World economy talk

[tidus1203]

And don't forget the CHF we are in uncharted teritory. The CHF is at the its strongest against the USD as far as my charting software can tell... I have data all the way back since 1988...

[uls]

just when i thought the AUD can't go any higher, positive jobs report from Australia (+56,000 jobs) sent the AUD/USD over .98

good luck trying to get past .9850

AUD/USD

[bmacavanza]

Thank you mate

[tidus1203]

I still think parity is too much to expect. Mag sell off din yan once it flirts with that number.

[Monseratto]

At least the local Central Bank knows the dollar appreciation is not due to an improving economy.

http://edition.cnn.com/2010/BUSINESS...ex.html?hpt=P1

Dollar falls to 15-year low against yen
By Peter Garnham, FT.com

(FT.com) -- The dollar continued to lose ground on Wednesday, hitting a 15-year low against the yen, as the prospect of more quantitative easing from the Federal Reserve kept the U.S. currency under pressure.

Central banks across Asia were suspected of intervening to stem gains in their own currencies, with authorities in South Korea, Thailand, Taiwan, Malaysia and the Philippines all active in the market.

But dealers said the Bank of Japan did not intervene to weaken the yen, even as the currency rose to a 15-year high of Y82.76 against the dollar, an event which last month sparked Tokyo's first foray into currency markets since 2004.

While traders noted that several Japanese government-backed institutions were active in the market buying dollars against the yen around Y83, analysts said the BoJ was likely to hold back from intervening before this weekend's meeting of finance ministers and central bank chiefs from the Group of 20 leading nations.

They reasoned that Tokyo would not risk further action that could attract criticism at the meeting, given the heightened tensions over exchange-rate policy, which have triggered much talk of currency wars.

Elsa Lignos, at RBC Capital Markets, said Japan would be hard pushed to justify intervention on the grounds of smoothing volatility in the currency markets. "This has not been a sudden jump in the yen, but a steady grind higher," she said. By late in the day in New York, the dollar was 0.4 per cent weaker at Y82.92 against the yen.

Meanwhile, the prospect of further QE from the Fed kept the greenback under pressure elsewhere. The dollar index, which tracks the U.S. currency's progress against a basket of six leading currencies, fell 0.5 per cent to 77.38 -- its weakest level since late January.

The euro was the biggest winner among leading currencies, rising 0.7 per cent to an eight-month high of $1.3937 against the dollar.

Analysts said the performance of the euro, which has risen more than 9 percent since the start of September, reflected the fact that the European Central Bank was the only large central bank not putting pressure on its currency by announcing or considering QE.

"On the back of the European Central Bank not complaining or participating in the race for the weakest currency, the euro has continued its majestic rise," said Ankita Dudani at Royal Bank of Scotland.

The dollar also lost ground elsewhere, falling 0.5 per cent to a record low of SFr0.9610 against the Swiss franc and losing 0.6 per cent to a 26-month low of $0.9771 against the Australian dollar. The greenback was flat against the British pound at $1.5889.

[tidus1203]

Nako its like a game of chess. The US is winning BOJ ano intervention pa ba? Its useless, but you could try right?

[uls]

hehe

but the BOJ can't intervene again... for now

malapit na kasi ang G20 meeting

baka pag-initan sila

kaya ayan -- below 83 na USD/JPY pero wala sila ginagawa

[Monseratto]

Would the QE have a big effect to on the yuan vs other currencies since it is artificially tied up with the US greenback?

[uls]

i think dollar devaluation doesnt affect the yuan

as the dollar weakens against other currencies, so does the yuan

[uls]

profit taking in gold

gold spot


and oil

NYMEX crude


US 10 yr treasury yield

[Monseratto]

http://finance.yahoo.com/news/Weak-e...&asset=&ccode=

Weak economy has nations waging currency wars
Tensions over currency manipulation threatens to dominate 3-day meeting of global leaders

Martin Crutsinger and Greg Keller, AP Business Writers, On Thursday October 7, 2010, 4:45 pm EDT

WASHINGTON (AP) -- Fears of a full-blown currency war flared Thursday as the dollar fell to an eight-month low against the euro and the U.S. stepped up pressure on China to let its currency rise.

The escalating tension threatened to dominate a three-day conference of the International Monetary Fund and the World Bank. Leaders from both groups warned Thursday that a currency war could destabilize global financial markets at a fragile moment.

The flare-up comes as investors are anticipating the U.S. Federal Reserve will pump billions more dollars into the U.S. economy. That is weakening the value of the dollar against the euro, which has been surging.

A falling dollar can hit U.S. consumers, investors and businesses in various ways. Travel to Europe becomes more expensive for Americans. Exports from U.S. businesses become more affordable for European buyers. U.S. Treasurys become less attractive to investors.

