Dollar Hits New 26-year Low Versus Sterling; Nears 2.09 Mark [GPB/USD]

Dollar Hits New 26-year Low Versus Sterling; Nears 2.09 Mark [GPB/USD]
The dollar hit a fresh 26-year low against the sterling Friday afternoon, extending a 2-week downtrend that has seen the dollar fall more than 6 cents. The dollar slipped to 2.0891 by 3 pm ET, down from an overnight level near 2.08.

Jobs Report Expected To Lift Markets - U.S. Commentary []
Stocks are expected to open Friday's session in positive territory after a strong jobs report issued this morning shook off fears of weakness within the housing and credit markets.

Euro Hits New Peak Versus Dollar, Rallies Versus Sterling Friday Morning [EUR/USD]
The euro advanced on other majors Friday morning in New York, hitting a fresh record peak versus the dollar before paring some its gains approaching mid-day. Meanwhile, the euro was able to claw back some of this week's losses to the sterling.

New Zealand Market Falls On Negative Lead From Wall Street []

New Zealand Market Falls On Negative Lead From Wall Street []
Friday, Wellington shares closed lower after the U.S stocks plunged overnight on the back of disappointig earnings reported by Exxon, weak economic data and down grading of Citigroup by CIBC.

S&P Comments It Is Not Too Late To Benefirt From An Underweighting Of The S&P500 Financials Sector []
Sam Stovall from the S&P remarked on Friday that yesterday, November 1, the S&P 500 declined 2.6% -- the eighth one-day decline of 2% or more this year - triggered primarily, in theiropinion, by bearish comments by an analyst at CIBC about the possibility of a cut in Citigroup's dividend.

Franc Bounces Against Sterling [GBP/CHF]
Versus the sterling, the Swiss currency saw little direction in trading on Friday morning. The franc bounced between a high of 2.3999 and a low of 2.4069. The UK CIPS/NTC Construction Purchasing Manager's Index posted a less than expected reading of 57.4 in October.

Renewed Credit Concerns, Lower Oil And Metal Prices Pull Down Australian Stocks []
Friday, Sydney stocks opened sharply lower on renewed worries of further fallout from the global credit crunch, while lower oil and metal prices pulled down resource stocks. The benchmark S&P/ASX 200 Index was losing 129.50 points or 1.90% to 6,699.20, while the All Ordinaries Index was down 125.50 points or 1.83% to 6,728.10.

European Markets Rise On Strong Earnings, Miners - European Commentary []
The European markets rose on Thursday, as upbeat corporate results from companies such as France Telecom and ABB lifted investor sentiments and a rebound in copper prices boosted mining stocks.

Chinese Stocks Settle Sharply Lower Led By Energy, Steel Stocks []
Friday, Shanghai shares closed sharply lower led by energy and steel stocks. The benchmark Shanghai Composite Index closed down 136.48 points or 2.31% at 5,777.81.

South Korean Market Closes Flat []

South Korean Market Closes Flat []
Thursday, Seoul shares closed flat as investors locked in profits after the KOSPI index rallied to a fresh record. The key index closed down 1.71 points or 0.1% at 2,063.14. The benchmark index surged at the opening to a fresh high of 2,084.55, surpassing the previous record of 2,070.86 set on Monday.

Markets Likely To Open Higher On Positive Cues From Wall Street - European Commentary []
The major European index futures are pointing towards a higher opening for the markets on Thursday. Global cues are also strong, with the U.S. stocks rallying overnight after the Federal Reserve cut interest rates and the major markets across the Asia-Pacific region trading higher on Thursday.

Euro Extends Highs Versus Dollar In Early Afternoon Dealing [EUR/USD]
The euro inched above a record high from earlier in the session against the dollar at around 1:20 pm ET. The euro touched 1.4427 before easing back to 1.4519 by 2 pm.

Trading Likely To Be Range-bound Ahead Of Key U.S. Data - European Commentary []
The major European index futures are pointing towards a lower opening for the markets on Thursday. But global cues are mixed, with the U.S. stocks closing slightly lower Wednesday, recovering from early weakness, and the major markets across the Asia-Pacific region showing a mixed trend on Thursday.

Renewed Credit Concerns, Lower Oil And Metal Prices Pull Down Australian Stocks []
Friday, Sydney stocks opened sharply lower on renewed worries of further fallout from the global credit crunch, while lower oil and metal prices pulled down resource stocks. The benchmark S&P/ASX 200 Index was losing 129.50 points or 1.90% to 6,699.20, while the All Ordinaries Index was down 125.50 points or 1.83% to 6,728.10.

Swiss Franc Strong Against Buck [USD/CHF]
The Swiss franc was strong against the dollar on Friday morning in New York. The franc advanced to a mark of 1.1513 as action progressed. The pair moved as US October payrolls rose by a stronger than expected 166k versus the consensus of 85k. Prior months were revised down by 10k.

Swiss Currency Mixed Versus Counterparts On Friday Morning In New York [USD/CHF]
The Swiss currency was mixed against its counterparts in trading on Friday morning in New York. The franc moved as consumer price index data was released for the area for October.

Australian Stock Market Rises To New Highs []
Thursday, Sydney shares surged to record highs after the Federal Reserve cut interest rates. Soaring commodity prices and solid corporate earnings also positively impacted the market sentiment. The S&P/ASX 200 closed up 74.6 points or 1.1% at 6,828.7, after hitting a record high of 6,851.5 in the last hour of trade.

Dollar Hits Record Lows Versus Euro And Loonie, 26-year Trough To Sterling [EUR/USD]
The dollar continued to show weakness against the euro, sterling and loonie Friday in New York as traders assessed key employment data from the US.

Euro Hits New Peak Versus Dollar, Rallies Versus Sterling Friday Morning [EUR/USD]
The euro advanced on other majors Friday morning in New York, hitting a fresh record peak versus the dollar before paring some its gains approaching mid-day. Meanwhile, the euro was able to claw back some of this week's losses to the sterling.

Greenback Falls Against Aussie [AUD/USD]

Greenback Falls Against Aussie [AUD/USD]
The greenback dropped against the aussie on Friday in New York. The greenback dropped below a short-term range at around 8:30 a.m. ET following the release of employment data in the U.S. The pair is moving at 0.9250. Data showed October non-farm payrolls were up 166,000, while the unemployment rate came in at 4.7%.

Financials Offset Jobs Report Optimism - U.S. Commentary []
The markets are mixed on Friday, as weakness in financials is contributing to losses by the Dow and S&P, while strength in technology drives the Nasdaq to modest gains.

Markets Are Hoping For A Treat From The Fed - U.S. Commentary []
Stocks continue to move to the upside on Wednesday, as investors anxiously await the Federal Reserve's decision on interest rates. Further upward momentum came from an unexpectedly strong report on GDP growth within the U.S.

Yen Bounces Back Versus Majors Amid Diminished Risk Appetite [USD/JPY]
The yen tumbled in early dealing versus other majors but manged to pare its losses around mid-morning as equities markets weakened, sparking interest in the safer lower yielding Japanese currency.

Stocks Poised To Fall In Early Trading - U.S. Commentary []
Stocks are pointing for a lower opening on Thursday, as the Fed-induced rally loses steam amid rising oil prices and disappointing quarterly results from several companies.

Swiss Currency Mixed Versus Counterparts On Friday Morning In New York [USD/CHF]
The Swiss currency was mixed against its counterparts in trading on Friday morning in New York. The franc moved as consumer price index data was released for the area for October.

Dollar Hits New 26-year Low Versus Sterling; Nears 2.09 Mark [GPB/USD]
The dollar hit a fresh 26-year low against the sterling Friday afternoon, extending a 2-week downtrend that has seen the dollar fall more than 6 cents. The dollar slipped to 2.0891 by 3 pm ET, down from an overnight level near 2.08.

Wachovia Remarks Duration Of Unemployment Suggests Labor Market Near Equilibrium []
John Silvia from Wachiova remarked Friday that jobs rose 166,000 in October with strength in services and declines in manufacturing and construction. Wages were up 0.2 percent and 3.8 percent year-over-year. This is reassuring to inflation hawks, Silvia commented, and suggested that real GDP growth will be below trend in the fourth quarter.

Stocks Seeing Considerable Volatility Follow Fed Announcement - U.S. Commentary []
After seeing significant strength throughout much of the session on Wednesday, the U.S. stock markets have seen considerable volatility following the Federal Reserve's announcement of its latest decision on interest rates.

Dollar Hits Record Lows Versus Euro And Loonie, 26-year Trough To Sterling [EUR/USD]
The dollar continued to show weakness against the euro, sterling and loonie Friday in New York as traders assessed key employment data from the US.

Interest Rate Speculation Boosts Stocks - U.S. Commentary []

Interest Rate Speculation Boosts Stocks - U.S. Commentary []
Wall Street is rising on Monday in anticipation of an expected interest rate reduction by the Federal Reserve at its next meeting later in the week. The gains come despite another record high in oil prices.

