New Overnight Developments Abroad: U.S. and Canadian Dollars Moderately Softer

October 26, 2009

The dollar is 0.3% lower against the yen, Swiss franc, and Australian dollar and has lost 0.2% against the euro.  The greenback is up 0.3% against the loonie and unchanged against sterling.

Following drops on Friday, most stock markets are higher with gains of 1.0% in South Korea, 2.9% in Pakistan, 0.8% in Japan, 0.4% in Thailand and 0.3% in the Philippines.  In Europe, the German Dax, Paris Cac and British Ftse are trading 0.5%, 0.3% and 0.2% higher.

The ten-year JGB bond yield firmed 3 basis points to 1.40%.  Comparable bund and gilt yields are up one and two basis points.

Oil has eased 0.5% to $80.08 per barrel, while gold is steady at $1056.40 per ounce.

A top researcher at the Peoples Bank of China has personally recommended greater diversification of that country’s $2.273 trillion stock of international reserves into yen and euros.  China’s finance minister predicts faster growth in 4Q09.

Australian producer prices edged only 0.1% higher last quarter, and their 12-month change fell to +0.2% from 2.1% in 2Q09, 4.0% in 1Q, and 6.4% in 4Q08.  Lower-than-forecast PPI inflation was caused by a 5.1% plunge in imports prices from 2Q.

Another sign of the rapid recovery in Asia was revealed in South Korean third quarter national income accounts.  Real GDP jumped 2.9% on to of a 2.6% increase in 2Q09, and on-year growth returned to positive growth of +0.6% after minus 2.2% in the year to 2Q.  Among comparisons of 3Q versus 2Q, investment soared 8.9%, exports increased 5.1%, and consumption rose 1.4%.

Germany reported an unexpected dip in consumer confidence to 4.0 in November from 4.2% in October, the first decline since September 2008.

The incoming center-right coalition in Germany presented a united platform that calls for EUR 24 billion of tax cuts and keeping nuclear plants open longer than had been planned previously.  The new finance minister is Wolfgang Schaeuble, whom former Chancellor Helmut Kohl once chose to be his heir apparent.

Hong Kong was closed for the Chung Yeung Festival.  European countries turned back their clocks Sunday to standard time, reducing the time difference between them and the United States by an hour for just this week until U.S. clocks are turned back next weekend.

Sweden’s trade surplus of SEK 5.5 billion in September was some 44% smaller than a year earlier, as exports fell 17%.  The January-September surplus of SEK 80.4 billion only 3.4% smaller than a year before.

Spanish producer prices fell by 0.4% in September and by 5.4% from a year earlier.  As in Australia’s case, these results were lower than forecast.

Singapore industrial production dropped 7.7% in the year to September, more than anticipated and more than the 6.0% decline in the year to August.

A measure of British business sentiment compiled by KPMG climbed to a 1.5-year high.

Economic sentiment in Hungary improved for a sixth straight month to minus 26.8 in October from minus 30.7 in September and minus 46.2 last April.

In a light start to this week’s U.S. data calendar, the Dallas and Chicago Fed indices get reported today.  The Bank of Israel has a scheduled interest rate announcement, and a second rate hike seems possible.  So far, only the central banks of Australia and Israel have begun to implement higher interest rates.

Copyright Larry Greenberg 2009.  All rights reserved.  No secondary distribution without express permission.

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