DOLLAR SET FOR WEEKLY ADVANCE BEFORE DATA ON HOUSING, GOODS ORDERS The dollar marching forward for a weekly gain versus all of its 16 major counterparts before U.S. data next week on home prices and durable-goods orders that may add to the case for the Federal Reserve to slow its bond purchases. The yen cutted a four-day drop versus the greenback as Asian stocks extended a global rout before a speech today by Bank of Japan Governor Haruhiko Kuroda. Deutsche Bank AG’s G10 FX Carry Basket index pulled back to the worst point since September as borrowing costs rose in the U.S. “I expect the dollar to remain resilient because it’s become clear that the Fed’s policy stance is tapering,” said Yuki Sakasai, a foreign-exchange strategist at Barclays Plc in New York. The yen may weaken further as “there’s a sufficiently good chance that the Bank of Japan will have to introduce additional monetary easing.” The dollar slightly changed at $1.3216 per euro as of 10:13 a.m. in Tokyo, set for a 1 percent advance on the week. The yen moved a bit at 97.29 per dollar and inched up 0.1 percent to 128.55 against the euro. The yen has dive low by 3.1 percent this week versus the greenback, poised for the largest decline since the period ended April 5, the same week the BOJ introduced unprecedented financial stimulus. It gave up 2.3 percent against the euro. The Federal Open Market Committee left the monthly pace of bond purchases at $85 billion on June 19, saying “downside risks to the outlook for the economy and the labor market” have diminished. Policy makers raised growth forecasts for next year to a range of 3 percent to 3.5 percent and reduced their outlook for unemployment to as low as 6.5 percent. Yields Surge “If the incoming data are broadly consistent with this forecast, the committee currently anticipates that it would be appropriate to moderate the pace of purchases later this year,” Fed Chairman Ben S. Bernanke said in a press conference in Washington after the central bank meeting. The U.S. Commerce Department is likely to say on June 25 that orders for U.S. durable goods rose 3 percent in May from April, expanding for a second month. A separate report may show the same day that the S&P/Case-Shiller index of property values jumped 10.6 percent in April from a year earlier, according to another poll of economists. That would almost match March’s increase which was the most in seven years. The Dollar Index, which Intercontinentalexchange Inc. uses to monitor the greenback against the currencies of six U.S. trade partners, fell 0.2 percent to 81.794. It’s climbed 1.4 percent this week, poised for the biggest advance since February. The gauge may climb to 85.7 by the end of the year. Rising Yields Yields on benchmark Treasuries touched 2.47 percent yesterday, the highest since August 2011. The MSCI Asia Pacific Index of shares declined 1.3 percent today, following a 2.5 percent slide in the Standard & Poor’s 500 Index yesterday. The yen tends to strengthen during periods of financial and economic turmoil because Japan isn’t reliant on foreign capital to fund its deficits. “The yen can’t shake off its safe-haven characteristics,” said Ray Attrill, the global co-head of foreign-exchange strategy in Sydney at National Australia Bank Ltd. “Money flies home during periods of heightened risk aversion” because of Japan’s status as the world’s biggest creditor, he said. Borrowing Costs Japan’s 10-year government bond yields have increased 32 1/2 basis points to 0.885 percent since the end of March, poised for the biggest quarterly gain since the period ended June 2008, even as the BOJ doubled monthly bond purchases to lower borrowing costs. The benchmark lending rate for large corporations, known as the primate rate, has advanced to 1.3 percent, a level unseen since July, while 35-year mortgage rates rose to a 13-month high of 2.03 percent. Deutsche Bank’s G10 FX Carry Basket index has slid about 10 percent from a high in April. The gauge gained 6.8 percent in 2012 as weakening economic data in the U.S., Japan and the euro region fanned expectations central banks would keep rates low and inject money to boost growth. The JPMorgan Global FX Volatility Index touched 11.51 percent, the highest level since June 7, 2012. The average in the past year is 8.65 percent. Source: mt5/
Posted on: Fri, 21 Jun 2013 09:02:35 +0000
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