The dollar held gains against most of its major counterparts on concern oil prices near a nine- month high will restrain global growth, increasing demand for haven assets.
Demand for the greenback was supported on speculation Chinese Premier Wen Jiabao will steer policy toward curbing inequality and financial instability at the expense of faster growth. The so-called Aussie dollar fell versus the yen as Australian Prime Minister Julia Gillard called a ballot for the leadership following the resignation of Foreign Minister Kevin Rudd. The yen gained as Asian stocks declined.
“In the short term, I would expect the dollar to be supported,” said Emma Lawson, a currency strategist at National Australia Bank Ltd. in Sydney. “Concern over the supply of oil and how it may affect the global economy is keeping the market cautious.”
The greenback traded at $1.3256 per euro as of 12:52 p.m. in Tokyo from $1.3249 in New York yesterday. It fell 0.2 percent to 80.11 yen. The 17-nation euro slid 0.2 percent to 106.19 yen.
Oil prices reached a nine-month high yesterday as International Atomic Energy Agency officials were denied access to an Iranian military base and said negotiations over the country’s nuclear program “couldn’t finalize a way forward.”
Oil Concern
“There’s a strong element of geo-political tensions, particularly in Iran, impacting oil prices and that’s a negative for risk,” said Greg Gibbs, a foreign-exchange strategist at Royal Bank of Scotland Group Plc in Sydney. “It could be a factor that undermines risk confidence and sees a return to U.S. dollar strength.”
Crude for April delivery increased 3 cents to $106.28 a barrel on the New York Mercantile Exchange yesterday, the highest settlement since May 4. Futures retreated today.
China’s Wen will target an expansion of less than 8 percent in his report to the National People’s Congress in Beijing on March 5, according to 8 of 15 economists surveyed by Bloomberg News. The median estimate of 7.5 percent compares with the 8 percent goal maintained from 2005 to 2011, even amid the 2008-09 world recession.
The survey results tally with state economist Fan Jianping’s prediction last week that a reduced goal will be set to send a message to local officials bent on chasing growth.
The MSCI Asia Pacific Index (MXAP) of stocks fell 0.4 percent.
Portugal, Italy Concern
The euro halted five days of gains against the yen as the Institute of International Finance said in its Feb. Global Economic Monitor that an orderly resolution of the Greek debt crisis “remains a key challenge.” There is the “risk of a subsequent debt restructuring,” following the pending private- sector involvement deal, said the IIF, which has been negotiating on behalf of private creditors in talks with Greece.
The IIF is also concerned that Portugal, which faces possible contagion from Greece, may miss its “very ambitious” fiscal target for 2012. Spain’s “significant fiscal tightening into an already weak economy” also presents concern, while Italy’s ability to rollover its debt is a risk, it said.
“European growth is pretty miserable,” said Alex Nicholas, a foreign-exchange dealer at Velocity Trade Ltd., a currency brokerage. “There’s no silver bullet for the problems affecting the euro.”
The dollar has risen 5.3 percent in the past six months, the second-biggest gainer among 10 developed-nation currencies tracked by Bloomberg Correlation Weighted Indexes. The yen has weakened 1.4 percent and the euro has dropped 3.9 percent over the same period.
Currency Forecasts
UBS AG lowered its forecasts for the yen versus the dollar, predicting a fall to 85 yen per dollar by the end of this year and 90 by end-2013, according to a research note to clients yesterday.
Goldman Sachs Group Inc. recommended that investors bet on gains in Norway’s krone against the British pound as rising oil prices boost demand for the Scandinavian nation’s currency and the central bank finds it difficult to stem gains.
“Norges Bank likely has little scope to use monetary policy to prevent further Norwegian krone strength,” strategists headed by Thomas Stolper, the London-based chief currency strategist at the company, wrote in a note to clients. The central bank “has sounded more hawkish than expected, in combination with strong activity data and more sticky inflation than expected.”
A report yesterday showed Norway’s unemployment fell to 3.3 percent in the December quarter, when most economists surveyed by Bloomberg had predicted no change from 3.4 percent in the prior period. Investors should position for gains in the krone toward 8.60 per pound and exit the position on a one-day close above 9, Goldman said.
Australian Leadership
The Australian dollar dropped against most major peers as Prime Minister Gillard called a leadership ballot for Feb. 27, seeking to end weeks of tension in the ruling Labor party with Rudd, the man she ousted from the top post in 2010. Rudd resigned at a 1 a.m. press conference yesterday in Washington, where he had been meeting U.S. government officials.
“This is a diversion from the government actually pushing through whatever they need to push through,” said Derek Mumford, a director in Sydney at Rochford Capital, a currency- risk management company. “All this, in the very short term, is not a good thing for the Aussie dollar.”
