Yuan Slips as China Raises Interest Rates and May Do So Again

The Chinese yuan slipped today as the central bank raised its interest rates in an attempt to curb China’s significant inflation and to prevent the asset-bubble. China’s economic growth makes traders expect another rates hike in the future.

The People’s Bank of China raised its key one-year lending and deposit rates by 25 basis points on the Christmas Day, the second increase since mid-October. The benchmark lending rate advanced to 5.81 percent, while it was 7.47 percent before the cuts from late 2008, caused by the global economic crisis. It may rise to 6.56 percent by the end of 2011. The deposit rate went up to 2.75 percent.

China’s central bank is expected to continue the interest rates hikes in the future, while the central banks of the US, the European Union and Japan will likely keep their rates on hold for some time. It’s not surprising as China’s economy may grow 9.6 percent next year, while the US economy will grow by 2.3 percent and the EU economy will expand 1.5 percent. China’s inflation was at 5.1 percent annual pace in November.

USD/CNY went up from 6.6280 to 6.6323 as of 17:32 GMT, following the advance to the intraday high of 6.6500. EUR/CNY advanced from 8.6927 to 8.7179.

If you have any questions, comments or opinions regarding the Chinese Yuan, feel free to post them using the commentary form below.

Can Yuan’s Gains Be Limited by Demands for Slower Appreciation?

The Chinese declined today as the Chinese executives call for a slower appreciation, while criticizing the US for the debasing of its currency and creating asset-bubbles on the emerging markets.

Earlier the executives were supporting the end of the yuan’s peg to the dollar and willing to see a faster appreciation of the Chinese currency. Now the CEOs are worried that the US quantitative easing may hurt the economies across the world and are willing to see the slowdown of the yuan’s appreciation.

USD/CNY advanced from 6.6258 to 6.6295 as of 13:47 GMT today.

If you have any questions, comments or opinions regarding the Chinese Yuan, feel free to post them using the commentary form below.

Yuan Rises Beyond 6.6 per Dollar as China Battles Inflation

The Chinese yuan gained today against the US dollar, rising for the first time since 1993 beyond 6.6 yuans per dollar level, on the speculation that the government may allow the currency to appreciate faster in an attempt to rein the inflation. The currency weakened against the euro.

The People’s Bank of China raised the reference rate today to 6.6227 per dollar from yesterday’s 6.6229, increasing it for the ninth day. The yuan is allowed to trade by up to 0.5 percent either side of the rate. The US Dollar Index, which tracks the strength of the greenback versus the currencies of the US major trading partners, retreated for the seventh day.

It looks like the Chinese policy makers recognized the usefulness of the strong currency in the battle with the inflation. The yuan advanced 0.57 percent this week, posting the fifth weekly gain, and touched the strongest price since China unified official and market exchange rates at the end of 1993.

USD/CNY traded at about 6.5916 as of 12:04 GMT after opening at 6.6035 and falling to the intraday low of 6.5897. EUR/CNY rose from 8.7764 to 8.8223, following the decline to the intraday low of 8.7653.

If you have any questions, comments or opinions regarding the Chinese Yuan, feel free to post them using the commentary form below.

China Allows Yuan Appreciate, Can It Do So?

The Chinese yuan appreciated today on the speculation that China will allow its currency to strengthen ahead of the President’s Hu Jintao visit to the US next week.

The analysts have divided opinions on the ability of the yuan to appreciate. Dariusz Kowalczyk, an economist at Credit Agricole CIB, said that “China has managed the currency in such a way that it has depreciated versus the basket, which gives it room to appreciate”. Philip Wee, an economist at DBS Group Holdings Ltd., think that “Europe is still China’s largest trading partner so it is difficult for China to let the yuan appreciate in a weak euro environment”.

USD/CNY declined from 6.6203 to 6.6048 as of 13:12 GMT today.

If you have any questions, comments or opinions regarding the Chinese Yuan, feel free to post them using the commentary form below.

Chinese Yuan Appreciates with Other Asian Currencies

The strong economic growth of the Asian countries spurred talks about future rate increases. These talks benefited the currencies of the region, including the Chinese yuan.

China’s Manufacturing PMI rose from 52.2 to 53.4 in March, according to the China Federation of Logistics and Purchasing. The Bloomberg-JPMorgan Asia Dollar Index, tracking 10 most-traded Asian currencies, increased 0.6 percent this week to 117.61, the highest level since 1997. The MSCI Asia-Pacific Index added 0.8 percent from over the week.

Christy Tan, a foreign-exchange strategist at Bank of America-Merrill Lynch, described the reason for the strength of the Asian currencies:

Most central banks in Asia are still inclined to raise rates in the coming quarter. That’s supportive for Asian currencies.

USD/CNY closed at 6.5488 after opening at 6.5496 yesterday. EUR/CNY fell from 9.3231 to 9.3205.

If you have any questions, comments or opinions regarding the Chinese Yuan, feel free to post them using the commentary form below.

Yuan Appreciates Above 6.5 vs. USD for a Short Time

The Chinese yuan rose above the 6.5 level against the US dollar today for several hours before returning to the levels below this important psychological rate.

The yuan reference trading rate was moved up to 6.499 per USD by the People’s Bank of China today. The currency is allowed to appreciate or depreciate within 0.5 percent boundary during a daily trading session, allowing an intraday low on the USD/CNY currency pair of 6.4805.

The main reason for this long-awaited (at least in the United States) strengthening of the yuan is seen in the rising inflation of the consumer prices in China. Another positive factor for this regulated currency is the prolonged weakness of the US dollar, which continued to fall against other major currencies this week.

USD/CNY rose from 6.5027 to 6.5060 as of 12:39 GMT today, following a drawdown to 6.4805 between 6:00 and 8:00 GMT.

If you have any questions, comments or opinions regarding the Chinese Yuan, feel free to post them using the commentary form below.

