Get automatic overview of a selected topic!

Apr-22-2008

Dollar steadies vs euro after fall on Bank of America

(topic overview)
CONTENTS:

Mersch's comments came a day after ECB Governing Council member Klaus Liebscher said there was no reason for pessimism on euro zone growth, suggesting the ECB will keep interest rates at a six-year high of 4.0 percent for a while. (More...)
The ECB has adjusted the distribution of liquidity over the reserve maintenance period, without, however, modifying the total average supply of bank reserves over the whole maintenance period. (More...)
National City Corp., Ohio's biggest bank and subprime lender, slumped in New York trading after it slashed the dividend and agreed to sell a $7 billion stake to a group of investors led by Corsair Capital LLC at a 40 percent discount to last week's closing price. (More...)
Bank loans to non-financial corporations continued to grow at a robust pace in the second half of the year, largely unaffected by the financial turmoil. (More...)
In the metals market, gold prices were rising, driven up by the weaker dollar and the added financial uncertainty surrounding the problems at BofA. Benchmark bullion futures were tacking on $5.60 at $920.80 an ounce in recent action on the Comex division of the New York Mercantile Exchange. (More...)
British Finance minister Darling further commented the plan will help resolve the problems in the wholesale financial markets. (More...)
In early morning deals, the euro rose to 1.5864 dollars from 1.5814 late Friday in New York. (More...)
There has been a large increase in derivatives to enable easy trading in commodities and much of the loose money has gone into these. (More...)
The dollar has declined 17 percent against the euro and has fallen 14 percent versus the yen in the past 12 months. (More...)
"The perception that the U.S. economy is weak and the risk of a systemic crisis have returned.'' (More...)
Sales of existing homes in the U.S. probably fell to an annual rate of 4.92 million in March, from 5.03 million the prior month, according to a Bloomberg News survey of economists. (More...)
If a crisis hits and the tools at hand are not up to the job, then central bank officials can and will improvise." (More...)
Is Britain (UK) moving to the Euro with devaluing of individuals investiments, property, and the low euro value against the pound. (More...)

SOURCES

FIND OUT MORE ON THIS SUBJECT

Mersch's comments came a day after ECB Governing Council member Klaus Liebscher said there was no reason for pessimism on euro zone growth, suggesting the ECB will keep interest rates at a six-year high of 4.0 percent for a while. "Investors feel more comfortable picking up the euro thanks to its yield advantage over the dollar," said Hiroshi Yoshida, a forex trader at Shinkin Central Bank. "It's only a matter of time before the euro hits the key $1.6 level as investors believe there are fewer risks in buying the euro," he said. The market expects the Federal Reserve to further lower rates from the current 2.25 percent at a policy meeting later this month. [1] The British pound edged up to $1.9957 from $1.9940, while the dollar declined to 103.76 Japanese yen from 104.17 yen. The dollar has been weighed down by a combination of gloomy U.S. economic data and high European inflation — fueling expectations that the U.S. Federal Reserve will continue cutting its interest rates, while the European Central Bank will leave the cost of borrowing unchanged at 4 percent. Lower interest rates can weigh on a nation's currency as traders transfer funds to countries where they can earn better returns, while higher rates are used to curb inflation.[2] Lewis said that first quarter U.S. growth is expected to be "minimal at best" amid a lingering housing market slump. Such concerns have sparked a flurry of U.S. interest rate cuts in recent months which in turn have contributed to weakening the dollar on foreign exchange markets as speculators have sought higher returns elsewhere overseas. A hard line from eurozone officials about the danger of inflation has provided sustained support for the euro because it suggests the European Central Bank will not cut interest rates until much later this year. Players widely expect further rate cuts later this month by the U.S. Federal Reserve which could reduce the return on holding dollars further still.[3] The euro gained strength against the dollar after hawkish comments by European Central Bank official Klaus Liebscher on the outlook for the euro. He warned that rising inflation in the euro zone leaves no room for ECB interest rate cuts, noting oil price increases are driving up wages.[4] The FINANCIAL -- According to Gulfnews, Barclays Capital forecast the dollar will drop 2.5 per cent against the euro in three months as record oil prices increase the U.S. import bill and prevent the European Central Bank from cutting interest rates because of inflation.[5]

The euro had hit a record high 1.5984 dollars last Thursday as the European Central Bank (ECB) warned that surging eurozone inflation could last longer than thought, reducing chances of a cut to interest rates.[6]

Inflation in the 15-nation euro region accelerated to 3.6 percent last month, the fastest in almost 16 years. ECB policy makers will have to "tolerate a stronger euro" or raise interest rates if they want to bring inflation down, said Thomas Mayer, the London-based chief European economist at Deutsche Bank. "Is there a level of a euro where the economy falls apart?" he said. "No, it's a gradual process." While Treasury Secretary Henry Paulson has said he is a "very strong" supporter of a "strong dollar," one of his predecessors, Paul O'Neill, described that policy as "vacuous" in a Bloomberg Television interview last week. Are any reporters reading this blog? If so, would one of you please ask Paulson when he is going to stop chirping Cuckoo and talk about fundamental reasons the dollar is falling: like deficit spending, the Fed slashing interest rates, the bubble blowing policies at the Fed, and a plethora of lending facilities some of which are illegal.[7] Though as earnings were the driver to the reemerging of the dollar along side carry trades the key highlight to keep our eyes on today will be earnings from Bank of America, the second largest U.S. bank, might have deeper losses affected by the credit meltdown and the housing market collapse. The bank might be announcing their third consecutive profits decline, and despite the upbeat sentiment in Wall Street and for the dollar, as now losses from the credit market seem to have neared their peak, and good businesses and strong returns from abroad is thought to support the economy to rebound from the verge of recession; but to me the amount of announced cost trimming plans by massive layoffs is bothering, since the thing that'''s needed to strengthen at this point is consumer spending, which accounts for 2/3 of the total GDP, as with a shrinking labor market, record energy and food prices which is deteriorating further disposable income that the housing market already ate off American'''s wealth and all that along side rock bottom confidence is not supporting the rise in spending. On the medium-term the dollar remains week, though Philadelphia Fed President Charles Plosser was rather hawkish in his comments, saying that now interest rates are low enough to support the economy to rise once again.[8] Expectations are that the U.S. housing market remains in a funk and prices and sales volumes have not yet bottomed. The only other piece of data of any significance for the U.S. this week is the March Durable Goods report, which comes out on Thursday. The focus this week will continue to be the credit markets and the health of the U.S. financial sector. Has the Fed done enough in the way of lowering interest rates and providing back-up credit facilities to ease the pressure on the banks? Have the banks cleaned house and taken sufficient credit related write-downs? Investors were believing this to be the case last week and were pricing in a likelihood that the Fed will only ease rates 25 basis points next week.[9]

Allan Meltzer, a Fed historian and economics professor at Carnegie Mellon University in Pittsburgh, agrees that Bernanke is swatting a fly with a sledgehammer. "In monetary policy, he has not been good," Meltzer, 80, says. "It is a silly policy designed to head off a recession that may come but hasn't come yet." Inflation Threat Meltzer says the Fed, by ignoring the inflationary potential in its latest rate cuts, is creating the possibility of negative real interest rates. He also says the Fed should never take credit risks, especially to save floundering banks. "We can't have a system that continues to work well if the bankers make the profits and the public, the taxpayers, take the losses," he says. "That is not a viable system." Meltzer says Paulson's plan for expanded Fed oversight of the financial industry is both overreaching and impractical. "It's hard to see how the Fed is going to do it," he says.[7]

The European Central Bank continued to focus on upside inflationary risks as ECB member Liebscher supported the central banks hawkish stance on inflation, and went on to say that current market conditions have left the ECB with no room to cut rates. Amid the rise in global inflationary pressures, OPEC President Chakib Khelil announced that they will keep oil productions at its current level in the midst of record high prices - stating that the current production level is in line with demands. Increased volatility shook the securities market as Bank of America post a 77 percent decline in first quarter profits, with National City adding to the mix as they approved the sale of a $7 billion stake at a 40 percent discount.[10] European Central Bank Governing Council member Klaus Liebscher said record-high oil prices are beginning to push up wages and noted that'second-round effects are appearing in some countries in the euro area.' Liebscher said that even though risks to the euro zone economy were on the 'downside,' there is no room to cut rates.[11] The euro was near a four-month high against the yen after European Central Bank council member Klaus Liebscher said record oil prices are pushing up wages, leaving no room to cut interest rates.[12]

''The dollar-euro exchange rate is pressing hard on the $1.60 mark and, if you are taking on a dollar-denominated investment at the moment, you are assuming that there will be an interest rate cut by the European Central Bank which will cause the euro to weaken against the dollar. ''That is what you are buying into, and you are probably looking at a six-to-12 month horizon for it to take place,' he explained.[13] The dollar fell against the euro on Monday after Bank of America reported a bigger than expected plunge in profit and a European Central Banker dashed hopes for a euro interest rate cut soon.[4]

The euro rose to within a cent of a record against the dollar as European Central Bank officials reiterated concern inflation has accelerated, increasing chances interest rates will stay at a six-year high.[14] In Europe, hawkish European Central Bank inflation comments supported the euro after ECB Governing Council member Klaus Liebscher said there was no reason for pessimism on euro zone growth, suggesting the ECB will maintain interest rates at a six-year high.[15]

Further weighing on the dollar are views that the European Central Bank (ECB) may resist calls to follow the Fed in trimming rates as the euro zone area continues to battle inflation.[16]

Because the ECB and the Bank of England show no sign of imitating the Fed's expansionary monetary policies, yet commodity prices are soaring in sterling and euros as well as dollars. Thirdly, because the commodities rising fastest - such as rice, wheat and pork - cannot be used as long-term stores of value and so must reflect the balance of supply and demand for instant use, rather than fears about loose monetary policy and its possible effects on inflation many years ahead. What, then, has suddenly boosted demand for agricultural commodities and how might this be related to the credit crunch? A possible explanation is that the rise in prices itself has triggered a self-sustaining upward spiral of demand, in which investors, wholesalers and final consumers want to buy more of a commodity each time its price rises and this leads to more hoarding and still higher prices. Such self-sustaining price trends are normally rapidly reversed because value-oriented investors and commodity producers start to trade against the trend, selling more each time the price rises.[17] Most importantly, there is a risk that the current temporarily high annual inflation rates, which may persist for a rather protracted period of time, could have second-round effects on wage and price-setting, in a context of moderating but ongoing economic growth and continuing very vigorous money and credit expansion. Although global economic growth is moderating this year, it is expected to continue to support euro area external demand, partly as a consequence of strong growth in emerging market economies. Both investment and consumption should continue to contribute to economic expansion as profitability has been sustained, credit growth remains robust and employment conditions have improved. This outlook for growth is surrounded by unusually high uncertainty and downside risks, stemming in particular from continuing financial market tensions, which may last longer than initially expected, from further unanticipated rises in oil and food prices, which may dampen aggregate demand, and from protectionist pressures. Against this background, the Governing Council believes that the current monetary policy stance will contribute to achieving price stability.[18] In present conditions, however, it is harder than usual for speculators to trade against the rising price trend, because bank lending has dried up. Several American grain wholesalers, for example, have been pushed towards bankruptcy because they have sold futures against grain supplies they bought in advance from U.S. farmers and have then been unable to finance these temporary "short positions" until the next harvest comes along. By draining liquidity in this way from all financial markets, the credit crunch has exacerbated trend-following behaviour among investors, promoted stockpiling throughout the global supply chain and encouraged hoarding by consumers. This financially driven process, rather than a sudden increase in Chinese and Indian appetites, has probably been the main cause of this year's shortfall in global food supplies. Similar influences may explain other surprising linkages that have suddenly emerged between financial markets. Since the credit crunch's start, commodity prices have developed an uncanny correlation with the euro/dollar exchange rate (see chart) and this currency trend, in turn, has been powerfully correlated to two other momentum-driven trends - the collapse in U.S. Treasury bond yields and the widening of credit spreads. If all these trends are driven ultimately by lack of liquidity in global financial markets, they are all likely to turn at about the same time, or in a fairly tight sequence - and this process may now be starting.[17] Traders said Bank of America's results had caused some investors to reconsider whether the credit crunch roiling the financial markets was ebbing. Bank of America said its profit plummeted 77 percent in the first quarter of the year to 1.21 billion dollars, highlighting the woes of the U.S. banking sector from economic and credit turmoil. Its profits shrunk dramatically from 5.26 billion dollars in the same quarter a year earlier when U.S. financial markets were in much better shape. "The weakness in the economy and prolonged disruptions in the capital markets took their toll on our performance," Bank of America's chairman and chief executive Kenneth Lewis said.[3] NEW YORK, April 21 (Reuters) - The dollar fell broadly on Monday after weaker-than-expected Bank of America profits damped investors' initial optimism that companies may escape the pinch of the crisis in global credit markets. Bank of America Corp (BAC.N: Quote, Profile, Research ), the No. 2 U.S. bank, reported a fall in its first-quarter profit due to write-downs and rising credit losses. Its net income fell to $1.21 billion, or 23 cents per share.[19] New York, April 21 (Xinhua) -- The dollar fell against the euro on Monday as a weaker-than-expected profit report from Bank of America dampened investors' optimism on U.S. financial sector.[20]

