Weaker Euro

May 24, 2010

The dollar gained 1.5% against the euro, ending last week’s respite for the common European currency.  Parts of Germany, France, Netherlands and Norway are closed for Whit Monday.

The dollar has also risen 0.9% against the kiwi, 0.7% against the Swissy, 0.5% relative to the Australian dollar and sterling, and 0.1% against the yen.  CAD/USD is unchanged.

Equity market changes in the Pacific Rim ranged from rises of +3.8% in China, 2.1% in Australia, 1.2% in Taiwan, 0.6% in Hong Kong, and 0.3% in South Korea to losses of 0.3% in Japan, 0.9% in Malaysia, 1.5% in Pakistan and 2.8% in Thailand.  In Europe, the Paris Cac is up 0.3%, but the German Dax and British Ftse show declines of 0.6% and 0.2%.

The yield on 10-year JGBs firmed one basis point to 1.26%.

Gold and oil prices rose by 0.8% and 0.1% to $1185.20 per ounce and $70.24 per barrel.

Japan’s all-industry index fell 0.8% in March after tumbling 2.3% in February but was 4.7% greater than a year earlier.  The March index was 1.4% lower than its first-quarter average level.  The all-industry index rose 1.3% in the first quarter from the fourth-quarter level.  In March, industrial production rose 1.2%, but construction and services declined by 3.8% and 3.0%.

The Bank of Japan’s monthly economic assessment was upgraded to “starting to recover moderately, induced by improvement in overseas economic conditions.”  Exports and industrial output are increasing, investment shows signs of picking up, consumption is picking up especially for durable goods, and housing is bottoming out.  A moderate recovery is likely, but bank officials expect the rate of improvement in private domestic demand to moderate. 

Thai GDP rose 3.8% on quarter and by a 15-year high of 12% on year in the first quarter.

Chinese President Hu in talks with Geithner and other U.S. officials indicated China is moving gradually and independently on the issue of the yuan.

Taiwan’s jobless rate unexpectedly dipped a tenth to 5.4% in April.  Industrial production was 31.4% higher in April than a year earlier.

Australian motor vehicle sales leaped 8.4% in April, the biggest monthly rise since the end of 2000, and was 28.7% greater than a year earlier.

Consumer prices in Singapore firmed 0.9% on month and 3.2% on year in April.  The CPI in January-April was 1.5% greater than a year before.

Czech consumer sentiment worsened in April while business confidence improved.  Overall confidence edged up two-tenths to 4.8.

Scheduled U.S. data today include existing home sales and the Chicago Fed index.  Israel’s central bank holds an interest rate policy meeting today.

Copyright Larry Greenberg 2010.  All rights reserved.  No secondary distribution without express permission.



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