Sixth Quarter of Gains for Yuan

The Chinese yuan posted the sixth straight quarterly gain on the speculation that China will allow the currency to appreciate faster in order to slow growth of consumer prices.

The People’s Bank of China increased the reference rate for the yuan to 6.4716 per dollar today, allowing the currency to fluctuate 0.5 percent in either side of the target. Li Daokui, the adviser to the central bank, explained the rise of prices in June by higher costs of agricultural products and pork. China Securities Journal said today, citing the State Information Center, the inflation is estimated to be 5.3 percent in the first half of 2011 and about 4.9 percent for the whole year.

USD/CNY traded at 6.4648 today as of 11:22 GMT, fluctuating near its opening rate of 6.4644, after rising as high as 6.4680 and falling as low as 6.4625.

If you have any questions, comments or opinions regarding the Chinese Yuan, feel free to post them using the commentary form below.

PBoC Allows Yuan Appreciation

The Chinese yuan climbed today after China’s central bank lifted the reference rate, following the downgraded of the US credit rating, signaling that the policy makers aren’t bothered by the currency’s gains.

The People’s Bank of China put its reference rate 0.23 percent higher at 6.4305 per dollar, allowing the yuan to trade up to 0.5 percent on either side of the official rate. The current level of the rate is the highest since November. China doesn’t worry about the appreciation of its currency, but is concerned that the dollar will continue to drop as the nation is the biggest holder of Treasuries.

USD/CNY traded at 6.4362 as of 11:51 GMT after falling from 6.4416 to 6.4265 earlier.

If you have any questions, comments or opinions regarding the Chinese Yuan, feel free to post them using the commentary form below.

Yuan Goes Down as Europe Saps Demand for Asian Assets

The Chinese yuan fell today as the central bank set the reference rate for the currency lower for the first time in six day after the European leaders failed to reach an agreement about measures for fighting the debt crisis.

The European leaders were discussing yesterday the plans to issue joint euro-bond, but rejected that idea after all, making traders to question what exactly politician are going to do with the debt issues (and are they going to do anything at all). The concerns reduced demand for assets of Asian countries. The People’s Bank of China reacted to the news setting the fixing for the yuan 0.11 percent weaker at 6.3996 per dollar.

USD/CNY advanced from 6.3838 to 6.3882 as of 13:02 GMT today and reached earlier the intraday high of 6.3933.

If you have any questions, comments or opinions regarding the Chinese Yuan, feel free to post them using the commentary form below.

Yuan Gets Stronger as China Expected to Allow Gains

The Chinese yuan gained today on the speculation China will allow the currency to appreciate to combat inflation that accelerates with fast pace.

China’s central bank set the exchange rate at 6.3987 per dollar, increasing the fixing for the second straight day. Market analysts explain that China needs help of a strong currency to deal with the fast growth of the consumer prices. Today’s report that showed growth of manufacturing confirmed the trend for increasing inflation remains in place.

USD/CNY went down from 6.4015 to 6.3980 today as of 11:07 GMT, gaining 0.07 percent. That was the fist gain in five sessions.

If you have any questions, comments or opinions regarding the Chinese Yuan, feel free to post them using the commentary form below.

Singapore Dollar Rises Before Fed Cut

The Singapore dollar rose today during the Asian Forex trading session as the market analysts expected the Federal Reserve of U.S. to lower the interest rate at the next meeting, widening the rates difference for these two currencies.

Fundamental data report on the U.S. housing which came out yesterday strengthened the confidence of the investors that Fed will have to cut its overnight interest rate  by at least 50 basis points tomorrow.

After the opening at 1.4204 USD/SGD slid down to 1.4184 and is now trading around this levels. And the volatility is now very low, as the Asian session has already ended.

The Monetary Authority of Singapore isn’t intervening to hold down the national currency’s appreciation, while the USD/SGD rate is above the level of the possible danger to the economy. Many economists believe that such growth of the Singapore dollar may stretch to 1.4150 per dollar, before the MAS will intervenes.

If you have any questions, comments or opinions regarding the Singapore Dollar, feel free to post them using the commentary form below.

Singapore Dollar Drops Large This Week

The Singapore currency had its worst week in a year on the Forex market, as it lost along with the other Asian currencies to the U.S. dollar, because the investors began to expect that the U.S. interest rate will unchanged rather than lowered next time.

The  U. S. dollar rose from its record low bottom against the euro this week and appreciated significantly against eight of the ten most traded Asian currencies (except the Japanese yen). April 24 report on the durable goods showed an unexpected rise in the orders (excluding transportation vehicles) that helped the dollar to go up on Forex.

The uprise of the U.S. dollar and decline of the Singapore dollar (and of the other Asian currencies) is a reflection of the interest rate expectations rescaling. The chances for the 2.25% interest rate in U.S. to be unchanged on the April 30 meeting were zero last week according to the futures on the Chicago Board of Trade. This week the chances went up to 18%.

The Singapore dollar dropped from 1.3729 per U.S. dollar to 1.3633 this week — that’s 0.7%, the largest weekly decline for this Asian currency in 2008.

If you have any questions, comments or opinions regarding the Singapore Dollar, feel free to post them using the commentary form below.

Asian Currencies Fell on High Oil Costs

The Asian currencies fell this week as the oil prices surged and the rising inflation concerns forced foreign investors to cut the inflow of liquidity into this region.

Indian rupee and Malaysian ringgit led the seven out of the ten most traded Asian currencies (excluding the Japanese yen) that dropped after the Federal Reserve representatives stated that the high inflation becomes a real challenge as the oil prices rose to the new historical maximum.

Recent macroeconomic reports from the regional countries show that the GDP growth may start slowing down there, while the inflation risks grow on the food and energy costs.

Reduction of the money flow supplied by the foreign investors is seen as one of the primary reasons for the Asian currencies’ downfall. Regional central banks can’t rise the interest rates to fight inflation, because doing so will put the output growth at risk.