Markets Likely To See Further Downside On Weak Global Cues - European Commentary []
The major European index futures are pointing towards a lower opening for the markets on Friday. Global cues are also discouraging, as the U.S. stocks plunged overnight and the major markets across the Asia-Pacific region are trading sharply lower on Friday.

Stocks Remain In The Red In Early Afternoon Trading - U.S. Commentary []
After trending higher in recent sessions, stocks are seeing some weakness in early afternoon trading on Tuesday. The major averages are all in negative territory, with the Nasdaq moving lower after ending the previous session at its best closing level in well over six years.

Markets Likely To Open Higher; Profit Taking May Cap Gains - European Commentary []
The major European index futures are pointing towards a higher opening for the markets on Tuesday. However, global cues are mixed, with the U.S. stocks continuing to rise Monday on interest rate optimism and the major markets across the Asia-Pacific region turning weak Tuesday on profit taking sets in.

New Zealand Shares Closing Quiet Week Off Down-side Wall Street Lead []
New Zealand share traders will be hoping Wall Street's troubles on Thursday don't find their way to Wellington on Friday. New Zealand shares experienced little movement on Thursday despite high trading volume, with the benchmark NZX-50 index closing down 1.19 points at 4,207.88.Turnover totaled NZ$185.5 million.

Stocks End Mixed After Opening Higher On Wall Street Gains - Asian Commentary []
Thursday, stock markets across the Asia-Pacific region closed mixed after the Federal Reserve cut interest rates. Chinese shares fell on the back of a fuel price hike, while Seoul shares ended flat on profit booking. Tokyo shares closed higher, as a weaker yen boosted buying of export-oriented shares and Sydney shares gained supported by commodity issues, while Indonesian stocks surged to fresh record highs.

Stocks Rise Ahead Of Fed Decision - U.S. Commentary []
Wall Street is experiencing modest buying interest on Wednesday, as optimism abounds that the Federal Reserve will cut interest rates at its meeting today.

European Markets Fall On Disappointing Earnings, Weak Commodities - European Commentary []
The European markets fell for the first time in four days on Tuesday, as disappointing earnings reports from companies such as Dassault Systemes, UBS and Royal KPN hurt investor sentiments and falling crude oil and metal prices hit energy and mining stocks.

Thai Stocks Called To Extend Slide []
Since shares in Thailand's stock market didn't gain Thursday after positive data from the U.S., analysts figure that a negative lead from Wall Street means the Stock Exchange of Thailand is again due for a decline when trading opens on the final day of the week.

European Markets Rise On Strong Earnings, Miners - European Commentary []

European Markets Rise On Strong Earnings, Miners - European Commentary []
The European markets rose on Thursday, as upbeat corporate results from companies such as France Telecom and ABB lifted investor sentiments and a rebound in copper prices boosted mining stocks.

European Markets Fall, Led By Banks - European Commentary []
The European markets fell on Wednesday, as banking stocks declined after Merrill Lynch reported its biggest ever quarterly loss and Standard & Poor's cut its debt rating for the world's biggest brokerage.

Dollar Hits New 26-year Low Versus Sterling; Nears 2.09 Mark [GPB/USD]
The dollar hit a fresh 26-year low against the sterling Friday afternoon, extending a 2-week downtrend that has seen the dollar fall more than 6 cents. The dollar slipped to 2.0891 by 3 pm ET, down from an overnight level near 2.08.

Bloomberg.com: Pound Has Biggest Weekly Gain This Year Against Dollar on Rate

By Kim-Mai Cutler

The British pound had its biggest weekly gain this year against the dollar, rising to a 26-year high, on growing speculation the Bank of England won't cut interest rates this year.

The U.K. currency climbed for a seventh day, its longest winning streak in almost a year, as traders bet the central bank will keep rates at a six-year high next week. The Federal Reserve lowered its benchmark a quarter point two days ago, widening the difference between the U.S. and U.K. key rates.

``Very, very negative U.S. dollar sentiment paired with a solid performance from the U.K. has been the recipe for these gains,'' said Nick Bennenbroek, head of currency research in New York at Wells Fargo & Co. ``You wouldn't expect to see a rate cut from the Bank of England until next year.''

The British currency was at $2.0892 as of 6:10 p.m. in London, from $2.0801 yesterday. Earlier, it rose to $2.0896, the strongest since May 11, 1981. Against the euro, the pound slipped to 69.49 pence, from 69.34 pence. Wells Fargo forecasts the pound will fall to $2.03 by the end of the year.

The U.K. central bank has raised the cost of borrowing by a quarter percentage point three times this year to control inflation in Europe's second-biggest economy. It will keep the rate unchanged at 5.75 percent when it next meets on Nov. 8, according to 57 of 60 economists surveyed by Bloomberg News.

`Dizzying Heights'

``The pound has reached new, ever-more dizzying heights,'' Paul Robinson, a currency strategist at Barclays Capital in London, wrote in a report today. ``The last time it was at these levels was in the early leadership days of Margaret Thatcher and Ronald Reagan. Momentum remains behind the pound.''

The pound, which rose almost 1.8 percent against the dollar this week, the most since December 2006, will strengthen to $2.07 in one month, compared with a previous prediction of $2.04, Barclays's Robinson said today. It will then fall to $2.04 in three months and $1.99 in six months, he said.

The median of 42 forecasts compiled by Bloomberg is for the pound to end the year at $2.05 before dropping to $2.01 by the end of the first quarter.

The implied yield on the three-month U.K. December interest- rate futures contract rose 5 basis points today to 6.22 percent. The yield on the March 2008 contract climbed 1 basis point to 5.90 percent. The contracts settle to the three-month London interbank offered rate for the pound, which has averaged 16 basis points more than the central bank's key rate over the past 10 years and 72 basis points more in the past three months.

``Sterling looks fairly firm,'' said Steve Barrow, chief currency strategist at Bear Stearns Cos. in London. ``Markets also backed away from the idea of near-term rate cuts in the U.K.''

Gilts Recover

Gilts recouped losses from mid-week as financial stocks led declines in equity markets, spurring safe-haven buying of government debt.

The FTSE 100 Index declined 0.8 percent. Barclays Plc and Royal Bank of Scotland Group Plc sank to the lowest in more than three years on concern British banks' earnings will be hurt by the credit-market turmoil.

``It's a financial story built on rumors and speculation of further losses at banks, with some in the U.K. involved,'' said Karsten Linowsky, a fixed-income strategist at Credit Suisse in Zurich. ``It's giving a strong bid in the gilt market.''

The benchmark 10-year note gained, with the yield falling 5 basis points to 4.87 percent. The price of the 4 percent security due September 2016 was at 93.81. Two-year yields fell 8 basis points to 5 percent.

To contact the reporter on this story: Kim-Mai Cutler in London at kcutler@bloomberg.net

Franc Bounces Against Sterling [GBP/CHF]

Franc Bounces Against Sterling [GBP/CHF]
Versus the sterling, the Swiss currency saw little direction in trading on Friday morning. The franc bounced between a high of 2.3999 and a low of 2.4069. The UK CIPS/NTC Construction Purchasing Manager's Index posted a less than expected reading of 57.4 in October.

Markets Rise On Interest Rate Optimism - U.S. Commentary []
The markets saw a modest increase on Monday, as investors took hope in a possible interest rate reduction and largely ignored another record high for oil prices.

Stocks Rise In Recent Trading, However, Financials Continue To Depress - U.S. Commentary []
Financials continue to lead the markets lower on Friday, offsetting a strong jobs report for October after negative news from Merrill Lynch (MER) generated selling pressure in the markets.

Markets Are Hoping For A Treat From The Fed - U.S. Commentary []
Stocks continue to move to the upside on Wednesday, as investors anxiously await the Federal Reserve's decision on interest rates. Further upward momentum came from an unexpectedly strong report on GDP growth within the U.S.

BMO Capital Markets Comments On US Payrolls Data, Says Report Is Hopeful Sign []
Sal Guatieri from BMO Capital Markets commented on Friday that U.S. nonfarm payrolls rose nearly twice as fast as expected in October, up 166,000 after a four-month string of tepid advances.

Yen Bounces Back Versus Majors Amid Diminished Risk Appetite [USD/JPY]

Yen Bounces Back Versus Majors Amid Diminished Risk Appetite [USD/JPY]
The yen tumbled in early dealing versus other majors but manged to pare its losses around mid-morning as equities markets weakened, sparking interest in the safer lower yielding Japanese currency.

South Korean Market Closes Flat []

South Korean Market Closes Flat []
Thursday, Seoul shares closed flat as investors locked in profits after the KOSPI index rallied to a fresh record. The key index closed down 1.71 points or 0.1% at 2,063.14. The benchmark index surged at the opening to a fresh high of 2,084.55, surpassing the previous record of 2,070.86 set on Monday.

Wall Street Anxiously Awaiting Fed's Interest Rate Decision - U.S. Commentary []
Stocks have seen little vertical movement in afternoon trading on Monday, as investors seem prepared to sit and wait for the Federal Reserve's upcoming interest rate decision.

