Dollar rate

Gold Up; Near-Term Resistance At $1,620/Oz - Analyst ------------------------------

2012-05-21T02:39:00.001-04:00

Jones] Gold prices are higher in Asia amid momentum-based buying following sharp gains late last week. Spot gold is trading at $1,595.52 a troy ounce, up $3.42 from its previous settlement and 4.5% up from last week's low, reached May 16. A Singapore-based analyst says gains in Thursday and Friday's trading indicate a breakdown in gold's recent positive correlation with risk, but notes that a near-term break above resistance at $1,620/oz is necessary to confirm the return of gold's traditional safe-haven status. "In the last few days that correlation (with risk) has broken down; we're hoping it carries through the next few days and we could be finally getting back to gold trading as a safe haven." However, he cautions that substantial gains are unlikely in Asian trading hours, as most volume and investor demand has been coming in U.S. trading. Asian consumers in India and China remain apprehensive of buying large amounts of gold following recent volatilty, he says.

Gold Up On Momentum Buying; $1,600/Oz Level Key

2012-05-21T02:20:00.001-04:00

Gold prices are higher in Asia amid momentum-based buying activity following strong gains late last week that have bolstered bullish sentiment. Spot gold is at $1,596.90 a troy ounce, up $4.80 from its previous settlement but still below key psychological resistance at $1,600/oz. While investor buying is steady in Asia Monday, physical appetite for the yellow metal remains muted following recent choppy trading, market participants say. However, a break above $1,600/oz would likely spur a pick up in physical demand. A softer USD is helping shore up prices Monday; the EUR/USD is at 1.2808 from 1.2783 late Friday in New York; dollar-priced commodities become cheaper to investors holding other assets when the greenback weakens.(clementine.wallop@dowjones.com)

USD/TWD Down; 29.500 Support Tipped

2012-05-21T02:13:00.001-04:00

The USD/TWD is lower, tracking the greenback's weakness against most regional currencies on improving risk appetite as worries over the European debt crisis eased a bit after the weekend, says a local trader. The pair is at 29.535 from 29.630 late Friday. "The greenback was hit by profit-taking after recent gains...rising local stocks and exporters' selling approaching the month-end also weighed on the pair." She tips the pair to trade in a 29.500-29.700 band for the session. The Taiex is up 0.8% after falling 3.4% last week.

USD/IDR Steady On Suspected Intervention; 9,330 Cap

2012-05-21T01:56:00.001-04:00

The USD/IDR is at 9,285, steady from late Wednesday on suspected intervention by Bank Indonesia. Indonesian markets were shut Thursday and Friday for a local holiday. Three dealers suspect the central bank to have sold $5 million at 9,285 as the pair still looks well bid. "The USD is relatively calm against most regional currencies so far this morning, which may also help ease the pressure on the rupiah," a dealer says. Still, he says the pair may try to test the 9,300 area later Monday if Bank Indonesia fails to sell more dollars. He tips a 9,280-9,330 range for the session.

Citi Trims Forecasts For Rio, BHP, Fortescue

2012-05-20T23:49:00.001-04:00

Citi trims target prices for Australia's three biggest iron ore producers after reducing earnings forecasts due to adjustments to prices, production, capital expenditure and the Australian tax rate. The target for BHP (BHP.AU) falls to A$41/share from A$43 as the current year earnings estimate moves to 337.6 US cents a share from 346.1 cents. It lowers the target on Fortescue (FMG.AU) to A$7.10/share from A$7.50 as the current year earnings estimate falls to US$0.49/share from US$0.54. The target for Rio Tinto (RIO.AU) is now A$86/share versus A$95 previously, and Citi's current year earnings forecast is cut to 671.5 US cents a share from 800.4 cents.

USD/SGD Down, But Risk Sentiment Remains Weak

2012-05-20T23:35:00.001-04:00

The USD/SGD falls early in Asia to quote as low as 1.2694, from 1.2747 late Friday, but risk sentiment stays weak, says DBS Bank currency analyst Philip Wee. "Generally, there is a bit of short covering and the market is selling (the U.S. dollar)." He adds the market needs a better picture on Europe. He tips 1.2650 support and 1.2785 resistance for now; the pair is last at 1.2707.

Dollar/India Squanders Record Gains

2012-05-20T22:25:00.001-04:00

The Dollar/rupee pair has become something akin to unexploded ordnance.