The Indian rupee fell 2.2 percent over this week — to 42.51 per one U.S. dollar. Rupee is the third-worst performing currency out of the most-traded Asian currencies this year with an 8.2 percent decline. The Malaysian ringgit declined for 1.4 percent this week, while the Singapore dollar dropped 0.2 percent during the last five days — to S$1.3713 for one U.S. dollar.

If you have any questions, comments or opinions regarding the Singapore Dollar, feel free to post them using the commentary form below.

Singapore Choose to Depreciate Its Currency

Singapore dollar declined for the sixth day against they U.S. dollar today as the country’s monetary authorities will probably use the weak national currency as a stimulus for the export-producing economy.

All major world’s central banks reduced their target interest rates earlier to fight the financial crisis. The Monetary Authority of Singapore may devalue SGD against the basket of foreign currencies in order to revive the growth of the national economy.

The Singapore dollar has been growing against the U.S. dollar until July this year. Since July the Singapore dollar depreciated by 13.5 percent against the greenback. While Singapore’s inflation has been the main target of the government the growth of the currency was stimulated, now the focus will switch on the GDP gain and the currency will be allowed to decline further.

USD/SGD rose from 1.5214 to 1.5270 as of 8:23 GMT today after reaching 1.5282 yesterday — its highest level since September 2007. The current rally lasts uninterrupted since November 11 when the currency pair was at 1.4877.

If you have any questions, comments or opinions regarding the Singapore Dollar, feel free to post them using the commentary form below.

SGD Up as Traders not Sure in Policy Change

The Singapore dollar gained against the U.S. dollar for the second day today as the traders reduced their bets that the monetary authorities are going to use the currency depreciation to stimulate the economy.

The market participants pushed the Singapore’s dollar up before the government reports on its stimulus package in the new budget. The fight with the recession may continue without the serious depreciation of the currency as the central bank said that they won’t change their stance on the dollar during the next few months.

Analysts believe that the current withdrawal of the bets that the monetary authorities are going to depreciate the currency will help the Singapore’s dollar to stand still against the U.S. dollar. Earlier, traders built up the confidence that the depreciation will be issued before April to stimulate the economy, now they will have to wait at least until that month for something to happen.

USD/SGD went down from 1.4978 to 1.4934 as of 8:32 GMT today after reaching 1.5120 during the trading session yesterday — its lowest level in 6 weeks.

If you have any questions, comments or opinions regarding the Singapore Dollar, feel free to post them using the commentary form below.

Singapore’s Dollar Gains on Asian and Domestic Economic Data

The Singapore dollar had one of the best weekly performances since the beginning of the year as optimism towards the domestic and regional economies improved, allowing the Singaporean currency to gain towards the weekend.
After Singapore’s industrial production rose last month in the seasonally adjust annual rate as much as twice what forecasts suggested, the country’s dollar rose, with several countries in Asia, as South Korea and Malaysia also contributing for the optimism growth in the region this week.
USD/SGD ended the week at 1.4086 from as high as 1.4125 during the week.

If you have any questions, comments or opinions regarding the Singapore Dollar, feel free to post them using the commentary form below.

Singapore Dollar Was Revaluated

The Singapore dollar experienced the unexpected surge as the government revaluated the currency after the forecast about the widening economy and the increasing inflation.

This decision reflects the broader trend for the Asian countries to shift their attention and resources from the economic stimulation to the containment of the inflation as the prices for the commodities rise. The decision may also signal about the policy maker’s belief that China is going to let its currency float, ending the yuan’s peg to the dollar. The Monetary Authority of Singapore stated that it plans the wider range of the currency’s fluctuations and the modest and gradual appreciation.

USD/SGD traded at 1.3762 as of 10:00 GMT today down from the opening price of 1.392. EUR/SGD traded near 1.8773, dropping from the opening price of 1.8955.

If you have any questions, comments or opinions regarding the Singapore Dollar, feel free to post them using the commentary form below.

China’s Growth Boosts Singapore Dollar

The Singapore dollar rose today on the speculation that the accelerating China’s economic growth would attract the investors to Asia, increasing the appeal of the region’s currencies.

The Chinese gross domestic product grew 9.6 percent in the third quarter of 2010 from a year earlier. Consumer prices went up 3.6 percent last month, the fastest growth in 23 months. The economic growth may be subdued a little by the interest rates, which were increased this week.

USD/SGD fell from 1.3028 to 1.2979 as of 11:47 GMT today, following the decline to 1.2959.

If you have any questions, comments or opinions regarding the Singapore Dollar, feel free to post them using the commentary form below.

Will Bernanke Announce QE3? Will Dollar Decline?

The US dollar continued to rise today ahead of tomorrow’s speech of Federal Reserve Chairman Ben S. Bernanke, who is expected to announce a new round of quantitative easing. Some economists believe such expectations are futile.

Some market analysts argue that the North American economy doesn’t require additional stimulus as consumer prices continue to rise and the economic growth continues to accelerate, while deflation pressure wanes. Today’s report that showed the increase of unemployment claims from 412,000 to 417,000 doesn’t support such optimistic outlook.

The third round of the quantitative easing would weaken the dollar and that can, actually, be positive for the economy of the US. Martin Feldstein, economics professor in Harvard University, explained:

A lower dollar means more exports, and it also means a shift from consuming imported products to consuming goods and services that we produce in the United States.

EUR/USD fell from 1.4412 to 1.4374 as of 19:41 GMT today. GBP/USD slipped from 1.6372 to 1.6282. USD/JPY climbed from 76.97 to 77.55.

If you have any questions, comments or opinions regarding the US Dollar, feel free to post them using the commentary form below.

Dollar Drops After Bernanke Speech & GDP Report

The US dollar fell today after the report showed that the US economy expanded with slower pace than was predicted by specialists and Federal Reserve Ben S. Bernanke hinted at possibility of additional stimulus.