Trading Likely To Be Range-bound Ahead Of Key U.S. Data - European Commentary []
The major European index futures are pointing towards a lower opening for the markets on Thursday. But global cues are mixed, with the U.S. stocks closing slightly lower Wednesday, recovering from early weakness, and the major markets across the Asia-Pacific region showing a mixed trend on Thursday.

Interest Rate Optimism Fuels Growth - U.S. Commentary []
Renewed hope for an interest rate reduction by the Federal Reserve has been enough to offset record high prices for oil, as stocks post modest gains heading into afternoon trading on Monday.

Stocks Plummet With The Dow Falling More Than 360 Points - U.S. Commentary []
Stocks plunged on Thursday, as the Fed-induced euphoria quickly gave way to a broad based sell-off after Citigroup (C) was downgraded by CIBC World Markets, sending financial stocks on a downward spiral.

Malaysian Shares Called To Decline []
Malaysia's Kuala Lumpur Composite Index set a new intra-day record high on Thursday on positive data from the U.S. markets, but now analysts are expecting the KLCI to follow Wall Street to the downside when trading opens on Friday.

South Korean Market Seen Pulling Back []
After setting a new intra-day record high on Thursday on positive data from the U.S. markets, the South Korean stock market is expected to follow Wall Street to the downside when trading opens on the final day of the week.

Stocks Close Sharply Higher After Volatile Reaction To Interest Rate Cut - U.S. Commentary []
While the U.S. stock markets initially fell sharply following the announcement of the Federal Reserve's latest decision on interest rates on Wednesday, the major averages bounced back to the upside shortly afterward, ending the session firmly in positive territory.

Stocks May Give Back Some Ground In Early Trading - U.S. Commentary []
After trending higher in recent sessions, stocks may give back some ground in early trading on Tuesday, with the futures indicating a lower open for the markets. Nonetheless, selling pressure is likely to remain relatively subdued ahead of the Federal Reserve's interest rate decision.

Stocks Close Lower Ahead Of Fed's Interest Rate Decision - U.S. Commentary []
While the U.S. stock markets turned mixed over the course of the trading session on Tuesday, the major averages all moved to the downside going into the close. The Nasdaq showed a notable decline, rejoining the Dow and the S&P 500 in negative territory.

Dollar Declines Against European Counterparts []

Dollar Declines Against European Counterparts []
Around 2:55 am ET, the US dollar fell sharply against its European counterparts. As of 3:05 am ET, the dollar fetched 1.4464 against the euro, 2.0829 against the Pound and 1.1544 against the Francs.

Loonie Higher Against Majors []
The Canadian dollar strengthened against its major counterparts at about 2:55 am ET. As of 3:25 am ET, the loonie was worth 0.9454 against the greenback, 1.3673 against the euro and 121.19 against the yen.

Canadian Dollar Edges Higher Against Majors []
During the early deals on Friday, the Canadian dollar edged higher against the other major currencies. Italian manufacturing PMI data for October, which was released during the European session, is likely to have an effect of trading in the euro-loonie pair.

Trading Likely To Be Range-bound Ahead Of Key U.S. Data - European Commentary []
The major European index futures are pointing towards a lower opening for the markets on Thursday. But global cues are mixed, with the U.S. stocks closing slightly lower Wednesday, recovering from early weakness, and the major markets across the Asia-Pacific region showing a mixed trend on Thursday.

European Markets Fall On Disappointing Earnings, Weak Commodities - European Commentary []
The European markets fell for the first time in four days on Tuesday, as disappointing earnings reports from companies such as Dassault Systemes, UBS and Royal KPN hurt investor sentiments and falling crude oil and metal prices hit energy and mining stocks.

Yen Weakens Against Majors []
The Japanese yen lost ground against its major counterparts at about 5:10 am ET. As of 5:37 am ET, the yen was quoted at 114.85 versus the greenback, 239.51 against the pound, 99.52 against the franc and 166.30 against the euro.

European Markets Rise On Strong Earnings, Miners - European Commentary []
The European markets rose on Thursday, as upbeat corporate results from companies such as France Telecom and ABB lifted investor sentiments and a rebound in copper prices boosted mining stocks.

Japanese Market Plunges On Wall Street Losses, Stronger Yen []

Japanese Market Plunges On Wall Street Losses, Stronger Yen []
Friday, Tokyo shares fell sharply after Wall Street plunged overnight on the back of disappointing earnings reported by companies and weak economic data. The bencmark Nikkei 225 index was down 315.93 points at around 9:54 a.m. local time and the broader Topix index of all First Section issues was down 34.56 points at 1,601.22.

China Shares Called To Extend Slide []
Since shares in China's stock market didn't gain Thursday after positive data from the U.S., analysts figure that a negative lead from Wall Street means the Shanghai Composite Index is again due for a decline when trading opens on the final day of the week.

Loonie Higher Against Majors []
The Canadian dollar strengthened against its major counterparts at about 2:55 am ET. As of 3:25 am ET, the loonie was worth 0.9454 against the greenback, 1.3673 against the euro and 121.19 against the yen.

New Zealand Dollar Gains Ground Against Majors []
Friday morning in Asia, the New Zealand dollar gained ground against the other major currencies. The Kiwi collected 0.7620 against the dollar and 87.52 versus the Yen, higher than yesterday's close of 0.7582 and 86.93 respectively. Against the euro, the Kiwi hit as high as 1.8948.

U.S. Dollar Drops Against Canadian Dollar [USD/CAD]
The U.S. dollar has slipped against the Canadian dollar. The greenback is trading in New York at .9488 to the loonie, giving back gains it made in mid-afternoon Eastern Time trading.

Malaysian Shares Called To Decline []
Malaysia's Kuala Lumpur Composite Index set a new intra-day record high on Thursday on positive data from the U.S. markets, but now analysts are expecting the KLCI to follow Wall Street to the downside when trading opens on Friday.

New Zealand Dollar Gains Ground Against Majors []
Friday morning in Asia, the New Zealand dollar gained ground against the other major currencies. The Kiwi collected 0.7620 against the dollar and 87.52 versus the Yen, higher than yesterday's close of 0.7582 and 86.93 respectively. Against the euro, the Kiwi hit as high as 1.8948.

Markets Likely To Open Lower Tracking Negative Cues From Global Peers - Indian Commentary []
Global cues are pointing towards a lower opening for the Indian markets on Friday. The U.S. stocks plunged overnight on renewed subprime worries and the major stock markets across the Asia-Pacific region are sharply lower in early trades on Friday. However, crude prices have eased from record highs.

New Zealand Market Falls On Negative Lead From Wall Street []
Friday, Wellington shares closed lower after the U.S stocks plunged overnight on the back of disappointig earnings reported by Exxon, weak economic data and down grading of Citigroup by CIBC.

New Zealand Market Closes Flat []
Thursday, Wellington shares closed flat, with the benchmark NZX-50 Index slipping 1.19 points or 0.03% to 4,207.88. The broader NZX All Capital index ended at 1136.39, down 0.67 points or 0.06%.

European Markets Rise On Strong Earnings, Miners - European Commentary []

European Markets Rise On Strong Earnings, Miners - European Commentary []
The European markets rose on Thursday, as upbeat corporate results from companies such as France Telecom and ABB lifted investor sentiments and a rebound in copper prices boosted mining stocks.

Interest Rate Optimism Boosts Stocks - U.S. Commentary []
Stocks are posting modest gains on Monday, as renewed hope for an interest rate reduction offsets a negative reaction to record high oil prices.

Forexnews.com-USD Stabilizes Losses, Eyes Payrolls

by Korman Tam

Forexnews.com--The dollar recovered slightly against the majors in the Thursday session, pushing the euro away from all-time highs just above the 1.45-level and containing its losses versus the sterling from breaching the 2.0870-mark. The greenback remains supported from tempered market expectations for further Fed easing following yesterday’s neutral bias adopted in the FOMC statement. Although the deterioration in US economic fundamentals continues, the declines have been inconsistent and unevenly distributed.

In contrast to the robust Q3 GDP figures released on Wednesday, the economic data released today was largely on the softer side. The key soft spots in the economy continue to be housing and manufacturing, with the October manufacturing ISM falling to 50.9, its lowest reading since March and slipping closer to the 50-level, which distinguishes between expansion and contraction. The new orders index fell to 52.5, while the employment index was marginally higher to 52.0. The prices paid index jumped to 63.0 versus 59.0 from September, and was attributable to higher energy and commodities costs.

Meanwhile, personal consumption in September fell to 0.1%, down from 0.6% from August and personal income edged up slightly to 0.4% versus 0.3% in the previous month. The PCE index, the Fed’s preferred gauge on inflation, ticked higher in September, with the core PCE index rising to 0.2% versus 0.1% from August and unchanged from the previous year at 1.8%. The headline PCE index increased by 0.2%, reversing a 0.1% decline a month earlier and rising to 2.4% on an annualized basis versus 1.8%. Weekly jobless claims drifted to 327k from 330k last week.

