency may fall to between $1.28 and $1.2760 after depreciating below a support level at $1.3113 and the 55-day moving average of $1.3025, Citigroup technical analysts Tom Fitzpatrick in New York and Shyam Devani in London wrote in a note today. The euro’s decline may signal a drop in the Standard & Poor’s 500 Index, they wrote.
“Euro-dollar has broken lower and further losses are expected,” the report said. “Is this giving a leading indication of where the stock market may be heading?”
The euro fell on Jan. 5, breaking through “near-term support levels” the day before a peak in the S&P 500 that preceded a two-month equities plunge, according to the Citigroup report. The drop took the stock index to a 12-year low March 6. read more

Euro falls to a one-month low against Dollar !

The euro fell to a one-month low against the dollar after European Central Bank President Jean- Claude Trichet said the central bank must do everything possible to boost confidence, signaling he may cut interest rates further.
The Dollar Index rose for a fourth day before a U.S. report today that may show consumer confidence in the world’s largest economy increased for a second month, adding to evidence its recession may be easing. South Korea’s won headed for a sixth weekly advance, its longest winning streak in 18 months, on optimism record-low borrowing costs and government stimulus plans will help encourage economic growth.
“Economies around the world, particularly Europe, are still in a recession,” said Yuji Saito, head of the foreign- exchange group in Tokyo at Societe Generale SA, France’s third- largest bank. “ECB officials are increasing their rhetoric that they’ll cut rates. The bias for the euro is to the downside.” read more

Dollar costs dip !

Dollar funding costs dip in Asia on Monday, although falling eurodollar futures and wider swap spreads reflect the lingering scepticism and risk-aversion in markets that has driven U.S. Treasury yields down this week.
* In Singapore, 3-month dollars are quoted at 1.1025 percent, down from 1.12 percent on Thursday and within striking distance of this year's trough at 1.09 percent in mid-January.

* Eurodollar futures EDZ9 meanwhile move down, notwithstanding the rally in stocks and dip in dollar funding costs, with December eurodollar futures pricing 3-month LIBOR at 1.28.

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Yen, Dollar Strengthen on Concern Global Recession

The yen and the dollar advanced on speculation the global recession is deepening, spurring demand for the relative safety of the two currencies.
Japan’s currency rose to the strongest in two weeks against the euro as Asian shares dropped, prompting investors to cut holdings of higher-yielding assets. The yen also gained versus the greenback before U.S. reports that may show industrial output fell for a fifth month and manufacturing contracted. Nine of the 10 most-traded Asian currencies outside Japan weakened after China said foreign direct investment fell a sixth month.
“The markets are returning to reality from an exuberant state,” said Ryohei Muramatsu, manager of Group Treasury Asia in Tokyo at Commerzbank AG, Germany’s second-biggest bank. “This is a correction which is leading to some buying of the yen. The dollar may be supported as the currency is likely to regain credibility.” read more

Yen, Dollar Fall Versus Higher-Yield Currencies as Stocks Gain

The yen and the dollar weakened against higher-yielding currencies as stocks rallied, spurring investors to favor riskier assets.
Japan’s currency also fell as a gauge of expected movements in foreign-exchange markets declined to the lowest level since September, signaling a lower risk of fluctuations that can undermine so-called carry trades. South Korea’s won rose the most versus the dollar among the 16 most-active currencies after the government sold bonds overseas for the first time in more than two years to bolster its foreign-exchange reserves. read more

Indian Rupee to Rise on ‘Bearish Signal’ in Dollar

India’s rupee may strengthen against the dollar after the U.S. currency showed two “bearish signals,” said Winston Tang, a technical analyst at Forecast Pte in Singapore.
The dollar-rupee weakened below the 50-day moving average of 50.0558 on April 6 and also broke an uptrend line from Dec. 19, Tang said. The rupee will extend gains toward its first target at the 100-day moving average of 49.43, Tang said. A break there would see it advance to 48.50, a so-called “congestion level.”
“These to me are very bearish signals,” Tang said. “The uptrend from December has been broken and the bearish sign is further confirmed by the close below the 50-day moving average, another bearish signal.”
The rupee closed at 50.0550 to the dollar on April 6, according to data compiled by Bloomberg. Indian markets were closed yesterday for a public holiday. read more

Yen gains, suffering stocks cut risk demand

The yen climbed broadly while the euro stumbled on Wednesday, as concerns that corporate earnings may show the global economy remains very weak stung shares and cut demand for currencies perceived to be a higher risk.
Lower European shares helped to push the euro down against the dollar and the yen, which tend to benefit from heightened risk aversion. Comments from Dallas Federal Reserve President Richard Fisher that the euro faced even more problems than the dollar also hit the common currency.
Traders awaited data on German industrial orders due at 1000 GMT.
Risk appetite was hit after a weak earnings report from aluminium group Alcoa (AA.N) raised concerns that other firms, due to state earnings later in the month, may also show poor performance in the first quarter.
"We're seeing an ongoing correction in the sharp increase in risk appetite from last week," said Carl Hammer, currency strategist at SEB Merchant Bank in Stockholm.
Higher-risk currencies including the euro and sterling have retreated after they had rallied on optimism that stimulus efforts would eventually filter through the global economy, which had boosted stock markets. read more

Euro Rises Against Dollar

The euro rose against the dollar on Monday after the meetings by the European Central Bank and the Group of 20 world leaders last week instilled a sense of optimism in financial markets.
The 16-nation euro bought $1.3544 in European morning trading, up from the $1.3481 late Friday in New York.
The British pound rose to $1.4928 compared with $1.4817 while the dollar was also up against the Japanese yen, at 101.21 compared with 100.28 yen late Friday in New York.
Last Thursday, the European Central Bank made a modest interest-rate cut but said it could lower the rate further if necessary. That leaves the ECB with more room to maneuver than the U.S. Federal Reserve and the Bank of England, which already have lowered their rates to near zero. read more