The U.S. dollar fell against major currencies after unexpectedly weak profits from Bank of America dampened investors' optimism that U.S. financial companies may escape the pinch of the crisis in global credit markets.[15]

HONG KONG (Thomson Financial) - The U.S. dollar weakened against the euro and the yen in afternoon Asian trade on Monday on worries that data released this week, including first-quarter results and housing figures, will add to signs the world's biggest economy may fall into a recession. Bank of America, Credit Suisse Group, Texas Instruments, Microsoft and AT&T; are some of the companies set to announce their results this week.[16]

The prospect of recession and the chaos in the financial markets which prompted the U.S. Federal Reserve to slash interest rates, prompted a significant fall in the dollar. By the middle of last week, it had reached a record low against the euro of $1.59.This compares to $1.34 a year ago, and roughly $1.20 two years ago.[13] The BoC remains cautious of economic circumstances in the U.S., and with the U.S. Federal Reserve likely cutting interest rates further next week, the Bank of Canada does not want to let Canadian interest rates wonder too far from U.S. rates because of what it would do to the dollar and Canada's export sector. Inflation in Canada remains benign at less than 2% and this gives the Bank leeway to bring rates down from 3.5%.[9] The loonie did trade up to within a few cents of par overnight but it has since backed off to the.9950 level. Despite the strength in commodity prices, the Canadian dollar continues to trade like a North American currency, reflecting Canada's close economic ties to the U.S. Week Ahead The Bank of Canada will be the center of attention tomorrow when they announce their interest rate decision.[9]

A brief note on the Canadian Dollar; with Sterling on the back foot and oil hitting $117 per barrel, the Sterling - Canadian Dollar exchange rate is understandably heading lower but we are expecting a 0.5 percent interest rate cut from the Bank of Canada tomorrow and that is tempering the strength in the Canadian Dollar. As you can see on the chart above, this exchange rate spiked last week but failed to maintain that upward momentum and is testing the support around the magic C$2.00 level as I write. That level should give way and a shuffle back down to the C$1.9750 level seen in the middle of last week looks the most likely scenario.[21] The euro rose for the first time in three days amid a growing view that the ECB is in no hurry to cut interest rates from 4.0 percent for now due to nagging inflation risks. Strauss said traders may attempt to push the euro through $1.60 this week.[22] Fascinating article but wrong in my view. It is cheap money that has caused all this - there is a huge amount of wealth around - what on earth is it to invest in - dollars, no way, money deposits in a time of falling interest rates, no way hedge funds and commodity funds and ETFs - yes - oh, and the first two are often highly geared - yes, banks are happy to lend veyr cheaply to their mates in these but not to people they don't know like house owners - it is this loose liquidity that is causing this inflation - it is a self per perpetuating cycle - as in all bubbles this one will eventually burst but when. it is why omentary policy and interst rates desperately need to be controlled not cut even further slack before enromous damage to the world economy is done - it is why Bernanke and King are wrong to cut interest rates and the ECB (yes even them) and the Chinese are doing right holding or increasing interest rates - nevertheless, the cheap dollar is still king in this.[17] The reality is that commodity prices have recently leapt higher every time the global banking system was hit by some new shock. China and other emerging countries, which last year were preparing to boost domestic consumption to compensate for weaker exports to the U.S., are now more worried about inflation and are raising interest rates to try to slow their domestic growth. This is potentially a very dangerous development for the world economy, which increasingly relies on domestic demand from Asia, the Middle East and Russia. This unexpected policy tightening by emerging nations also explains why stock markets fell far harder in Asia than in America and Europe in the first quarter of this year.[17]

If the Bank does indeed deliver a 50-basis point interest rate tomorrow, that will make a total of 1.50% in rate cuts since the Bank started easing late last year. With the U.S. Fed expected to shift its monetary stance to neutral within the next few months, and provided the U.S. economy starts to show signs of rebounding, it would not be surprising if this isn't the last rate cut we see from the Bank of Canada in this interest rate cycle.[9]

Sydney, Australia - U.S. Dollar Trading (USD) strengthened on Friday as market sentiments drastically improved following Q1 results from Citigroup coming in better than expected, with a loss of US$5.1 billion, much lower than the US$10 billion loss during Q4. Based on this result, the market reacted as if it was an indication the worst of the credit turmoil may be over. Despite this positive sign, it is still widely predicted the Fed will cut rates by 25bps when it meets later this month. Contrary to this popular opinion, Philadelphia Fed President Plosser hinted that he felt the Fed had cut rates enough to promote economic growth. This saw the Swiss franc and yen being the most heavily sold off owing to a return to risk appetite amongst investors.[23] Troubled news continues to flow from the financial sector as the second largest U.S bank, Bank of America Corp., reported a 77% drop in Q1 profit brought about by US$6bn of credit write-downs. Speculation has mounted that Citigroup may cut its dividend again following on from billion dollar write-downs. Chicago Board of Trade (CBOT) has cut its predictions of a 50bps rate cut when the Fed meets at the end of the month, however believes there is a 92% chance of a 25bps rate cut.[24]

"The Bank of England's plan of injecting 50 billion pounds is not a lot compared with the 1.2 trillion pound mortgage market in the U.K.,'' said Rafael Martorell, chief dealer of spot foreign exchange at BNP Paribas in New York. Lehman Brothers Holdings Inc. recommended yesterday that investors sell the pound against the dollar, saying the worst housing slump in 30 years will force the BOE to cut its target lending rate by 1 percentage point to 4 percent by January.[12] The dollar dropped 12 per cent against the euro since September as the Fed cut the overnight lending rate between banks by 3 percentage points to 2.25 per cent as subprime-mortgage losses spread. ECB officials have signalled they are unlikely to cut their benchmark rate from four per cent because lower borrowing costs may further accelerate inflation. Barclays Capital revised its forecast for the euro to 79 pence in three months, compared with a previous forecast of 76 pence.[5] The Euro (EURO) fell to 1 week lows against the dollar after U.S equity markets rallied on the heels of better than expected profit results from Citigroup. ECB Council member Liebscher prevented the Euro falling further against the dollar as his comments all but ruled out imminent rates cuts, going so far as to say, "no room exists to cut Euro Zone interest rates." These comments come as no surprise to many traders who believe Euro selling would likely be short-lived, as ongoing inflation pressures will likely encourage the ECB to hold rates at 4% at least through autumn.[23] Europe The Euro reached a fresh record high of 1.5983 against the dollar following strong inflation data from the Euro zone and Germany, which reinforced the view that the ECB will not cut interest rates anytime soon.[25] The single European currency was supported by a growing view that the ECB is in no hurry to cut interest rates from 4.0 percent for now due to nagging inflation risks.[19] The euro got a boost when ECB official Klaus Liebscher said that despite downside risks to growth, there was no room for interest rate cuts.[26]

Two top Federal Reserve officials warned on Thursday against the risks of inflation, in remarks that underscored the existence of a hard wing of policy-makers who oppose further interest rate cuts. Both Richmond Federal Reserve President Jeffrey Lacker and Richard Fisher, president of the Dallas Fed, in separate speeches cited the dangers of delaying moves to rein in inflation.[7] "The U.S. dollar was boosted (on Friday) by strengthening perceptions that the worst of the credit crisis is over and so the Federal Reserve will not need to cut interest rates aggressively further," noted NAB Capital analyst John Kyriakopoulos.[6] The U.S. Federal Reserve is slashing interest rates, while the European Central Bank is refusing to budge.[13] Against the pound, the U.S. currency will weaken to $2.05 versus $1.97. "The dollar is locked in a vicious circle," they wrote. The currency's drop is causing higher oil prices as oil nations seek to preserve their revenues and "this in turn leads to further dollar weakness as the European Central Bank becomes even less likely to follow Federal Reserve easing."[5]

Cecchetti is a former research chief at the New York Federal Reserve Bank and will soon be head of the research unit at the Bank for International Settlements, the central bankers' central bank in Basel, Switzerland. He offers his account of how central bankers were forced to improvise when a downturn in housing prices triggered a major financial crisis in an essay for the Centre for Economic Policy Research in London. "Reflecting on all that has happened, it is natural to wonder whether the Federal Reserve should have refashioned their tools in the way that they did," he concludes. "It seems clear that the 19th century view of the lender of last resort does not work. What should take its place? Should it be a more aggressive central bank that makes loans to a broader set of borrowers, taking credit risk along the way? Or, should this function belong to the Treasury? After all, it is the fiscal authority, not the monetary authority that has responsibility for the public purse. These are really questions for another day.[27] Financial stability and supervision Since last summer, the global financial system has been undergoing a process of risk repricing and balance-sheet deleveraging. This process, which is still ongoing, did not come as a total surprise to us. The ECB, in particular in its Financial Stability Review, as well as other central banks and international institutions, had issued repeated warnings about the potential underpricing of risks in a number of markets, including the U.S. sub-prime mortgage markets. For instance, in my speech before this Committee last year, I noted that the unabated growth in the volume and complexity of new financial instruments could have made these markets vulnerable to disruptive adjustments, as it was not always clear where the risk exposures ultimately lay.[18]

Against the European currencies, the dollar weakened against the euro to 1.591 as ECB's Liebscher reiterated the central bank's inflation-targeting policy, while the British pound actually plunged against the U.S. dollar as the pair retraced to 1.980.[10] The U.S. dollar (USD) is currently the world's reserve currency. If you look around at most central banks around the world, you will see that the majority of them hold the majority of their assets in U.S.-dollar based assetslike U.S. treasuries. The slide of the USD has caused many to wonder if the governments and central banks of the world are going to shift from the USD to the Euro (EUR) as their reserve currency of choice. This is a fundamentally paramount question because if the majority of governments and central banks do decide to go with the EUR as their reserve currency of choice, the value of the USD will plummet as supply floods the market and the value of the EUR will skyrocket as demand increases. Recently, George Sorosyou know, the billionaire investor who brought the Bank of England (BOE) to its knees a while backweighed in on th topic. He doesn't believe the EUR can replace the USD as the world's reserve currency.[28]

The U.S. currency registered small volatility today, trading around the 1.5821 level against the Euro and appreciating by 0.2 percent against the Yen. David Simmons, head of currency strategy at Royal Bank of Scotland Group Plc in London, believes that '''The dollar will weaken to $1.62 or $1.63 per euro this quarter even after the G-7 statement'''.[29] The dollar slid toward a new low Monday against the euro after Bank of America Corp. reported worse-than-expected first-quarter earnings. The 15-nation currency rose as high as $1.5946 in afternoon European trading, up from S$1.5805 in New York late Friday and not far off its all-time high of $1.5982 reached last Thursday.[30] The dollar perked up after a Wall Street rally on Friday generated optimism that the worst of the credit crunch may be over. That was dampened Monday as Bank of America (nyse: BAC - news - people ) said its profit fell 77 percent in the first quarter, hurt by trading losses and a $3.3 billion increase in reserves for problem loans.[30] Net income fell to $1.21 billion, or 23 cents per share. Analysts said Bank of America's results suggest the fallout from the credit crisis may not be over as some have speculated, chilling the appetite for risk as such problems were expected to continue weighing on the U.S. economy and the dollar.[22] Worse-than-expected first-quarter earnings from Bank of America ( BAC ), the second-largest U.S. bank, played a part in weighing on the U.S. dollar and also caused U.S. stocks to decline Monday. Bank of America announced that its first-quarter net income fell 77% to $1.21 billion from $5.26 billion a year earlier, and earnings per share fell to 23 cents from $1.16, less than analysts''' estimates. EUR/USD erased its losses from Friday, climbing to a session high of 1.5950, and is once again an arm'''s length away from its record high of 1.5980, reached last Thursday. The U.S. dollar gained against the British pound after GBP/USD tried unsuccessfully to hold onto its gains above the crucial 2.0000 level, and the pair fell to the low end of 1.9800.[31]

Bank of America - the U.S.'s largest retail bank - announced a 77% decline in first quarter net income and recorded at least US$1.91 billion in write-downs. The dollar fell on this news on broad concerns that the U.S. financial sector still has a tremendous amount of write-downs related to credit losses that have yet to be announced.[32]

NEW YORK (AFP) — The dollar traded mainly lower Monday as worse-than-expected earnings from Bank of America renewed concerns about the strength of U.S. financial markets, traders said.[3]

The dollar remained lower against the euro yesterday as Bank of America Corp., the second-largest U.S. bank, reported a 77 percent drop in first-quarter profit. The euro is likely to climb to its record high of $1.5983 provided that it stays above support around $1.5708, Benedikt Germanier, a foreign-exchange analyst at UBS AG, the world's second-biggest currency trader, wrote in a research note dated yesterday.[12] "Bank of America's results obviously don't help the dollar and we also have the ECB making comments suggesting rates may remain steady." The euro zone single currency rose to a record $1.5983 on April 17, its highest since its inception in 1999, according to Reuters data.[22] The single currency climbed as high as $1.5948 against the dollar after Bank of America reported worse-than-expected earnings for the first quarter. That left the euro just off its record at $1.5985 and not far from the symbolic $1.60 level that, if reached, could set off even more dollar-selling. It took the euro almost five months to go from a record $1.40 to $1.50, but it would be less than two months between.[33] The euro took a stab at $1.60 Monday, as a dollar rally that began last week came to a halt on weak earnings from Bank of America.[33]

