Pound Slides as S&P Signals Britain May Lose Top Debt Rating

May 21 (Bloomberg) -- The pound dropped against most of the other major currencies after Standard & Poor’s signaled Britain may lose its top credit rating for the first time as the government’s finances deteriorate during the economic slump.
Sterling declined from a six-month high versus the dollar and dropped the most in two weeks against the euro as S&P lowered the outlook on the U.K.’s AAA rating to “negative” from “stable.” The dollar rose from a four-month low against the euro after former Federal Reserve Chairman Alan Greenspan said the financial crisis isn’t over, increasing demand for the greenback as a haven.
“People will be cautious before placing bets on sterling,” said Brian Kim, a currency strategist at UBS AG in Stamford, Connecticut. “People will be watchful, and this will benefit those currencies of countries that don’t have fiscal problems, such as the Norwegian krone and the Australian dollar. We are going to see a pullback in the pound.”
The pound fell 0.8 percent to $1.5629 at 9:01 a.m. in New York, from $1.5755 yesterday. It earlier touched $1.5817, the highest level since Nov. 10. It dropped as much as 1.4 percent to 88.70 pence per euro, the largest intraday decline since May 7. The dollar was at 94.90 yen, compared with 94.88 yen. The U.S. currency traded at $1.3735 per euro, from $1.3780 yesterday, after touching $1.3839 earlier, the weakest level since Jan. 5. read more

Dollar’s Decline Begins to Take on ‘Life of Its Own,’

May 21 (Bloomberg) -- The dollar’s drop is broadening amid the thaw in credit markets and investor concern about the long-term effects of the Federal Reserve’s asset-buying program, according to Royal Bank of Scotland Group Plc.
“The decline in the dollar has developed more a life of its own this week, extending to major currencies,” Greg Gibbs, a foreign-exchange strategist in Sydney, wrote in a note today. “The broader thematic is that simply the U.S. was and is pursuing a relatively easy monetary policy that tends to create inflation pressure.” read more

Dollar on defensive but euro, others lack punch

TOKYO, May 15 (Reuters) - The dollar was back on the defensive on Friday, holding close to a four-month low, after a climb in U.S. stocks gave investor confidence a lift and boosted the fortunes of riskier currencies.
The euro, sterling and the Australian dollar held on to gains made on Thursday against the greenback and the yen, keeping within sight of recent highs made as optimism has grown that the worst of the global economic crisis may be over.
But they lacked conviction to push any higher against the dollar, even though stock markets in Asia were on the rise, and traders said the rally had run out of steam for now.
"The dollar still looks soft but people don't want to sell it too aggressively at these kind of levels," said Gerrard Katz, regional head of FX trading at Standard Chartered in Hong Kong. read more

Euro falls vs dollar after German GDP Fell.

May 15 (Bloomberg) -- The euro fell against the dollar and extended a weekly loss versus the yen after a German government report showed Europe’s largest economy contracted last quarter by more than economists estimated.
The euro also headed for its first weekly loss in a month versus the dollar on concern a European report today will show the region’s economy shrank at the fastest pace in at least 13 years. New Zealand’s dollar fell against all 16 of the most- traded currencies after a report showed retail sales dropped almost twice as fast as economists forecast. South Korea’s won rose as overseas funds bought more local stocks than they sold. The euro declined to $1.3593 as of 7:36 a.m. in London from $1.3639 in New York yesterday, heading for 0.3 percent loss this week. Europe’s currency fell to 129.93 yen from 130.67 yen, and was set for a 3.2 percent decline this week. The dollar bought 95.59 yen from 95.80 yen.

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Dollar retreats as investors look to diversify

TOKYO, May 11 (Reuters) - The dollar fell on Monday, hitting its lowest in seven weeks on the euro and seven months on the Australian dollar, as investors emboldened by slowing U.S. job losses extended diversification into other currencies.
The dollar index .DXY hit a fresh four-month low, following through on a fall on Friday after data showed the U.S. economy shed 539,000 jobs in April, fewer than expected and boosting hopes the worst of the economic slump may be over.
Analysts said that with several risk events out of the way, such as stress tests for U.S. banks and the jobs numbers, investors seemed more confident, although it was hard to see what there was in the way of near-term events to keep up that momentum.
As a result currencies were expected to look to equity markets for now, though Asian stocks were putting in a mixed performance after gains on Wall Street on Friday and S&P futures SPc1 were down 0.6 percent, indicating a weak U.S. start later.

Yen, Dollar Gain on Speculation U.S. Banks Will Need More Funds

May 6 (Bloomberg) -- The yen and the dollar rose against the euro on concern U.S. regulators will say Bank of America Corp. needs $34 billion in new capital, boosting demand for the relative safety of the currencies.
Japan’s currency climbed versus the greenback by the most in more than a week and gained against all 10 major Asian currencies. Bank of America faces the largest need for new capital among the 19 banks reviewed, according to people familiar with the matter. The euro fell the most in more than a week against the yen on concern the European Central Bank tomorrow will cut interest rates and buy debt to stem the slump.

The yen rose 0.7 percent, the most since April 24, to 98.10 per dollar as of 6:05 a.m. in London from 98.82 yesterday in New York. Japan’s currency climbed 1.2 percent, the most since April 27, to 130.13 per euro from 131.73 in New York yesterday. The dollar advanced to $1.3262 per euro from $1.3330. read more

Canadian Dollar Rises to Highest Since November as Stocks Gain

Canada’s dollar advanced to the highest level since November as speculation the worst of the global economic crisis is over boosted the appeal of currencies that would benefit from renewed growth.
“Commodity currencies can continue to do well as we come out of the worst of the production-cycle downturn,” said Daniel Katzive, a senior currency strategist at Credit Suisse Group AG in New York. “We’re cautiously optimistic on the Canadian dollar.”
The Standard & Poor’s 500 Index rose 3.4 percent to 907.24 after its biggest monthly advance in nine years, as pending home resales in the U.S. unexpectedly rose. Canada’s dollar, a proxy for risk appetite, tends to track movements in equities.
The Canadian currency, known as the loonie, appreciated 1 percent to C$1.1734 per U.S. dollar

at 4:03 p.m. in Toronto, from C$1.1852 last week. It touched C$1.1733, the strongest level since Nov. 10. One Canadian dollar buys 85.22 U.S. cents. read more

Euro Falls on Speculation ECB Will Cut Rates to Stem Recession

May 5 (Bloomberg) -- The euro fell against the dollar and the yen on speculation the European Central Bank will cut interest rates to a record to counter a deepening recession, diminishing the allure of assets in the 16-nation region.
The euro slid versus 12 of the 16 most-active currencies after the European Commission yesterday said the euro-area economy will shrink 4 percent this year, twice the contraction projected three months ago. The dollar rose versus all but two of the currencies after the Wall Street Journal reported U.S. regulators will tell 10 lenders to raise more capital, spurring demand for the relative safety of the greenback. Australia’s dollar gained after its central bank left rates unchanged. read more