According to the preliminary report, US gross domestic product grew 1.0 percent in the second quarter of 2011, following the increase by 0.4 percent in the first quarter. The advance estimate promised growth by 1.3 percent, while market participants expected rise by 1.1 percent.

Bernanke said today at the Federal Reserve Bank of Kansas City Economic Symposium in Jackson Hole, Wyoming, that the Fed has means to further stimulate the US economy, stating “the Federal Reserve has a range of tools that could be used to provide additional monetary stimulus”. Chairman added that in the long run the economy can overcome its current difficulties:

Notwithstanding the severe difficulties we currently face, I do not expect the long-run growth potential of the U.S. economy to be materially affected by the crisis and the recession if — and I stress if — our country takes the necessary steps to secure that outcome.

The speech was well received by markets and stocks advanced, pushing the Standard & Poor’s 500 Index up 0.7 percent after it earlier fell 2 percent.

EUR/USD climbed from 1.4377 to 1.4476 as of 17:00 GMT today, following the drop to 1.4328. GBP/USD rose from 1.6278 to 1.6341 after it dropped to 1.6206 earlier. Meanwhile, USD/JPY tumbled from 77.44 to 76.67.

If you have any questions, comments or opinions regarding the US Dollar, feel free to post them using the commentary form below.

Fundamentals are Bad for US Dollar, But Week Wasn’t Bad

The fundamentals this week were negative for the US dollar, weakening the currency against some major counterparts, but performance of the greenback wasn’t that bad, considering all the pressure to the downside.

There were plenty of bad new for the dollar this week. Bad housing data, rising unemployment claims and slower that expected growth of the US economy. The week ended with the speech of Ben Bernanke, who hinted at possibility of additional stimulus without detailing an actual plan.

The dollar was dragged down by the unfavorable fundamentals and fell against the euro and commodity currencies (including the currencies of Canada, Australia and New Zealand). On the other hand, the dollar gained against the franc and rallied versus the yen before losing its gains by the end of the week as there aren’t many choices for investors who need a safe currency, but afraid of interventions of Japan and Switzerland. The pound also fell against the greenback as Britain has its own problems that erase attractiveness of the nation’s currency.

Next week may also be hard for the dollar. Analysts predict another unfavorable report about hosing and are pessimistic about employment data.

EUR/USD climbed from 1.4376 to 1.4498, while during the week it dropped to 1.4327. USD/CHF climbed from 0.7904 to 0.8058 and reached the daily high of 0.8157. AUD/USD surged from 1.0380 to 1.0569.

If you have any questions, comments or opinions regarding the US Dollar, feel free to post them using the commentary form below.

USD Gains vs. EUR & CHF, Falls vs. JPY

The US dollar managed to gain against the euro and the Swiss franc today, but fell against the Japanese yen as mixed fundamentals left traders unsure about prospects for the US currency.

The Standard & Poor’s Case-Shiller House Price Index fell 4.5 percent in June on year-over-year basis. That’s better result than the predicted 4.7 percent decline and the drop by 4.6 percent in May. On the other hand, Conference Board consumer sentiment was much worse than forecasts, falling from 59.2 in July to 44.5 in August, while analysts hope that the index will retreat just to 52.1.

Tomorrow’s reports don’t look good for the dollar either. The ADP Employment report is expected to show slower growth of employed Americans by 102,000, compared to the July growth by 114,000. Economists say that Chicago PMI will show a drop to 54.3 in August from 58.8 in July.

EUR/USD went down from 1.4510 to 1.4444 as of 21:05 GMT today, while intraday it touched the low of 1.4382. USD/JPY dropped from 76.84 to 76.73, while USD/CHF advanced from 0.8156 to 0.8201.

If you have any questions, comments or opinions regarding the US Dollar, feel free to post them using the commentary form below.

US Dollar Suffers From Terrible Nonfarm Payrolls

The US dollar fell against other major currencies, including the Great Britain pound and the Japanese yen, today after the non-farm payrolls showed that job creation in the US stalled. The currency also slipped against the euro, but later rebounded.

US non-farm payrolls showed no employment growth in August. That’s much worse than the market expectations (growth by 74,000) and the worst reading since September 2010, when employment declined by 95,000. Average hourly earnings dropped 0.1 percent, while markets counted on an increase by 0.2 percent. The poor economic report renewed speculations that the Federal Reserve needs third round of asset purchases, known as quantitative easing, to bolster the economic recovery in the United States.

The Dollar Index managed to rise 0.3 percent to 74.683 today from 74.479 yesterday. The dollar trimmed losses versus the pound and the yen, as well as rebounded versus the euro. The Standard & Poor’s 500 Index plunged as much as 2.3 percent.

GBP/USD climbed from 1.6177 to 1.6253 before trading at 1.6220 as of 19:40 GMT today. USD/JPY fell from 76.91 to 76.80 and touched low of 76.52 intraday. Meanwhile, EUR/USD tumbled from 1.4257 to 1.4199.

If you have any questions, comments or opinions regarding the US Dollar, feel free to post them using the commentary form below.

US Dollar Suffers From Terrible Nonfarm Payrolls

The US dollar fell against other major currencies, including the Great Britain pound and the Japanese yen, today after the non-farm payrolls showed that job creation in the US stalled. The currency also slipped against the euro, but later rebounded.

US non-farm payrolls showed no employment growth in August. That’s much worse than the market expectations (growth by 74,000) and the worst reading since September 2010, when employment declined by 95,000. Average hourly earnings dropped 0.1 percent, while markets counted on an increase by 0.2 percent. The poor economic report renewed speculations that the Federal Reserve needs third round of asset purchases, known as quantitative easing, to bolster the economic recovery in the United States.

The Dollar Index managed to rise 0.3 percent to 74.683 today from 74.479 yesterday. The dollar trimmed losses versus the pound and the yen, as well as rebounded versus the euro. The Standard & Poor’s 500 Index plunged as much as 2.3 percent.

