Thursday, July 12, 2007


US$ Hits "Fresh Lows" Versus Euro

Bloomberg reports on currencies. "The yen may set a record low against the euro for a third day this week as a surge in global stocks signaled that investors are taking on risky bets, including so- called carry trades. Japan's currency may extend its losses as investors resume selling the yen to fund carry-trade purchases of assets in countries with higher yields."

"'With global equity sentiment stabilizing I think the Asian open will be positive and encourage investors back to the carry trades,' said Mike Moran, a senior currency strategist at Standard Chartered Bank in New York. 'The yen will continue to weaken.'"

"The yen traded at 168.82 per euro at 6:13 a.m. in Tokyo, after touching 168.88 yen yesterday, the weakest since the euro's debut in January 1999. The Japanese currency traded at 122.39 per dollar. It may reach 173 per euro by the end of September, Moran said."

The Associated Press. "The dollar briefly stumbled to a fresh low against the euro Thursday on continuing concerns that troubles in the U.S. housing market could drag down the overall economy."

"The 13-nation euro peaked at $1.3797, topping its previous record of $1.3784 set early Wednesday. It retreated to $1.3783 in late New York trading, still up from $1.3761 late Wednesday."

"The euro dipped after several U.S. retail stores announced stronger-than-expected June sales, including Wal-Mart Stores Inc., which posted a 2.4 percent rise in sales at stores open at least a year."

"Rising oil prices and the struggling housing market, however, appear to have dampened consumers' appetites for nonessential purchases. Aside from a few strong performers, Thursday's retail sales came in generally weak."

From Reuters. "Gold jumped 1 percent to a one-month high on Thursday, powered by the dollar that slumped to a record low against the euro and as the precious metal's recent rally led to a sharp inflow into the largest bullion exchange-traded fund."

"But the metal was likely to attract heavy selling at key technical points on its upward move as investors were not yet convinced it was on a recovery path, analysts said. Seasonally less-active months for physical buying and the approaching holiday period could also cap sharp price gains, but the near-term outlook was positive, they said."

"'Gold is supported by the weakening in euro/dollar, driven by the continued concerns over the U.S. subprime mortgage market in the past few days. It is likely that the stream of bad news in the mortgage market will not abate,' said Michael Widmer, analyst at Calyon Corporate and Investment Bank. 'Investors are also set to look at signs that may indicate any contagion from the housing market in the U.S. economy. Against this backdrop, it is likely that gold prices will be strong in the coming days.'"

"Spot gold rose as high as $669.05 an ounce and was quoted at $667.20/668.00 by 2:30 p.m. EDT (1830 GMT), up from $660.30/660.90 late in New York on Wednesday."

"Most-active gold for August delivery on the COMEX division of the New York Mercantile Exchange settled up $6.20 at $668.30 an ounce. Earlier, it surged to a session-peak of $671, the loftiest level since June 7. It hit a low of $661.80."

"The dollar's selloff this week was triggered by reports from credit rating agencies Standard & Poor's and Moody's Investors Service on Tuesday that warned of downgrades to more than $17 billion of debt related to risky mortgages, much of it subprime."

"A Reuters poll suggested on Wednesday that average gold prices would jump nearly 10 percent this year and gain further in 2008 on a weaker outlook for the dollar, less aggressive sales by central banks and physical demand."

"A recovery in gold prices after a three-month low at $638.90 on June 26 helped exchange-traded funds (ETFs) attract fresh inflows after witnessing a sharp decline."

"Data showed that holdings in New York's StreetTRACKS ETF rose to 481.15 tonnes on Wednesday, against 463.45 tonnes two weeks ago and a record high of more than 500 tonnes in April."

"Platinum rose to a six-week high of $1,315.90 an ounce and was last at $1,314.80/1,321.80, against $1,298/1,305 late in New York on Wednesday, supported by news of a labour dispute in South Africa."

"'Prices might shift higher in the next month or so, depending on the outcome of difficult wage talks in South Africa ... An outright strike is at this stage remote, but if it happened it could be bitter,' Fortis Bank said in a report."

"Palladium edged up to $367.75/371.75 an ounce from its previous close of $365.55/369.55 in New York, while silver rose as high as $13.11, the highest in nearly three weeks. It was last traded at $13.07/13.12 an ounce, versus $12.87/12.90 in the U.S market on Wednesday."

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