Market attention now shifts to the October jobs data, due out at 8:30 AM on Friday. With the ADP private sector payrolls boding positively for tomorrow’s report, traders will scrutinize the October non-farm payrolls to gauge whether the Fed will likely maintain its neutral bias heading into the last policy meeting of the year. Consensus estimates are calling for NFP to slip to 80k, down from 110k from October. The unemployment rate is forecasted to remain unchanged at 4.7%. Also due out are durable goods orders and factory orders.

A strong labor report will solidify the FOMC’s neutral bias and keep the Fed’s hand in check for the rest of the year, while also raising speculation that the easing cycle may be behind us given lingering inflationary pressure. Nevertheless, we look for the dollar to remain under pressure amid persistent fears stemming from credit concerns. Market jitters have not subsided and were evident with today’s analyst downgrade on Citigroup, a catalyst for the US equity sell-off which resulted in DJIA falling by over 1.5% and posting its largest decline since October 19th.

Japanese Yen, China's Yuan, Baht, Peso: Asia Currency Preview

By Aaron Pan

Bloomberg -- The following events and economic reports may influence trading in Asian currencies today.

Exchange rates are from the previous session.

Japanese yen: Chief Cabinet Secretary Nobutaka Machimura will talk to reporters after an 8:30 a.m. Cabinet meeting and again at 4 p.m. in Tokyo, as part of his regular press briefings. Finance Minister Fukushiro Nukaga and Economic and Fiscal Policy Minister Hiroko Ota will hold a news conferences after the meeting. The Bank of Japan will release the nation's monetary base data for October at 8:50 a.m.

The yen traded at 115.70 per dollar at 5:45 p.m. in Singapore yesterday.

South Korean won: The Bank of Korea is scheduled to report data on the country's foreign-exchange reserves today. The reserves increased by $1.99 billion to $257.3 billion in September.

South Korea's consumer prices unexpectedly rose in October, pushing annual inflation to the highest in more than two years, on soaring fuel and food costs. The consumer price index climbed 0.2 percent from September, when it gained 0.6 percent, the National Statistical Office said yesterday.

The won closed at 903.60.

Indian rupee: Inflation probably held at 3.07 percent in the week ended Oct. 20, the median estimate of 15 economists surveyed by Bloomberg showed. The Ministry of Commerce & Industry will release the report today at noon in New Delhi. The Reserve Bank of India will issue foreign-exchange reserves data for the week ended Oct. 26. It will release the report at 5 p.m. in Mumbai.

The rupee was at 39.3262 against the dollar.

Thai baht: The Bank of Thailand will release at 2:30 p.m. in Bangkok its data on reserves for the week ended Oct. 26. The central bank said last week reserves rose to $81.8 billion in the week ended Oct. 19, the most since Bloomberg began to compile the data in July 1998.

The baht traded at 33.95 in onshore trading, according to data compiled by Bloomberg.

To contact the reporter on this story: Aaron Pan in Hong Kong at Apan8@bloomberg.net

Danske Bank Notes No One Can Accuse Sedlabanki Of Being Dovish []

Danske Bank Notes No One Can Accuse Sedlabanki Of Being Dovish []
Lars Christensen from Danske Bank remarked on Thursday that nobody can accuse the Icelandic central bank (Sedlabanki) of being dovish. He noted that today Sedlabanki hiked its key policy rate by 45bp to 13.75% – contrary to the market's expectation of unchanged rates.

Swiss Franc Rebounds From Early Weakness Versus Dollar, Stays Near 2005 High [USD/CHF]
The Swiss franc was little changed in choppy dealing versus the dollar Thursday afternoon, staying near a 2 1/2 year high from the previous session. The franc slipped to 1.1638 in early dealing, but turned around at 5 am ET to reach 1.1587 by mid-day.

Global Insight Suggests That Fed Will Not Cut Rates Unless Economic Outlook Deteriorates Sharply []
Global Insight Chief U.S. Economist Nigel Gault commented on Thursday that consumer spending growth slowed in September, and retailer reports for October suggest that the fourth quarter began with little momentum. He commented that labor income growth still seems supportive, but rising gasoline prices are hurting real incomes while falling house prices are damaging real wealth.

Yen Rallies Against Euro [EUR/JPY]
The yen rallied against the euro in the mid-morning Thursday and erased losses from the previous session. The Japanese currency began to rise at around 8 a.m. ET and continued to move higher. The yen climbed to 165.70 against its European counterpart.

Stocks Seeing Continued Weakness In Late Morning Trading - U.S. Commentary []
While selling pressure has remained relatively subdued, stocks are seeing some weakness in late-morning trading on Tuesday. The major averages are all currently in negative territory after seeing some strength in recent sessions.

European Markets Fall, Led By Banks - European Commentary []
The European markets fell on Thursday, as banking stocks retreated after Credit Suisse Group said it is too early to predict an end to the credit-market turmoil and a brokerage downgraded shares of U.S. financial giant Citigroup.

Markets Likely To Open Higher On Positive Cues From Global Peers - Indian Commentary []

Markets Likely To Open Higher On Positive Cues From Global Peers - Indian Commentary []
Global cues are pointing towards a higher opening for the Indian markets on Thursday. The U.S. stocks rallied overnight after the Federal Reserve cut interest rates and most of the stock markets across the Asia-Pacific region are higher in early trades on Thursday, though they have come off their day's highs.

Stocks May Give Back Some Ground In Early Trading - U.S. Commentary []
After trending higher in recent sessions, stocks may give back some ground in early trading on Tuesday, with the futures indicating a lower open for the markets. Nonetheless, selling pressure is likely to remain relatively subdued ahead of the Federal Reserve's interest rate decision.

Fed Optimism Abounds - U.S. Commentary []
Wall Street is poised for a sharp opening on Wednesday, as optimism abounds that the Federal Reserve will cut interest rates at its meeting today.

Stocks Post Modest Gains At Open - U.S. Commentary []
Stocks are posting modest gains at the opening on Monday, as the markets move higher on optimism for a reduction in interest rates by the Federal Reserve and strong earnings results from Verizon (VZ).

Stocks Close Sharply Higher After Volatile Reaction To Interest Rate Cut - U.S. Commentary []
While the U.S. stock markets initially fell sharply following the announcement of the Federal Reserve's latest decision on interest rates on Wednesday, the major averages bounced back to the upside shortly afterward, ending the session firmly in positive territory.

Interest Rate Speculation Boosts Stocks - U.S. Commentary []
Wall Street is rising on Monday in anticipation of an expected interest rate reduction by the Federal Reserve at its next meeting later in the week. The gains come despite another record high in oil prices.

Stocks Remain In The Red In Early Afternoon Trading - U.S. Commentary []
After trending higher in recent sessions, stocks are seeing some weakness in early afternoon trading on Tuesday. The major averages are all in negative territory, with the Nasdaq moving lower after ending the previous session at its best closing level in well over six years.

Stocks Turning In A Mixed Performance In Mid-Afternoon Trading - U.S. Commentary []
Stocks have turned mixed over the course of the trading session on Tuesday, with the Nasdaq climbing into positive territory after lingering below the unchanged line along with the Dow and the S&P 500 for much of the day.

Profit Taking Contributes To Some Weakness In Morning Trading - U.S. Commentary []

Profit Taking Contributes To Some Weakness In Morning Trading - U.S. Commentary []
Stocks have come under pressure over the course of morning trading on Tuesday, with the major averages giving back some ground after trending higher in recent sessions. Profit taking has contributed to the downward move, although selling pressure has remained relatively subdued.

Stocks Close Sharply Higher After Volatile Reaction To Interest Rate Cut - U.S. Commentary []
While the U.S. stock markets initially fell sharply following the announcement of the Federal Reserve's latest decision on interest rates on Wednesday, the major averages bounced back to the upside shortly afterward, ending the session firmly in positive territory.

Market Opens Sharply Higher; Capital Goods, Energy Stocks Gain - Indian Commentary []
Thursday, Indian shares opened sharply higher on positive cues from global markets. At 10:07 a.m. IST, the Sensex was adding 211 points to 20,049 and the broader Nifty was climbing 75 points to 5,975.

Japan Stocks Posed For Higher Open On Fed Rate Cut, Wall Street Lead []
Japanese share traders are looking for a higher open on Thursday, gaining momentum from Wall Street's rally on the heels of the U.S. Federal Reserve's decision to cut a key interest rate by 25 basis points.

Pound Trades Near 26-Year High Against Dollar on BOE Rate View

Quoted from Bloomberg.com: Currencies

The British pound traded near a 26- year high against the dollar and rose against the euro on speculation the Bank of England will leave interest rates unchanged at its Nov. 8 meeting.

The pound pared earlier advances as stocks in Europe and U.S. slumped, fanning risk aversion. The currency rose to its highest since May 1981 against the dollar a day after the Federal Reserve cut its benchmark interest rate. Central bank policy makers ``cannot afford to relax'' on inflation, Bank of England Chief Economist Charles Bean said yesterday.