The U.S. dollar rose has risen towards a 7 week high against the Yen and stayed away from an all time low against the Euro overnight as Citigroup's results (released last Friday) fuelled hopes that the worst of the bank losses stemming from the U.S. housing sector are now 'on the table'.[34] On the flip side of the coin, Aussie ( AUD ) and kiwi ( NZD ) are really puttin' on the Ritz, with some nice moves higher. Did you see that famous, and well respected investment analyst, Dennis Gartman, is "abandoning ship" on his outlook for gold? It was reported on the Bloomie this morning that Mr. Gartman, wrote in his newsletter this morning, "We are abandoning our long held bullish outlook on gold this morning." Talk about a two-way market! We've got Jimmy Rogers, Jim Sinclair, and other notables holding onto their beliefs that gold will continue to be strong, and now Dennis Gartman is on the other side of that trade. Well I saw a snippet go across the screen that I couldn't find later But it was talking about the Swiss National Bank (SNB) increasing their yen holding and selling dollars. I'm not announcing a fire sale here These are minor moves so far. The price of oil spiked again, this time to $117 OUCH! That's just crazy stuff! But think about it for a minute The total cost to drive your car has more than doubled in the past two years And food? Oh my gosh! The prices on food are just ridiculous which to me means that the "normal consumers" are going to be spending all their money on food and gas, instead of things they don't need at Wal-Mart, and other stores.[35] Carlyle Group, the world's second largest private-equity firm, is raising a $500 million collateralized loan obligation to buy high-risk, high-yield debt being sold by banks at discounted prices, according to people with knowledge of the plan. Citigroup Inc., the biggest U.S. bank by assets, may cut its dividend for a second time this year as losses escalate, Oppenheimer & Co.' s Meredith Whitney said.[14]

Bank of New Zealand currency strategist Danica Hampton said the kiwi had been squeezed to an overnight high around US79.70c, but the time above US79.50c was short-lived. Renewed concern about the credit crisis weighted on U.S. stock markets and risk appetite, which in turn tempered demand for high yielding currencies such as the NZ dollar, she said.[15] Results from the U.S. investment banks were again under closely scrutiny and there were no major negative surprises. Overall risk tolerances remained higher during the day and this maintained a weaker tone for the Japanese currency with the dollar challenging the 102.70 level in U.S. trading.[36] Bank of England announces plan to increase liquidity. U.S. Dollar Trading (USD) was softer against the majors other than sterling despite no significant data being released, leaving the market to find its own direction based on sentiment. U.S. Fed officials Kroszner and Evans both spoke on Monday, avoiding the topic of monetary policy in their comments.[24]

The dollar was quoted at 103.70 yen, down from 103.88 yen. The Federal Reserve is widely anticipated to further trim its key interest rates by at least 25 basis points when policymakers meet next week. Since it began easing monetary policy in September, the Fed has slashed its rates by a cumulative 300 basis points.[16] Some optimism that the credit crunch could be easing also increased speculation that the Federal Reserve would be less inclined to cut interest rates aggressively at the end-April meting. These expectations were also fuelled by the more cautious remarks from Fed officials over the past 24 hours.[37]

A common explanation in the media is that soaring commodity prices reflect a global panic about inflation, as the Federal Reserve Board supports the U.S. banking system by printing money and slashing interest rates. This explanation does not pass muster for at least three reasons.[17]

Interest rates are likely to be higher a year from now and bond prices will be lower. It will be interesting to see if equities continue to enjoy incoming fund flows at the expense of bonds as they did at the end of last week. In the U.S. this week, we get existing home sales data tomorrow and new homes sales figures on Thursday.[9] Expectations of a rate cut next week trimmed back again to 25 bp, though we cannot say the economy will rise until we see considerable evidence from the heart of economic activity and not base assumptions on corporate earnings. This week we can judge from expectations to see March existing and new home sales have continued to fall despite seeing mortgage applications rise, while the other considerable economic data is durable goods orders which are expected to have remained unchanged buoyant by overseas demand. The sentiment will have its major role in determining the Yen'''s path, which is clear; the dollar will play a role though more affecting will be equities performance.[8] Despite the fact that the Canadian economy overall is not doing that badly, the Bank is widely expected to continue on the path of monetary easing and the markets have priced in expectations for a 50-basis point interest rate cut to 3.0%.[9] Domestically, the monthly Tankan index weakened to a 5-year low for April which will maintain a lack of confidence in the economy. There are, however, reduced expectations that the Bank of Japan will cut interest rates in the near term and this may provide some degree of support to the currency.[36] Earlier today, International Monetary Fund Europe Director Michael Deppler said the European Central Bank may need to cut interest rates within six months to bolster the economy.[38] The Bank of England is likely to accept around GBP30bn in mortgage-related securities in exchange for government bonds. If such measures can ease money-market rates this would ease pressure on the central bank to sanction a further aggressive near-term cut in interest rates.[37] Any credible agreement would underpin Sterling on an easing of fears over the housing sector, especially with reduced expectations that the central bank will have to cut interest rates rapidly.[36]

Liebscher, who heads Austria's central bank, told reporters in Vienna yesterday that inflation leaves no room for the ECB to lower interest rates.[12]

The euro was supported after a Financial Times Deutschland report on Tuesday quoted European Central Bank Governing Council member Yves Mersch as saying that the central bank has to ask itself each month whether a rate rise is needed to control inflation.[1] In Europe, hawkish European Central Bank inflation rhetoric supported the euro after Governing Council member Klaus Liebscher said there was no reason for pessimism on euro zone growth.[19]

Yesterday was Chamber of Commerce weather here in St. Louis. OK Friday we had no data to review, so the currencies were on their own And as I signed off on Friday, the euro ( EUR ) was getting sold, and I told you that European Central Bank (ECB) member, Juncker had tried to shake things up with a comment about G-7.[35] FRANKFURT (AFP) — France and Italy will likely stop making progress towards establishing sound finances, the European Central Bank said Monday as it complained that eurozone fiscal consolidation would come to a standstill this year. Budget plans for 2008 "indicate that the decline in the average government deficit in the euro area, observed since 2004, will come to a halt," the ECB said in its annual report for 2007.[39]

The euro could slip from its recent record highs against the dollar amid a schism between the European Central Bank and the Continent's political leaders.[40]

FRANKFURT (Thomson Financial) - The European Central Bank said the outlook for both world and domestic food prices remains 'highly uncertain', with overall risks expected to be on the upside. 'Looking ahead, the outlook for both world and domestic food prices remains highly uncertain.[41] 'There is a risk we see nothing at all from the European central bank through the next few months,' said Shaun Osborne, chief currency strategist at TD Securities.[11] The central bank said that the swaps will last for one year, but be renewable for up to three years and that the risk of losses on the securities will remain with the banks. Well At least they're trying something, eh? The news moved pound sterling ( GBP ) a bit higher, but not much.[35] Matsushita Electric Industrial Co. and Pioneer Corp. plan to combine units that develop plasma television panels by next year to gain production efficiencies, Nikkei English News reported, without citing anyone. The Bank of Japan may forecast real economic growth in fiscal 2008 of about 1.5 percent, lower than its previous 2.1 percent, reflecting the central bank's view that the economy will continue to soften, Nikkei English News reported, without citing anyone.[14] According to the Colombian Central Bank, nation's economy expanded 7.5% in 2007 and the foreign direct investment rose 40% last year, reaching $9.03 billion.[38]

On the economic front, the Bank of England has followed the Fed's approach in easing the mounting turmoil in the credit markets as the central bank looks to exchange nearly $100 billion worth of 9 month UK Gilts for AAA-rate mortgage backed securities.[10]

Oil, the country's biggest export, touched a record $117.83 per barrel, and traders bet the central bank will raise the 5.25 percent target lending rate by a quarter-percentage point tomorrow.[12] Most market participants are expecting the BOC to cut the rate by 50 basis points to 3%, after last week'''s soft inflation data showed that the central bank could afford a bit of a leeway.[31] Looking ahead, all eyes will be focused on the Bank of Canada's rate decision tomorrow at 13:00 GMT, with market participants beginning to price in a 50bp rate cut by the central bank.[10]

"A direct transfer of mortgage and mortgage-backed securities of questionable pedigree from an investment bank to the Federal Reserve seems to test the time- honored central bank mantra in times of crisis: lend freely at high rates against good collateral. It tests it to the point of no return."[7] While we might want to reassess the role of the central bank once the crisis is over, for now it is difficult to fault the Federal Reserve's creative responses to the crisis that began in August 2007. Let's just hope that they work."[27]

The ECB has adjusted the distribution of liquidity over the reserve maintenance period, without, however, modifying the total average supply of bank reserves over the whole maintenance period. The ECB has also conducted fine-tuning operations more frequently and lengthened the average maturity of its open market operations. All these measures have allowed the ECB to keep very short-term interest rates close to the policy rate and to contain potential spillover effects to other segments of the financial markets and the real economy. In this way, the ECB has contributed to safeguarding financial system stability and to mitigating macroeconomic volatility. [18] The Euro (EURO) rallied to within a cent of a record high against the dollar as ECB officials reiterated the concern of an accelerating inflation on the Euro, increasing the chances interest rates will stay at six-year high for some time yet.[24] Futures markets were indicating that the chances of a 0.50% rate cut at the FOMC meeting had fallen to below 10%. In this environment, the dollar has secured a correction on yield and risk appetite grounds. ECB members maintained a tough stance on inflation during Friday and this will tend to limit the scope for Euro selling in the short term.[37]

April 21 (Bloomberg) -- Traders betting on intervention by the Group of Seven nations to stem the dollar's 9 percent decline against the euro this year may be disappointed. Finance ministers are less concerned about the currency's relative value than the risks from "sharp fluctuations'' in exchange rates, their April 11 statement shows. Those swings, as measured by JPMorgan Chase & Co.' s index of implied volatility on dollar options, are abating.[42] Swiss retail sales rose an adjusted 3.3% in the year to February, but the ZEW economic expectations index remained at a depressed level of -71.4 for April which was little changed from the previous month. National Bank President Roth stated that the economic risks were to the downside even though he expected growth to remain relatively robust. He also remarked that the franc over the past few months had corrected some of the recent weakness against the Euro.[36]

The dollar held above the 102.0 level against the Japanese currency in Asian trading on Friday with yen demand still at reduced levels. Domestically, the Bank of Japan lowered its assessment of the economic view while consumer confidence was slightly weaker than expected which will reinforce unease over the economic trends.[37] U.S. dollar moves dominated in European and U.S. trading and the Australian currency dipped to lows below the 0.93 level as the U.S. currency gained ground while gold prices came under pressure.[37] The Australian dollar hit resistance close to the 0.94 level against the U.S. dollar during Friday, but corrections were generally limited in local trading as the currency retained a firm tone.[37]

The euro notched gains vis-à-vis the U.S. dollar today as the single currency tested offers around the US$1.5945 level and was supported around the $1.5790 level.[32] The dollar traded at $1.5906 per euro at 10:13 a.m. in Tokyo, after falling 0.6 percent yesterday. It touched $1.5983 on April 17, the lowest level since the European currency's 1999 debut.[12]

"The moment will come where the exchange rate level will start to cause serious harm to the European economy," said Mr Juncker. My Comment : Is this a joke or is "Mr. Euro" that incompetent? Since when can G7 statements dictate the level of a currency. If he wants to chastise the U.S. for bad economic policies of the U.S. that led to this situation that is one thing, but to seriously suggest currency markets are going to follow the will of the G7 is complete silliness.[7] Euro-group head Juncker stated that the markets had not understood the G7 message on exchange rates. These comments temporarily pushed the dollar stronger on renewed speculation that there could be a decisive move to intervene and support the U.S. currency. The more likely outcome for now is that they concentrate on verbal intervention to keep dollar selling in check, but there will be reservations over pushing the Euro aggressively higher.[36]

The trend in credit spreads began to reverse in mid-March after the Bear Stearns rescue - and last week, more or less on cue, the predominant direction of the U.S. bond market seemed to switch from lower to higher bond yields. If this rise in U.S. bond yields proves sustainable, the overwhelming currency momentum against the dollar and in favour of the euro may also start to reverse.[17] The U.S. currency was weakening against the euro and the yen Monday following the announcement of a big writedown and increased provision for credit losses at Bank of America BAC.[43] TOKYO (Reuters) - The dollar steadied against the euro on Tuesday, keeping losses made after softer than expected profits from Bank of America rekindled concerns the fallout from the credit crisis may not be over.[1] Analysts said Bank of America's results suggest the fallout from the credit crisis may not be over as some have speculated. Such problems were expected to continue weighing on the U.S. economy and the dollar.[20] For details, see. Analysts said BoA's results suggested that the fallout from the credit crisis may not not be over as some have speculated, chilling risk appetite as such problems were expected to continue weighing on the U.S. economy and the dollar.[19]

GbpUsd rose 0.35% to 1.9977. Despite the Dollar's gains, analysts cautioned that although U.S. bank earnings this quarter have not been as good as some had expected, there are still indications the credit crisis is far from over.[44] U.S. Dollar Weaker on Oil and BOA Earnings Report The U.S. dollar has started the week off with a negative tone after Bank of America (the second biggest U.S. bank) announced dismal first quarter earnings.[9] BERLIN (AP) - The euro moved back within sight of its all-time high against the U.S. dollar on Monday after Bank of America Corp. reported worse-than-expected first-quarter earnings.[45]