GBP/USD climbed from 1.6177 to 1.6253 before trading at 1.6220 as of 19:40 GMT today. USD/JPY fell from 76.91 to 76.80 and touched low of 76.52 intraday. Meanwhile, EUR/USD tumbled from 1.4257 to 1.4199.

If you have any questions, comments or opinions regarding the US Dollar, feel free to post them using the commentary form below.

USD Up vs. GBP, Down vs. JPY, Fluctuates vs. EUR

The macroeconomic data from the US was rather mixed today, making the US dollar fluctuate against the euro. The US currency gained versus the Great Britain pound, but fell versus the Japanese yen.

The report about the import and export prices in the US was positive. Export prices increased 0.5 percent in August, following the 0.4 percent drop in July. Import prices decreased 0.4 percent last month (led by the 1.8 percent decrease in fuel prices), but that’s still better than the forecast of a 0.7 percent decline.

On the negative side, the Treasury budget deficit widened in July. The Department of the Treasury reported the deficit was $134.2 billion in August, compared to the deficit of $129.4 billion in July. Market analysts that the deficit of budget would shrink to $128.4 billion.

EUR/USD traded near its opening level of 1.3679 as of 22:06 GMT, following the drop to the daily low of 1.3557. GBP/USD fell from 1.5867 to 1.5779, while USD/JPY dropped from 77.18 to 76.92 today.

If you have any questions, comments or opinions regarding the US Dollar, feel free to post them using the commentary form below.

Mixed Fundamentals Leave Traders Uncertain, USD Fluctuates

The US dollar fluctuated as the mixed fundamental data left Forex traders uncertain will the US economy face recovery or recession. The currency was falling yesterday, but at the start of today’s trading session the dollar rebounded.

There was plenty of good news. The consumer price index rose 0.4 percent in August, compared with the median forecast of 0.2 percent. The current account deficit decreased to $118.0 billion (preliminary) in the second quarter of 2011, from $119.6 billion in the first quarter, instead of widening to $122.0 billion as was expected. Industrial production advanced 0.2 percent in August.

There were enough bad news, though. The jobless claims increased from 417,000 to 428,000 last week. The Empire State Manufacturing Survey and the Business Outlook Survey of the Federal Reserve Bank of Philadelphia showed that manufacturing conditions in the US worsened in September.

EUR/USD fell from 1.3875 to 1.3852 today as of 2:32 GMT after it rose yesterday from 1.3754 to 1.3875. GBP/USD traded near 1.5794, following yesterday’s rally from 1.5770 to 1.5798. USD/JPY traded at 76.78 after opening at 76.68.

If you have any questions, comments or opinions regarding the US Dollar, feel free to post them using the commentary form below.

Thai Baht Declines on Political and Civil Crisis

The Thai baht continued its decline against the U.S. dollar today and touched its lowest level in the last 21 months as the political protests and the civil unrest raged through the country.

The political turmoil in the country is caused by the demands of the opposition and the military leaders for the current Prime Minister Somchai Wongsawat to resign. He still rejects these demands despite the fact that the opposition has already captured the two country’s most important airports.

Analysts don’t see anything positive for the baht for as long as the situation in the country remains at such a dangerous level. And there are no signs that it will end soon, causing the baht to depreciate further.

The Thailand’s baht falls under the double pressure — the currencies of the Asian region fall because of the recession in the developed countries and the foreign capital outflow and also because of the current political crisis, which doesn’t add optimism to the investors and the currency traders.

USD/THB rose from 35.26 to 35.32 as of 10:00 GMT today after reaching as high as 35.51 during the early trading session — a level not seen since February 2007.

If you have any questions, comments or opinions regarding the Thai Baht, feel free to post them using the commentary form below.

Thai Baht Rises, but Remains Under Pressure

The Thai baht rose today after it previously fell as the political turmoil drove away the investors and prompted them to take away the fund from the nation’s equities.

The foreign investors took away $1.88 billion from the nation’s stocks since March, following the $1.31 billion net purchases in the first three months of 2010. The analysts say that the baht would remain under pressure as the stocks falls and the concerns for China’s growth increase the risk aversion sentiment.

USD/THB traded near 32.25 as of 12:55 GMT today down from the opening price of 32.40.

If you have any questions, comments or opinions regarding the Thai Baht, feel free to post them using the commentary form below.

Thai Baht Rises on Outlook for Growth of Asian Economies

The Thai baht went up today on the speculation that the fast growth of the Asian nations would attract more investors to the region, increasing the appeal of the Asian currencies.

The central banks of some Asian nations, including Thailand, raised the interest rates this year, making their currencies higher yielding than the currencies of the Group of the Seven Nations. The International Monetary Fund predicted that the Asian developing economies would grow 9.2 percent this year, compared to the 2.6 percent growth in the industrialized nations.

USD/THB traded near 31.63 today as of 8:16 GMT after opening at 31.75.

If you have any questions, comments or opinions regarding the Thai Baht, feel free to post them using the commentary form below.

Thai Baht Gains on Capital Inflows & Central Bank’s Statement

The Thai baht gained today as the outlook for the economic growth in Asia increased the inflows of the global funds in the region and after the central bank suggested that it wouldn’t limit the currency’s appreciation.

Thailand’s central bank said that it’s “not concerned” with the baht’s gains as long as the baht moves in line with other Asian currencies. The Asian developing economies expected to expand 9.2 percent this year, attracting more and more investors to the region.

USD/THB fell from 31.55 to 31.49 today as of 8:27 GMT, following the advance to 31.65.

If you have any questions, comments or opinions regarding the Thai Baht, feel free to post them using the commentary form below.

Thai Baht Demonstrates Best Performance Since February 2008

The Thai baht strengthened today, showing this month the best performance since February 2008, after the central bank raised the borrowing costs and as the pace of the nation’s economic growth was the fastest in 15 years.

