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[IFX Darika]

The dollar continued to decline Thursday morning as improving growth prospects in Asia and Europe made counterparts in those regions more attractive.
At the same time, a recent string of troubling economic data from the US has fueled concerns that the domestic recovery is petering out.
Yesterday's disappointing retail sales report confirmed that consumers are anxious amid lingering problems in the labor and housing markets.
JP Morgan Chase has joined the growing line of companies to have reported better than expected earnings results this week, propping up stock futures and generating risk appetite.
Higher-yielding currencies like the euro tend to benefit from increased capacity for risk.
The dollar dropped to a fresh 2-month low versus the euro, extending its big July losses. The buck slipped to 1.2825, moving a full ten cents from June's 4-year high of 1.1805.
The eurozone economy is likely to grow at a "moderate and uneven" pace while inflationary pressures in the 16-nation bloc remain contained, the European Central Bank says.
In its latest monthly bulletin, the ECB said the risks to the euro area's economic outlook are "broadly balanced, in an environment of high uncertainty."
There was no relief for the dollar against the sterling. The buck fell to 1.5363, its lowest since late April.
Against the yen, the dollar pulled back to 87.84. Late in June, the dollar hit a 2010 low of 86.95.
The Bank of Japan has sharply revised up its fiscal 2010 growth forecast for the country's economy, citing the acceleration of growth in emerging economies.
A plethora of key economic data will keep traders on their toes throughout Thursday's session.
At 8:30 am ET, the Labor Department will release its weekly jobless claims report, with economists forecasting a modest drop in claims to 450,000 in the recent reporting week from the 454,000 for the previous week.
The Labor Department is also due to release its producer price index for June at 8:30 am ET. The recent dip in oil prices is expected to act as a drag on the headline number, with economists expecting a 0.1% drop in the producer price index. At the same time, the core producer price index is likely to show 0.1% growth.

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[IFX Darika]

The People's Bank of China and the Monetary Authority of Singapore on Friday agreed to a bilateral currency swap arrangement.

The swap arrangement will provide Chinese Yuan liquidity of up to CNY 150 billion and Singapore dollar liquidity of up to S$30 billion. The agreement has a maturity of three years and can be extended by agreement between the two sides.
The agreement intended to promote trade and direct investment for economic development between two nations, was announced at the 7th Joint Council for Bilateral Cooperation Meeting held in Beijing. "The bilateral currency swap arrangement is a key pillar of co-operation between the PBoC and the MAS to strengthen regional economic resilience and financial stability," MAS said in a statement.

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[IFX Darika]

U.K.'s sterling surged up to 1.5619 against the US dollar by 1:35 am ET Wednesday, its highest level since February 18 and a further rally may push the pair to stay around the 1.5820 resistance level. The cable is presently quoted at 1.5614.
The pound also edged slightly higher to 137.21 against the yen and challenged yesterday's new multi-week high of 1.6552 against the Swiss franc at this time. The pound is presently quoted at 1.6549 against the alpine unit and 137.12 against the Japanese currency.

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[IFX Darika]

Japan automobile sales grew at a pace of 15% year-on-year in July to 333,403 units, the Japan Automobile Dealers Association said Monday. In June, sales showed an annual growth of 20.6%. Sale of cars, trucks and buses excluding minicars in July totaled 333,403 units.

Toyota sold 161,444 units, up 19.1% from the prior year. Sales of Honda Motor increased 14.5% to 50,448 units. Nissan recorded only 2.3% increase in sales, now at 50,719. However, overall auto sales are expected ease in the months ahead as the government incentives to boost sales expire at the end of September.
Japan Automobile Manufacturers Association on July 30 said auto production increased 25.9% in June. Domestic sales climbed 17.4% to 448,831 vehicles. Overall auto production in the first half of 2010 surged 45.8%.

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[IFX Darika]

The dollar was mixed Friday morning in New York ahead of a slew of economic data related to inflation and the mindset of the US consumer.

Risk aversion and slumping stocks have helped the dollar find its footing against most majors this week, but the buck hit a 15-year low against the yen on Wednesday and has failed to improve much since.
The Labor Department will table the consumer price index for July at 8.30 a.m. ET. Economists expect that inflation rose 0.2% for July following the 0.1% decline in the previous month, while core inflation, excluding food and energy, is expected to be 0.1% following a 0.2% rate in June.
At the same time, the Commerce Department will release its report on retail sales for July. Economists expect that retail sales rose 0.5% for the month following 0.5% decline in the previous month.
At 9.55 a.m. ET, the preliminary report of the Reuters/University of Michigan's consumer sentiment survey for August will be released. Economists expect the consumer sentiment index to increase to 70 from July's 67.80.
The buck was steady near 1.2800 versus the euro, having rebounded nicely this week after touching a 3-month low of 1.3333 last Friday.
Eurozone gross domestic product grew at a faster pace of 1% sequentially in the second quarter, following a 0.2% rise in the first quarter, flash estimates published by Eurostat showed Friday.
The dollar also held its ground versus the sterling, staying near 1.5600. A week ago, the buck was at a 6-month low of 1.5998.
The buck remained stuck in the mud versus the yen, as the Japanese currency remains the preferred safe haven option. The pair was at Y85.73, near the dollar's 15-year low of 84.71.

