Euro: 12 Years Later

Discussing the outlook for the euro, which debuted 12 years ago, and how investors can play the currency, with Ashraf Laidi of CMC.

Everybody is Doing it!

We're talking about currency intervention here. Chile's central bank said on Monday it will buy $12 billion in U.S. currency in its biggest-ever forex intervention aimed at taming the soaring peso, which is near 3-year highs and hammering local exporters. Read more here.

Morning Currency Wrap for Tuesday January 4, 2011

Spring Is In The Air, For Today Anyway  - Risk appetite is back on, which means the USD is down across the board on upbeat euro zone economic news and on top of yesterday's U.S. economic data pointing to springtime feel. Euro zone purchasing managers' index (PMI) was revised upwards on Monday from the earlier flash estimate, indicating a pick up in the region's growth momentum. The Euro also received a boost on comments from a Chinese official, who said on Monday the country would continue buying Spanish debt. As I mentioned in the past, it is in the best interest of China to have a viable alternative to the USD so they will continue to support the euro zone with bond purchases. Yesterday's reports out of the U.S. continue to add to a recent string of encouraging data, which demonstrates that the economy is slowly and steadily improving. Yesterday, the ISM index rose to 57 in December from 56.6 a month earlier, which marked the 17th month of growth in manufacturing and a separate report showed that construction spending picked up in November to its best level in five months. For the Euro, the next couple of months will be crucial due to an estimated 150-200 billion Euros of government bonds are scheduled be issued by euro zone countries, some of whom are struggling with rising budget deficits and higher borrowing costs. In the U.S., this week's main focus will be Friday's U.S. nonfarm payrolls, which are seen rising by 126,000 in December, and U.S. Federal Reserve Chairman Ben Bernanke's congressional testimony and today's release of the minutes of the Federal Open Market Committee's Dec. 14 meeting. Elsewhere, the GBP was up across the board as data showed UK manufacturing activity grew robustly while the AUD fell more than 1% as massive flooding in north-east Australia fueled worries over coal production. In Canada, the CAD is firm but slightly down after hitting its strongest level since May 2008 in yesterday's trading action. The CAD continues to hold above parity on firmer oil prices and better economic news out of the U.S., which is Canada's largest trading partner. This week's main driver with be the domestic jobs report on Friday.

Morning Currency Wrap for Monday, January 3, 2011

First Trading Day Of The Year For Some, But Not All - With markets closed in Tokyo and London today, market players are taking advantage of thin holiday liquidity to create some volatility and earn some quick easy money. As you can see from last week's post, the Euro was down 6.73% for 2010, its biggest annual drop since 2005, thanks to the European sovereign debt crisis. Last week we saw a lot of short covering in the Euro as the 200-day moving average just below 1.31 has offered strong support. In term of the crisis, nothing has changed there but the equity markets have been rising cause the USD to retreat from its 2 months advance. I can see the rally in the equity markets continuing for at least another couple weeks, before focus shifts back to the Euro. The key drivers this week will be Friday's U.S. nonfarm payrolls, which are seen rising by 126,000 in December, and U.S. Federal Reserve Chairman Ben Bernanke's congressional testimony. Today news that the Institute of Supply Management’s index on U.S. manufacturing showed an improvement for December help spur the USD higher against the Euro. In Canada, the CAD continues to hold on to its gains against the USD due to continued improvement in the U.S. economy and firmer oil prices.

China Continues To Strive To Internationalize Its Currency

Ronald Arculli, chairman of the Hong Kong exchanges discusses the internationalization of the Chinese currency.