New 2009 Highs For Euro and Swissy Against Dollar

November 25, 2009

The dollar lost 1.3% against the Canadian dollar, 1.1% against the Aussie dollar, kiwi and yen, 0.9% relative to sterling, 0.8% against the euro and 0.7% against the Swiss franc.  In the process, the greenback plumbed new 2009 lows of 1.5087 per euro and Chf 1.0017, and it touched its weakest yen level (87.53) since last January.

Stocks are mostly higher, with advances of 2.9% in Thailand, 2.3% in China, 0.8% in Hong Kong and Australia, 0.4% in Japan, Britain, and France and 0.2% in Germany.

Gold climbed another 1.0% to $1179.50 per troy ounce.  Oil edged 0.1% lower, crossing to just below $76 per barrel.

The yield on ten-year gilts slid 2 basis points, while those on bunds and JGBs are steady.

Vietnam became the first Asian central bank to raise interest rates after devaluing the dong by 5.2%.  The refinancing rate, which had been at 7% since January, was increased to 8%, and the discount rate also went up a percentage point to 6%.  The step was taken to stabilize the currency and support exports.

Revised British 3Q09 GDP data showed negative growth of 0.3% from 2Q and 5.1% from a year earlier; those drops were each a tenth smaller than preliminary figures.  Consumption was flat but down 3.2% on year.  Business investment dropped 3.0%.  Overall investment including by the public sector edged down 0.3% on the quarter and 14.3% on the year.  Current government spending rose 0.2% and 1.9% from a year earlier.  Net exports exerted a drag of 0.2 percentage points.  The GDP price deflator was 2.0% higher than a year earlier.

German consumer confidence slid to 3.7 in December on labor market concerns from 4.0 in November.  Italian consumer confidence unexpectedly rose to 112.8 in November from 111.7.  Italian retail sales edged down less than expected in September, dropping  0.1% from August and 1.6% from a year before after falling 2.4% in the year to August.  Spanish September mortgage loans fell 4.2% in number and 14.3% in value from a year earlier.

Polish retail sales grew 2.1% in the year to September, somewhat less than forecast and less than the 2.5% on-year increase in August.

Swedish consumer confidence jumped to 11.4 in November from 7.5 in October.  Prior to August, such had been a negative figure.

Japan’s customs trade balance recorded a Y 807 billion surplus in October versus a Y 75 billion deficit a year earlier, as exports posted a smaller on-year drop of 23.2%.  Export volumes declined 13.0% compared to declines of 21.8% in September and 25.4% in August from a year earlier.  Import values were 35.6% lower than in September 2008.  Japan’s deficit with China was 88.6% smaller than a year before.  The seasonally adjusted trade surplus nearly doubled to Y 419 billion from Y 223 billion in September, as exports firmed 2.5% while imports fell 2.0%.

Japanese corporate service prices firmed 0.1% in October.  It’s drop from a year earlier narrowed to 2.2% from 3.2% in September.  The Shoko Chukin index of small business sentiment settled back to 43.0 in November from October. The index posted quarterly averages of 42.1 in 3Q, 34.3 in 2Q and 26.7 in the first quarter of 2009.

The Filipino trade gap narrowed sharply to $34 million in September.

Deputy Governor Batellino of the Reserve Bank of Australia made bullish remarks, predicting a multi-year economic expansion.  His comments reinforced speculation about another rate hike early next month.  RBA policymakers do not meet in January.

Deputy Governor Yamaguchi of the BOJ was more equivocal, conceding a world recovery but also calling the financial system fragile.

Sources in Europe claim that ECB officials will consider making the interest rate on next month’s 12-month refinancing loan adjustable but are likely to reject doing that.  The Bank already has said December’s will be the last of these one-year tenders.

South African consumer price inflation dipped under the target ceiling to 5.9% in October, the first in-target print in somewhat over two years.

Brazilian consumer confidence posted a second consecutive improvement to 115.4 in November from 113.7 in October.

Before Treasury markets close early in the U.S. for the Thanksgiving holiday, a considerable slate of data will be released, including energy inventories, personal income and spending, durable goods orders, the U. Michigan index of consumer sentiment, new home sales, the Kansas City Fed index, and weekly jobless claims.

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


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