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[IFX Darika]

The world economic climate looks slightly clouded in the third quarter of 2010, latest survey results from the Ifo Institute for Economic Research showed Wednesday.

The think tank said its world economic climate indicator fell to 103.2 in the third quarter from 104.1 in the second quarter. It suggests that the recovery of world economic activity will continue at a slower pace in the second half of the year, the Munich-based Ifo said.

The world economic climate indicator fell in North America and in Asia, but rose in Western Europe. In North America, the assessments of the current economic situation were more favorable than in the previous survey and expectations for the coming six months were less optimistic. In Asia, the favorable economic situation has improved further, but the optimism for the next half year has declined somewhat.

In Western Europe, the assessments of the current economic situation have improved more clearly than the worldwide average. Since the six-month economic outlook has not clouded so strongly, the climate indicator as a whole rose marginally, the think tank said.

Although the surveyed experts have given better assessments of the current economic situation than in the first half of 2010, the economic expectations for the coming six months have been revised downwards. The corresponding indicator declined to 112.3 from 126.3.

In contrast to the previous surveys, the euro was assessed as slightly undervalued against the U.S. dollar. Overall, in the coming six months, after adjustments have occurred, the experts foresee largely stable exchange rates for the four major world currencies, the euro, the U.S. dollar, the Japanese yen and the British pound, Ifo said.

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[IFX Darika]

The euro was taking yet another beating on Tuesday, but snapped back after the release of data suggesting the US housing market is in even worse shape than the most pessimistic economists have feared.

Before finding its footing, the euro dropped to its lowest since 2001 versus the yen, and extended its steep recent losses versus the dollar.

Stocks continued to sell off, and commodity prices fell further on renewed risk aversion.

A mixed bag of economic data from Europe failed to generate any confidence that the region is on a path toward a sustainable recovery.

Euro zone industrial new orders rose by 2.5% month-on-month in June, slower than the revised 4.1% growth in the prior month, the European Union's statistical agency Eurostat said on Tuesday.

The German economy logged its biggest expansion since its 1991 reunification' in the second quarter. The economy grew by a seasonally adjusted 2.2% sequentially in the second quarter.

The euro dropped to a 7-week low of $1.2586 in early dealing versus the dollar, but stormed back to $1.2715 after industry data showed a record drop in US existing home sales.

The National Association of Realtors said existing home sales fell by 27.2 percent to an annual rate of 3.83 million units in July from a downwardly revised 5.26 million unit rate in June.

The euro fell to a more than 8-year low of Y105.41 versus the yen, then improved to Y106.45. At the same time, the US dollar fell to its lowest since 1995 versus the yen, which has become the preferred safe haven option.

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[IFX Darika]

The dollar struggled for direction Monday morning as traders contined to digest Friday's remarks from Federal Reserve Chairman Ben Bernanke, who said the US economic recovery is on track.

Still, this week's deluge of data is likely to confirm that the economy is slowing down. In addition to the government's monthly jobs report, traders will be treated to data on the pending homes sales, manufacturing, and consumer confidence.

US personal spending is estimated to have risen by 0.3% in July, helped by a small bounce in core retail sales and solid auto sales. At the same time, economists estimate a 0.2% increase in personal income.

The dollar came under pressure versus the yen in early dealing, giving back most of its rebound from the previous session. The buck slipped to 84.60, moving back towards a recent 15-year low of 83.63.

The Bank of Japan announced an expansion to its low-interest lending program after an extraordinary policy board meeting on Monday. At the same time, the bank also maintained its key interest rate at near-zero.

The buck firmed a bit versus the euro, improving to $1.2700 from $1.2765. At the same time, the dollar remained stuck in the mud near $1.5550 against the sterling.

The British Chambers of Commerce hiked U.K.'s 2010 GDP growth forecast to 1.7% from the earlier 1.3%. Similarly for 2011, the Chamber upped its forecast to 2.2% from the 2% predicted in June.

Eurozone economic confidence rose in August to 101.8 from 101.1 in July, a monthly survey from the European Commission showed Monday. The economic sentiment index remained above its long-term average and expected reading of 101.6.

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[IFX Darika]

The dollar continued to hover around a 15-year low versus the yen but eked out gains versus the euro Tuesday morning in New York, as traders returned to their desks following the Labor Day weekend.
Stocks rose on Friday after better-than-expected jobs data, but momentum has not carried over into this week. Stocks are down around the world this morning amid renewed fears about the European banking system.

The dollar was again testing its worst levels since 1995 versus the yen, slipping to 83.80 in very early dealing. Two weeks ago, the dollar hit a 15-year low of 83.58.

The Bank of Japan maintained its key interest rate at near-zero at the end of its two-day policy meeting on Tuesday. It also promised to take more policy actions if judged necessary to kick start the deflation-ravaged economy.

Still, the markets have considered the BoJ's recent moves far too tepid to either bolster the economy or stop the yen from rising further.

Germany's factory orders declined 2.2% in July from the prior month, the Federal Ministry of Economics and Technology said on Tuesday. Economists were expecting factory orders to rise 0.5%.

The dollar rose to 1.2750 versus the euro, up a penny from Monday morning. The pair has been unable to sustain any direction for the past month.

The buck bounced back and forth near 1.5360 versus the sterling, having edged higher over the past few weeks.

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