The Canadian dollar also posted a loss against the U.S. dollar as market participants raised bets of a 50bp rate cut by the Bank of Canada tomorrow.[10] Even with a possible rate cut in the shadow, the Loonie has been holding on quite well versus the U.S. dollar due to rising oil prices.[31]

High commodity prices have put a floor under the dollar, so the Bank can cut away without worrying about the impact of lower rates on the dollar.[9]

Fear over inflation has dampened speculation that the Reserve Bank will be in a position to cut interest rates over the next few months.[36] After last week's tame Canadian inflation reading, economists expect that BOC will cut 50 basis points bringing interest rates to 3.00%.[46]

Countries will have to tolerate a stronger currency or cut interest rates, in order to maintain prices low.[29] Given the stimulus from a weaker currency, the remarks suggest a reluctance to cut interest rates aggressively which will curb short-term Sterling selling.[36]

The euro has jumped 8.4% to the Dollar this year on the view European interest rates will stay put at 4% until later this year.[44] The higher eurozone interest rate makes the euro a more attractive investment than the dollar, analysts said.[6]

'The rhetorical tug-of-war between some euro officials and the ECB on interest rates is making some market players cautious,' Lam said.[16] To contain upside risks to price stability, the Governing Council raised the key ECB interest rates by a total of 50 basis points in the first half of 2007, to 4%.[18]

The ECB is likely to ignore IMF'''s calls for now, seeing that Eurozone inflation rose to 3.6% in March and that oil prices are still going higher. The Bank of Canada will announce its rate decision on Tuesday, and some volatility is expected in CAD-paired currency pairs.[31] "Bank of America's results obviously don't help the dollar, but the comments by the ECB earlier today were very hawkish and it clearly indicates the bank is very concerned about inflation and will avoid cutting rates," said Matthew Strauss, a senior currency strategist at RBC Capital Markets in Toronto.[19]

Silvio Berlusconi, Italy's newly elected premier, has called for a change in the ECB's mandate, proposing a dual mission akin to the U.S. Federal Reserve's mandate to promote growth as well as fighting inflation. He has the support of France's Nicolas Sarkozy. My Comment : What is in that drinking cup they are passing around in Europe? Berlusconi wants the ECB to have a dual mandate like the Fed, when the Fed has failed on both halves of its mandate. Why would anyone in their right mind want to emulate what Bernanke is doing and Greenspan did? Paulson Supports Strong Dollar Like a clock stuck on midnight for ages, Paulson is chirping the same old cuckoo.[7] The Fed has lowered the 2.25 percent target lending rate 3 percentage points since September to prevent widening financial company losses from pushing the U.S. economy into a recession. The ECB has kept its benchmark unchanged at 4 percent since June.[12] Consumer prices in the 15-member euro zone rose to 3.5 percent in March from a year earlier, the highest since June 1992. Unlike the Fed, the ECB has maintained its rate at a six-year high since June.[16]

National City Corp., Ohio's biggest bank and subprime lender, slumped in New York trading after it slashed the dividend and agreed to sell a $7 billion stake to a group of investors led by Corsair Capital LLC at a 40 percent discount to last week's closing price. [14] Sterling weakened 1.8 percent versus the Swedish krona and 1.7 percent against the Australian dollar yesterday as the Bank of England's plan to swap 50 billion pounds ($100 billion) of government bonds for mortgage-backed securities disappointed investors.[12]

Yen traded at 103.85 against the Dollar at 7:00am GMT. The Pound is recovering from last week'''s losses, as the Bank of England said it would intervene and revive the credit market, swapping about 50 billion pounds of government bonds for mortgage-backed securities.[29]

The dollar slipped to a 2-week low of 2.0026. The Bank of England grabbed headlines when it launched the much-hyped GBP50 billion Special Liquidity Scheme to allow banks to swap temporarily their high quality mortgage-backed and other securities for UK Treasury Bills. Acknowledging an 'overhang' of illiquid assets, mortgage-backed ones in particular, on banks' balance sheets, the BoE said their financial position has been stretched by this that banks have been reluctant to make new loans, even to each other.[26] In European intraday dealing, the FTSE of the UK was up 7 points, but the CAC of France was down 34 points and the DAX of Germany shed 33 points. The Bank of England grabbed headlines Monday morning when it launched the much-hyped GBP50 billion Special Liquidity Scheme to allow banks to swap temporarily their high quality mortgage-backed and other securities for UK Treasury Bills. Acknowledging an 'overhang' of illiquid assets, mortgage-backed ones in particular, on banks' balance sheets, the BoE said their financial position has been stretched by this that banks have been reluctant to make new loans, even to each other.[47]

The major developments were in the United Kingdom, where the Bank of England launched a $100 billion plan to boost lending between banks. The BoE's Special Liquidity Scheme allows banks to swap temporarily their high quality assets, including AAA-rated securities backed by UK and European residential mortgages for Treasury Bills. This is intended to help banks and building societies to raise cash easily amid the credit crunch.[48] The Sterling (GBP) fell against the majors as the BoE confirmed speculation by announcing a plan to relieve the liquidity problems in the UK financial network by accepting at least 50 billion pounds of mortgage-backed securities in exchange for UK Treasury bills to lower credit costs and help revive lending by banks.[24]

Citigroup, the largest U.S. bank, posted a quarterly loss of $5.1bio and pretax write-downs of $6bio. Shares in the company rose as investors were appeased by efforts being made to get past its credit problems and drive down costs. EurUsd fell 0.57% on Friday at 1.5815 after posting intraday low 1.5712, its steepest decline in nearly three weeks, well away from a record peak of 1.5983 hit earlier in the week and posting. UsdJpy rose 1.27% to 103.68, after reaching its strongest since late February at 104.65. UsdChf rose to a five-week high at 1.0285 and last traded at 1.0183, up 1.26%, posting its largest daily increase since April 1.[44] Following the earnings report, U.S. equity futures and overseas bourses fell to session lows, the U.S. dollar neared an all-time low against the euro and Treasuries briefly rallied before continuing last week's sell off.[11] BERLIN (AP) — The euro moved higher on Monday against the U.S. dollar, which pulled off all-time lows at the end of last week thanks to a rally in stocks.[2]

The Swiss currency weakened sharply on Friday with lows near 1.0280 against the U.S. dollar while the franc also weakened to lows beyond 1.6150 against the Euro.[37]

The U.S. dollar failed to hold onto last week's gains as foreign economic data brightened the outlook for the corresponding currencies and spurred downward pressures for the troublesome dollar. The U.S. dollar took the biggest plunge against the Australian dollar as input prices rose to its fastest pace in almost a decade, and was followed by the New Zealand dollar as the pair climbed to 0.793.[10] Surprisingly, gold is rather quiet today and has not ventured far from the $920 level despite the sharp sell-off in the U.S. dollar. Other commodity prices are firm to higher with the broad based CRB index back up at record high levels.[9] The U.S. dollar weakness was a significant factor in local trading on Thursday while there was further strong support from the extended gains in commodity prices.[36]

The Euro stalled close to the 1.5950 level against the dollar on Friday and weakened sharply in early U.S. trading.[37] The Euro again made a push towards the 1.60 level against the dollar on Thursday, but was unable to sustain the advance and was generally weaker in New York trading.[36] The euro bought 1.5916 dollars in late New York trading compared with 1.5805 dollars it bought late Friday.[20]

Crude oil in New York rose to a record above $117 a barrel after attacks cut Nigerian output and the dollar dropped against the euro.[14] The dollar was at $1.5931 per euro by 10:33 a.m. in New York, from $1.5817 on April 18. It was at 103.24 yen, from 103.67.[42] Monday, April 21, 2008 7:04:32 AM - The dollar was mixed against other major currencies Monday morning in New York, surging higher versus the sterling but easing against the euro and yen.[47]

"The lines have been drawn, and there is a war of rhetoric that has begun between the ECB and the constituent ministries of the European Union over monetary policy," said Michael Woolfolk, currency strategist at the Bank of New York Mellon. That rhetorical war inflicted some damage on the euro Thursday, with the.[40] "The near stabilisation of the euro area average deficit reflects a slowdown or even a reversal of consolidation efforts in some countries and a reduction of surpluses in others," it added. "In more detail, no substantial consolidation progress towards sound public finances is expected in France and Italy," which would leave their deficits, like that of Portugal, near the upper limit of 3.0 percent of output for countries that share the single European currency. The ECB also noted "fiscal deteriorations" in Germany and Ireland, and pressed eurozone members to work harder towards reducing public deficits, in part because they could exceed the 3.0 percent ceiling required by the EU Stability and Growth Pact, if economic conditions worsened.[39]

A rally on Wall Street Friday that followed upbeat U.S. earnings data "is being taken by many as a sign that the worst of the credit crunch may now be behind us," said Gary Thomson, head of sales trading at CMC Markets in London. That has prompted pressure on the euro; while the European currency has recovered some ground, "the scale of the rally does suggest there's a degree of conviction amongst traders that the U.S. may be out of the worst," Thomson said.[2] 'There is a lot of caution ahead of another week of heavy earnings releases and some economic data,' said Thomas Lam, senior treasury economist at United Overseas Bank. At 1:00 p.m. (0500 GMT), the euro was trading at $1.5826, up from $1.5808 in Sydney this morning.[16] "There is a lot of caution ahead of another week of heavy earnings releases and some economic data," said Thomas Lam, senior treasury economist at United Overseas Bank. "Because of this, some market participants are paring back their positions." Bank of America, Credit Suisse Group, Texas Instruments, Microsoft and AT&T; are some of the major companies set to announce their results this week.[6]

There were no significant data releases during the day with the main focus on asset markets. The results from Citigroup contained a lower than expected figure for debt write-downs and this boosted confidence that Wall Street banks could manage the credit and economic risks.[37] The Basel II framework is expected to improve transparency and foster more sophisticated internal control and risk management systems. Supervisors will monitor the effective implementation of the new framework to ensure that relevant information is actually disclosed and that banks retain adequate capital and liquidity buffers, commensurate to their risk profile, throughout the economic cycle. That said, the lessons drawn from the financial turmoil also point to certain aspects of the framework that need to be revisited, such as the treatment of exposures to structured finance products and to off-balance-sheet vehicles.[18] Easy-Forex strongly recommends that a user considering trading foreign exchange products read through all the main topics contained in the Easy-Forex website so that he/she may obtain a clear and accurate understanding of the risks inherent to fx trading. Opinions and analysis on potential expected market movements contained within the Easy-Forex website are not to be considered necessarily precise or timely and due to the public nature of the internet, Easy-Forex cannot at any time guarantee the accuracy of such information. Trading on-line, no matter how convenient or efficient it may be, does not necessarily reduce the risks associated with foreign exchange trading, and Easy-Forex does not accept any responsibility towards any customer, member or third party, acting on such information contained on the web site as to the accuracy or delay of information such as quotations, news and charts derived from quotations.[24] Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors.[29] Site visitors hereby acknowledge that: Trading foreign exchange on the margin carries a high level of risk, and may not be suitable for all investors.[44]

Japan The Japanese Yen is still linked to the risk appetite of the investors and the movements of the equity markets. The currency plummeted on Friday to its lowest level in 7-weeks and traded at the 104 levels against the Dollar after Citigroup earnings' report.[25]

In keeping with the ECB's hawkish rhetoric, Weber again insisted that upward risks to prices are prevalent in the medium term. The euro eased slightly from its early levels versus the dollar in afternoon dealing.[49] You would then remove the safety net the speculators provide when an asset mkt price collapses and no one else will buy except the same speculators. On a different note does the Euro really belong at this level, or the autralian dollar, New Zealand dollar, brazilain dollar.[17] "A fall in bond prices, for example, would change the picture completely. That's not what we are seeing.'' The dollar will weaken to $1.62 or $1.63 per euro this quarter even after the G-7 statement, according to Simmonds. He declined to speculate on what level might bring G-7 intervention.[42] The dollar has declined about 8.2 per cent versus the euro and Japanese yen in 2008 as oil prices rose to an all-time high of $115.54 a barrel compared with $95.98 on December 31.[5] The dollar was at 103.14 yen, after falling 0.4 percent. The dollar may fall to $1.60 per euro and 101.50 yen this week, Soma said.[12]

The securities unit of Barclays, the UK's third- biggest bank, predicts the dollar will fall to $1.63 per euro, compared with a previous estimate of $1.50, analysts led by David Woo, London-based global head of currency strategy, said.[5] Monday, April 21, 2008 2:10:50 PM - The dollar was mixed against other majors in quiet dealing on Monday, easing slightly to the euro but picking up ground on the broadly weaker sterling as the Bank of England launched a $100 billion plan to boost lending between banks.[48]

The U.S. financial sector showed signs of lingering trouble, after the second largest U.S. lender, Bank of America Corp., reported a 77 percent profit decline to $1.21 billion.[4] Bank of America Corp., the second-largest U.S. bank, said profit dropped for a third straight quarter as the company set aside $6.01 billion for bad loans.[14]