The pair effectively covered itelf with ambiguity earlier Friday after a record high for the dollar versus its Indian counterpart dissolved and almost gave away the earlier gain.

Despite the current push-pull of the charts, I conclude that the rupee's worst days may be behind it for a while at least, with the dollar set up for a significant correction that will test support at INR53.98 at least.

The dollar opened Friday trading practically at the day's low of INR54.30 and shot up to the record high, INR54.92.

But then it eased out of the Indian close at INR54.41.

A wave of global risk aversion sparked by weak U.S. manufacturing data Thursday and ratings firm Moody's move to downgrade 16 Spanish banks hit the rupee and other risk-sensitive currencies hard in early trade. But, a recovery in local stocks following better-than-expected results from State Bank of India, the country's largest lender by assets, and a bounce in the euro brought some relief for the rupee.

The rupee remains the most vulnerable to risk-averse selling as the government hasn't taken any steps to reduce India's wide current account and fiscal deficits and improve the investment climate.

The Reserve Bank of India has been intervening to prop up the currency, though it didn't appear to do so Friday.

And if support at INR53.98 gives way then there would be little in the way of a move down to INR53.05, which may break down support.

Speculators Pare CAD, Still Largest Net Long Vs USD

2012-05-20T22:12:00.001-04:00

Risk aversion continued to weigh on currency markets as traders step back from the EUR and commodity currencies AUD and CAD in week ending May 15, according to CFTC report Fri. Long CAD positions were pared back, but shorts were up, a sign investors believe CAD is beginning to run out of steam. The good news is the CAD remains the largest net long held against the USD, reflecting the loonie's strong fundamental situation. "However, the data only covers until Tuesday and it is therefore likely that some of this long position has been pared back, as the combination of risk aversion, weaker global growth and soft data from the US all weigh on CAD," Scotia says.

Gold Shorts Hit Post-Lehman High Before Rally

2012-05-20T21:28:00.001-04:00

Market watchers eager to jump on the gold bandwagon after the metal's two-day, $55/oz rally, should take a glance at the latest CFTC data. As of Tuesday, the day before gold hit a 10-month low, money managers held the most short positions in gold futures and options since the day after Lehman Brothers filed for bankruptcy in 2008. It doesn't take much to spark a ferocious, short-covering rally when hedge funds were the most bearish they'd been in more than three years. Today, June gold rises 1.1% to $1,591.90/troy oz, and up 0.5% on the week.

Traders Testing Brazil's Trigger Level

2012-05-20T21:06:00.001-04:00

The Brazilian real's further weakening against the dollar has been purely speculative, in a move to test the Central Bank and gauge at which level it feels it needs to intervene in the currency market, Espirito Santo Investment Bank says. Intervention coming at BRL2.05 to the dollar shows the bank's actually quite comfortable with the real at up to that level, BES says. With the global scene continuing problematic, the real's likely to hover around current levels in coming days with further Central Bank interventions controlling any excesses, according to BES. This could even take the shape of dollar spot sales, BES says.

Brazil's Real Trades At BRL2.032 Versus Weak Point Of BRL2.0524

2012-05-20T21:05:00.001-04:00

Brazil's real continues to strengthen following central bank intervention in the market, recovering much of its earlier losses.

Investors snapped up all of the dollar swap contracts offered by the central bank, which was seen as a move to offset some heavy selling by local investors in Brazil, according to market participants.

At 1946 GMT--long after normal market trading had ceased--the Brazilian currency was trading at BRL2.032 per dollar, off the weak point of BRL2.0524, but still about 1% weaker on the day.

What Triggers Intervention On A Fri afternoon

2012-05-20T20:51:00.001-04:00

What had driven the Brazilian real to such rapid losses late Friday afternoon was local players in Brazil who were long BRL, short USD, hitting their stop-losses at key technical levels, a trader says. With locals being taken out of the positions quite heavily, these big local flows resulted in a fairly uncontrolled move in USD/BRL. And to the rescue: the central bank. Dollar now trades at BRL2.0371.

Brazil Central Bank Indicates Real Floor

2012-05-20T20:48:00.001-04:00

Brazil's central bank swap auction this afternoon has indicated to the market that the monetary authority considers the exchange rate of BRL2.05 to the dollar as the floor for the currency, says Reginaldo Gualhardo, forex manager at Sao Paulo's brokerage Treviso. Brazil's central bank sold the equivalent of $654.3 million in dollar swap contracts this afternoon.