U.K. Pound Retains 'Ability to Collapse'

The pound may tumble amid persistent “economic problems” in the U.K., MIG Investments SA said.
“Though the pound has performed splendidly over the past six weeks, the economic problems do not seem to be going away despite some better-than-expected numbers last week,” Paul Day, chief market analyst at MIG in Neuchatel, Switzerland, wrote in an e-mailed note today. “The pound remains a currency that has the ability to collapse at some point in the future.”
The British currency rose 0.6 percent to $1.4928 as of 8:26 a.m. in London. It strengthened 0.2 percent to 90.69 pence per euro. read more

Futures Traders Turn Bullish on Euro

Futures traders turned bullish on the euro against the U.S. dollar this week for the first time since July, figures from the Commodity Futures Trading Commission show.
The difference in the number of wagers by hedge funds and other large speculators on an advance in the euro compared with those on a drop, known as net longs, was 2,265 on March 31, compared with net shorts of 5,458 a week earlier. It is the first time that speculators were net long the euro since the week ended July 22.
The dollar weakened 1.5 percent this week to $1.3491 per euro, from $1.3287 on March 27 as investors sought higher- yielding assets on speculation the worst of the economic recession may be ending.
Net short positions on the euro versus the dollar were 9,039 as of March 17, a day before the dollar dropped a record 3.4 percent versus the euro after the Federal Reserve announced plans to buy as much as $300 billion in Treasuries. read more

Most-active Asian currencies RIse for Fifth Week

April 4 (Bloomberg) -- Asian currencies rose for a fifth week, the longest winning streak since October 2007, after Group of 20 leaders pledged more than $1 trillion to help combat a global recession.
Eight of the 10 most-active Asian currencies outside Japan advanced in the week after economic reports in China, the U.S. and the U.K. fuelled speculation that demand for regional exports will strengthen. The Bloomberg-JPMorgan Asia Dollar Index, which tracks their performance, touched a two-month high on April 2 as regional stocks rallied.
“The G-20 initiatives have injected positive sentiment into stocks and currencies in the region,” said Suresh Kumar Ramanathan, a currency strategist at CIMB Investment Bank Bhd. in Kuala Lumpur. “It would be tough to get another massive set of news to support further gains.” read more

Euro falls vs dollar as U.S. jobs data looms

LONDON, April 3 (Reuters) - The euro fell against the dollar on Friday in cautious trade as investors nervously awaited key U.S. employment data which are expected to show the U.S. economy suffered deep job losses in March.
The non-farm payrolls figure, due at 1230 GMT, is forecast to show a fall of around 650,000 jobs in March to take the unemployment rate to a 26 year high of 8.5 percent.
Speaking on Friday, White House spokesman Robert Gibbs warned the jobs report is likely to show "additional severe job cuts".
Nevertheless, the euro pared earlier losses against the dollar and gained against the yen, while sterling also rose after better-than-expected euro zone and UK services sector data, which helped European equities .FTEU3 to trim losses. read more

Euro rises after ECB rate decision

The euro rose the most against the dollar in two weeks as the European Central Bank lowered its benchmark interest rate less than forecast and deferred a decision on what else it can do to rescue the economy.
The yen and dollar fell against all of the other major currencies on reduced demand for safety as U.S. accounting regulators approved a rule change that may boost bank profits and leaders of the Group of 20 nations pledged more than $1 trillion in emergency aid. Japan’s currency dropped to a five- month low near 100 versus the dollar.
“It’s not surprising to see the euro pop up,” said Paresh Upadhyaya, who helps manage about $30 billion in currency assets as a senior vice president at Putnam Investments LLC in Boston. “The ECB neither advocates nor rules out unconventional measures. The market has entered into a new phase of risk- seeking behavior. The dollar will remain under pressure across the board.”
The euro rose as much as 2 percent to $1.3517, the biggest intraday advance since March 18, before trading at $1.3446 at 4:01 p.m. in New York. The 16-nation currency climbed 2.5 percent to 133.84 yen from 130.52. The dollar appreciated 1 percent to 99.54 yen from 98.53 after touching 99.90, the highest level since Nov. 5. read more

Stocks rally on G20 news

Global stocks and oil surged on Thursday on optimism over efforts by world leaders meeting in London to revive global growth and on a change in U.S. accounting rules that will help ailing banks whose troubles triggered the worst economic crisis in decades.
Oil prices rocketed up more than 8.0 percent above $52 a barrel on hopes that demand will rebound after world leaders at the G20 summit agreed to pump an additional $1.1 trillion into the global economy through extra funding for groups like the International Monetary Fund. For details see [ID:nL1230573].
The upbeat tone at the G20 summit boosted the risk appetite for many asset classes by raising hopes among investors that a coordinated effort would reverse the shrinking of the global economy for the first time since World War Two. read more

Forex moves help push up reinsurance rates-brokers

LONDON, April 1 (Reuters) - The cost of reinsurance continues to rise as 2008 investment and catastrophe losses and volatile foreign exchange rates combine to curb capacity, leading reinsurance brokerages said on Wednesday.
Aon Benfield, the world's biggest reinsurance broker, said property catastrophe rates had continued to firm in most regions at the April 1 renewals, when many insurers renegotiate the cost and terms of the annual risk cover they buy from reinsurers.
"The April reinsurance renewals continued the global trends witnessed in January, with the exception of the significant influence of currency fluctuations, mainly the strengthening of the Japanese yen," Bryon Ehrhart, chief executive officer of Aon Benfield Analytics, said in a statement. read more