Swissie Weakens, Commodity Currencies Strengthen, and Irene Not as Bad as Feared

August 29, 2011

The U.S. dollar rose 1.1% against the Swiss franc but lost 0.6% against the Canadian dollar, 0.7% relative to the kiwi and 0.4% against the Aussie dollar.  Other dollar relationships are pretty steady, with dips of 0.1% against the euro, yuan and sterling and no change in the yen.

Britain is closed for a late summer bank holiday, but Wall Street is projected to openHurricane Irene scored a direct hit on NYC as forecast but with less intensity than feared.  Deaths from the storm were limited.  It moved through the area faster than expected.  Skies now blue, and winds are calm.  Still many power outages and lots of flooding.

Stocks rose overnight in Asia and Europe.  Equities advanced 3.6% in India, 2.8% in South Korea, 1.8% in Taiwan, 1.5% in Australia, 1.4% in Hong Kong and 1.6% in Singapore.  The Paris Cac and German Dax are up by 1.5% and 1.2%. 

Chinese stocks slumped 1.7%, however, following announced changes by the People’s Bank of China that effectively tighten monetary policy.  Banks will be required to hold more kinds of deposits as reserves, including margin deposits.

Gold advanced 1.2% to $1818.90 per ounce. Oil edged 0.1% higher to $85.47 per barrel.

Markets have moved past Bernanke’s speech in Jackson Hole, which failed to unveil any new stimulus and identified politics as the main obstacle to restoring trend growth in the future.

Democratic Party of Japan lawmakers chose Finance Minister Yoshihiko Noda as the next party leader.  Noda will succeed Prime Minister Kan this week and does not plan to call snap elections.  Noda will be the sixth prime minister since September 2006, following Abe (12 months), Fukuda (12 months), Aso (12 months), Hatoyama (9 months) and Kan (15 months).  Before this merry-go-round, the popular reformist, Koizumi, had served the role from April 2001 until September 2006.

German consumer prices in August may have slipped marginally more than expected in August.  Among five states reporting preliminary CPI figures fell by 0.2% on month in Hesse and North Rhine Westphalia, 0.1% in Brandenburg and Saxony, and were unchanged in Bavaria.  These results suggest a drop of 0.1-0.2% decline for the whole nation and an on-year advance of 2.2-2.3%.

Retail sales volume in Hong Kong were 22.4% greater than a year earlier in July.  Singapore domestic producer prices dipped 0.1% in July but accelerated to a 9.1% 12-month rate of increase.  South Korea’s trade and current account surpluses in July amounted to $5.9 billion and $4.9 billion.

New home sales in Australia fell 8.0% in July.  Such had also declined in May and June.

Consumer confidence in Italy slumped 3.4 points to 100.3 in August and was over a point below expectations.

Spanish retail sales in July were 3.9% lower than a year earlier.  The on-year drop on a volume basis was 6.0%. Swedish retail sales fell 0.7% last month and recorded a 1.1% on-year advance, down from 3.2% in the year to June.  The volume of Irish retail sales fell by 0.5% on month and 0.6% on year in July.

Greek producer prices increased 1.1% in July and by 9.1% from a year earlier.  Hungarian unemployment in May-July averaged 10.8%, the same rate as in 2Q.

Britain’s Hometrack house price index registered a monthly decline of 0.1% for a fourth consecutive time in August and was 3.7% lower than a year before.

U.S. personal income and spending and the PCE price deflator get released at 12:30 GMT, followed at 14:00 GMT by pending home sales.  The Bank of Israel’s latest interest rate decision will be announced later today.  ECB President Trichet, Boston Fed President Rosengren, and Juncker of the EU speak publicly today.

Copyright 2011, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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