Thread: Economic News from InstaForex

The dollar continued to hover around a 15-year low versus the yen but eked out gains versus the euro Tuesday morning in New York, as traders returned to their desks following the Labor Day weekend.
Stocks rose on Friday after better-than-expected jobs data, but momentum has not carried over into this week. Stocks are down around the world this morning amid renewed fears about the European banking system.

The dollar was again testing its worst levels since 1995 versus the yen, slipping to 83.80 in very early dealing. Two weeks ago, the dollar hit a 15-year low of 83.58.

The Bank of Japan maintained its key interest rate at near-zero at the end of its two-day policy meeting on Tuesday. It also promised to take more policy actions if judged necessary to kick start the deflation-ravaged economy.

Still, the markets have considered the BoJ's recent moves far too tepid to either bolster the economy or stop the yen from rising further.

Germany's factory orders declined 2.2% in July from the prior month, the Federal Ministry of Economics and Technology said on Tuesday. Economists were expecting factory orders to rise 0.5%.

The dollar rose to 1.2750 versus the euro, up a penny from Monday morning. The pair has been unable to sustain any direction for the past month.

The buck bounced back and forth near 1.5360 versus the sterling, having edged higher over the past few weeks.

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The robust expansion of the south east Asian economies may weaken in the next quarter, the Organization for Economic Cooperation and Development, or OECD, said in its latest Asian Business Cycles quarterly report.

Both leading and coincident indicators for the Association of South East Asian Nations, or ASEAN, economies point towards steady growth on the back of sound exports and strong domestic demand supported by improved business sentiment, the report said.

However, the leading indicators suggested that growth may slow in these economies during the next quarter. Continued signs of slowing of the Chinese economy constitute a negative factor for the outlook for ASEAN economies, while uncertainty about growth prospects for OECD economies remain.

However, overall growth prospects are stronger on average for the ASEAN economies than for the Emerging Asia area including China and India.

The 10-member association consists of Malaysia, Vietnam, Thailand, Indonesia, Singapore, Philippines, Myanmar, Laos, Cambodia, Brunei Darussalam.


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The dollar dropped to a fresh 15-year low versus the yen on Tuesday, after Japanese Prime Minister Naoto Kan survived a major political battle.
While the buck came under pressure versus the yen, risk aversion gave the dollar a bit of a lift versus the euro. German investor confidence fell to a 19-month low in September, a report showed today.

Trading took place ahead of a busy day on the US economic front.

Looking at this morning's currency charts, the dollar slumped to Y83.06 - its lowest since 1995.

Versus the euro, the buck improved to $1.2835 after hitting a weekly low of 1.2909 overnight.

German investor confidence slumped more than expected in September, according to research firm ZEW institute. The ZEW index of economic sentiment fell to a negative reading of -4.3 from 14.0 in August.

The buck continued to wobble versus the sterling, holding in a range around $1.54 for a second week.

The dollar remained on the ropes versus its Canadian counterpart, hanging around a 4-week low of C$1.0264.

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Egypt's Finance Minister said that the government will protect investors exposed to an ongoing dispute over the sale of state land to real estate firm Talaat Moustafa Group (TMG).
He added that Madinaty issue will be fixed in next few days.
Shares of property firm TMG tumbled last week after a court upheld a ruling that a housing ministry body broke the law by selling land for the company's landmark project without an auction.

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The dollar continued to wobble versus other major currencies on Friday, nearing its lowest in a decade versus the Swiss franc while hovering near a recent 5-month low against the euro.

Another batch of economic news from the housing front may provide clues about the ailing sector. Durable goods data is also on tap this morning, and may shed some light on manufacturing activity.

Lingering economic weakness has fueled speculation that the Federal Reserve is preparing a second round quantitative easing measures. The central bank has few arrows left in its quiver, having long ago lowered interest rates to a record low near zero.

The dollar continued its dramatic slump versus the safe haven Swiss franc, dropping to a 2-year low of .9795. A move below 0.9645 would take buck to its lowest in more than a decade.

Dollar weakness has contributed to the rise of gold, which breached the $1300 an ounce mark for the first time today.

The dollar dropped to a 10-day low of Y84.19 against the yen, edging closer to this month's 15-year low of Y82.86.

Against the euro, the dollar held near $1.3439 -- its lowest level since May. After starting September near 1.2600, the buck has steadily lost ground, returning to levels not seen since the start of the European sovereign debt crisis.

Concerns about public debt in Europe have been soothed by austerity measures and the a series of successful bond offerings.

German business sentiment improved unexpectedly in September to the highest level since June 2007, despite concerns of a double-dip in the largest eurozone economy.