The Bank of Thailand raised the borrowing costs last week for the second time this year. The policy makers suggested that the rates remain “very low compared to the economic growth even after the increase”. The nation’s gross domestic product grew 9.1 percent in the second quarter of this year, following the increase by 12 percent in the previous three months. The good fundamentals attracted more foreign investors to Thailand, resulting in the inflows into the stocks and the bonds and making another rates hike possible.

USD/THB currency pair went down from 31.15 to 31.32 today as of 9:03 GMT after it touched 31.47.

If you have any questions, comments or opinions regarding the Thai Baht, feel free to post them using the commentary form below.

Thai Baht Gains as Economy Grows

The Thai baht gained today on the speculation that the policy makers won’t prevent the appreciation of the currency as the economic growth increases the inflation pressure.

The report today showed that Thailand’s economy expanded in 2010 with the fastest pace since 1995. The fast economic growth of the Asian countries causes the imbalances in the global economy and the Asian governments may allow their currencies to appreciate and reduce the import gains.

USD/THB fell from 30.5750 to 30.5450 as of 14:53 GMT today.

If you have any questions, comments or opinions regarding the Thai Baht, feel free to post them using the commentary form below.

Thai Baht Gains as Economy Grows

The Thai baht gained today on the speculation that the policy makers won’t prevent the appreciation of the currency as the economic growth increases the inflation pressure.

The report today showed that Thailand’s economy expanded in 2010 with the fastest pace since 1995. The fast economic growth of the Asian countries causes the imbalances in the global economy and the Asian governments may allow their currencies to appreciate and reduce the import gains.

USD/THB fell from 30.5750 to 30.5450 as of 14:53 GMT today.

If you have any questions, comments or opinions regarding the Thai Baht, feel free to post them using the commentary form below.

Thai Baht Weak Ahead of Elections

The Thai baht fell today on the concerns about the coming elections and on the negative influence of the economic situation in the European Union.

Market participants are afraid that the election on July 3 will increase the political instability in the country. The baht declined 1.2 percent this month. That’s the worst performance against 10 major Asian currencies.

USD/THB rose to 30.67 from 30.64 today as of 13:49 GMT.

If you have any questions, comments or opinions regarding the Thai Baht, feel free to post them using the commentary form below.

Thai Baht Advances on Overseas Inflows

The Thai baht rose today, together with other Asian currencies, on the speculation that the growing economy and increasing interest rates will draw inflows of foreign funds in the nation’s economy.

Pheu Thai party won a clear majority in the elections last week, easing concerns about political unrest. The Bloomberg-JPMorgan Asia Dollar Index gained 0.3 percent this week, reaching today the highest level in 14 years of 119.40. Global funds invested about $1.9 billion into equities of Indonesia, South Korea and Thailand this week.

USD/THB fell from 30.32 to 30.25 as of 15:39 as of 15:39 GMT today after falling to 30.12.

If you have any questions, comments or opinions regarding the Thai Baht, feel free to post them using the commentary form below.

Carney Expects Economic Growth, CAD Fluctuates

The Canadian dollar was closed flat against the US dollar and the Japanese yen as contradicting signals haven’t allowed the currency to establish a clear trend.

Mark Carney, Governor of the Bank of Canada, outlined some downside risks for the economy of Canada in his speech yesterday:

In recent weeks, several downside risks to the Bank’s July Monetary Policy Report (MPR) projection have been realised. The European sovereign crisis has intensified, the U.S. credit rating has been downgraded, and a broad range of data has signalled slower global growth.

Despite the negative factors, Carney expects the economy to expand, albeit with slower pace:

The Bank continues to expect that growth will accelerate in the second half of the year, led by business investment and household expenditures. Ongoing strength in major emerging markets should also help maintain commodity prices at relatively high levels. However, relative to our prior expectations, we expect somewhat weaker economic momentum globally and, as a result, in Canada, with attendant consequences for resource utilization and inflationary pressures.

Canada’s consumer prices, on a seasonally adjusted monthly basis, increased 0.1 percent in July, following the 0.3 percent decrease June from May. On the other hand, on a year-over-year basis, prices for most major components increased at a slower rate in July.

USD/CAD closed at 0.9900, following the slump from 0.9903 to 0.9824, while CAD/JPY closed at 77.25, almost unchanged from the opening price of 77.26. EUR/CAD initially fell from 1.4192 to 1.4131, but later rebounded to close at 1.4252.

If you have any questions, comments or opinions regarding the Canadian Dollar, feel free to post them using the commentary form below.

Loonie Feels Better with Good Signs from US

The Canadian dollar gained today versus most its major peers as the signs of stronger US economic growth and anticipation of new round of quantitative easing in the US improved prospects for the Canadian currency.

Canada and its currency depend on the economy of the United States as the US is the major trading partner of Canada. Therefore, better prospects of the economic growth of Canada’s neighbor help the Canadian currency. US durable goods orders rose 4.0 percent in July, following the 1.3 percent decline in June. That’s almost two times higher than the expected figure of 2.1 percent.

The loonie, as the Canadian currency is nicknamed, was rising against the US dollar, but lost its gains as the positive news from the US benefited the greenback more. The loonie erased its earlier losses versus the franc and currently fluctuates against the Swiss currency. The Canadian dollar managed to gain against other commodity currencies, including the Australian dollar.

USD/CAD rose from 0.9872 to 0.9879 as of 19:07 GMT today after it reached earlier the daily minimum of 0.9838 and the daily maximum of 0.9904. CAD/CHF advanced from 0.8020 to 0.8037, following the drop to 0.7974. AUD/CAD sank from 1.0391 to 1.0339.

If you have any questions, comments or opinions regarding the Canadian Dollar, feel free to post them using the commentary form below.

Market Optimism Makes Loonie Stronger

The Canadian dollar gained, rising to the highest level in more than a week against the greenback, as stocks and commodities rallied, making the growth-linked currency appealing to investors.