The Australian dollar lost 0.2 percent 85.22 yen and was little changed at $1.0635.
Demand for the greenback was supported on speculation Chinese Premier Wen Jiabao will steer policy toward curbing inequality and financial instability at the expense of faster growth. The so-called Aussie dollar fell versus the yen as Australian Prime Minister Julia Gillard called a ballot for the leadership following the resignation of Foreign Minister Kevin Rudd. The yen gained as Asian stocks declined.
“In the short term, I would expect the dollar to be supported,” said Emma Lawson, a currency strategist at National Australia Bank Ltd. in Sydney. “Concern over the supply of oil and how it may affect the global economy is keeping the market cautious.”
The greenback traded at $1.3256 per euro as of 12:52 p.m. in Tokyo from $1.3249 in New York yesterday. It fell 0.2 percent to 80.11 yen. The 17-nation euro slid 0.2 percent to 106.19 yen.
Oil prices reached a nine-month high yesterday as International Atomic Energy Agency officials were denied access to an Iranian military base and said negotiations over the country’s nuclear program “couldn’t finalize a way forward.”
Oil Concern
“There’s a strong element of geo-political tensions, particularly in Iran, impacting oil prices and that’s a negative for risk,” said Greg Gibbs, a foreign-exchange strategist at Royal Bank of Scotland Group Plc in Sydney. “It could be a factor that undermines risk confidence and sees a return to U.S. dollar strength.”
Crude for April delivery increased 3 cents to $106.28 a barrel on the New York Mercantile Exchange yesterday, the highest settlement since May 4. Futures retreated today.
China’s Wen will target an expansion of less than 8 percent in his report to the National People’s Congress in Beijing on March 5, according to 8 of 15 economists surveyed by Bloomberg News. The median estimate of 7.5 percent compares with the 8 percent goal maintained from 2005 to 2011, even amid the 2008-09 world recession.
The survey results tally with state economist Fan Jianping’s prediction last week that a reduced goal will be set to send a message to local officials bent on chasing growth.
The MSCI Asia Pacific Index (MXAP) of stocks fell 0.4 percent.
Portugal, Italy Concern
The euro halted five days of gains against the yen as the Institute of International Finance said in its Feb. Global Economic Monitor that an orderly resolution of the Greek debt crisis “remains a key challenge.” There is the “risk of a subsequent debt restructuring,” following the pending private- sector involvement deal, said the IIF, which has been negotiating on behalf of private creditors in talks with Greece.
The IIF is also concerned that Portugal, which faces possible contagion from Greece, may miss its “very ambitious” fiscal target for 2012. Spain’s “significant fiscal tightening into an already weak economy” also presents concern, while Italy’s ability to rollover its debt is a risk, it said.
“European growth is pretty miserable,” said Alex Nicholas, a foreign-exchange dealer at Velocity Trade Ltd., a currency brokerage. “There’s no silver bullet for the problems affecting the euro.”
The dollar has risen 5.3 percent in the past six months, the second-biggest gainer among 10 developed-nation currencies tracked by Bloomberg Correlation Weighted Indexes. The yen has weakened 1.4 percent and the euro has dropped 3.9 percent over the same period.
Currency Forecasts
UBS AG lowered its forecasts for the yen versus the dollar, predicting a fall to 85 yen per dollar by the end of this year and 90 by end-2013, according to a research note to clients yesterday.
Goldman Sachs Group Inc. recommended that investors bet on gains in Norway’s krone against the British pound as rising oil prices boost demand for the Scandinavian nation’s currency and the central bank finds it difficult to stem gains.
“Norges Bank likely has little scope to use monetary policy to prevent further Norwegian krone strength,” strategists headed by Thomas Stolper, the London-based chief currency strategist at the company, wrote in a note to clients. The central bank “has sounded more hawkish than expected, in combination with strong activity data and more sticky inflation than expected.”
A report yesterday showed Norway’s unemployment fell to 3.3 percent in the December quarter, when most economists surveyed by Bloomberg had predicted no change from 3.4 percent in the prior period. Investors should position for gains in the krone toward 8.60 per pound and exit the position on a one-day close above 9, Goldman said.
Australian Leadership
The Australian dollar dropped against most major peers as Prime Minister Gillard called a leadership ballot for Feb. 27, seeking to end weeks of tension in the ruling Labor party with Rudd, the man she ousted from the top post in 2010. Rudd resigned at a 1 a.m. press conference yesterday in Washington, where he had been meeting U.S. government officials.
“This is a diversion from the government actually pushing through whatever they need to push through,” said Derek Mumford, a director in Sydney at Rochford Capital, a currency- risk management company. “All this, in the very short term, is not a good thing for the Aussie dollar.”
The Australian dollar lost 0.2 percent 85.22 yen and was little changed at $1.0635.
