By Usman on June 2nd, 2011
The Euro increased against all sixteen of its major trading currencies, after the German Chancellor, Angela Merkel, stated that Germany’s economic growth rate is impressive and the European Union is committed to maintaining the Euro. The EURO-USD exchange rate rose by 0.2847 percent to 1.4369.
Inflation in Europe is around 2.7 percent, higher than the European Central Bank’s target inflation rate of 2 percent. However, Europe has not disintegrated into a double-dip recession yet, and, taking cue from the comments of its major financial ministers and policy makers, there is a huge possibility of the EU raising interest rates in order to combat inflation. In such a scenario, with the US Federal Reserve maintaining interest rates at record low levels and the US economy putting on a sluggish growth, the Euro appears to be the more attractive currency as compared to the Greenback.
The Japanese Yen fell against the Euro, as the Japanese Prime Minister,Naoto Kkan, declared that he would step down from his post after completing the recovery efforts in Japan. The USD-JPY exchange rate rose by 0.0723 percent to 81.0090.
By Usman on June 2nd, 2011
Oil futures fell for a second day after reports showed that the number of new jobs added in the US declined, crude stockpiles increased and global manufacturing slowed down. WTI crude futures fell by 0.50 percent to USD $ 99.79 a barrel. Brent crude futures fell by 0.30 percent to USD $ 114.19 a barrel.
The American Petroleum Institute (API) stated that crude stockpiles in the US increased by 3.5 million barrels to 371.6 million barrels last week. Moreover, the API also stated that oil imports in the US rose by 29 percent to 9.9 million barrels last week.
In May, employment in the US increased by 38,000, which is the lowest increase in employment since September 2010. Furthermore, the US Institute for Supply Management’s factory index fell to 53.5 in May, down from its level of 60.4 in April. Also, a purchasing managers index for China hinted towards the slowest expansionary growth in nine months. Russia’s purchase index signified slow growth too, while reports from Poland and Hungary also stated a slowdown in the manufacturing sector. This series of news increased speculation about the global demand of oil falling, which led to the fall in the price of oil futures.
By Usman on May 31st, 2011
The Euro advanced against the US Dollar, as there was a growing sense of optimism that European leaders were working towards an amiable solution to Greece’s sovereign debt crisis.
The EURO-USD exchange rate increased by 0.6718 percent to 1.4378.
Luxembourg’s Prime Minister, Jean-Claude Juncker, who is also the head of the group of euro finance ministers, said that a total restructuring of Greece’s debt had been ruled out. The EU, the IMF and the ECB are scheduled to complete their review on Greece’s economy in a few days, after which a new set of regulations would be enforced on Greece to follow before any more bailout money can be released to the country. Moreover, Germany has decided not to push for an early rescheduling of Greek bonds in order to gain new loans for itself. There is a growing level of optimism amongst investors that the European crisis will eventually be resolved.
Meanwhile, failure on the part of Democratic and Republican lawmakers to strike a deal for avoiding the $ 14.3 trillion debt ceiling has caused the Dollar Index to fall, thereby contributing to the rise of the Euro.
Inspite of the US Dollar depreciating against major currencies, the USD-JPY exchange rate rose by 0.2888 percent to 81.1730. Moody’s has put Japan’s credit ratings on review for possible downgrading, which resulted in a fall in the Yen.
By Usman on May 31st, 2011
Gold and silver rose, as continued concerns over Europe’s sovereign debt crisis helped the precious metals to register a rally in their prices. Gold futures increased by 0.01 percent to USD $ 1537.40 an ounce, while silver futures rose by 0.74 percent to USD $ 38.145 an ounce.
The Greek Prime Minister, George Papandreou, announced his resolve of sticking with austerity measures in order to improve the country’s debt crisis, even as his party becomes increasingly unpopular. European financial leaders are working overtime in order to ensure their creditors that a solution to Greece’s debt crisis will be found out soon. Uncertainty regarding the eventual fate of the Euro is expected to push gold and silver upwards in the coming weeks.
By Usman on May 30th, 2011
The US Dollar declined against its major currencies, as economic news pointed out towards a weak economic growth in the US economy. Also, the Euro declined on rising concerns over Greece’s ability to come out of its economic crisis. The EURO-USD exchange rate fell by 0.2008 percent to 1.4290, while the USD-JPY exchange rate fell by 0.0019 percent to 80.7970.