``Independently, sterling is still relatively strong,'' said Adam Cole, head of global currency strategy at Royal Bank of Canada in London. ``The market chose to focus on Bean's hawkish statements, moving current sentiment away from lower U.K. rates.''

The pound traded at $2.0808 as of 2:46 p.m. in London, from $2.0798 late yesterday. It reached $2.0851, the strongest since May 18, 1981. Against the euro, the pound strengthened to a four- week high of 69.33 pence, from 69.66.

Cole predicts the pound will end the year at $2.09, higher than the $2.03 median forecast of 42 strategists and economists compiled by Bloomberg.

The FTSE 100 stock index fell 2.2 percent and the Dow Jones Industrial Average fell or 1.6 percent

At 5.75 percent, the Bank of England's main interest rate is the highest among the Group of 10 nations, making it a target currency for carry traders.

Interest Rates

The U.K. central bank has raised the cost of borrowing three times this year by a quarter percentage point. The bank will keep its benchmark rate unchanged at its next meeting on Nov. 8, according to the median estimate from 37 economists in a Bloomberg News survey.

``There's going to be a significant impact from energy prices going forward in the early part of next year,'' Bean said in London. ``We're cautious about prospects for inflation,'' and it is ``a bit troubling'' that measures of consumer price expectations have yet to follow the inflation rate down.

Expectations for lower interest rates in the future priced into markets already represent a ``de facto loosening'' of monetary policy, Bean said in comments after his speech.

He is the fourth policy maker since Governor Mervyn King spoke on Oct. 9 to suggest that the rate will remain on hold.

`Watch And See'

King said the rate-setting committee is gauging the effects of higher credit costs on the economy while keeping up their guard on inflation. David Blanchflower said yesterday the bank is taking a ``watch and see'' approach on whether to lower the U.K.'s benchmark rate and his colleague Kate Barker signaled on Oct. 30 it isn't ready to cut borrowing costs.

U.K. manufacturing expanded at the slowest rate in almost a year in October, an industry report showed. An index based on a survey of more than 600 manufacturers by the Chartered Institute of Purchasing and Supply and Royal Bank of Scotland Group Plc fell to 52.9 from a revised 54.7 in September, Reuters said today.

To contact the reporters on this story: Kim-Mai Cutler in London at kcutler@bloomberg.net

South Korean Market Pares Opening Gains []

South Korean Market Pares Opening Gains []
Thursday, Seoul shares were trading slightly higher amid volatility. Earlier, the KOSPI index had opened higher after the Federal Reserve cut interest rate on Wednesday. At 11:00 a.m. local time, the benchmark KOSPI index was up 2 points or 0.1% at 2,067.

South Korean Market Rebounds; KOSPI Sets New Closing High []
Wednesday, Seoul shares set another record high amid volatility, higher oil prices and a strengthening currency. The market traded in negative territory for most part of the session after South Korea's currency rose past 900 to the dollar for the first time in more than 10 years, raising worries about export earnings.

European Markets Rise On Strong Oils, Miners - European Commentary []
The European markets rose on Friday, as heavily weighted energy stocks rallied after crude oil prices climbed to a record high and mining stocks edged higher after copper prices advanced.

US Dollar Up Against Majors []

US Dollar Up Against Majors []
The US dollar gained ground against its major counterparts at about 3:55 am ET. As of 4:07 am ET the greenback was quoted at 1.4443 against the euro, 2.0787 against the pound, 115.61 against the yen and 1.1608 against the franc.

European Markets Rise On Strong Oils, Miners - European Commentary []
The European markets rose on Friday, as heavily weighted energy stocks rallied after crude oil prices climbed to a record high and mining stocks edged higher after copper prices advanced.

Stocks May Give Back Some Ground In Early Trading - U.S. Commentary []
After trending higher in recent sessions, stocks may give back some ground in early trading on Tuesday, with the futures indicating a lower open for the markets. Nonetheless, selling pressure is likely to remain relatively subdued ahead of the Federal Reserve's interest rate decision.

U.S. Dollar Moving Higher Against Swiss Franc [USD/CHF]
The U.S. dollar is pushing higher against the Swiss franc. The pair is trading in New York at 1.1602, regaining ground lost since mid-morning trading on Wednesday.

Yen Mixed In Trading Against Majors []
The Japanese Yen showed a mixed trading against its major counterparts on Thursday morning in Asia. While the Yen moved sideways against the Swiss Franc, it dropped against the rest of majors. However, at about 9:00 pm ET, the Yen reversed the losses against the euro.

Stocks Rally On Microsoft And Countrywide Strength - U.S. Commentary []
Wall Street rallied on Friday after strong quarterly results from Microsoft (MSFT) and a positive outlook from Countrywide Financial (CFC) reassured investors that a US recession is unlikely.

Japanese Yen Moving Higher Against U.S. Dollar []

Japanese Yen Moving Higher Against U.S. Dollar []
The Japanese yen is pushing to higher ground against the U.S. dollar. The yen is trading in New York at 115.39 to the greenback, regaining ground lost in the last few hours.

Thai Stocks Wait On Fed Decision []
Little movement is expected when the Thai stock market opens trade on Wednesday as caution reigns supreme ahead of the U.S. Federal Reserve's decision on interest rates later in the day.

Hang Seng To Threaten 32,000 Points []
Hong Kong's stock market saw its string of record closes come to a close on Wednesday, but investors expect the Hang Seng Index to soar into record territory when the market opens Thursday. On the heels of the U.S. Federal Reserve's decision to cut interest rates by 25 basis points, analysts are calling for the index to again test and perhaps crack the 32,000-point plateau.

New Zealand Stocks Looking For Positive Reaction To Fed Rate Cut []
New Zealand Shares are poised to join other markets in the Asia Pacific region in a higher open on the back of Wednesday's 25 basis point reduction in key interest rates by the U.S. Federal Reserve.

Markets Rise On Interest Rate Optimism - U.S. Commentary []
The markets saw a modest increase on Monday, as investors took hope in a possible interest rate reduction and largely ignored another record high for oil prices.

South Korean Won Declines Against Dollar [USD/KRW]
The South Korean Won declined against the US dollar in the early Asian deals on Thursday. The Won hit a low of 903.10 by about 10:00 pm ET, compared to 900.70 late Wednesday in New York. The Won then gained slightly and the pair is worth 901.90 as of now.

Profit Taking Contributes To Some Weakness In Morning Trading - U.S. Commentary []
Stocks have come under pressure over the course of morning trading on Tuesday, with the major averages giving back some ground after trending higher in recent sessions. Profit taking has contributed to the downward move, although selling pressure has remained relatively subdued.

Yen Mixed In Trading Against Majors []
The Japanese Yen showed a mixed trading against its major counterparts on Thursday morning in Asia. While the Yen moved sideways against the Swiss Franc, it dropped against the rest of majors. However, at about 9:00 pm ET, the Yen reversed the losses against the euro.

Stocks Trade Lower Ahead Of U.S. Federal Reserve's Interest Rate Decision - Asian Commentary []
Wednesday, stock markets across the Asia-Pacific region were trading flat, tracking the losses on Wall Street overnight. The investor were also exercising caution ahead of the U.S. Federal Reserve's and Bank of Japan's interest rate decisions. While it is widely expected that the Fed will cut interest rate by 25 basis points, the Bank of Japan is expected to hold interest rate.

Focus is on the FOMC meeting

Forex News

by Angelo Airaghi [Guest Analyst]

The Federal Reserve meets Tuesday and Wednesday. The decision to cut rates by 25 basis points to 4.50% is only a matter of time with October and December sharing a 50/50 chance. The U.S., whose trend stays bearish for now, is reaching important support levels against the European currency.

Fed decision is only a matter of time

Housing slump continues in the United States. In September, existing home sales declined 8% month over month, following August¡¦s fall of 4.7%. The drop was broad based among condominiums (-4.3%) and family homes (-8.6%). Inventories, on the other hand, moved up a tiny 0.4%, while the month¡¦s supply of unsold homes jumped to 10.5 from August¡¦s 9.6 months, the largest increase of the past eight years. New home sales rose instead 4.8% (-2.5% expected) in September, but the previous month was revised down to 735,000 units from 795,000 units. In the West sales increased 37.7%, while in the Midwest they decreased 19.5%. The month of supply remains above the median level of six months, but it declined to 8.3 months from 9 months. With housing decline unfolding, and the stock market stalling, consumer spending might contract in the last part of 2007. The Federal Reserve is expected to cut rates again by 25 basis points to 4.50% by year end with October and December sharing a 50/50 chance.

U.S. consumer confidence might contract further

In effect, September¡¦s durable goods orders softened 1.7% (1.5% expected) after declining 5.3% in August. Excluding transportation, orders increased 0.3% versus August¡¦s decline of 1.8%. Core orders, non defence capital goods orders excluding aircraft (an indicator of future activity), moved up 0.4% in September after falling 0.1% in August. Orders have rose 8.2% annualized in the third quarter compared to the 15.1% shown in the second quarter. Core orders moved up only 1.4% annualized compared to the increase of 13% showed in the second quarter of 2007. The University of Michigan survey final reading moved down to 80.9 (82.0 expected) in October, from September¡¦s 83.4, the lowest level since October 2006. The expectations index fell to 70.1 from 74.1, while the current conditions index declined to 97.6 from 97.9. Inflations forecasts over one year stayed unchanged at 3.1% and it decreased over the five years period.