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The euro area unemployment rate continued to stay at a 12-year high in August as the region's economy started to cool, reflecting slowing trends in global economy. Official figures suggest large disparities in unemployment figures among core and peripheral economies of the single currency bloc.

The euro area unemployment rate came in at 10.1% in August, unchanged from July, data published by Eurostat, the statistical office of the European Union showed Friday. The rate for July was revised up from 10%. The jobless rate was 10.1% since May.

"Eurozone unemployment appears to have reached a plateau at a high level," said ING Bank economist Martin van Vliet.

Around 15.87 million people were unemployed in August. From the previous month, the number of persons unemployed decreased by 20,000 compared to an increase of 9,000 in July. From August 2009, unemployment rose by 0.569 million.

Compared with a year ago, the unemployment rate fell in seven member states, remained stable in one and increased in nineteen. The largest decreases were observed in Malta and Austria, while Estonia and Lithuania showed largest increases.

As the labor market situation improved in some major economies and deteriorated in some peripheral economies, the ING Bank economist said the devil is very much in the detail. When the Spanish and Ireland unemployment rose to 20.5% and 13.9% respectively, the rate fell to 8.2% in Italy.

Data released by Germany's Federal Labor Agency said the number of unemployed decreased sharply by 40,000 in September, taking the level to 3.15 million. The jobless rate fell to 7.5% in September, the lowest since 1992.

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U.S. researchers Peter Diamond and Dale Mortensen, and British-Cypriot Christopher Pissarides have won this year's Nobel Prize for Economic Sciences for their work on how unemployment, job vacancies and wages are affected by government rules and policies.

Announcing the Award in Stockholm on Monday, the Royal Swedish Academy of Sciences said the trio developed a theory that answer the questions why are so many people unemployed at the same time that there are a large number of job openings, and how can economic policy affect unemployment.

On many markets, buyers and sellers do not always make contact with one another immediately. This concerns employers who are looking for employees and workers who are trying to find jobs. Since the search process requires time and resources, it creates frictions in the market. On such search markets, the demands of some buyers will not be met, while some sellers cannot sell as much as they would wish. Simultaneously, there are both job vacancies and unemployment on the labor market.

Diamond analyzed the foundations of search markets, while Mortensen and Pissarides expanded the theory and applied it to the labor market.

"Their models help us understand the ways in which unemployment, job vacancies, and wages are affected by regulation and economic policy," the Committee added.

The laureates' study concludes that more generous unemployment benefits give rise to higher unemployment and longer search times.

Search theory has been applied to many other areas in addition to the labor market. This includes, in particular, the housing market. The number of homes for sale varies over time, as does the time it takes for a house to find a buyer and the parties to agree on the price. Search theory has also been used to study questions related to monetary theory, public economics, financial economics, regional economics, and family economics.

President Barack Obama nominated him as a member of the U.S. Federal Reserve, but Senate rejected it. The White House re-nominated Diamond, but his nomination is pending clearance by the Senate Banking Committee.

The prize-money, worth 10 million Swedish kronor ($1.5 million), will be equally shared by the laureates. The Award also carries a gold medal and citation.

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No member state of the European Union recorded a government surplus in 2009, latest data from the statistical office Eurostat showed Friday.

The largest government deficits in percentage of GDP were recorded in Ireland and the U.K. In Ireland, the deficit was 14.4% of GDP and that in the UK at 11.4%. The lowest deficit was recorded in Luxembourg, at 0.7% in 2009.

The statistical office postponed the publication of figures for Greece to mid November as it is undertaking a process of quality assessment of statistical source data from public accounts, in cooperation with the Greek Statistical Office and the Greek Court of Auditors.

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U.K.'s sterling continued its strong rally versus most major currencies in early New York trading on Thursday and touched a fresh 5-week high of 1.5708 against the Swiss franc, 16-day high of 0.8706 against the euro, 9-day high of 1.5932 against the US dollar around 8:15 am ET.

If the pound strengthens further, likely target levels are seen at 0.8630 against the euro, 1.60 versus the US dollar and 1.5880 against the Swiss franc.

The pound also reversed its course after hitting a 2-day low against the yen in early trading and touched as high as 129.41 before holding steady around 8:15 am ET. On the upside, the UK currency may target resistance around the 130.30 level.

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The Swiss franc extended its previous session uptrend against the euro and the US dollar in late European trading on Friday. At 5:10 am ET, the franc climbed to a 2-week high of 1.3524 against the euro and nearly a 3-week high of 0.9550 versus the greenback, which may be compared to Thursday's closing value of 1.3618 and 0.9586, respectively.

Against its British counterpart, the franc also spiked up further and hit a 10-day high of 1.5464 by about 5:10 am ET. Currently, the Swiss currency is trading near 0.9575 against the dollar, 1.3547 versus the euro and 1.5490 versus the sterling.

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