Finotec News Archive - June 26 2009
The Dollar falls as Investors acknowledge that the Fed will keep interest-rates
The dollar fell against 12 of the 16 major currencies as Dallas Fed President Richard Fisher may today give more detailsTammy Wally 
26 June 2009
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| EUR/USD | USD/JPY | GBP/USD | USD/CHF | |
|---|---|---|---|---|
Resistance | 1.4270 1.4180 1.4140 | 97.20 96.70 96.05 | 1.6665 1.6650 1.6625 | 1.1030 1.1020 1.0955 |
Support | 1.3980 1.3890 1.3825 | 95.60 94.90 94.45 | 1.6375 1.6350 1.6210 | 1.0885 1.0795 1.0635 |
The greenback declined against the Euro, as Asian stocks gained for a third day and traders added to bets that the Federal Reserve will keep interest rates low. The dollar fell against 12 of the 16 major currencies as Dallas Fed President Richard Fisher may today give more details on the central bank’s statement this week that the benchmark rate will stay at “exceptionally low levels.” “Gains in stocks are pumping capital into markets,” said Masaki Fukui, a senior market economist in Tokyo at Mizuho Corporate Bank Ltd., Japan’s second-largest publicly traded lender by assets. “The recent risk aversion strengthened the dollar as a refuge but as risk appetite rebounds, higher- yielding currencies seem to be benefiting. Central Banks interest rates are 0.1 percent in Japan and as low as zero in the U.S, compared with 3 percent in Australia. The EUR/USD is currently trading at $1.4050 as of 8:36am, London Time.
Barclays Capital Inc., the world’s third-largest currency trader, lowered its one-year forecast for the dollar, saying foreign investors will reduce their purchase of U.S. assets. The dollar will weaken to $1.50 per euro in a year, from $1.3988 today, currency strategists Steven Englander and David Woo wrote in a research note to clients today.“Over the medium and long term, it is hard to identify U.S. assets whose performance will be attractive enough to motivate large capital inflows,” New York-based Englander and London- based Woo wrote. They referred to the dollar’s status as “safe- haven paradise lost” as the U.S. fiscal deficit balloons and the central bank prints money to buy government and private securities. The dollar will strengthen to $1.35 in three months before declining to $1.45 by year-end, according to the note.
The Canadian currency headed for weekly loss amid speculation its rally went too far to be sustained and global growth is likely to remain subdued while crude prices are not expected to gain above $75 a barrel. The loonie which rose in May is down 5.3 percent since reaching an eight-month high on June 1. However BNP Paribas say that the loonie’s decline “should be running out of steam, with the commodity currencies picking up renewed support,” said Ian Stannard, a currency strategist in London at BNP Paribas SA. “The activity we’ve seen from central banks over the past couple of days is positive for risk appetite.” The USD/CAD is currently trading at 1.1510 as of 9:06am, London Time.
Finotec Analysis Team
26 June 2009
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Today's Economic Events
Time  |
Event |
Currency/Country
|
Period | Previous | Forecast |
Significance
|
Actual | |
|---|---|---|---|---|---|---|---|---|
| 26-06-2009 14:00 | Univ. of Mich. Consumer Confidence Index | United States | 69 | 69 |  | 70.8 | ||
| 26-06-2009 12:30 | Core Personal Consumption Expenditure (M-o-M) | United States | Monthly | 0.3 | 0.2 | | 0.1 | |
| 26-06-2009 12:30 | Personal Spending (M-o-M) | United States | Monthly | 0.0 | 0.4 | | 0.3 | |
| 26-06-2009 12:30 | Core Personal Consumption Expenditure (Y-o-Y) | United States | Yearly | 1.9 | 1.8 |  | ||
| 26-06-2009 12:30 | Personal Income (M-o-M) | United States | Monthly | 0.7 | 0.2 | | 1.4 | |
| 26-06-2009 12:30 | Personal Spending Y-o-Y | United States | 0.5 | | 0.1 | |||
| 26-06-2009 09:30 | KOF Swiss Leading Indicator | Switzerland | -1.86 | | ||||
| 26-06-2009 04:00 | CPI (M-o-M) | Germany | Monthly | -0.1 | 0.2 | | 0.4 | |
| 26-06-2009 04:00 | CPI (Y-o-Y) | Germany | Yearly | 0.0 | -0.1 | | 0.1 | |
| 26-06-2009 04:00 | CPI - EU Harmonised (M-o-M) | Germany | Monthly | -0.1 | 0.2 | | 0.4 | |
| 26-06-2009 04:00 | CPI - EU Harmonised (Y-o-Y) | Germany | Yearly | 0.0 | -0.1 | | 0.0 |