Monday, June 11, 2007


US$ Gains Again

The Associated Press reports on currencies. "The dollar gained again Monday as doubts lingered about the likelihood of an interest rate cut by the Federal Reserve. The 13-nation euro bought $1.3359 in late New York trading, down from $1.3447 late Friday. The British pound declined to $1.9693 from $1.9844."

"The dollar strengthened late last week on news of rising bond yields, which lessened the chances of a Fed rate cut. The yield on the U.S. Treasury's 10-year note passed 5 percent Thursday for the first time since August. The yield rose to 5.13 percent Monday, down from 5.15 percent earlier in the day but still up from 5.11 percent late Friday."

"A significant narrowing of the U.S. trade deficit in April, further boosted the dollar last week. Traders are scrutinizing economic data closely for pointers to the Fed's future course, and inflation figures due Thursday and Friday could help move the dollar."

"On Thursday, the Labor Department releases its producer price index and on Friday the consumer price index is due."

"The dollar was little changed against Japan's currency, edging up to 121.77 yen from 121.74 yen after slipping to as low as 121.50 yen during Monday's session."

"In other New York trading, the dollar bought 1.0609 Canadian dollars, down from 1.0792 late Friday, and 1.2383 Swiss francs, up from 1.2279."

From Bloomberg. "The U.S. currency advanced against all but three of its 16 most active counterparts after Bank of Cleveland President Sandra Pianalto said inflation is 'uncomfortably high.' The euro pared its loss against the dollar as European Central Bank President Jean-Claude Trichet said monetary policy is 'still on the accommodative side.'"

"'Investors have figured out the Fed won't change the rates for many months to come,' said Tim Mazanec, senior currency strategist in Boston at Investors Bank & Trust Co. 'The dollar will probably gain another 1 percent against the euro this week.'"

"The yen advanced today against all but five of the 16 most active currencies on the New Zealand central bank's decision to sell local currency on the foreign exchange market to stem a rally fueled by investors borrowing cheaply in Japan. Investors sold higher-yielding currencies against the yen on speculation other central banks will follow the New Zealand central bank."

"Gold rose from a 12-week low in New York on speculation that last week's slump was overdone because rising equity markets and higher energy costs will boost the metal's appeal as a hedge against inflation. Silver gained."

"'The rally in the equities and the metal stocks, that helped gold itself to do better,' said Marty McNeill, a trader at R.F. Lafferty & Co. 'Oil does have a positive influence on it.'"

"Gold futures for August delivery rose $7.70, or 1.2 percent, to $658 an ounce at 12:12 p.m. on the Comex division of the New York Mercantile Exchange. The price on June 8 touched $647.80, the lowest since March 16."

"Silver for July delivery rose 22 cents, or 1.7 percent, to $13.26 an ounce. The metal plunged 3.3 percent on June 8, the biggest decline for a most-active contract since March 2. The price fell 5.1 percent last week."

"'I think the interest-rate paranoia has been overdone and see gold rallying modestly next week,' William O'Neill, a partner at Logic Advisors in Upper Saddle River, New Jersey, said on June 8. 'However, to maintain any lasting strength, the metal needs to see a return of significant alternative asset demand and it may be a few months before that occurs.'"

"Before the sell-off in the past two sessions, Hedge-fund managers and other large speculators increased their net-long position in gold futures for the week through June 5, ending a two-week decline, according to U.S. Commodity Futures Trading Commission data."

"Speculative long positions, or bets prices will rise, outnumbered short positions by 107,617 contracts for the week through June 5, up 13 percent from the previous week, the Washington-based commission said in its Commitments of Traders report."

"Platinum futures for July delivery rose $11.20, or 0.9 percent, to $1,298 an ounce on the New York Mercantile Exchange, the biggest increase since May 31. The price fell 0.7 percent last week. Platinum reached a record $1,353.80 on May 7 and has gained 13 percent this year."

"Palladium for September delivery rose $2.40, or 0.7 percent, to $373 an ounce. The metal fell 1.8 percent last week, after two straight weekly gains. Palladium futures have risen 10 percent this year."

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