Federal Reserve Chairman Ben S. Bernanke spurred optimism on markets last Friday and it still persists. The Standard & Poor’s 500 index rose as much 2.8 percent. October futures for delivery of crude oil (main export of Canada) gained 2.5 percent to $87.52 per barrel in New York.

Sentiment across markets became even better as the report showed that personal spending in the US, the main trading partner of Canada, increased 0.8 percent in July, compared to the median forecast of 0.5 percent and the decline by 0.1 percent in June. The report later this week by Statistics Canada is expected to show growth of Canada’s gross domestic product by 0.2 percent in June, following the drop by 0.3 percent in May.

USD/CAD traded at 0.9764 today as of 1:18 GMT after it fell yesterday from 0.9795 to 0.9767, while touching 0.9738 during the day — the lowest level since August 4. EUR/CAD fell from 1.4203 to 1.4171 on the previous trading session and traded near 1.4167 today. CAD/JPY traded at about 78.66 after rising from 78.21 to 87.61.

If you have any questions, comments or opinions regarding the Canadian Dollar, feel free to post them using the commentary form below.

CAD Near Parity with USD

The Canadian dollar traded within a cent from parity with the US currency as decline of stocks and signs of global economic slowdown spurred speculation that the nation’s central bank will decrease its interest rates.

The Bank of Canada will announce its decision about borrowing costs tomorrow. Investors’ viewpoints are split about evenly among those who believe that the bank will keep the key Overnight Rate unchanged at 1 percent and those who think that the current unfavorable economic conditions will force the bank to cut its target lending rate.

The Standard & Poor’s 500 Index slumped as much as 2.2 percent. Market pessimism was tempered by the good new from the US, Canada’s biggest trading partner. The Services Purchasing Managers’ Index of Institute for Supply Management advanced from 52.7 to 53.3 in August, compared to the median forecast of 51.2.

USD/CAD traded near 0.9910 as of 15:31 GMT today after jumping from 0.9904 to 0.9963. EUR/CAD climbed from 1.3960 to as high as 1.4100 before retreating to 1.3871. CAD/JPY rose from 77.50 to 78.05.

If you have any questions, comments or opinions regarding the Canadian Dollar, feel free to post them using the commentary form below.

Canadian Dollar Falls with Employment

The Canadian dollar today for the second day against its US counterpart and the Japanese yen, heading to parity with the greenback, after the report showed that employment in Canada unexpectedly dropped and unemployment rate rose last month. The currency managed to gain versus the euro.

Statistics Canada reported today that the number of employed persons decreased by 5,500 in August, following the increase by 7,100 in July. Forecasts much were more optimistic, promising a growth by 24,200. Unemployment rate increase by 0.1 percent to 7.3 percent.

The Standard & Poor’s 500 Index slumped as much as 3 percent, while Canada’s S&P/TSX Composite Index fell 2.2 percent.

Mood on markets was depressed as talks abound that Greece may leave the Eurozone. The negative sentiment pushed the loonie (the nickname of the Canadian currency) down against the US dollar and the yen, but allowed to outperform the euro.

USD/CAD jumped from 0.9893 to 0.9967 as of 20:41 GMT today. CAD/JPY fell from 78.28 to 77.75 after touching the intraday low of 77.31. EUR/CAD fell from 1.3732 to 1.3606.

If you have any questions, comments or opinions regarding the Canadian Dollar, feel free to post them using the commentary form below.

CAD Rebounds from Parity with USD

The Canadian dollar rebounded as the speculation that China may help Europe to deal with the debt crisis eased concerns on markets and boosted stocks.

According to the announcement of the Italian government, Italy discussed potential investment in the nation’s economy with China. This announcement eased concerns that the crisis would spread from Greece to Italy and Spain.

The Standard & Poor’s 500 Index closed higher 0.7 percent over the day, erasing previous 1.6 percent drop. The MSCI World Index of stocks fell 1.1 percent, following the previous decline by 2.4 percent. The stock market affect the Canadian currency as rising stocks signal about economic growth and growth help the loonie.

USD/CAD traded at 0.9918 as of 2:07 GMT today after it fell from 0.9972 to 0.9925, while intraday it reached the high of 1.0025. EUR/CAD traded near 1.3564 after falling from 1.3578 to 1.3527 today. CAD/JPY traded at about 77.71 after yesterday’s rise from 77.61 to 77.72.

If you have any questions, comments or opinions regarding the Canadian Dollar, feel free to post them using the commentary form below.

Stocks & Crude Oil Add Strength to Loonie

The Canadian dollar rose today as stocks advanced and crude oil gained, reducing risk aversion on Forex market and improving prospects for growth-related currencies.

The pessimistic outlook on markets receded somewhat. Most economists believe that it’s not for long and very soon riskier assets will again feel the weight of the pessimism, but for now traders again inclined to risk. Some analysts think that the current strength of the loonie (the nickname of the Canadian currency) is more a result of a weaker greenback than of good fundamentals.

The Thomson Reuters/Jefferies CRB Index rose 0.5 percent, posting the first gain in three days. October futures for crude oil delivery advanced 2.6 percent to $90.52 per barrel in New York, the highest price since August 4, before trading at $89.79. Raw materials (including crude oil) are the source of about a half of Canada’s export revenue.

USD/CAD traded at about 0.9850 as of 1:18 GMT today after it slumped from 0.9927 to 0.9857. EUR/CAD traded near 1.3488 after falling from 1.3578 to 1.3482. CAD/JPY traded at 78.02, following the advance from 77.71 to 77.98 on the previous trading session.

If you have any questions, comments or opinions regarding the Canadian Dollar, feel free to post them using the commentary form below.

Canadian Dollar Within Cent of Parity with Greenback

The Canadian dollar fell today, trading within one cent of parity with the US dollar, as copper and crude oil prices declined on the signs the global economic recovery is faltering.