The initial jobless claims edged higher last week at 37,000 applications from 355,000 close to the expected 375,000, indicating that labor market conditions are still deteriorating. Citigroup, the largest U.S. bank posted a quarterly lost of $5.1 billion, adding to its previous quarter losses, and pre-tax write downs of $6 billion.[25] Shares fell nearly 2.5 percent. Regional U.S. bank National City Corp. reported a quarterly loss and said it would bolster its balance sheet by raising $7 billion.[4] A weaker dollar benefits the U.S. by giving a boost to exports, which increased 2 percent to a record $151.4 billion in February, according to the Commerce Department.[42] Google Inc. said April 17 that first-quarter international sales, which jumped 55 percent, would have been $202 million lower without the benefit of a depreciating dollar. While Treasury Secretary Henry Paulson has said he is a "very strong'' supporter of a "strong dollar,'' one of his predecessors, Paul O'Neill, described that policy as "vacuous'' in a Bloomberg Television interview last week.[42] The dollar will probably have to depreciate by 1 percent for three to four consecutive days before policy makers consider intervening, said Ricardo Zulliger, who heads fixed-income, currency and commodities sales in North America at Dresdner Kleinwort.[42]

Siemens AG Chief Executive Officer Peter Loescher said March 4 the currency's level is "not easy'' for the company. MTU Aero Engines Holding AG, the largest independent provider of jet-engine maintenance, said this month the dollar's decline will reduce profit this year. "Since our last meeting, there have been at times sharp fluctuations in major currencies, and we are concerned about their possible implications for economic and financial stability,'' the G-7's finance ministers and central bankers said in a statement after the talks in Washington on April 11.[42] The UK currency found support close to the 0.80 level against the U.S. dollar on Friday and pushed to highs around 0.7875 before correcting weaker to 0.7920.[37] The British pound depreciated sharply vis-à-vis the U.S. dollar today as cable tested bids around the US$1.9800 figure and was capped around the $2.0025 level.[32] The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥102.95 level and was capped around the ¥104.05 level.[32] The Swiss franc appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the CHF 1.0065 level and was capped around the CHF 1.0205 level.[32]

While the value of the U.S. dollar against the euro has been declining steadily over the last few years, recent months have seen that trend accelerate.[13] April 22 (Bloomberg) -- The dollar traded within a cent of its record low against the euro before an industry report forecast to show U.S. sales of existing homes fell last month.[12] The euro is up more than one and a half cents from Friday's lows, as is the British pound. The Australian dollar has gained more than a cent today and is trading within half a cent of it's all-time high of 95 cents set in February. The Japanese yen and Swiss franc have reversed their recent slide with both currencies posting good gains against the dollar this morning.[9] In European trading on Monday, the euro changed hands at 1.5864 dollars against 1.5814 late Friday, at 164.34 yen (163.96), 0.7991 pounds (0.7914) and 1.6061 Swiss francs (1.6102).[6]

Sterling found support near 0.81 against the Euro and strengthened sharply to highs near 0.7975 in U.S. trading while it also rallied to highs above 1.99 against the dollar.[36] The dollar again found support below the parity level against the franc and strengthened to highs near 1.0090 in U.S. trading.[36]

"There is a long way to go for the U.S. housing slump to bottom out,'' said Masaki Fukui, a senior economist and currency analyst in Tokyo at Mizuho Corporate Bank Ltd., Japan's third- largest bank by assets. "This could further increase subprime- related bad loans, pushing down the dollar.''[12] A 50 billion pound Bank of England plan to get British banks lending again proved welcome on the view that the authorities had finally taken concrete action. This helped London stocks close off their lows. It also highlighted just how serious the fallout from the U.S. subprime home loan crisis has become, with British bank-lending drying up fast for new mortgages.[50] THE Bank of England, which this week will announce a £50 billion package designed to help the banks and unfreeze the money markets, has come under attack for failing to act sooner. The bank has been in discussions with financial institutions for weeks about the plan after criticism from the City that it has been slower to respond to the credit crunch than its American and European counterparts. The Council of Mortgage Lenders has warned that home loans could halve this year without help from the authorities. John Redwood, a senior Conservative MP, said the bank's move represented "an extraordinary U-turn" compared with its reluctance to step in last year.[51] Now that the Bank of England has got off its high horse and decided to support British banks in much the same way that the European Central Bank has been supporting Spanish and German banks since last August, governments around the world are finally committed to publicly funded financial workouts. This is the "Plan B" that I have described here - the inevitable next stage in the credit crunch, once it became apparent that a market-based solution was doomed to fail.[17] The Euro got a brief boost on remarks by European Central Bank Governing Council member Klaus Liebscher.[44] There was, however, evidence that central bank Euro buying had eased significantly on Friday with a possible perception that the Euro offered little value at current levels.[37]

Maintaining price stability is "of paramount importance," European Central Bank President Jean-Claude Trichet said in Frankfurt on April 15.[7] The central bank said the preliminary size of the plan is likely to be around '50 billion, with an asset swap permitted for a period of one year, which may be renewed for a total of three years.[11] The experience of the turmoil also showed that EU arrangements for financial stability should be enhanced. An important element of this process is the strengthening of the cooperation and exchange of information between central banks and prudential supervisors in both crisis prevention and crisis management. In situations of financial stress, enhanced cooperation is important to allow both central banks and supervisory authorities to perform their respective functions more effectively.[18] The roadmap of objectives and actions agreed by the ECOFIN Council and the recommendations of the Financial Stability Forum, strongly endorsed by the G7 finance ministers and central bank governors, are consistent and converge to a very large extent.[18] Supervisors and central banks around the globe will be monitoring very closely the adequacy of the actions taken by the financial industry to restore market confidence.[18] In the heat of a financial crisis, the central bank is the only official body that can act quickly enough to make a difference.[27]

Bank loans to non-financial corporations continued to grow at a robust pace in the second half of the year, largely unaffected by the financial turmoil. The analysis of these developments confirmed the Governing Council's assessment that upside risks to price stability prevailed. [18] We remain strongly committed to preventing second-round effects and the materialisation of upside risks to price stability over the medium term. Especially in a period of heightened financial market volatility, such as the one we are experiencing at present, the ECB's solid commitment to do what is necessary to preserve price stability over the medium term can help to establish an environment of greater certainty for economic agents. Equally, our manifest dedication to be active in the money markets when required to ensure their orderly functioning can contribute to instilling confidence and dealing with stress in financial markets. Monetary policy and liquidity management The Eurosystem has clearly distinguished between its decisions determining the monetary policy stance to maintain price stability and its money market operations conducted in order to implement this stance and provide liquidity to relieve pressures in interbank money markets.[18] All in all, the risks to euro area financial system stability have materially increased over the past eight months. Looking ahead, the ongoing adjustment of global financial markets is likely to last for some time, its interaction with the real economy could prove more wide-ranging and the shock-absorption capacity of the euro area financial system could be further tested.[18]

"The bad news is that ânormalâ does not mean anything like the conditions that have prevailed in the world financial system and the global economy during the past few years." This is in fact good news: the credit conditions of the past few years in the global economy have been in no ways normal or productive.[17] Three lasting changes in the world economy are likely to result from the credit crunch. The U.S. economy, which should start to recover this summer in response to fiscal and monetary stimulus, will no longer be powered by housing and consumption, but mainly by exports and manufacturing. The British and European economies, which are 12 to 18 months behind the U.S. in a broadly similar monetary cycle, will only now begin to experience an economic slowdown and housing slump as serious as the one that has almost ended in the U.S. So, while the credit crunch may be in its final stages globally, its economic impact will probably be far more noticeable from now on in Britain and Europe than in the United States.[17]

The International Monetary Fund recently cut the 2008 economic forecast for the U.S. to 0.5 percent from 1.5 percent due to the widening credit crisis arising from unpaid housing mortgages. The IMF has also not discounted the possibility that the United States may suffer a 'mild recession' this year.[16] The Federal Reserve, on the other hand, is seen cutting rates further from the current 2.25%. More U.S. cuts would help keep euro zone rates significantly above those in the United States, keeping the Euro's yield appeal intact.[44] The BofA news raises further concerns that the continuing troubles in the banking sector will spread to the wider economy and slow growth in the U.S. As a result, the Federal Reserve will probably lower rates again, many analysts believe. That could mean lingering pressure on the greenback.[43] Real Time Economics offers exclusive news, analysis and commentary on the economy, Federal Reserve policy and economics.[27]

The Bernanke Fed may have already seized too much power and has abandoned historical principles, says Paul Volcker, who was Fed chairman from 1979 to '87. "The Federal Reserve has judged it necessary to take actions that extend to the very edge of its lawful and implied powers," Volcker, 80, told the Economic Club of New York on April 8.[7]

In the metals market, gold prices were rising, driven up by the weaker dollar and the added financial uncertainty surrounding the problems at BofA. Benchmark bullion futures were tacking on $5.60 at $920.80 an ounce in recent action on the Comex division of the New York Mercantile Exchange. [43] The dollar fell to $1.5907 at 2:25 p.m. in New York, from $1.5817 last Friday.[4]

The European single currency stood at 1.5885 dollars, up from 1.5871 dollars earlier in the day and 1.5814 dollars in New York on Friday.[50] LONDON (AFP) — The dollar slid on Monday against the European single currency in cautious trade ahead of vital economic data and earnings news in the United States, dealers said.[6] With only a trickle of economic data released worldwide on Monday, traders were left to weigh another batch of corporate earnings news, including a disappointing result from Bank of America (BAC).[46] With little economic data set for release on Monday, the news flow has been dominated by the Bank of England's launching of a plan to thaw frozen credit markets in the UK.[26]

UK After a very vulnerable week, the Sterling Pound gained broadly on Friday on news that the UK authorities are planning to support the mortgage market. The currency was further supported by reports that the Royal Bank of Scotland, the UK's second largest bank, was set to launch a massive rights issue to rebuild its capital reserves.[25] The Sterling (GBP) rose against the dollar due to short covering. Many investors have been shorting the pound on the back of a weakening UK economy but news that the BoE may be planning to support the mortgage market this week has caused them to change their sentiment.[23] According to Stephen Taylor, an equity analyst with Dolmen stockbrokers, buying into the U.S. is one investment strategy investors should consider. ''We could see the dollar weaken slightly more after this week but, in the longer term, we anticipate it will regain some of its strength, probably by the end of the year,' he said.[13]

"Weaker share prices sparked yen buy-backs, while some investors also booked profits on the dollar's recent rise against the yen," said a trader at a Japanese trust bank.[1] London: European stocks closed lower on Monday as investors opted to take profits on recent gains after another series of bad U.S. bank results highlighted damage caused by the U.S. subprime home loan crisis.[50] European government bonds rose as stocks in Europe and the U.S. fell on concern credit losses will weigh on earnings, spurring investor demand for the safest assets.[14] April 22 (Bloomberg) -- U.S. stocks fell for the first time in five days after worsening credit losses at Bank of America Corp. and National City Corp. undermined confidence that banks are overcoming the subprime mortgage market's collapse.[14] Bank of America Corp (BAC.N: Quote, Profile, Research ), the No. 2 U.S. bank, reported a fall in first-quarter profit due to write-downs and rising credit losses.[22]

Bank of America, the largest retail bank in the United States, reported a 77 percent drop in profits in the first three months of2008, hit by trading losses and a 6 billion-dollar write-down to cover bad loans.[20] The Dow closed up 228.87 points or 1.8 percent at 12,849.36, the Nasdaq closed up 61.14 points or 2.6 percent at 2,402.97 and the S&P; 500 closed u 24.77 points or 1.8 percent at 1,390.33. Dow components will be in the spotlight for a second day, with Bank of America (BAC) and Merck (MRK) expected to report their quarterly results before the opening bell. Analysts have predicted that Bank of America will report a profit but that its earnings will drop sharply.[47]

Worse than expected Q1 2008 results of Bank of America further added to the dollar weakness.[52]

KUWAIT CITY : The dollar hit a one-month high against the yen to reach 104.23 but on the other hand rose further away from the record low versus the Euro on Friday after Citigroup results contained less damage than some had expected.[25] The Dollar climbed to a seven-week peak against the Yen and moved further away from a record low versus the Euro on Friday after Citigroup's results sparked hope that the worst of the credit crisis has passed.[44]

The yen pulled away from longer-term lows against the euro and sterling. Among the major news for the day, Japan's Finance ministry downgraded its regional economic assessment, while a Singapore sovereign wealth fund predicted a global recession. Japan's Ministry of Finance downwardly revised its regional economic assessment for the first time in more than six years.[46] The Canadian currency also saw modest weakness against the Japanese yen. The pair traded at 102.60 in the late afternoon, near its lows of the day. Japan's Ministry of Finance downwardly revised its regional economic assessment for the first time in more than six years.[46]

European exports to the U.S. fell in 2007 for the first time in four years as the U.S. currency's decline made goods from the region more expensive for Americans.[42] The last time the G-7, which comprises the U.S., Japan, Germany, Britain, France, Italy and Canada, intervened was Sept. 22, 2000. It bought euros after that currency tumbled 27 percent from its 1999 debut.[42] Short term the U.S. currency may pick up more support but it is too early to say the Trend has definitely changed with our model showing the Euro still in a buy Trend against the dollar.[34]

