Forex | Morning Overview | BOE Rate | 10 February 2011

Forex | Morning Overview | BOE Rate | 10 February 2011

Previous session overview : The dollar rose against the yen Thursday in Asia due to buying by Japanese life insurance firms and importers, while speculators remained on the sidelines ahead of a U.S. Treasury auction later in the day.

Dealers said demand for the greenback among the importers was strong due to regular settlements, while institutional investors were active in foreign-asset investment on the back of the recent global trend toward higher interest rates.

Short-term-focused funds were paying attention to moves in U.S. Treasury yields because if they rise, that would be a cue for investors to increase holdings of the U.S. currency, dealers said. A higher Treasury yield increases the amount of return from holding dollar-denominated assets.

As of 0450 GMT, the dollar was at JPY82.51 from JPY82.36 Wednesday in New York. The ICE Dollar Index, which tracks the U.S. dollar against a trade-weighted basket of currencies, was at 77.712 from 77.610.

The euro, meanwhile, was at USD1.3688 from USD1.3733 and JPY113.10 from JPY113.08.

Sterling was USD1.6103 and JPY132.85 from USD1.6100 and JPY132.60 in late New York Wednesday.

The Australian dollar dipped in Asia trade Thursday as a decline in full-time workers in January weighed on sentiment. At 0530 GMT, the Australian dollar changed hands at USD1.0073, down from USD1.0132 late Wednesday.

Market expectation : The EURUSD is at USD1.3688 from USD1.3733 in New York late Wednesday as short-term investors in Asia adjust their positions ahead of the much-awaited BOE rate announcement due later in the global day, analysts said. They say views are somewhat divided over whether the BOE's stance will remain unchanged or become more hawkish given recent strong economic indicators. They add the EURUSD is also weighted by Japanese importers' USD buying against the JPY. Read more

Forex | Afternoon Overview | 7 February 2011

Forex | Afternoon Overview | 7 February 2011

Previous session overview : The euro's slide against the dollar extended into a new week Monday after a disappointing German economic report.

Losses accelerated after the common currency fell through the key 100-day moving average around USD1.3530, triggering additional sell orders.

Traders in the past few days have begun unwinding long positions they built up in the euro during January, adding to the losses in recent days.

The currency fell to a two-week low Monday against the dollar after release of news that German manufacturing orders fell by 3.4% in December; more than double the 1.5% decline in orders that forecast.

Trichet backed off previous comments late last week, saying the euro zone's interest rates were currently at proper levels. That disappointed market participants who had been building in expectations that the central bank would hike rates to combat coming inflation. Last month, Trichet sounded hawkish and hinted at future rate hikes, leading to a steep rally in the euro.

The euro was at USD1.3512 in morning trading in New York from USD1.3582 late Friday. The euro dropped as low as USD1.3508 earlier in the day, its lowest level since Jan. 21.

The euro was at JPY111.57 from JPY111.67 late Friday, while the dollar was at JPY82.35 from JPY82.20. Read more

Forex | Morning Overview | 7 February 2011

Forex | Morning Overview | 7 February 2011

Previous session overview : The euro rose against the yen and the dollar in Asia Monday as generally stronger regional equities encouraged buying of the risk-sensitive common currency, which also benefited from bargain hunting following falls in New York on Friday.

At 0450 GMT, the euro was up at JPY111.95 from JPY111.67 late Friday in New York. Against the dollar, the common currency traded up at USD1.3616 from USD1.3582. Higher share prices in Japan, where the benchmark Nikkei Stock Average traded up 0.64% in afternoon trade, cued short-term investors to buy the risk-sensitive currency, dealers said.

Sentiment toward the euro also got a slight boost from data showing that Japan ramped up lending of its foreign currency reserves to the International Monetary Fund to help staunch the European debt crisis. Data released Monday by the Ministry of Finance Monday showed that Tokyo's outstanding loans to the IMF grew to USD10.15 billion in January from USD8.5 billion in the previous month. The money is for a fund to help Ireland, a Japanese finance ministry official said.

Elsewhere, the dollar was little changed against the yen at JPY82.22 at 0450 GMT, compared with JPY82.20 late Friday in New York. The ICE Dollar Index, which tracks the greenback against a trade-weighted basket of currencies including the euro and yen, was at 77.889 from 78.031. Read more