In Europe, growth remains a priority

In Germany, the economy appears to have reached an intermediate top. In fact, consumers are more concerned about the future, as inflation remains a menace and the strong euro might reduce exports. In October, the IFO business climate index, which is calculated over 7000 businesses, fell for the sixth consecutive month to 103.9 from September 104.2. The numbers matched expectations, but the services industry has clearly lost some ground. Current assessment printed 109.6 from September 109.9. Expectations was 98.6 from 98.7. Finally, in November, the Gfk consumer climate index for Germany is expected to decline 4.9 points from 6.7 points in October. The European Central Bank will probably leave rates unchanged for now, so to better understand actual economic performance. Growth is a priority, but inflation might again pick up in the next months, following the cyclical bull trend in all commodity markets.

Euro and BPound are testing resistance

The medium/long term trends are still pointing upward for European currency against the U.S. dollar. However, the 1.43/1.44 level is at the conjunction of various resistance lines that might represent a strong technical barrier and cyclical components are switching from positive to neutral/negative for the European currency. A strong move above 1.4480 is necessary to lift the Euro to 1.4560, 1.48. The long term upper channel line that started in 2006 is acting as an important support level, although only a move below 1.3925 would possibly mark the end of current uptrend. In that case, a decline to 1.3820/1.3750 is possible.

The British Pound is again testing the important resistance level at 2.0480/2.0550. This area is at the conjunction of both a long term trendline and the high Bollinger band and is acting as a strong barrier. A move above 2.0580 is necessary to target 2.0630/50, eventually 2.08, provide its price will not decline again below 2.0440. The British Pound is entering into an area of strong technical and cyclical resistance as well.

Angelo Airaghi is a Commodity Trading Advisor, registered with the National Futures Association and the Commodity Futures Trading Commission. He has been an active professional since 1990 working for major international financial companies. In the past 10 years, Angelo Airaghi has been an analyst and commentator for national and international media.

Forexnews.com

by Korman Tam

Quoted from:

Forexnews.com

The FOMC lowered its benchmark Fed Funds rate by 25-basis points to 4.5%. The accompany policy statement tempered expectations for another rate cut over the remainder of the year, adopting a more neutral stance and emphasizing that risks to inflation and growth are currently balanced. “Economic growth was solid in the third quarter, and strains in financial markets have eased somewhat on balance”. Further, the Fed said today’s 25-basis point cut, in conjunction with the September ease, “should forestall some of the adverse effects on the broader economy that might otherwise arise from the disruptions in financial markets and promote moderate growth over time”. The Fed cited recent increases in energy and commodity prices as “roughly balancing the downside risks to growth”. The vote was not unanimous with KC Fed President Hoenig voting in favor of leaving rates unchanged.

Economic growth for the third quarter exceeded consensus forecasts, as the economy expanded by 3.9%, versus calls for 3.0% GDP growth and up slightly from the previous quarter at 3.8%. The US economy posted its strongest growth rate since Q1 2006 – thereby bringing to question how aggressively the Fed will continue to ease rates over the coming months. The Q3 PCE price index was higher than expectations at 1.7%, albeit sharply lower than Q2, while core PCE edged up to 1.8% versus 1.4% from the prior quarter. A worrying, but not unexpected component of the GDP report was a large drop in housing investment, which plunged 20.1%, accelerating from an 11.8% decline in Q2.

Meanwhile, manufacturing contracted with the Chicago PMI at 49.7 for October falling short of consensus expectations of 53.0 and down from 54.2 in September. The decline marked the lowest reading in 8-months, while the employment index was down to 49.5.

The dollar continues to struggle against the major currencies, with the exception of the yen – falling to fresh all-time lows versus the euro at 1.4503 and new multi-decade lows versus the sterling, Loonie and Aussie. The market remains bearish on the greenback despite a combination of strong US economic growth data and a neutral tone adopted by the FOMC – suggesting overwhelming market sentiment for further losses to come. The next key piece of data to potentially impact both the December FOMC policy decision and the dollar’s fate will be Friday’s October labor report.

JPY Slumps following BoJ

The Bank of Japan left policy unchanged when it announced its decision in early Wednesday trading. The BoJ voted 8-1 to keep interest rates at 0.5%. Governor Fukui said that “downside risks to Japan are also increasing compared with upside risks”. He added that “the environment overseas has changed and uncertainty over the global economy persists”. Fukui said that “if the risk factors materialize, the global economy could worsen more than anticipated, and an adverse impact on the Japanese economy would be inevitable”. The BoJ also reduced its forecasts for growth and inflation, expecting the economy to grow at 1.8% this year, downwardly revised from 2.1% while inflation remains flat compared with a 0.1% estimate from earlier in the year.

Dollar Ends Decline Versus Euro as Charts Signal Drop Excessive

Quoted from http://www.bloomberg.com/apps/news?pid=20601083&sid=awWiPScIXyyA&refer=currency:

Bloomberg.com: Currencies

Nov. 1 (Bloomberg) -- The dollar snapped seven days of losses against the euro on speculation the currency's 1.6 percent decline over the past month was too fast as the Federal Reserve signaled it may be done with cutting interest rates.

The U.S. currency rebounded from a record low versus the euro as the Fed's statement following yesterday's quarter- percentage point cut in rates said ``the upside risks to inflation roughly balance the downside risks to growth.'' A chart traders watch to predict currency moves rose above a level that suggests the euro was about to reverse course.

``We could see an adjustment lower in the euro against the dollar,'' said Hiroshi Yoshida, a foreign-exchange trader at Shinkin Central Bank in Tokyo. ``There are technical signs the euro's gains and the dollar's losses have gotten out of hand.''

The dollar traded at $1.4465 per euro at 11:30 a.m. in Tokyo compared with $1.4487 yesterday, when it touched $1.4504, the weakest since the European currency's debut in January 1999. The U.S. currency was little changed at 115.45 yen. The dollar may rise to $1.4430 against the euro today, Yoshida forecast.

The euro's relative strength index against the dollar, a comparison of the magnitude of gains and losses, has been above 70 over the past three trading days.

The U.S. dollar recouped losses against the Australian dollar, South African rand and the Canadian dollar, currencies that have benefited from increased demand for their nations' commodities.

Commodity Currencies

They were also favored destinations for investors in the carry trade, which involves borrowing funds at low rates in countries such as Japan and buying higher-yielding assets elsewhere.

The Australian dollar bought 93.09 U.S. cents, down from a 23-year high of 93.43. The rand was at 6.5035 per dollar from 6.4986 yesterday and the Canadian dollar traded at $1.0573 from $1.0603.

Australia's benchmark interest rate is 6.5 percent, compared with 10.5 percent in South Africa and 4.5 percent in Canada. Japan's benchmark rate is 0.5 percent while the European Central Bank's is 4 percent.

``There's talk of speculators buying back dollars they sold before the Fed meeting,'' said Osao Iizuka, head of foreign- exchange trading at Sumitomo Trust & Banking Co. in Tokyo. ``This is likely a temporary adjustment to the speed of the dollar's recent decline.''

The dollar may advance to $1.4420 against the euro today, he said.

To contact the reporter on this story: Stanley White in Tokyo at swhite28@bloomberg.net ; Kosuke Goto in Tokyo at kgoto2@bloomberg.net

Fed Rate Cut To Spark Malaysian Stocks []

Fed Rate Cut To Spark Malaysian Stocks []
The Malaysian stock market touched a record high in Wednesday's trade, and analysts are calling for the Kuala Lumpur Composite Index to add to its totals on the heels of the U.S. Federal Reserve's decision to cut interest rates by 25 basis points.

Trading Likely To Be Subdued Ahead Of Fed's Interest Rate Decision - European Commentary []
The major European index futures are pointing towards a lower opening for the markets on Wednesday. Global cues are also weak, with the U.S. stocks falling overnight on uncertainty about the outcome of FOMC meeting and the major markets across the Asia-Pacific region trading mixed on Wednesday.

New Zealand Stocks Edge Lower []
Wednesday, Wellington stocks edged lower ahead of the U.S. Federal Reserve's decision on interest rates. The benchmark NZX 50 Index was losing 2.95 points or 0.07% to 4,216.81, while the NZX All Capital Index was declining 6.89 points or 0.16% to 4,244.21.

Shanghai Stocks Due For Correction []

Shanghai Stocks Due For Correction []
After soaring 5.2 percent over the last two days, analysts are calling for China's Shanghai Composite Index to pull back slightly on profit-taking when the market opens for business on Wednesday.

PNC States Commerical Markets Could Cool With Weaker Demand And Higher Credit Costs []
Stuart Hoffman, chief economist from PNC, commented on Wednesday that the advance estimate for real Gross Domestic Product for the third quarter of 2007 gave markets a Halloween surprise this morning by blowing past the consensus estimate of 3.1 percent growth.

