Euro Rises to Seven-Week High After German Exports; Aussie Jumps The euro strengthened to a seven-week high against the dollar as exports rebounded in Germany and China, adding to signs the global economy is recovering. The 17-nation currency advanced for a third day versus the greenback before a report next week that analysts said will show the euro-area economy returned to growth in the second quarter. Australia’s dollar climbed to its highest level this month as China’s trade data improved the outlook for the South-Pacific nation’s exports. South Africa’s rand rose against all 16 of its major counterparts as demand for higher-yielding assets increased. The Bloomberg U.S. Dollar Index fell for a fifth day. “As global-growth expectations pick up the euro is benefiting,” said Michael Sneyd, a currency strategist at BNP Paribas SA in London. “Positive China data boosts the euro on signs of a global recovery and we’ve had reasonable German data. The euro could continue to remain elevated.” The euro rose 0.2 percent to $1.3358 at 6:525 a.m. in New York after climbing to $1.3369, the highest level since June 19. The 17-nation currency gained 0.1 percent to 128.64 yen. The yen was little changed at 96.30 per dollar after weakening as much as 0.6 percent. German exports, adjusted for working days and seasonal changes, rose 0.6 percent from May, when they dropped a revised 2 percent, the Federal Statistics Office said in Wiesbaden. Chinese shipments overseas climbed 5.1 percent in July from a year earlier after sliding 3.1 percent in June, according to the General Administration of Customs in Beijing. Euro-area gross domestic product expanded 0.1 percent in the second quarter, after contracting for the previous six quarters, according to the median estimate in a Bloomberg survey before the report is released on Aug. 14. The euro has strengthened 5.6 percent this year, the best performer of 10 developed-market currencies tracked by Bloomberg Correlation-Weighted Indexes. The dollar gained 4.2 percent, while the yen tumbled 7.2 percent. The Bloomberg U.S. Dollar Index, which tracks the greenback against 10 major counterparts, fell 0.2 percent to 1,019.22, extending its run of declines to the longest since the period ended April 30. The Aussie advanced for a fourth day versus the U.S. currency as traders pared bets the Reserve Bank of Australia will lower the benchmark interest rate. Chinese imports gained 10.9 percent in July compared with a year earlier, after falling 0.7 percent in June, the General Administration of Customs said in Beijing. “The worst of China slowdown fear may have passed for now, and that’s helping the Australian dollar,” said John Horner, a Sydney-based strategist at Deutsche Bank AG, the world’s biggest currency trader. “There’s been considerable short positioning in the currency, and given the rally we have seen in the past few days, those positions may come under further pressure.” A short position is a bet an asset will decline. Australia’s dollar advanced 0.8 percent to 90.71 U.S. cents after climbing to 90.89, the highest since July 30. The rand jumped 1.1 percent to 9.8578 per dollar after sliding 1.3 percent during the previous three days. Then yen erased earlier declines versus the dollar after central bank Governor Haruhiko Kuroda’s board stuck with an April pledge to expand the monetary base by 60 trillion yen to 70 trillion yen per year. “There may have been some people, especially those overseas, expecting additional BOJ easing,” said Takuya Kawabata, an analyst at Gaitame Research Institute Ltd. in Tokyo. “If there were to be additional stimulus, it will likely come after the increase in the sales tax.” Japan’s current-account surplus was at 336.3 billion yen in June, the Finance Ministry said, trailing the 400 billion yen median estimate in a Bloomberg survey. The balance dropped 20.3 percent from a year ago. Japanese investors increased their holdings of overseas bonds for a fifth week, purchasing 689.9 billion yen of the securities in the period ended Aug. 2, the Ministry of Finance said today. Those flows help to weaken the yen and are part of a portfolio shift among Japanese investors that Kuroda is trying to encourage with bond purchases that keep yields low.
Posted on: Thu, 08 Aug 2013 11:21:39 +0000
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