For Those Scratching Heads About EUR/USD Surge...

2012-05-20T20:43:00.001-04:00

A confluence of factors has come into play to push the EUR higher: 1) Brazil is selling dollars to boost real, which pushes USD crosses lower, triggering stops in EUR/USD. 2) G8 is meeting this weekend; best to be positioned defensively against euro-supportive words/measures. 3) It's Friday, after a week of heavy euro losses; time to take profits and square positions into weekend. 4) For the same reasons, trading conditions are thin. 5) The euro zone is, for now, still intact.

Brazil's Central Bank Surprises With Dollar Swap; BRL Recovers Vs USD

2012-05-20T20:37:00.001-04:00

Brazil's central bank surprised the currency market with a move to try to ease some of the pressure that has weakened the Brazilian real sharply this week, as the euro zone's sovereign debt crisis continues to roil global markets.

The market hadn't been expecting this move, according to Mario Batistel, a foreign exchange manager at the Fair Corretora brokerage in Sao Paulo. The central bank is sending a signal that it isn't happy with the exchange rate depreciation, and decided put a lid on the dollar's gains, he said.

The central bank sold all 13,000 of the dollar-swap contracts on offer, equivalent to $654.3 million, according to a central bank statement.

The Brazilian real recovered some of its losses versus the dollar after the swap was announced. The currency retraced to BRL2.0355 per dollar, from a weak point of BRL2.0524--but was still more than 1% weaker on the day.

The dollar-swap auctions offer investors the opportunity to exchange contracts indexed to domestic interest rates for paper linked to the U.S. dollar. The central bank typically holds foreign-exchange swap auctions at a time when the Brazilian real is weakening against the U.S. dollar. The auctions often help to stem the depreciation of the real by offering investors the chance to obtain contracts linked to the U.S. dollar at a time of dollar scarcity.

Friday's dollar swap is the first since October 28, 2011.

The intervention marks a turnaround for the central bank. Until recently, it had been buying up dollars, encouraging weakness in the Brazilian real, which the government has claimed is overvalued against the dollar. The last time the central bank intervened in the market to buy dollars was April 27.

As the euro-zone crisis intensified, however, the Brazilian real has been among the hardest hit in emerging markets. Although the government has welcomed the weakness as a boost for Brazilian industry and exporters, there had been speculation that any signs of a sudden collapse in the real could prompt central bank intervention.

Peru's Central Bank Places More US Dollar Repos

2012-05-20T20:22:00.000-04:00

The Central Reserve Bank of Peru sold two series of US dollar repos in the foreign exchange market, as banks sought the greenback to meet increased reserve requirements. On Thursday the central bank for the first time placed the US dollar denominated instruments, adding $50M in liquidity. On Friday, it placed $400M in two series of the new repos, one for three days and the other for seven days.

Dollar's Gains To Impact Weekly CFTC Data

2012-05-20T20:17:00.001-04:00

Even if traders did not add any new speculative bets on the CME this week, positioning will still show some movement thanks to the dollar's big rally in recent weeks. Exchange rates add a second layer to the shift in positioning each week beyond the change in the number of net contracts, so with the dollar's big rally, extreme short or long bets on a foreign currency against the dollar wouldn't look as big this week. For example, if the number of net short contracts betting on the euro to fall against the dollar does not change at all, the speculative positioning as valued in dollars would drop some 2% to $22.9B because of the dollar's gains.

Moody's Lifts Media General Outlook To Positive On Berkshire Hathaway Agreements

2012-05-20T20:04:00.001-04:00

Moody's Investors Service raised its outlook on Media General Inc. (MEG) to positive from stable after Warren Buffett's Berkshire Hathaway Inc. (BRKA, BRKB) earlier this week agreed to buy almost all of the company's newspaper assets for $142 million as well as provide it with $445 million of new financing.

Media General currently has a corporate family rating of Caa1, which denotes highly speculative territory.

Berkshire will add 63 newspapers in four southern states to its vast stable of companies and will provide $445 million in credit to Media General in exchange for warrants that would give Buffett's conglomerate a nearly 20% stake in the company.

Buffett, who serves as Berkshire's chairman and chief executive, is famous for exacting a high price while serving as a lender of last resort when companies need immediate access to cash, and the financing deal with Media General has many of the hallmarks of a classic Buffett arrangement. Under an agreement it reached in March, Media General had until next week to secure new financing to win a much-needed extension on its existing bank debt.

