Money and Metals

Bloomberg reports on currencies. "The dollar snapped a two-day rally against the yen and declined the most in more than a week versus the euro after a government report showed construction of homes tumbled to a six-year low in the U.S. last month."

"The data may raise speculation the slowdown in the housing industry will spill over into the broader economy, pushing the Federal Reserve to cut borrowing costs and dimming the allure of assets denominated in the U.S. currency. Speculation that a hedge fund is selling dollar assets to cover losses added to the decline, traders said."

"The housing data 'raised concern that the housing slowdown will continue to be a drag on growth in the fourth quarter,' said Brian Dolan, research director at a currency trading firm which has about $250 million worth of funds under management. 'This puts the dollar under pressure.'"

"The dollar fell to 117.66 yen at 12:50 p.m. in New York from 118.21 yesterday. The U.S. currency also declined to $1.2823 per euro from $1.2796 yesterday."

"Builders broke ground on an annual rate of 1.486 million new homes, down 14.6 percent from September's revised 1.74 million pace, the Commerce Department said today. 'It's a dollar-negative number,' said Lara Rhame, a New York-based senior currency strategist at Credit Suisse. 'The more important issue is, until we see the Fed move toward a rate cut, you're not going to see the dollar break below recent ranges.'"

"The yen also rallied on speculation the G-20 meeting will include the issue of carry trade by which investors borrow the yen and buy high-yielding assets in the U.S. and other nations. 'The market is taking this as an excuse to pare their dollar long positions,' said Michael Malpede, a senior currency analyst in Chicago at Man Global Research. 'They are concerned that the carry trade may be unwound.'"

From News Australia. "Traders were also closing out positions in anticipation of a quiet week ahead, which will be shortened in the United States because of Thanksgiving Day celebrations on Thursday. 'After a raft of economic indicators, the markets will have little US data to trade on during this holiday-shortened week,' said Calyon analyst Michael Carey."

"The euro came under pressure from comments by French President Jacques Chirac, who said eurozone member states should be allowed more say in the monetary policy of the European Central Bank, two days after Prime Minister Dominique de Villepin said the strong euro was damaging exports."

"The calls by the French leaders reflect anxiety in eurozone countries that the high level of the single currency penalises European companies, making their exports expensive in foreign markets."

From MarketWatch. "Gold futures closed higher Friday for the first time in six sessions, but posted a loss for the week with pressure from easing inflation fears and a steep decline in oil prices partially offset by support from modest weakness in the U.S. dollar."

"The December gold contract closed up 80 cents to close at $622.50 an ounce on the New York Mercantile Exchange after trading as low as $614.50, its weakest intraday level since Nov. 1. December silver shed 14.5 cents to close at $12.80 an ounce, down 2.4% for the week."

"January platinum rose $2.80 to close at $1,192.10 an ounce, marking a complete reversal from a drop earlier to $1,137. It was still down 1.4% for the week.
December palladium fell $4.30 to end at $317.95 an ounce to end the week 3.9% lower."

"'Ahead of a Thanksgiving, weekend trade quieted down, leaving the market ready for a quiet week with little activity expected,' said Julian Phillips, an analyst at GoldForecaster.com. 'But with the London market dominant, perhaps the true expression of the physical gold market will be made,' he said. 'Certainly global influences will reign over U.S. ones.'"