Crude oil, the key Canadian export fell to $88.54 per barrel in New York, while copper dropped 1.6 percent to $8,630 per metric ton. Some other raw materials, including lead, tin and zinc, also declined. The retail sales in the US, the biggest trading partner of Canada, unexpectedly stalled last month, posting no change in August instead of the expected increase by 0.2 percent.

The losses of the loonie (the nickname of the Canadian currency) may be trimmed as German Chancellor Angela Merkel and French President Nicolas Sarkozy stated after speaking with Greek Prime Minister George Papandreou by phone they’re convinced Greece will remain in the Eurozone. But for now the currency continue its downfall as prospects of slower growth in Asia added to concerns about the economies of the US and Europe.

USD/CAD rose from 0.9891 to 0.9935 today as of 4:17 GMT. EUR/CAD advanced from 1.3604 to 1.3634. CAD/JPY fell from 77.41 to 77.12.

If you have any questions, comments or opinions regarding the Canadian Dollar, feel free to post them using the commentary form below.

Canadian Securities Drive Canadian Dollar to Two-Week Record

The Canadian dollar jumped today, reaching the highest level in two weeks against its US counterpart and the Japanese yen, as foreign investors bought more Canadian securities than was predicted.

The purchases of the Canadian securities by foreign investors rose by C$11.8 billion ($12 billion) in July. That’s much better than the median forecast of C$2 billion and a huge improvement over June decline by C$3.4 billion. The MSCI World Index of stocks gained 0.6 percent, advancing for the fourth consecutive session.

The loonie (the nickname of the Canadian currency) advanced 1.9 percent over this week against the greenback, showing the biggest gain since July. The Canadian dollar rose even as fears about Europe intensified. Some analysts think that traders began to consider Canada’s currency as a haven from the crisis in the European Union. In such case the loonie can appreciate in times of uncertainty, even being “commodity” currency.

USD/CAD slumped from 0.9833 to the closing price of 0.9779, the lowest level since September 2, while during the trading session the currency pair advanced to 0.9859. EUR/CAD tumbled from 1.3647 to 1.3493. CAD/JPY climbed from 77.91 to close at 78.45, while intraday it reached 78.52, the highest price since September 2.

If you have any questions, comments or opinions regarding the Canadian Dollar, feel free to post them using the commentary form below.

Building Permits in Australia & New Zealand Rise, Aussie & Kiwi Gain

The Australian and New Zealand currencies rose today, before declining later, after the reports showed that number of building permits in these countries increased in July.

New Zealand building consents rose 6.3 percent in July, following a fall of 4.3 percent in June. Australian building consents increased 1.0 percent in July on a seasonally adjusted monthly basis after falling 3.6 percent in June. Currently, the kiwi tends to decline, while the Aussie lost all its gains.

NZD/USD rose from 0.8459 to 0.8486 as of 12:57 GMT today and earlier it touched the intraday high of 0.8535 — the highest level since August 4. AUD/USD traded at 1.0644 today, while earlier it climbed from 1.0656 to 1.0684.

If you have any questions, comments or opinions regarding the New Zealand Dollar, feel free to post them using the commentary form below.

Aussie Recovers on Stevens’ Speech

The Australian dollar strengthened today as the statement of nation’s central bank Governor Glenn Stevens spurred the speculation that the Reserve Bank of Australia won’t cut interest rates.

Stevens spoke today to House of Representatives Standing Committee on Economics, telling about the uncertainty and problems of the global economy. Despite these challenges, the Governor was rather optimistic:

But at this point in time, our terms of trade are at a record high, while our unemployment rate remains low. Inflation bears careful watching, but we can keep it under control. Our banks are strong, our currency is sound and our sovereign credit position is in the international top tier.

The comment about inflation made economists speculate that the RBA hasn’t finished with tightening.

AUD/USD jumped from 1.0429 to 1.0497 today as of 8:50 GMT. EUR/AUD fell from 1.3780 to 1.3750, while earlier it reached the intraday low of 1.3713.

If you have any questions, comments or opinions regarding the Australian Dollar, feel free to post them using the commentary form below.

Australia’s Dollar Weakens on Germany’s Consumer Confidence

The Australian dollar fell today against most major currencies, before rebounding, as the report showed consumer confidence in Germany declined this month, reducing appeal of higher-yielding assets.

The drop of German confidence wasn’t very big as the GfK indicator retreated just to 5.2 in August from 5.3 in the month before. The report explained:

Despite the current crisis on the financial markets, Germans’ willingness to buy is surprisingly robust and increased further in August from an already high level. However, the worsening of the international debt crisis and rising fears of a return to recession for the global economy have clearly left their mark on the economic optimism of Germans.

AUD/USD traded at about 1.0466 today as of 11:16 GMT after dropping from 1.0471 to 1.0428.

If you have any questions, comments or opinions regarding the Australian Dollar, feel free to post them using the commentary form below.

Australia Dollar Receives Help from Commodities

The Australian dollar rose today, rallying to the highest price in almost two weeks against the US dollar, as commodities gained and increased appeal of growth-related currencies to Forex traders.

The Leading Index of Melbourne Institute showed the annual growth of 0.1 percent in June. That’s not a bad result, compared to the 0.1 percent decline in the month before, but far below the long-term trend of 2.8 percent. The Wage Price Index rose 0.9 percent in the second quarter of 2011 after increasing 0.8 percent in the previous three months. The Thomson Reuters/Jefferies CRB index gained as much as 1.3 percent.

The Aussie gained about 0.4 percent against the greenback today. Earlier it reached $1.0601, the strongest level since August 4. The Australian currency lost some of its gains since, but still remains strong.

AUD/USD rallied from 1.0482 to 1.0538 today as of 21:48 GMT. EUR/AUD fell from 1.3737 to 1.3684 after reaching the daily low of 1.3646. AUD/JPY advanced from 80.50 to 80.72.

If you have any questions, comments or opinions regarding the Australian Dollar, feel free to post them using the commentary form below.