New Overnight Developments Abroad: Softer Dollar

July 28, 2009

The dollar lost 1.2% against the Australian dollar, 0.8% against the kiwi, 0.6% relative to the yen, 0.4% versus the Canadian dollar, 0.3% against the euro and Swiss franc and 0.2% relative to sterling.

The Nikkei closed unchanged.  Elsewhere in Asia, stocks rose 1.8% in Singapore and Hong Kong, 1.6% in Taiwan, 1.3% in Indonesia, 1.4% in Malaysia, 1.3% in The Philippines, and 0.7% in Australia and New Zealand.  European bourses are modestly softer, with dips of 0.3% in Britain and 0.1% in France and Germany.

Ten-year sovereign bond yields edged 1 basis point lower in Japan, Britain and Germany.

Oil and gold ticked up 0.1% to $68.44 per barrel and $957.50 per ounce.

The Reserve Bank of India as expected left its key repo rate at 4.75%, its cash reserve ratio at 5%, and revised projected inflation up to 5%.

Down-under currencies got a boost from remarks from the Reserve Bank of Australia’s Governor Stevens, who predicted Australia is likely to rebound faster than imagined six months ago.  The Aussie dollar hit a 2009 high.  The kiwi strengthened to $0.6638 in spite of released data showing an unexpected New Zealand trade gap in June of NZ$ 417 million.  The deficit in the year to June of NZ$ 3.18 billion was wider than the shortfall of NZ$ 2.97 billion in the year to May.

In Britain, the CBI business group released a monthly survey of retailers with a weak and only slightly improved sales volume index of -15% in July after minus 17% in June.  Slight deterioration is projected for August.

Norway’s quarterly survey of bank lending found further tightening in conditions.

Italian consumer confidence jumped from 99.8 in March to 105.4 in June and 107.5 in July, best since November 2007.

According to France’s quarterly manufacturing survey, the orders balance was minus 43 in 2Q, still deeply in the red but not as much so as negative readings of minus 58 in 1Q and minus 52 in 4Q08.

Dutch business sentiment of minus 14.8 in July after minus 15.0 in June continues to firm gradually.

The Swiss UBS consumption indicator improved to 0.96 in June from 0.75 in May.

Swedish producer prices fell 0.8% in June, cutting on-year inflation to 1.1% from 2.9% in May.  Swedish retail sales slid 0.4% in June and rose 2.2% from June 2008, less than gains of 4.3% in the year to May and 3.6% y/y in 2Q.

Slovakian producer prices were unchanged in June and 7.6% lower than a year earlier.  Lithuanian GDP fell 22.4% in the year to 2Q09.

The euro area COIN indicator improved to minus 0.42 in July from minus 0.62 in June.  It was the best reading in 11 months, a fifth straight improvement, but still suggesting negative growth.

South African unemployment remained very high in the second quarter, 23.6%, after 23.5% in 1Q09.

Scheduled U.S. data today include consumer confidence, the Case Shiller house price index, and the Richmond Fed survey.

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


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