A different scenario has been playing out with China. An undervalued Chinese yuan has weakened U.S. exports while making Chinese goods attractive to U.S. consumers. The imbalance has weakened U.S. economic growth. And it threatens U.S. manufacturing jobs at a time when the American economy is struggling with 9.6 percent unemployment.

At the same time, China's economy is soaring.

World Bank President Robert Zoellick said Thursday that the tensions over currencies could undermine investor confidence at a time when the world needs the private sector to bolster growth.

"If ever there were a time that we should not turn our backs on international cooperation, it is now," Zoellick said at a news conference ahead of three days of high-level talks on global finance in Washington.

Economists said they don't expect major breakthroughs coming out of the weekend meetings. Countries are feeling so much pressure to produce jobs by boosting exports. One way to do that is by lowering the value of the country's currency.

China is hardly alone in trying to gain a competitive advantage. The United States is contributing to a weaker dollar by pressuring Beijing and by having the Fed flood the markets with U.S. dollars.

The Japanese government intervened in currency markets for the first time in years on Sept. 15. It sold yen and bought dollars to push the yen's value lower. And this week, the Japanese central bank announced that it would pursue a policy similar to the Fed's: Buy assets to lower Japanese interest rates, another way to lower the yen's value.

Brazil and South Korea have also taken recent actions to weaken their currencies as a way to protect their exporters.

"The global economy is struggling right now after a very deep recession. Everybody wants to grow through increasing their exports," said Sung Won Sohn, an economics professor at the Martin Smith School of Business at California State University. "I think we will see more currency tensions and trade tensions."

High unemployment in the United States and many other nations could pressure leaders to establish trade embargoes that could further strain the global economy.

Already, the U.S. House has approved legislation that would allow for economic sanctions on China and other countries found to be manipulating their currencies to gain trade advantages.

The legislation is not expected to pass the Senate this year. Still, the Obama administration has responded by increasing pressure on Beijing in the weeks leading to congressional midterm elections. Those elections are shaping up to be a referendum on Democrats' handling of the economy.

American manufacturers would like to see the dollar fall by as much as 40 percent against the yuan. The administration is hoping this change will give a boost to U.S. manufacturing jobs.

The U.S. plans to make currency values a dominant topic at the IMF-World Bank meetings this weekend. It will also raise the issue during sideline discussions among the Group of 20 major economies. That group of rich nations and major developing countries includes China.

Chinese officials have reacted strongly to the stepped up U.S. pressure. Prime Minister Wen Jiabao said Wednesday that "if the yuan is not stable, it will bring disaster to China and the world."

IMF Managing Director Dominique Strauss-Kahn and Zoellick said a compromise solution to the currency dispute would reassure financial markets.

Strauss-Kahn suggested China needs to move faster to address concerns about its undervalued currency if it wants more influence at the IMF. He echoed comments Wednesday by Treasury Secretary Timothy Geithner.

"If you want to have more say, more weight in the IMF, then you need to take more responsibility in the stability of the system," Strauss-Kahn said when asked about Geithner's speech Wednesday at The Brookings Institution.

Keller contributed from Paris.

[uls]

we were already talking about currency war (competitive devaluation) even before the mainstream media started reporting about it

so what's gonna happen next?

trade war

Beggar-Thy-Neighbor

http://financial-dictionary.thefreed...r-Thy-Neighbor

A protectionist policy involving the devaluation of one's currency and the construction of tariffs barriers on other countries. The goal of a beggar-thy-neighbor policy is to increase demand for a country's exports (by devaluing the currency and making a country's goods less expensive in other countries) while also reducing demand for the countries imports (by making them more expensive through the tariff barriers). A form of this policy, notably the tariff barrier, was implemented at the beginning of the Great Depression with almost no success. A beggar-thy-neighbor policy in the United States caused other countries to follow suit, resulting in a massive decrease in international trade. This made the Depression worse.

[Monseratto]

EPIC FAIL policy in the making...

[safeorigin]

they're just following their textbooks that's all

[tidus1203]

Well all love free trade when things are well and start to become protectionist in bad times. Just like how we love capitalism in good times and we start to become socialist in bad...

[safeorigin]

sheeple like taking the placebo ^^

[uls]

nonfarm payrolls 8:30 tonight

baka bumalik 9.7% ang unemployment rate

[tidus1203]

Ano ba concensus uls. How many job gains/losses??

[uls]

Morgan Stanley estimate -53K

Barclays Capital estimate -10K

JP Morgan estimate -45K

UBS estimate -20K

Goldman Sachs estimate -50K

Deutsche Bank estimate +25K

Bank of America estimate -10K

HSBC Markets estimate 0

expected unemployment rate 9.7%

an increase in the unemployment rate would mean people who gave up looking for work started to look for work again

[tidus1203]

Thanks! So mukang ang majority concensus is double digit losses... This should be interesting... This report could finally stop the USD bleeding and the commodities surge at least for the meantime...