Well, the dollar held the hammer for most of the morning, but then a funny thing happened on the way to the forum: the euro turned on a dime, and began rallying, and did so for the rest of the day. Overnight though, we did have ECB member Liebscher making some very hawkish statements, which has helped the euro this morning. Liebscher said that he "sees no room to lower interest rates" And that he "sees some indication of second-round effects". He's talking about inflation here folks.[35] ECB governing council member Alex Weber, who last month called for higher rates in the euro area to bring down inflation, will be holding a news conference later today.[16] The euro zone's inflation rate accelerated to 3.6 percent in March, the highest level in almost 16 years, a report said on April 16.[12] In the last quarter of the year, annual inflation rates rose sharply, reaching a peak of 3.1%, driven largely by substantial increases in oil and food prices. Notwithstanding these price shocks, wage growth remained moderate and medium to longer-term inflation expectations firmly anchored at levels consistent with price stability.[18] 'Overall, risks seem to be on the upside,' it said. The report said in 2008, total base effects from both energy and non-energy prices are expected to make substantial downward contributions to inflation developments 'of around 1.1 percentage point cumulatively in the 12 months to December 2008'. It said the impact will generally be concentrated towards the end of the year as the significant increases in energy and food prices recorded in the second-half of 2007 will drop out of the annual comparison 12 months later. 'However, the extent to which these negative base effects will also lead to lower HICP inflation hinges crucially on the absence of further shocks to oil and food prices and on the moderate evolution of the other HICP components, which in particular requires the absence of second-round effects,' it said.[41]

The Euro gained momentum after policy maker Liebscher stated that record oil prices are beginning to push up wage demands and maintain a high inflation level.[24] In the euro area, average annual HICP inflation last year was 2.1%, that is, slightly above the ECB's definition of price stability.[18] Liikanen said increasing inflation pressures have reduced the chances of an ECB rate cut in 2007 and could force policymakers to debate a rate hike. Germany's IW economic institute sees German GDP growth around 1.7% this year.[32] Weber suggested the ECB may raise interest rates if second-round inflation effects emerge while Liebscher suggested a "path of moderation" because "certain indicators suggest that specific second-round effects are starting to appear."[32] Since the summer, the Governing Council has kept the key ECB interest rates unchanged, in view of the unusually high uncertainty surrounding the macroeconomic outlook as a result of the financial turmoil.[18]

Were it not for the reduction in expectations of EU interest rate hikes, I am certain the Sterling - Euro exchange rate would be far lower having just dropped back into the previous downtrend, that may well be the case before the week is out.[21] The Federal Reserve stance on interest rates will be an increasing focus ahead of the late April decision.[36] Treasuries fell, pushing yields on two-year notes higher for a sixth day, as central bankers seek to spur lending without lowering interest rates much further.[14] If such dichotomy continue to exist, are we creating a casino where "Head I win, tail taxpayer lose"? We've seen how GSEs like Fannie and Freddie operate under such house rule and all taxpayers are liable for their (future) bailout. The fundamental solution is to raise interest rate and stop the negative rate campaign, so people in this country has sane reason to save and be self-reliant.[27] If you're looking to borrow money, now might be the time to be thinking of locking in the interest rate.[9] Markets will be expecting interest rates to be left on hold in the short term.[36] Asymmetrical Libertarian said: "The fundamental solution is to raise interest rate and stop the negative rate campaign, so people in this country has sane reason to save and be self-reliant."[27]

British Finance minister Darling further commented the plan will help resolve the problems in the wholesale financial markets. He went on to suggest, '''We expect the BoE to undertake gradual easing in the coming quarters, bringing the Bank Rate to 4.5% by year end.''' [24] Formerly editor-in-chief of Futures Magazine, Darrell Jobman has been writing about financial markets for more than 35 years and has become an acknowledged authority on derivative markets, technical analysis and various trading techniques for currency futures, currency future trading and commodity currency future trading.[36]

The 15-nation currency bought $1.5835 in morning European trading, up from $1.5805 in New York late Friday but still well short of the all-time high of $1.5982 it reached last Thursday.[2] Oil climbed to $117.05 a barrel for the first time in New York, the highest since futures began trading in 1983.[42]

In early morning deals, the euro rose to 1.5864 dollars from 1.5814 late Friday in New York. [6] The dollar eased versus the yen Monday morning in New York, pulling back from Friday's 7-week high of 104.63.[26] In late New York trade Friday, the dollar stood at 1.0091 Swiss francs, down from 1.0180 late Friday.[3]

''Although the US's biggest trade deficit is with Asia, Asian governments tightly control the exchange rate, while the dollar floats freely against the euro, which is why the euro has appreciated,' Beggs explained.[13] Jean-Claude Juncker, the EU's 'Mr Euro', has given the clearest warning to date that the world authorities may take action to halt the collapse of the dollar and undercut commodity speculation by hedge funds. "I don't have the impression that financial markets and other actors have correctly and entirely understood the message of the G7 meeting," he said.[7] At noon, ECB Governing Council Member Axel Weber will address financial markets and the economic outlook for the euro zone at Germany's Ifo institute.[38] Market participants focused more heavily on financial market news amid a lack of U.S. economic news.[3] There have also been generally favourable U.S. corporate results over the past 24 hours, notably from Google, which has boosted optimism in the wider economy and U.S. financial markets.[37]

Interest-rate cuts by the Federal Reserve to keep the U.S. economy out of a recession have also reduced demand for dollar-denominated assets.[5] "There's a good chance the housing market will lead the U.S. economy into a recession, and that reduces the appeal of the dollar.''[12] Market participants said the dollar will likely continue to suffer as a result until there are clear signs the U.S. economy is beginning to pick up. "We keep our view that the dollar will come under renewed pressure once a rising number of market participants lose their faith in the current optimistic view and against the backdrop of an economy that will remain sluggish for longer than many market participants currently envisage," said Commerzbank analyst Gavin Friend.[3]

Lately, troubles at U.S. financial firms have been triggered by weakness in the housing market, but Citigroup's earnings have tempered worries about the sector and boosted risk appetite, supporting Dollar.[44] In the medium term, it is of the utmost importance to converge towards best practices on risk valuation and disclosure in order to facilitate the assessment of the risk profile of financial institutions by investors, markets and public authorities. The turmoil highlighted the implications of the increased exposure of some banks to complex financial instruments, which, unfortunately, was not always matched by a full understanding of the inherent risks and their possible impact on banks' capital and liquidity positions. This underscores the importance of having in place robust risk management practices, including liquidity risk management, stress-testing and contingency funding plans.[18] Demands for U.S. Treasuries declined as global stock markets advanced, and led many investors to leave the safe haven of risk free bonds.[10] Asian stock markets posted robust gains on Monday as investors there read last week'''s first quarter U.S. results, especially from Citigroup, in a positive light, convinced that much of the subprime losses were now out in the open.[50]

Monday, April 21, 2008 6:36:26 AM - U.S. stocks were poised for a lackluster open Monday morning in New York as investors geared up for another round of corporate earnings reports.[47] News that Bank of America'''s first quarter earnings had been savaged added to the overall negative tone, which contrasted sharply with Asia where investors chased stocks in the belief that the worst of the crisis was over.[50]

In share market news, Bank of America'''s shares fell 2.5%, whilst National City Bank'''s shares fell 27%.[24]

Sterling looked set to rally against the Euro on Friday and it did make exemplary gains for much of the day but the enthusiasm for the Pound became a bit hollow as news of the Bank of England's 'mortgages for treasury certificates' plans started to circulate. As we start this week, the Pound is sliding with traders fighting shy of the Bank of England's initiative.[21] Traders dumped the pound following news that Bank of England will allow banks to swap about GBP 50 billion of mortgage-backed and other securities for nine-month U.K. treasury bills to improve liquidity in the domestic mortgage market. Many traders are skeptical that this amount will suffice.[32] The pair moved at 204.21, continuing a climb that began on Friday. The Bank of England launched a much-hyped GBP50 billion Special Liquidity Scheme to allow banks to temporarily swap their high quality mortgage-backed and other securities for U.K. Treasury Bills.[46]

Believe or not, it mirrors the Fed's plan to take securities (read mortgage backed bonds) of any rating as collateral. The BOE will allow banks to temporarily swap their mortgage-backed and other securities for U.K. Treasury bills, to ease the current credit crunch.[35] The Bank of England, Britain's equivalent of the Fed, said it will swap high-grade mortgage-backed securities for government issued treasury bills in an effort to ease the credit crisis.[43]

In the latest bid to combat the global credit crisis, the Bank of England on Monday announced a 100 billion-dollar rescue plan to allow banks to swap mortgage-backed securities for British Treasury bills. The package was met with an unenthusiastic response as the currency markets are still examining its potential impact.[20]

Important data will come from Britain today, as the President of BoE will speak, revealing the details of the plan to boost credit market in the country. To finish, later today will be revealed the monthly foreign securities purchase in Canada, which if the forecast of 1.5 billion becomes true, the Canadian Dollar will increase value; foreigners have to buy the country'''s currency before they can buy their assets.[29]

Deutsche Bank AG and UBS AG, the two biggest currency traders, say the decline in volatility means the likelihood of buying or selling currencies in concert to halt the dollar's slide has diminished even with the greenback at record lows.[42] The dollar fell from a 7-week high against the yen, as traders moved into the safer, low-yielding Japanese currency.[46] The currency touched 1.9997 against the dollar. It also rose against the Yen and the Euro to 208.20 and 0.7893, respectively.[25] "The dollar started Monday on a weak note, while the euro got a lift from ECB hawkish comments," said Matthew Strauss, a currency strategist at RBC Capital Markets in Toronto.[22]

Payment and securities settlement systems Before closing, I would like to say a few words on developments in the field of payment and settlement systems, where the year 2007 was marked by major achievements. As you are aware, the Eurosystem is engaged in four big projects to ensure well-functioning payment and securities settlement systems in the euro area: TARGET2, TARGET2-Securities, the update of the correspondent central banking model (CCBM2), and SEPA. In tandem with these efforts to promote the integration of payment and settlement systems, the ESCB and the Committee of European Securities Regulators are currently developing recommendations to ensure the soundness and safety of the European post-trading sector. Ladies and gentlemen, the ECB places the greatest value on the fulfilment of its accountability obligations. In last year's Resolution you made a number of suggestions to the ECB and requested us to report back on the follow-up given to them. We carefully considered these suggestions and I am pleased to inform you that in his letters of transmission of this year's Annual Report to President P'ttering and to you, Madame Ber's, as Chair of this Committee, President Trichet has provided an overview of the follow-up measures taken by the ECB. I thank you for your attention.[18]

Although the Bank of England said it plans to swap 50 billion pounds of government bonds for mortgage-backed securities, that amount is just a drop in the water in relation to the 1.2 trillion pound mortgage market. The International Monetary Fund repeated Monday that the ECB '''can afford some easing of the policy stance,''' a remark which it made earlier this month in its World Economic Outlook.[31] Redwood, chairman of David Cameron's economic competitiveness policy group, said that while the bank's plan appeared sensible, it should have been put in place months ago. "If the government and Bank of England can make £50 billion available to the banks today to get the mortgage market going again, why couldn't they have done that last September to prevent the Northern Rock crisis?" he said. "This latest move completes their extraordinary U-turn from wrongly saying there would be no bail-outs or help for the banks last September, to now adding a £50 billion money market package to the £100 billion nationalisation of Northern Rock.[51]

IMF'''s European department director Michael Deppler, said, '''While now isn'''t the time to do so, if inflation expectations remain well-anchored, there is no sign of second-round effects, and the economic slowdown is confirmed, we see room for policy easing.'''[31] Instead of just chirping cuckoo, Paluson is now chirping cuckoo "very strong". What's next? A public appearance with Mr. Euro so they can both chirp at the same time? Open Dissent At The Fed Meanwhile there is open dissent at the Fed: Fed hawks Lacker, Fisher warn on inflation.[7] Gold rose after energy costs surged and the dollar weakened against the euro, boosting the appeal of the precious metal as a hedge against inflation.[14] Analysts said the market was taking a breather ahead of 1.6000 and market participants said Euro selling would likely be short-lived, as ongoing inflation pressures will prompt the ECB to hold rates at 4% at least through Q3.[44] The contracts settle to the three-month inter-bank offered rate for the euro, which has averaged 18 basis points more than the ECB's benchmark rate from 1999 until August.[5] The ECB's benchmark rate, 4.00 percent, is substantially higher than that of the Fed, which stands at 2.25 percent.[6] The ECB is holding rates steady and talking hawkish whereas the Fed is expected to lower rates again very soon.[34]

The U.S. Philadelphia Fed index was significantly weaker than expected with a decline to -24.9 in April from -17.4 the previous month.[36]

The pound sterling was down 1.70 cents to 1.9812 USD and the Australian dollar was higher by 0.70 cents to 0.9413 USD. The U.S. Dollar Index was down 0.184 points to 71.74.[11] Last Friday'''s rebound of the U.S. dollar proved very short-lived as the currency lost ground again on Monday.[31] As mentioned, the U.S. dollar has traded lower today with just about every other currency making sharp gains.[9]

The Chinese yuan weakened vis-à-vis the U.S. dollar today as the greenback closed at CNY 7.000 in the over-the-counter market, up from CNY 6.9935.[32]

