Dollar Advances as Fed May Increase Rate Gap With Europe, Japan
Dec. 7 (Bloomberg) – The dollar rose the most in a week against the euro on speculation the Federal Reserve will next week raise borrowing costs, widening the gap between U.S. rates and those set by other central banks.
The dollar also approached a 32-month high against the yen after Prime Minister Junichiro Koizumi said today it’s too early for the Bank of Japan to raise rates from near zero. The extra yield offered by two-year U.S. Treasury notes over comparable Japanese bonds is close to the most since May 2001 and near a three-month high versus German debt.
“The dominating theme in the market is yield,'’ said Marios Maratheftis, a currency strategist at Standard Chartered Plc in London. “That’s supporting the dollar and will continue to do so in the short term until the Fed signals it’s thinking about the end of the rate cycle.’
More: bloomberg.com
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Chinese juggling with yuan risks the wrath of Europe and Japan
CHINA allowed its currency to break through the watershed of eight yuan to the dollar to its highest in a decade yesterday, but left room for scant if any gains against the euro and the yen in a policy that could vex Europe and Japan.
The Chinese central bank, set yesterdays yuan central rate at 7.9982 against the dollar — the first time that it has gone past eight since the authorities revalued the yuan by 2.1 per cent last July.
The move to let the yuan rise to the
Gold ends firm in Europe after China, dollar moves
Gold-bugs had a rocky ride in Europe on Thursday, with the market swinging wildly lower when China raised interest rates only for fresh dollar woes to ignite a smart rally, traders said.
It has been hectic and volatile -- after it sold off on the China (rate) increase it did not take much to move it back up when the dollar tumbled, a trader said.
The U.S. currency slid to fresh seven-month lows against the euro of $1.2547 after Federal Reserve Chief Ben Bernanke hinted at a U.S. rate hike pause.
Spot gold rallied strongly
Europe braces for rate increase to check inflation
The European Central Bank may raise its key interest rate this week to keep inflation in check as economic growth accelerates and oil trades near a record, a survey of economists shows.
Policy-makers probably will raise the benchmark rate for the 12 euro nations to 3 per cent from 2.75 per cent when they convene in Frankfurt on Thursday, said all 34 economists surveyed by Bloomberg News. Economists say reports this week on manufacturing and services will show the euro-region economy is headed for the fastest expansion since 2000.
ECB
Europe and Japan in effort to shore up yen
Finance ministers from Europe and Japan have launched a co-ordinated effort to shore up the yen, voicing concern over the recent sharp decline in a move designed to stop the Japanese currency falling any further.
After a meeting of ministers and central bank governors of the G7 in Singapore at the weekend, Sadakazu Tanigaki, the Japanese finance minister said the yens value should reflect Japans economy, which is recovering, and added that the recent drop in yen had been a little rough.
Jean Claude Trichet, president of the European Central Bank, said: We noted
Dollar Mixed, Gold Down in Europe Trading
The U.S. dollar was mixed against most other major currencies in European trading Tuesday. Gold prices fell.
The euro traded at $1.2791, down from $1.2798 late Monday in New York.
Other dollar rates in Europe, compared to late Monday, included 114.58 Japanese yen, down from 114.68; 1.2256 Swiss francs, up from 1.2240; and 1.1070 Canadian dollars, down from 1.1111.
The British pound traded at $1.8446, up from $1.8416.
Gold in London traded at $621.80 per troy ounce, down from $624.20 late Monday.
In Zurich, gold traded at $621.50, down from $624.25.
More : forbes.com