The Dollar Index, which measures the relative strength of the US Dollar against six other trading partners, including the pound, euro and yen, declined by 0.9 percent to 74.758. US GDP grew by 1.8 percent per annum in the first quarter of this year, lower than the expected growth rate of 2.2 percent per annum. Consumer spending increased by 0.4 percent in April, again lower than the investors’ predicted growth rate of 0.5 percent. Home sales and durable goods orders fell in April, while US employers added only 185,000 new jobs in May, the lowest amount since the beginning of this year. These economic news are pointing towards a stagnating US economy. With no signs of the economy picking up pace, the US Federal Reserve is expected to stick with maintaining interest rates between 0 and 0.25 percent at least for the rest of this year. Thus, the Greenback is expected to remain depreciated against its major trading currencies.
The Euro declined as the International Monetary Fund claimed that it may not release the next batch of bailout money due to Greece next month unless the country’s debt crisis improves. Greece is increasingly appearing to eventually restructure its debt and technically default, which will plunge the Euro’s value. Concerns about Greece is moving investors towards the Swiss Franc as a safer alternate, thereby depreciating the Euro.
By Usman on May 30th, 2011
Gold futures slightly declined after rising for the better part of the past several weeks. Gold futures decreased by 0.02 percent to USD $ 1537 an ounce. Silver continued its upward trend, with prices rising by 0.98 percent to USD $ 38.235 an ounce.
Gold slightly fell ahead of the holiday in US and UK markets on Monday. However, its long term trend is expecting to continue increasing in lieu of a number of factors. There has been a lot of talk over whether Greece would be able to avert its economic crisis after receiving the 110 billion Euro bailout package from the EU last year. The situation in Greece does not appear good, and there are growing voices over the need to restructure the country’s debt. Furthermore, the Dollar Index fell by almost 1 percent, thus spurring the demand of gold and silver.
Investors searching for volatility are crowding towards silver. With the global economy appearing in a precarious condition, the gold and silver are expected to increase in the coming days.
By Usman on May 30th, 2011
Oil futures slightly slipped today, after rising over the weekend on account of optimism from the G-8 regarding the condition of the global economy. WTI crude futures fell by a slight 0.06 percent to USD $ 100.53 a barrel. Brent futures declined by 114.87 a barrel.
With the markets expected to remain closed in the US and UK today on account of a holiday, there is no outright reason for the slip in crude futures, apart from the fact that it was probably spurred by heavy selling in order to take advantage of the rise in oil futures.
At the end of a two-day summit in France, leaders of the G-8 stated in a statement that the global economy was becoming increasingly self-sufficient, an announcement which led to a rise in stock indexes and the price of commodities. Furthermore, the Dollar Index declined after it was revealed that purchases increased in the US by 0.4 percent last month, lower than the expected increase of 0.5 percent. The depreciation of the Dollar increased the attractiveness of commodities as an alternate investment.
The condition in the Middle East is still very volatile. With Syria already in the grip of widespread protests, guards in Yemen killed 15 members of the Nihm tribe. This volatile situation is igniting fears about a widespread breakdown of law and order in the region severely disrupting oil supplies, and it led to the price surge in oil futures over the weekend.
By Usman on May 27th, 2011
The Euro appreciated against the US Dollar, as the Greenback declined against 15 out of 16 of its major trading currencies. The EURO-USD exchange rate increased by 0.88 percent to 1.4270.
Growth in consumer spending in the US rose by 0.5 percent in April, which is the smallest rise in consumer spending in three months. Also, pending home sales declined by 1 percent in April, along with the initial jobless claims increasing to 424,000 people last week. All of these are indicators of a sluggish US economy, which has resulted in an atmosphere of selling the Greenback, contributing to its depreciation.
The USD-JPY exchange rate fell by 0.3309 percent to 81.0183. The decline of the US Dollar against Asian currencies was also spurred by an increase in Asian stocks, which led to a move towards riskier, higher yielding assets and a subsequent decline in the demand of the Greenback.
By Usman on May 27th, 2011
Gold and silver futures registered advances on concerns over the European Debt Crisis and a sluggish US economy. Gold futures advanced by 0.18 percent to USD $ 1526.40 an ounce.
The Euro declined against the US Dollar, after reports suggested that the IMF might not release the next tranche of money to Greece as part of its bailout package keeping in view the deteriorating condition of its economy. Gold also increased as US economy data showed that the US economy had increased by 1.8 percent in the first quarter of this year, lower than the anticipated growth rate. Furthermore, initial claims for jobless benefits increased to 424,000 last week.
Silver futures rose by 1.31 percent to USD $ 37.820 an ounce. Silver volatility has decreased ever since CME Group, the owners of NYMEX, increased the margin required for silver trading by almost 84 percent. Silver continues to increase on the same reasons which have increased the demand of gold as a safe-haven.