With oil at a record high, betting against intervention might prove unwise for traders, said Jim O'Neill, chief economist at Goldman Sachs Group Inc. in London. The U.S. may have consented to the change in the G-7 language because the falling dollar is pushing up the price of oil, threatening foreign investment in U.S. stocks and other assets, he said.[42] Shift a small percentage of your devaluing dollar assets (bonds, U.S. equities, etc.) into the relatively small commodities markets and, hey presto, surging commodity prices.[17] Whatever the G7 wording, Washington is happy to watch the dollar slide. "They are not going to worry unless there is a knock-on effect on U.S. equity or bond prices. That hasn't happened. There are no signs that the dollar decline has turned disorderly," he said. My Comment : David Woo has this correct.[7]

Implied volatility on options for the dollar fell to 11.28 percent after the G-7 meeting on April 11. It was 14.5 percent on March 17, the same level at which the G-7 stepped into the market in 1995 to influence prices.[42] The core consumer price index (CPI), which excludes volatile food and energy prices, rose in line with expectations by 0.2% month on month and 2.4% year on year. March housing starts fell by 11.9% from a revised 1.075 million to 0.947 million annual units, their lowest level since 1991.[25] Data released in Japan overnight saw the February leading index upwardly revised to 54.5 from 50.0 while the February tertiary index fell 1.7% m/m. Many important data will be released in Japan this week including corporate and consumer prices data.[32]

European stocks fell the most in a week after record oil prices dimmed the earnings outlook for airlines and carmakers and a slowing housing market weighed on Schneider Electric SA's sales.[14] The enourmous increases in commodities (petro, metals and agri commodities) are being driven along hard by a substantial rise in investment by parties with no end use. In that oil prices both in terms of the cash price and the oil volatility price are traded by hedge funds, asset managers etc who will never ever take delivery of a barrel of oil. Nor wheat, orange juice, copper, iron ore, gold etc etc. these trades are on pretty much every leveraged investors trade sheet now and for the last 2 years. There may be an argument for the provision of end user licences in order to be able to participate in these markets in sizeable numbers, this would reduce their price overnight.[17] I would add an additional, perhaps more significant, factor explaining the rise in commodity prices. It has become clear that western governments in general, over-indebted as they are, have been reduced to a single, last, meaningful intervention to stave off economic recession; print money in all its forms, in so doing eroding debt in real terms (along with savings of responsible taxpayers). Every investor worth his or her salt knows that the eventual outcome of this, 2-3 years down the line, is higher nominal prices for just about everything. We've witnessed a micro version of this over the past 7 years. Traders know this too. What's the best way to protect your portfolio against this hyperinflation ? Hard assets (commodities).[17]

Gold (XAU) prices fell on Friday as U.S investors risk appetite returned, seeing long gold positions unwound and put into equities.[23] The Japanese Yen (JPY) weakened sharply against the greenback following on from strong U.S equity markets, resulting in an increased risk appetite amongst investors.[23]

Prospects of a dollar recovery ''The dollar has fallen for a number of reasons,' said John Beggs, chief economist at AIB. ''A long-term decline has been under way for some time now, primarily due to the U.S. current account deficit. In the 1990s, investors piled into the U.S. following the technology boom.[13] ''While I wouldn't be surprised to see the dollar rally in the short term, there are still fundamental concerns about the American market itself. The current credit crisis has its origin in the U.S., but the U.S. market has actually fallen far less than the markets in Europe to date.[13] Not all are bad news; a weaker Dollar benefits U.S. exports, since foreign countries have to pay less for American goods.[29]

The Dollar inverted its positive trend of the last days, trading against the Euro at 1.5831 at 7:00 am.[29] The Japanese currency edged towards the top of a short-term trading range against the euro, after falling to a multi-month low earlier in the day.[46] Against the euro, the Australian currency lost ground after hitting a 5-week high of 1.6795 at about 2:45 am ET. Currently, the euro-aussie pair is trading at 1.6908, compared to Friday's close of 1.6929.[26]

P.O. Box 53742. The transaction of such financial instruments known as forex, fx, currency, and dealt on a valued basis known as'spot' or 'forward' 'Day Trading' and 'option', can contain a substantial degree of risk. Before deciding to undertake such transactions with Advanced currency markets Easy-Forex LTD (herewith expressed as Easy-Forex) and indeed any other firm offering similar services, a user should carefully evaluate whether his/her financial situation is appropriate.[24] You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.[44]

As forex specialist, ACM provides only currency and precious metals trading via highly professional forex trading software. All customers are aware that this information or any part thereof has been prepared without taking account of your objectives, financial situation and/or needs. This information is not intended as personalized investment advice and does not constitute a recommendation. It is not an offer or solicitation of any offer to purchase or sell any financial instrument.[44] All site content, including advertisements, shall not be construed as a recommendation to buy or sell any security or financial instrument, or to participate in any particular trading or investment strategy. The ideas expressed on this site are solely the opinions of the author(s) who may or may not have a position in any company or advertiser referenced above. Any action that you take as a result of information, analysis, or advertisement on this site is ultimately your responsibility.[7]

There has been a large increase in derivatives to enable easy trading in commodities and much of the loose money has gone into these. Should a good harvest or a marked downturn in demand in hard commodity products occur there will be enormous losses for the speculators in these instruments. These positions are being financed by banks and it is more than likely positions are in futures rather than physical goods. Should banks be told to reduce their financing of Hedge Funds or at a higher cost that might precipitate a sooner collapse in prices. [17]

Citigroup is expected to cut another 9,000 jobs. The bank slashed its dividends and raised more than $30 billion in capital.[25] BOA's earnings fell 77% in the quarter as the bank took another $5 billion in credit-related write-downs.[9]

Traders also await news from Royal Bank of Scotland concerning a rights offering valued at up to 12 billion in order to replenish capital reserves.[32] ''We believe that more bad news is still to come on that front. There will come a time when the banks all restructure and then there will be some big returns to be made, but at the moment, it is still too uncertain,' he said.[13] Nothing contained in this publication shall constitute or be deemed to constitute an offer to sell/purchase or as an invitation or solicitation to do so for any securities of any entity. ICICI Bank and/or its Affiliates ("ICICI Group") make no representation as to the accuracy, completeness or reliability of any information contained herein or otherwise provided and hereby disclaim any liability with regard to the same. ICICI Group or its officers, employees, personnel, directors may be associated in a commercial or personal capacity or may have a commercial interest including as proprietary traders in or with the securities and/or companies or issues or matters as contained in this publication and such commercial capacity or interest whether or not differing with or conflicting with this publication, shall not make or render ICICI Group liable in any manner whatsoever & ICICI Group or any of its officers, employees, personnel, directors shall not be liable for any loss, damage, liability whatsoever for any direct or indirect loss arising from the use or access of any information that may be displayed in this publication from time to time.[52] The pound traded near a record low against the euro on speculation a Bank of England plan to swap government bonds for mortgage-backed securities won't be enough to revive lending.[12] In foreign exchange, the euro strengthened following Liebscher's comments and continued to gain following the Bank of America earnings report.[11]

Elsewhere, the British pound weakened after the Bank of England said it would allow high street banks to swap mortgage-backed assets in exchange for government bonds, in an effort to improve financial market conditions.[6] Authorities, at the EU and global levels, have taken measures to facilitate the adjustment of financial markets and address the revealed weaknesses in the financial system.[18]

At the current juncture, the outlook for financial stability in the euro area continues to be characterised by considerable uncertainty. The magnitude of the total valuation and income losses facing the global financial system and their distribution across individual financial institutions is uncertain, although several estimates have been made. It is also unclear what the impact will be on the intermediation of credit to the household and corporate sectors.[18] Renewed concern about the global credit crisis overnight tempered demand for high-yielding currencies such as the New Zealand dollar.[15] Later in the session, a pull back in commodity prices added to the weight on commodity exporting currencies, including the Australian, Canadian and New Zealand dollars.[15] Commodity prices continue to surge higher, led by crude oil, which traded to a new record high of $117.40 overnight.[9] Oil surged to a new high of $117.60 a barrel after exports from Nigeria were halted.[11]

A rising dollar makes dollar-denominated gold more expensive for other currencies holders. Oil (WTI) continued its record-breaking streak with yet another high of $117 on Friday before settling at around $116.[25]

The dollar has declined 17 percent against the euro and has fallen 14 percent versus the yen in the past 12 months. [42] The G-7 last propped up the dollar in 1995, when it sank almost 20 percent in four months against the Japanese yen to a post-World War II low of 79.95 yen.[42] The low yielding Swiss franc advanced against the weakened dollar as rising inflationary pressures sparks bets that the SNB may call for a rate increase, with the Yen picking up as well as the pair traded in the 103.2 range.[10] Renewed interest in carry trades pushed the yen sharply weaker with lows near 104.65 against the dollar as Wall Street opened higher.[37] The dollar has been inching higher versus the yen since hitting a 12-year low of 95.70 in March.[26]

The dollar found support below the 101.80 level against the yen on Thursday and secured a firmer tone over the day.[36] The euro gained ground vis-à-vis the yen as the single currency tested offers around the ¥164.85 level and was supported around the ¥163.90 level.[32] The euro moved higher vis-à-vis the British pound as the single currency tested offers around the 0.8040 level and was supported around the 0.7895 level.[32]

The Swiss currency also tested the 1.60 level against the Euro for the first time since late February.[36]

Before the G-7 meeting in Washington, strategists including Stephen Jen, head of currency research at Morgan Stanley, speculated that the world's richest nations might intervene. "It's not about levels but the volatility,'' said Geoffrey Yu, a foreign-exchange strategist in Zurich at UBS. "If the dollar drops in a gradual fashion, they are unlikely to act.[42] The dollar was up versus the Swiss franc to 1.0252. In their post-meeting statement, the G7 nations changed the usual language on currencies and touched upon the detrimental effect that sharp currency moves can have on economic and financial stability.[25]

The UK currency also gained support from an improvement in risk tolerances while there was speculation that the Royal Bank of Scotland rights issue would boost demand for Sterling given the extent of overseas ownership of the shares.[37] The overall improvement in risk appetite also provided some degree of support to the UK currency even though confidence remained fragile.[36]

"The perception that the U.S. economy is weak and the risk of a systemic crisis have returned.'' [12] Further tensions in structured credit markets cannot be excluded in view of the ongoing weakness in the U.S. housing market, and there is a risk of adverse developments in the credit cycle.[18] Global risk tolerances will tend to remain dominant in the short term. U.S. corporate earnings results were generally close to or above expectations with lower debt write-downs than expected and this improved risk appetite.[37]

Although markets are expecting a further cut, the risk of divisions was illustrated by comments from Fed Governor Fisher. He stated his strong reluctance to further monetary easing which suggests that he will not back further cuts and market expectations may shift slightly.[36] Consumer and commercial rates may have already bottomed and may not respond further to BoC easing tomorrow. Mortgage rates, for instance, are priced off 10-year government bond yields and those yields moved higher last week in spite of expectations that the BoC is going to cut its overnight rate this week.[9]

Sales of existing homes in the U.S. probably fell to an annual rate of 4.92 million in March, from 5.03 million the prior month, according to a Bloomberg News survey of economists. [12] The U.S. will also release last month's data for existing and new home sales on Tuesday and Thursday, respectively.[16]

Following the rate decision, our attention will turn to fresh U.S. housing and manufacturing data due out at 14:00 GMT, and will be followed by the ABC Consumer Confidence index at 21:00 GMT.[10]

Particularly as for years U.S. manufacturing has lost ground and exports have barely increased. In general the USA has no need of an export market in the same way Germany for example does, because its own internal market is so huge.[17]

If OPEC did the sensible thing and switched Oil pricing to Euros (which is what Saddam was going to do which was the REAL reason for the U.S. invasion) then we might see some sanity restored to that market.[17] "I don't think that the euro can replace the dollar. A system with two major reserve currencies? Not a stable system," he said.[28] As central bankers appear inclined to stand firm on rates, many politicians are looking for looser monetary policy and a weaker euro.[40] Most traders believe Bank of Japan's Policy Board will keep the overnight call rate unchanged at 0.50% for the foreseeable future.[32]

Bank of England Chief Economist Bean stated that growth was likely to slow further, but he also warned that inflation was likely to rise above the 3.0% level.[36] The minutes of recent meeting of the Hungarian National Bank's (MNB) Monetary Council point out that, the country's monetary authorities highly worried about inflation.[49] If that reversal occurs, the trend in commodities should soon follow and the panic about inflation in China and other emerging economies should start to subside. At that point, we will finally be able to say that the worst of the global credit crunch is over.[17]

March inflation was revised up to 3.6% year on year from a preliminary 3.5%, the fastest pace since the introduction of the euro and in fact the highest in 16 years.[25] A strong Euro, despite pushes European exports down, benefits the Euro zone in terms of controlling inflation.[29]

The Euro Stoxx 50 index of leading European shares was down 1.02% at 3,769.89 points.[50] The average government debt ratio in the euro area is expected to decline less rapidly in 2008, by around 1.5 percentage points, to 65.1 percent of GDP, it said.[41] 'With economic growth expected to be broadly in line with potential, the near stabilisation of the euro area average deficit reflects a slowdown or even a reversal of consolidation efforts in some countries and a reduction of surpluses in others,' it said.[41] Further progress with structural reforms, economic integration and cross-border competition are needed to address some countries' diverging competitiveness positions and support the smooth functioning of the euro area economy.[18] In the second half of 2007, the outlook for economic activity was clouded by unusually high uncertainty, stemming from the difficulty of ascertaining the potential impact on the real economy of the financial turmoil that erupted in August 2007.[18]