The ratings firm said the May 2020 maturity of the proposed Berkshire loan is meaningfully longer than the two-year extension to March 2015 that the company was seeking under its previous credit agreement. Moody's noted the Berkshire agreements also provide clarity regarding the structure of Media General's plan to divest its newspaper assets and the cost to resolve its March 2013 maturity. Additionally, Berkshire's substantial debt and equity interests in the company provide support to Media General's efforts to reduce leverage, address its 2017 note maturity and execute its business plan.

Media General shares were down 7% to $3.89 in recent trading. The stock is off 24% over the past three months.

USD/BRL Pushes Higher On Local Dollar Demand

2012-05-20T20:02:00.001-04:00

A New York-based trader says the moves in USD/BRL have been mainly driven by onshore demand for dollars, with the latest push higher to BRL2.0349 marking another wave of people getting out of real. Today's downbeat market mood has also hit the currency, which was most recently at BRL2.0339, according to CQG.

Dollar Appreciation Pressures Oil - Commerzbank

2012-05-18T05:45:00.001-04:00

The appreciation of the US dollar is seen as a major negative factor in the recent correction in oil futures, as oil priced in euros still costs around 10% more than last year, while it's cheaper in US dollars than it was a year ago, says Commerzbank.

Tubidy

"However, the fundamentally relaxed conditions in the oil market at the moment are also undoubtedly having a negative impact: on Wednesday, the US Department of Energy announced another sharp increase of 2.1 million barrels in crude oil stocks in the week to 11 May," the bank notes. "Crude oil remains severely under pressure," Commerzbank adds. ICE July Brent is down 61c at $106.88/bbl. Nymex June crude is down 15c at $92.41/bbl.

USD/INR Pares Gains As Stocks, Euro Recover

2012-05-18T05:40:00.001-04:00

The USD/INR is sharply off its record high as local stocks recover their early losses, while the EUR strenthens against the greenback in early London trade.

Tubidy

The USD/INR is at 54.71 after hitting an all-time high of 54.90 vs 54.47 late Thursday in Asia. A dealer with a private bank says the rupee could recover further if the EUR/USD breaches its psychological resistance of 1.2700 (it is now at 1.2689). Still, the USD/INR is likely to find support at 54.50. The RBI is unlikely to enter the market today unless the record high is breached, he adds. The Sensex is off 0.2%, after falling as much as 1.6% earlier in the day.

USD/PHP Hits 4-Month High; Next Cap At 43.40

2012-05-18T05:24:00.001-04:00

The USD/PHP rises to a four-month high as investors seek safety in the U.S. dollar amid growing concerns over Europe's political and financial problems.

Tubidy

The currency pair is at 43.25, its highest level since Jan. 20, vs 42.925 late Thursday in Manila. Volume is heavy, with traders pointing to 43.40 as next cap and 43.00 as support. "We may see some correction on the dollar in the near-term as banks are expected to take some profits after recent gains," a Manila-based currency trader says.

USD/PHP Hits 4-Month High; Next Cap At 43.40

2012-05-18T04:45:00.001-04:00

The USD/PHP rises to a four-month high as investors seek safety in the U.S. dollar amid growing concerns over Europe's political and financial problems. The currency pair is at 43.25, its highest level since Jan. 20, vs 42.925 late Thursday in Manila. Volume is heavy, with traders pointing to 43.40 as next cap and 43.00 as support. "We may see some correction on the dollar in the near-term as banks are expected to take some profits after recent gains," a Manila-based currency trader says.