New Zealand Shares Headed For Uncertain Day In Advance Of Fed Rate Decision []
Another day of light trading is facing New Zealand stocks on Wednesday, as traders join others around the globe in awaiting word on interest rates from the U.S. Federal Reserve, which is due to issue its decision after Asia-Pacific markets close.

Yen Drops Versus Sterling After BoJ Decision [GBP/JPY]
The Japanese yen slipped to a 10-day low against the sterling on Wednesday in New York after the Bank of Japan announced that it is holding interest rates unchanged at 0.50%. The decision was adopted by an 8-1 majority vote. the yen began to fall in the early morning and dropped sharply for about four hours.

Stocks Rally On Microsoft And Countrywide Strength - U.S. Commentary []

Stocks Rally On Microsoft And Countrywide Strength - U.S. Commentary []
Wall Street rallied on Friday after strong quarterly results from Microsoft (MSFT) and a positive outlook from Countrywide Financial (CFC) reassured investors that a US recession is unlikely.

Interest Rate Optimism Fuels Growth - U.S. Commentary []
Renewed hope for an interest rate reduction by the Federal Reserve has been enough to offset record high prices for oil, as stocks post modest gains heading into afternoon trading on Monday.

Dollar Hits New 47-year Low Versus Loonie Amid GDP Data, Tame Inflation Reading [USD/CAD]
The dollar extended its 47-year low versus the loonie Wednesday morning following the release of stronger than expected US GDP figures. The dollar fell to .9506 just before the opening bell on Wall Street.

Profit Taking Contributes To Some Weakness In Morning Trading - U.S. Commentary []
Stocks have come under pressure over the course of morning trading on Tuesday, with the major averages giving back some ground after trending higher in recent sessions. Profit taking has contributed to the downward move, although selling pressure has remained relatively subdued.

Bloomberg.com: Currencies

Quoted from http://www.bloomberg.com/apps/news?pid=20601083&sid=ab1UjI96JIJs&refer=currency:

Bloomberg.com: Currencies

U.K. Pound Rises to Highest Since 1981 on Interest-Rate Outlook
By Kim-Mai Cutler and Aaron Pan

Oct. 31 (Bloomberg) -- The pound rose to its highest against the dollar since 1981 on speculation the U.S. Federal Reserve will cut interest rates today, widening the difference in borrowing costs with the U.K.

Bank of England policy maker David Blanchflower said the bank is taking a `watch and see' approach on rates and his colleague Kate Barker has signaled it isn't ready to cut them. Futures traders are betting U.S. borrowing costs will be reduced.

``Sterling has continued to be well-supported by ongoing pressures on the U.S. dollar,'' said Jeremy Stretch, a senior currency strategist at Rabobank Groep. ``The market has scaled back more exaggerated hopes of rate cuts from the Bank of England.''

The pound rallied to as high as $2.0742, the strongest against the dollar since May 20, 1981. It traded at $2.0717 as of 1:13 p.m. in London, from $2.0677 late yesterday. Against the euro, the pound traded at 69.73 pence, from 69.80.

Stretch predicts the pound will end the year at $2.08, higher than the $2.03 median forecast of 43 strategists and economists compiled by Bloomberg.

The U.K. currency pared gains after the Commerce Department reported that U.S. economic growth unexpectedly accelerated in the third quarter to 3.9 percent as increases in exports, consumers spending and investment made up for a housing slump.

In the U.K., home prices rose at the fastest pace in four months in October, according to the Nationwide Building Society, the country's fourth-biggest mortgage lender. The average cost of a British home rose 1.1 percent from September, boosting the annual rate of increase to 9.7 percent, according to Nationwide.

Consumer Confidence

U.K. consumer confidence fell to a seven-month low this month as shoppers became more reluctant to make purchases, a poll for the European Commission showed. A gauge of sentiment fell one point from September to minus 8, London-based market researcher GfK NOP Ltd. said, citing its poll of 2,000 people.

Blanchflower said the U.K. economy was showing `signs of softness' and that the bank would adopt a ``watch and see'' approach toward interest rates, according to the Lancashire Evening Post newspaper.

The U.K. central bank has raised the benchmark interest rate three times this year. The increases, the latest in July, took the rate to the most in six years and the highest among the Group of Seven nations.

Bank of England Governor Mervyn King said on Oct. 9 policy makers are gauging the effects of higher credit costs on the economy while keeping up their guard on inflation.

Consumer prices rose 1.8 percent in September from a year earlier, the same as August, and below the central bank's 2 percent target for a third month, the Office for National Statistics said in London on Oct. 16.

``There's still more room for the pound to rise against the dollar,'' said Akio Shimizu, chief manager of foreign-exchange trading at Mitsubishi UFJ Trust & Banking Corp. in Tokyo. ``Inflationary pressure in the U.K. means interest rates aren't likely to fall soon. In contrast, the Federal Reserve may lower rates a few more times this year.''

To contact the reporters on this story: Kim-Mai Cutler in London at kcutler@bloomberg.net ; Aaron Pan in Hong Kong at Apan8@bloomberg.net

Dollar Rebounds From Record Low Versus Euro as Growth Quickens

Quoted from http://www.bloomberg.com/apps/news?pid=20601083&sid=azEST11DN_Ng&refer=currency:

Bloomberg.com: Currencies

Dollar Rebounds From Record Low Versus Euro as Growth Quickens

By Min Zeng

Oct. 31 (Bloomberg) -- The dollar rose from a record low against the euro after reports showed the U.S. economy unexpectedly accelerated in the third quarter and job growth quickened this month.

The U.S. currency gained the most in four weeks versus the yen as the data boosted speculation the Federal Reserve will refrain from cutting borrowing costs later today amid the biggest housing slump in 16 years. The Fed will announce the rate decision at about 2:15 p.m. in Washington.

``The market has expected a doom-and-gloom scenario for the U.S. economy,'' said Brian Dolan, chief currency strategist at FOREX.com, a unit of online currency trading firm Gain Capital in Bedminster, New Jersey. ``There is a disconnect between what the data says and what the market expects. You are seeing a fair amount of bounce back in the dollar.''

The U.S. currency traded at $1.4435 per euro at 9 a.m. in New York from $1.4432 yesterday. The dollar reached $1.4467 per euro today, the weakest since the European currency's debut in January 1999. The dollar rose 0.6 percent to 115.36 yen.

U.S. gross domestic product, the broadest measure of the economy, grew at a 3.9 percent annual pace in the third quarter from a 3.8 percent clip a quarter earlier. The median forecast in a Bloomberg survey was for a 3.1 percent growth rate.

Job Growth Quickens

The dollar started to pare its decline earlier as a private report showed job growth is accelerating. Companies in the U.S. created 106,000 jobs in October, ADP Employer Services said, compared with a median forecast of 58,000 among economists polled by Bloomberg News.

Interest-rate futures traded on the Chicago Board of Trade show a 90 percent chance the Fed will lower its target rate for overnight loans between banks to 4.5 percent today, down from 94 percent odds yesterday. The odds of the Fed holding rates steady rose to 10 percent from 6 percent yesterday. The European Central Bank's key rate is 4 percent, while the Bank of Japan's is 0.5 percent.

The Fed cut its target rate for overnight bank loans by a half-point on Sept. 18 to 4.75 percent, the first reduction since 2003, after losses from subprime mortgage investments roiled credit markets.

To contact the reporters on this story: Min Zeng in New York at mzeng2@bloomberg.net .

Australian Shares Trade Weak Ahead Of U.S. Interest Rate Decision []

Australian Shares Trade Weak Ahead Of U.S. Interest Rate Decision []
Wednesday, Sydney stocks opened lower on the back of a weak lead from Wall Street and lower base metal prices. However, the market recovered by noon and was trading flat. The benchmark S&P/ASX 200 index was losing just 0.4 points to 6,749.8 and the broader All Capital index was down 0.3 points at 6,772.8.

Australian Stocks Fall On Profit Taking []
Sydney shares fell Tuesday as investors locked in profits following the recent rally. Investors were also exercising caution ahead of Wednesday's Federal Open Market Committee's decision on U.S. interest rates.

New Zealand Shares Headed For Uncertain Day In Advance Of Fed Rate Decision []
Another day of light trading is facing New Zealand stocks on Wednesday, as traders join others around the globe in awaiting word on interest rates from the U.S. Federal Reserve, which is due to issue its decision after Asia-Pacific markets close.

Japanese Stocks Close Mixed Ahead Of Rate Decision []
Tuesday, Tokyo shares closed mixed as investors lock in profits ahead of the U.S. Federal Reserve's and Bank of Japan's rate decisions. The Nikkei 225 Stock Average closed down 47.07 points or 0.3% at 16,651.01, recovering from the day's low of 16,492.56.

Japan Share Traders Eye Bank Rates, Earnings Statements For Rebound []
Japanese shares are poised for a cautious day of trading in advance of interest rate decisions both at home and abroad.