The UK is burdened with an army of surplus non-EU labour in a post boom economy living on low wages and benefits, who are suffering disproportianately from higher taxes, food prices and living costs.[17] Data released in the U.K. today saw BRC central London March retail sales up an annualized 2.0% while Rightmove April annual house price gains were at lows not seen since mid-2005.[32] The monthly survey from the property website Rightmove showed UK annual house price inflation slowed significantly in April to reach a three-year low.[48]

The focus of the group remained on the threats of rising inflation and slowing growth as well as rising oil and energy prices and increased demand for food and products from emerging markets.[25] Data released in Switzerland today saw March producer and import price inflation up 0.6% m/m and 3.9% y/y.[32]

Commodity prices have remained at elevated levels and the latest data reported a sharp rise in export prices which also boosted sentiment.[37] Looking ahead, the focus is on Wednesday'''s data releases with German and Euro PMI Manufacturing figures for the month of April with forecasts of 54.8 for Germany and 51.5 for the Euro Zone, after March saw a level of 55.1 in Germany and 52.0 for the Euro Zone.[24] The euro traded at 164.06 yen, after rising yesterday to 164.86 yen, the strongest level since Dec. 31.[12] Euro traded at 164.39 against the Yen at 7:00 am GMT. Yen is depreciating, as stocks''' good performance gives investors the confidence to invest in higher-yielding currencies with funds from Japan.[29] The yen firmed broadly as a slide in Asian stocks prompted investors to trim risky yen carry trades, in which players use the low-yielding Japanese currency to finance purchases of assets offering higher returns elsewhere.[1]

Investors interested in the U.S. should also watch the financial sector for signs of a recovery.[13]

The franc was able to regain some ground later in U.S. trading with the currency over-sold on a short-term view.[37] As of now, the dollar-Colombian peso pair is trading at 1781.80. U.S. President George Bush repeated his call for Congress to act on the Colombian Free Trade Agreement while speaking in his weekly radio address on Sunday. He also described "a strategic imperative" to the trade agreement. The Colombian peso is now trading at its highest level since July 1999 as foreign investment has rushed into Colombia.[38] GE shares are down 10% in pre-market trading, and the Dow is off 125 points as a result. Of course, with equities out of favour this morning, government bonds are attracting capital and yields are down. 3-month U.S. T-bills are paying 1.14% this morning and the 2-year Treasury note is yielding 1.78%.[9]

The ECB has come under pressure from union groups and manufactures to slow down the rapid rise of the euro, which is trading near Friday's record high at 1.5950 Monday morning.[38]

Following a number of years of high profitability, the euro area banking sector has a strengthened financial position to face credit-cycle pressures.[18] Economic and monetary developments 2007 was a very good year for the euro area in terms of economic activity.[18]

There was no fresh economic data during Thursday, but there was further speculation that there would be an agreement between the government and Bank of England over support measures for the mortgage sector.[36] With no real economic data to go by, corporate news pushed the markets higher.[47]

Monday, April 21, 2008 1:50:01 PM - With earnings season kicking into high gear this week, economic news took a back seat on Wall Street Monday.[48]

World News Gold tumbled more than 3% to a one-week low at $904.35 an ounce on Friday, as better than expected earnings from Citigroup boosted the greenback.[25]

The Canadian Dollar (CAD) is expected to move on Tuesday as the BoC has a rate announcement scheduled.[24] As for the mystery of rising food and fuel prices look no further than the beggar thy neighbour collapsing dollar, in which commodities and fuel are priced and the activity of hedge funds. Speculative activity in these ingredients of life should be strictly regulated to avoid the social consequences of a rampant and immoral capitalism.[17] Because U.S. inflationary pressures are already subsiding as a result of the credit crunch and the associated fall in house prices and employment.[17] There is, however, another apparent consequence of the credit crunch that is less understood and is causing consternation and anxiety, especially in China and other developing countries. This is the upsurge in oil, food and commodity prices, many of which have almost doubled since the credit crunch began last August, even though the causal linkage between soaring commodity prices and a collapsing supply of credit remains obscure.[17] The price of oil jumped to a fresh record high above $117 after an attack on a Japanese oil tanker off the coast of Yemen.[47]

The company announced writedowns of $6.01 billion and CEO Kenneth Lewis said second-quarter U.S. GDP growth will be "minimal at best."[11] "Last week people thought the worst had passed in the U.S. markets,'' said Shaun Osborne, chief currency strategist at TD Securities Inc. in Toronto.[12] The dollar meanwhile dipped to 103.19 yen compared with 103.66 late last week.[3] The dollar traded at 103.03 yen from 103.67. This article is copyrighted by International Business Times.[4] The dollar fell to 1.0072 Swiss francs from 1.0182 Swiss francs, and rose to 1.0071 Canadian dollars from 1.0058 Canadian dollars. It was unchanged at 104.17 Japanese yen.[20]

European traders looked forward to Italian trade balance data on Tuesday and French PMI data on Wednesday. The yen moved away from its lowest level since late February against the pound.[46] Yen trends will continue to be dominated by levels of risk aversion in the short term.[37]

In keeping with the ECB's hawkish rhetoric, Weber again insisted that upward risks to prices are prevalent in the medium term.[46] Although we had pointed to the risks associated with the accumulation of imbalances and had identified several vulnerabilities in the financial system, it was difficult to foresee the specific nature and all the propagation channels of the market turmoil, as well as its intensity and duration.[18]

Before doing so, I would like to highlight an important event: the third enlargement of the euro area with the adoption of the euro by Cyprus and Malta on 1 January 2008. Thanks to the meticulous preparations of all parties concerned, the changeover to the euro was very smooth and efficient in both countries. The single currency was received with great enthusiasm by the Cypriot and Maltese people and we warmly welcome them to the euro area.[18] The "Finacial Crisis" is letting home prices rise so high that ordinary working people got priced out of the housing market. This is the unwinding, and really is good news for all, all except bankers anyway.[27] I couldn't find the link,but the lack of financing for short positioning in commodity markets does go along way to pull all the pieces together. Correct me if I'm wrong but wasn't the bear market in stocks of the mid to late seventies accompanied by a run up in commodity prices? Is it possible that all the loose money sloshing around the markets is coming out of a depressed property market and is skirting a stock market where each rally appears weaker and prompted by ever dimmer glimmers of good news and is going somewhere else? Some analysts have been singing comodities praises for a couple of years or more now - and as you say it's not just minerals it's animals and vegetables too.[17]

The economy is circling the bowl. That's it for today Today is our accountant extraordinaire, Mary Owens' birthday And, my good friend, Paul turns 50 today! It was an ugly weekend for my beloved Cardinals But, they're off to a good start despite the ugly weekend! I tried to do some yard work yesterday, but I just can't do it any longer. Good thing my little buddy, Alex, will be ready to go to work on the yard this year! I've always thought about making a shirt that says on the front I fought the lawn And on the back And the lawn won! My oldest son Andrew and his friend Rachel are doing much better after last week's accident. Good to see them moving around better! Time to hit the send button.[35]

Traders are betting the ECB will keep the main refinancing rate at a six-year high. The yield on three- month Euribor contracts expiring in December rose to 4.405 per cent yesterday, the highest this year.[5] ''By mid-year, the impact of the financial crisis may hit Europe, and there is already speculation about the ECB cutting rates,' said Beggs.[13] If it weren't for the exchange rate, the ECB would have had to raise interest rates.''[42]

The statement contained no reference that "exchange rates should reflect economic fundamentals,'' a phrase included in every G-7 statement since 2003 where it mentioned currencies.[42]

If a crisis hits and the tools at hand are not up to the job, then central bank officials can and will improvise." [27] Analysts surveyed by Bloomberg expected Bank of America first-quarter profits of 41 cents per share, but the banking giant earned only 25 cents.[11] March producer prices index (PPI) rose more than expected by a strong 1.1% month on month and 6.9% year on year.[25] Consumer prices rose as expected by 0.3% month on month and 4% year on year in March, unchanged from February.[25]

Is Britain (UK) moving to the Euro with devaluing of individuals investiments, property, and the low euro value against the pound. [17] The content on this site, including news, quotes, data and other information, is provided by Thomson Financial News and its third party content providers for your personal information only, and neither Thomson Financial News nor its third party content providers shall be liable for any errors, inaccuracies or delays in content, or for any actions taken in reliance thereon.[41] The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News. The content on this site, including news, quotes, data and other information, is provided by Thomson Financial News and its third party content providers for your personal information only, and neither Thomson Financial News nor its third party content providers shall be liable for any errors, inaccuracies or delays in content, or for any actions taken in reliance thereon.[16]

SOURCES

1. Dollar steadies vs euro after fall on Bank of America | Markets | Hot Stocks | Reuters
2. The Associated Press: Euro moves higher against dollar
3. AFP: Dollar weakens on renewed credit fears
4. Dollar Falls on Bank Profit Plunge, Hawkish ECB Official - Forex News | IBT FX Center
5. The FINANCIAL, News That Makes Money, Business News & Multimedia - Barclays Capital sees dollar dropping 2.5% against euro
6. AFP: Dollar on backfoot against euro
7. Articles
8. Dollar favoring short-term! - Forex News | IBT FX Center
9. Articles
10. US Dollar Recovery Short Lived as ECB's Liebscher Adds to Hawkish Outlook
11. Canadian Economic Press - Welcome
12. Bloomberg.com: Japan
13. Sunday Business Post | Irish Business News
14. Bloomberg.com: Japan
15. Apr 22 - Open: Renewed credit concerns temper demand for NZ dollar - New Zealand's source for business, stock market & currency news on Stuff.co.nz
16. Forex - Dollar weaker in afternoon trade in Asia ahead of more earnings, data - Forbes.com
17. What's credit got to do with the price of rice? - Times Online
18. Speech Lucas Papademos: Presentation of the ECB's Annual Report 2007 to the Committee on Economic and Monetary Affairs of the European Parliament (sur Edubourse.com)
19. FOREX-Dollar slips broadly as BoA results cools optimism | Markets | Markets News | Reuters
20. Dollar falls on weak Bank of America earnings_English_Xinhua
21. Forex Traders » Forex » Forex News » Halo Financial - Daily Currency Insight
22. FOREX-US dollar down on Bank of America results; euro up | Currencies | Reuters
23. U.S dollar boosted by improved financial profit results. - Forex News | IBT FX Center
24. Bank of England announces plan to increase liquidity. US dollar weakens as sentiment dampens
25. Arab Times :: Dollar hits 1 mth high against yen as euro reaches fresh record peak
26. RTTNews - Currency Trading, Currency Market Update, Trading Opportunities, US Market Update .
27. Economics Blog : Modern Central Banking: When in Doubt, Improvise
28. Can the Euro Overtake the U.S. Dollar as the World's Reserve Currency?
29. The Dollar inverted its positive trend of the last days
30. Dollar nears record low on Bank of America write-downs - Forbes.com
31. Dollar Falls Against Euro; Bank of America Earnings Hurt - Seeking Alpha
32. Forex Traders » Forex » Forex News » Fundamental Outlook at 1400 GMT (EDT + 0400)
33. Free Preview - WSJ.com
34. FX Trend Trader -The Day ahead - Forex News | IBT FX Center
35. Dollar Rally Fizzles Out
36. Daily currency analysis - Apr 20 - Forex News | IBT FX Center
37. ForexHound.com trading news from the FX world
38. RTTNews - Currency Trading, Currency Market Update, Trading Opportunities, US Market Update .
39. AFP: Eurozone budget improvements grinding to a halt, ECB says
40. Free Preview - WSJ.com
41. ECB says outlook for food prices remains highly uncertain - Forbes.com
42. Bloomberg.com: Worldwide
43. Gold Prices Rise; Dollar Is Mixed | Currencies | FXB FXE FXY GLD IAG NEM - TheStreet.com
44. ForexHound.com trading news from the FX world
45. Euro higher against US dollar as bank earnings disappoint
46. RTTNews - Currency Trading, Currency Market Update, Trading Opportunities, US Market Update .
47. RTTNews - Forex News top stories, Forex Trading, European Market Update, Currency Market Update, Forex trading.
48. RTTNews - Forex News top stories, Forex Trading, European Market Update, Currency Market Update, Forex trading.
49. RTTNews - Currency Trading, Currency Market Update, Trading Opportunities, US Market Update .
50. European stocks end lower - livemint
51. Bank in U-turn on credit crunch - Times Online
52. The Euro rose against the Dollar

GENERATE A MULTI-SOURCE SUMMARY ON THIS SUBJECT:

Please WAIT 10-20 sec for the new window to open...
You might want to EDIT the default search query below:
Get more info on Dollar steadies vs euro after fall on Bank of America by using the iResearch Reporter tool from Power Text Solutions.

Give Us Your Feedback!

How did you like this article?

Above is the automatically generated multi-source news digest.

Its main content has been compiled basing on the fair use of snippets from original news stories (initially clustered by the Google News) by applying our multi-document summarization technology. The title has been excerpted from this article, and the top image was found here.

Dollar steadies vs euro after fall on Bank of America

Give Us Your Feedback!

Web discoveries