European Stocks Weak; Safe Haven Assets Rally

2012-05-18T04:36:00.001-04:00

European stocks dropped Friday, while bund yields plunged, as investors opted for safety over risk after Moody's downgraded several Spanish banks and Fitch cut its credit rating on Greece.
At 0755 GMT, the benchmark Stoxx Europe 600 index was down 0.8% at 239.63. The U.K.'s FTSE 100 index was 0.7% lower at 5302.12, Germany's DAX was down 0.5% at 6274.67 and France's CAC 40 was 0.8% lower at 2988.38.
In the euro-zone 'periphery,' Spain's IBEX-35 was down 0.4% at 6513.80, while Italy's FTSE MIB was off 0.4% at 13,032.83. Greece's ASE Composite was down 0.2% at 239.63.
Overall, losses in equity markets weren't spectacular, given the flurry of bad news, and banking stocks proved more than resilient. By 0755 GMT, the Stoxx Europe 600 banks index was down just 0.1% after opening with heavy losses.
And Spanish banks erased initial losses to trade up. Banco Santander rose 2.3%, while Banco Bilbao Vizcaya Argentaria added 2.8%. Bankia shares surged 21%, bouncing back from the previous session, when shares were pummeled by a local newspaper report--later denied by the bank and the government--suggesting that depositors were taking their savings out of the bank.
Investors pointed to a report in Spanish financial daily Cinco Dias, saying that the country's banks are asking the stock market regulator to reinstate a temporary ban on short selling of domestic banking stocks that was lifted in February, to help contain recent sharp declines in lenders' share prices.
After the close Thursday, Moody's Investors Service downgraded 16 Spanish banks and Santander UK, a U.K.-domiciled subsidiary of Banco Santander, pointing to mounting loan losses and the recession. Banco Santander and Banco Bilbao Vizcaya Argentaria were downgraded to A3, while Santander UK was cut one notch to A2. Earlier this week, Moody's downgraded 26 Italian lenders, as part of a series of similar moves on sovereign and corporate debt issues across the euro-zone periphery.
The downgrades by Moody's were largely expected, as the agency had announced in April that it would publish the results of its ratings reviews for several European and U.S. banks as of mid May.
"Nevertheless, this move has the potential to add to fears over Spanish banking sector vulnerability to contagion effects related to a possible Greek exit," said Rabobank. "The principle channel for this contagion is likely to come via the sovereign with 'exit risk premia' pushing Spanish yields yet higher which, in turn, will erode the balance sheets of banks that are now markedly more exposed to Spanish government debt in the wake of the first and second long-term refinancing operations."
Still, the flight to safety was evident Friday, and as investors looked for somewhere safe to park their cash, the 10-year German Bund yield hit a record low of 1.398%. The 2-year German Schatz yields fell to 0.028%, which is also a record low. The June bund futures contract was up 21 ticks at 143.88, after hitting a record high of 144.06. Elsewhere, gilt yields were at record lows of 1.799%.
Spanish and Italian bond markets were fairly quiet, with the yield on the 10-year Italian government bond yield was unchanged at 5.97%, and the corresponding Spanish yield was up three basis points at 6.31%, according to Tradeweb.
After the close Thursday, Fitch Ratings downgraded Greece's credit rating by two notches further into junk territory, pointing to increased risk the country may exit the euro zone. Fitch lowered Greece's long-term foreign and local currency issuer default ratings to triple-C, which denotes highly speculative credit, from B-minus.
Meanwhile, results of the first two polls carried out since the May 6 elections have done little to clear up any confusion. One poll showed that support for the Greek leftist anti-austerity Syriza party has grown even more, while another had Greece's conservative New Democracy party in the lead, ahead of Syriza. The former suggested Syriza would receive 22% of the vote if elections were held now, compared with New Democracy, who would get 19.5% and Pasok, which would receive 14%. According to the other poll, however, New Democracy would receive 26.1%, while Syriza would garner 23.7% of votes.
Investors will look to the summit of the Group of Eight leading nations, which takes place at Camp David in Maryland from Friday and over the weekend. It will include a discussion on the global economy, in particular, the recent escalation in the European debt crisis.
On the European foreign exchanges, the euro was under pressure against the dollar and by 0755 GMT, was trading at $1.2670, from $1.2697 late Thursday in New York. The dollar was unchanged at Y79.27.
Among commodities, spot gold was at $1575.90 a troy ounce, up 60 cents from New York, while June Nymex crude oil futures were down 26 cents at $92.30 a barrel and July Brent futures were down 64 cents at $106.85.

Greek Woes Reinforce Credit Suisse Bullish USD View

2012-05-18T04:32:00.001-04:00

Greek woes reinforce Credit Suisse bullish USD view and the Swiss bank thinks EUR/USD will struggle to make it back above 1.30 even if polls start to signal greater chances of a pro-EMU composition of the Greek parliament. Warns that any successful Greek coalition government will still face a difficult negotiation process on a modified austerity plan. "Further ECB easing remains a critical element of a more pro-growth policy stance in the euro area, and rate markets are likely to continue to price accordingly," the bank adds. EUR/USD now at 1.2689.