Japanese Market Flat Ahead Of Interest Rate Decisions By Federal Reserve And BoJ []
Wednesday, Tokyo shares fell, tracking losses on Wall Street. The investors were also exercising caution ahead of the interest rate decisions by the Federal Reserve and the Bank of Japan.

Japanese Market Recovers To End Slightly Higher []
Wednesday, Tokyo shares recovered from early losses to close slightly higher after the monetary policy committee of Bank of Japan decided to hold overnight call rate at 0.5%. However, the investors were exercising caution ahead of the Fed's interest rate decision later today.

Chinese Market Closes Sharply Higher On Stronger Yuan []
Tuesday, Shanghai shares extended their gains for a third day led by large banks and airlines after the yuan finished at a new record on Monday. The benchmark Shanghai Composite Index closed up 149.20 points or 2.60% at 5,897.19.

Australian Stocks Fall On Profit Taking []

Australian Stocks Fall On Profit Taking []
Sydney shares fell Tuesday as investors locked in profits following the recent rally. Investors were also exercising caution ahead of Wednesday's Federal Open Market Committee's decision on U.S. interest rates.

South Korean Stocks Trade Flat; Market Awaits Fed's Rate Decision []
Wednesday, Seoul shares were trading flat ahead of the Federal Reserve's decision on interest rates. The benchmark KOSPI index was down 1.03 points or 0.05% at 2051.31.

Trading Likely To Be Subdued Ahead Of U.S. Interest Rate Decision - Indian Commentary []
Global cues are pointing towards a lower opening for the Indian markets on Wednesday. The U.S. stocks were weak overnight ahead of the Fed's interest rate decision and the stock markets across the Asia-Pacific region are also weak in early trades on Wednesday.

Housing, Tech Stocks Weigh On Markets - U.S. Commentary []
Stocks are posting considerable losses on Thursday, as poor economic data combines with weakness in tech stocks to send stocks lower.

Stocks Post Losses In Early Trading - U.S. Commentary []
Stocks have moved modestly to the downside at the opening on Thursday, as positive effects from optimistic earning results were not enough to offset selling pressure from an unexpected drop in durable-good orders.

European Markets Rise On Strong Oils, Miners - European Commentary []

European Markets Rise On Strong Oils, Miners - European Commentary []
The European markets rose on Monday, as energy stocks rallied after crude oil prices climbed to a record high and mining stocks edged higher after metal prices advanced.

Stocks Rally On Microsoft And Countrywide Strength - U.S. Commentary []
Wall Street rallied on Friday after strong quarterly results from Microsoft (MSFT) and a positive outlook from Countrywide Financial (CFC) reassured investors that a US recession is unlikely.

European Markets Fall On Disappointing Earnings, Weak Commodities - European Commentary

Source: RTT News : European Market Update

The European markets fell for the first time in four days on Tuesday, as disappointing earnings reports from companies such as Dassault Systemes, UBS and Royal KPN hurt investor sentiments and falling crude oil and metal prices hit energy and mining stocks.

Investors also waited warily for a decision on interest rate policy from the U.S. Federal Reserve, which is meeting Tuesday and Wednesday. The Fed is widely expected to cut rates by a quarter percentage point to 4.5%.

Crude for December delivery fell $1.59 to $91.94 a barrel on the New York Mercantile Exchange after Mexico's state oil company said it will resume production and on expectations that a U.S. government report will show crude supplies grew last week.

The FTSEurofirst 300 index of pan-European blue chips closed 0.42% lower at 1,581.58 points, while the narrower DJ Stoxx 50 index fell 0.53% to 3,852.31 points.

Around Europe, the U.K.'s FTSE 100 index dropped 0.70% to 6,659.00, while France's CAC 40 index slipped 0.55% to 5,803.93 and Germany's DAX index fell 0.40% to 7,977.94.

Dsesign software maker Dassault Systemes dropped 6.4% after the company reported a 24% decline in third quarter earnings and cut its full year earnings and sales forecast.

UBS, Switzerland's, slipped 1.6% after the company reported its first quarterly loss in almost five years on writedowns tied to the U.S. mortgage market.

Royal KPN, the Netherlands' largest phone company, slid 5.6% after the company's third quarter earnings and sales missed analysts' estimates.

Michelin, the world's second largest tiremaker, dropped 6.6% after the company's third quarter sales trailed analysts' forecast.

Heavily weighted oil stocks edged lower after crude oil prices retreated. BP, Europe's biggest oil company, dropped 1.8%, while Royal/Dutch Shell, the second biggest, slipped 1.5% and Total, the third biggest, fell 0.6%.

Similarly, mining stocks lost ground after copper, nickel, lead, zinc and aluminum prices declined in London. BHP Billiton, the world's biggest miner, slipped 2.7%, while Rio Tinto, the third biggest, fell 1.6% and copper miner Antofagasta dropped 3.1%.

Continental, Europe's second largest tiremaker, fell 1.9% after the company said it will raise 1.5 billion euros from a share sale to help fund its purchase of Siemens's auto-parts unit.

On the other hand, Vinci, the world's biggest construction company, surged up 5.1% after the Financial Times reported that French billionaire Francois Pinault and ArcelorMittal may join forces to make a bid for Vinci.

Pound leaps to post 1981 high against dollar as UK rate cut looks less

Pound leaps to post 1981 high against dollar as UK rate cut looks less
Times Online - The pound yesterday vaulted to its highest levels against the dollar since the early days of the Thatcher era in 1981, coming within striking distance of the watershed of $2.07 against the embattled American currency. Sterling scaled its latest peaks

Manufacturing abroad helps JCB weather currency turbulence
Guardian Unlimited - Ten years ago JCB was famous in the UK for making diggers, big yellow ones with the company's name in large black letters. It was quite well known across parts of western Europe too. But it was not a global brand. Earlier this year, however, on the

Take your U.S. dollars to Latin America
MSNBC - Panama uses the U.S. dollar as its own currency, so no matter how bad things get on international exchanges, you'll always land in Panama City knowing your bucks will buy a lot. You can head to impressive beaches, explore rainforests full of exotic

USD Slumps on Consumer Confidence

Quoted from Forexnews.com

 by Korman Tam

The beleaguered dollar found no reprieve on Tuesday, remaining mired near all-time lows versus the euro at 1.4436, and 26-year lows against the sterling just shy of the 2.07-level. Dragging the greenback lower today was a report from the Conference Board revealing a dip in consumer confidence to a new 2-year low at 95.6 for October, compared with a downwardly revised 99.5 from September. The expectations index for October fell to 80.1, versus a revised 85.0 from a month earlier.

The currency market will likely consolidate in the coming session as traders take to the sidelines ahead of Wednesday’s FOMC monetary policy decision and accompanying statement. Although the Fed funds futures are fully discounting a 25-basis point rate cut to 4.50% tomorrow, the focus will be on the language used in the subsequent policy statement. Further, the dollar may regain its footing against the majors if the Fed instead opts to leave rates unchanged at 4.75% while signaling a cut at its December meeting.

Prior to the Fed announcement, several key pieces of economic data will provide additional gauges on the state of the US economy. Growth in Q3 is estimated to fall to 3.0%, down from 3.8%. The core PCE is seen edging up to 1.5% from 1.4%, while the headline Q3 PCE is forecasted to fall to 1.5% from 4.3%. The October ADP private sector payrolls, often viewed as a proxy to the more important non-farm payrolls, are seen up slightly to 60k versus 58k. Meanwhile, the October Chicago PMI is estimated to slip to 53.0, down from 54.2.

GBP Rallies amid Tempered Rate Cut Expectations

The sterling climbed to its highest level in 26-years against the greenback while rallying sharply versus the yen prompted by overnight comments from a Bank of England board member. The BoE’s Barker pondered whether conditions have changed significantly since August that would force the Bank’s hand next week. Given the recent slate of upbeat UK economic reports, we do not expect the BoE to alter its stance when it deliberates monetary policy next week.

Cable remains buoyed near its multi-decade highs, pulling off slightly from beneath the 2.07-level. Resistance is seen at 2.07, followed by 2.0740 and 2.0775. Subsequent ceilings are eyed at 2.08 and 2.0850. Meanwhile, on the downside support begins at 2.0650, followed by 2.06 and 2.0560. Additional floors will emerge at 2.0530 and 2.05.

Euro Hovers near All-Time High

The euro remains buoyed near its record high versus the dollar near the 1.4440-level. Germany’s October unemployment rate was unchanged at 8.7%, while the unemployment change was -40k, versus -30k from September. In the Wednesday session, traders will digest Germany September retail sales, Eurozone October business climate, consumer sentiment, industrial sentiment, unemployment rate and flash inflation.

EURUSD continues to hold steady above the 1.44-level, with resistance emerging at 1.4440 and 1.4470. Subsequent ceilings are seen at 1.45 and 1.4550. On the downside, support begins at 1.44, followed by 1.4380 and 1.4350. Additional floors are eyed at 1.43, backed by 1.4250 and 1.4220.