By Monami Yui and Ron Harui - Feb 18, 2011 1:55 PM GMT+0700. The dollar and the yen headed for weekly declines against most of their major counterparts before reports that economists said will show French business confidence rose and Italian industrial orders increased. The dollar was close to a one-week low versus Australia’s currency as Asian stock gains spurred demand for higher-yielding assets. The yen traded within 0.7 percent of a six-month low against the pound before a U.K. report forecast to show retail sales rebounded in January. South Korea’s won rose for a second day on speculation the central bank will boost interest rates next month to curb inflation. “The global economy is recovering,” said Sean Callow, a senior currency strategist at Westpac 
Banking Corp. in Sydney. “Stocks gains are consistent on the U.S. economy but also beyond the U.S. as well, so that’s a profitable environment” for currencies linked to growth, he said.
The dollar traded at $1.3603 per euro as of 6:44 a.m. in London from $1.3609 in New York yesterday, after weakening to $1.3627 earlier today, the lowest since Feb. 10. The greenback has dropped 0.4 percent this week.
The yen was at 113.26 per euro from 113.37, set for a 0.2 percent decline this week. Japan’s currency traded at 134.62 yen per pound from 134.74, after dropping to 135.47 on Feb. 16, the weakest level since Aug. 11. The yen was at 83.26 per dollar from 83.31.
French Sentiment
An index of sentiment among factory executives in France rose to 109 in February from 108 the prior month, while factory orders in Italy climbed 2.1 percent in December from November, according to Bloomberg surveys. U.K. retail sales gained 0.5 percent in January from December, when they sank 0.8 percent, a separate survey showed. All three reports are due today.
The MSCI Asia Pacific index of shares gained for a third day, rising 0.6 percent, after the Standard & Poor’s 500 Index yesterday climbed to the highest since June 2008.
Ten-year Treasury yields have fallen three basis points this week as growth signs damped demand for debt.
“It’s hard for the greenback to gain any traction from a yield perspective,” said Tim Waterer, a foreign-exchange dealer at CMC Markets in Sydney. “If equities maintain their upward trend it will assist the growth currencies such as the Australian dollar.”
Australia’s currency traded at $1.0123 from $1.0119. It appreciated to $1.0131 earlier today, matching the strongest level since Feb. 10.
G-20 Meeting
Demand for the dollar was also damped on speculation Group of 20 policy makers meeting in Paris will put pressure to China to allow faster gains in the yuan.
G-20 finance ministers and central bankers gather today and tomorrow in the French capital. French Finance Minister Christine Lagarde has said her counterparts need to agree on several indicators to tackle global economic imbalances.
“The dollar may be sold and the yen may be bought if developed nations push China to appreciate the yuan during the G-20 meeting,” said Toshiya Yamauchi, a senior currency analyst in Tokyo at Ueda Harlow Ltd., which provides foreign-exchange margin-trading services.
Losses in the yen and dollar were tempered on speculation tensions will escalate in the Middle East.
Bahrain’s army deployed yesterday in the capital to quell an uprising by pro-democracy protesters. Dissent in Bahrain follows the toppling of autocratic rulers by popular movements in Egypt and Tunisia and marks the spread of unrest into the Persian Gulf, where most of the Middle East’s oil is produced.
‘Mideast Tensions’
The yen typically strengthens in times of political, financial and economic turmoil as Japan’s trade surplus makes the currency attractive because it means the nation doesn’t have to rely on overseas lenders.
“Mideast tensions are likely to remain high,” said Yuji Saito, director of the foreign-exchange department at Credit Agricole Corporate and Investment Bank in Tokyo. “This could weigh on market sentiment and cause buying of safe-haven currencies.”
The Korean won completed a weekly gain on speculation the central bank will increase interest rates to curb inflation.
The consumer-price index rose 4.1 percent in January from a year earlier, after gaining 3.5 percent in December, the government said Feb. 1. The Bank of Korea unexpectedly kept rates unchanged at 2.75 percent at its Feb. 11 meeting even as Inflation breached the central bank’s 4 percent target ceiling.
“Inflation is a hot topic and one of the reasons for the won gains is that Bank of Korea may raise rates next month as they didn’t do it in February,” said Ko Yun Jin, a currency trader at Kookmin Bank in Seoul. “The overall atmosphere in the global stock market is also better.”
The won rose 0.5 percent to close at 1,112.10 per dollar extending this week’s gain to 1.5 percent.
To contact the reporters on this story: Monami Yui in Tokyo at myui1@bloomberg.net; Ron Harui in Singapore at rharui@bloomberg.net
To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net
Resource : bloomberg.com
Banking Corp. in Sydney. “Stocks gains are consistent on the U.S. economy but also beyond the U.S. as well, so that’s a profitable environment” for currencies linked to growth, he said.The dollar traded at $1.3603 per euro as of 6:44 a.m. in London from $1.3609 in New York yesterday, after weakening to $1.3627 earlier today, the lowest since Feb. 10. The greenback has dropped 0.4 percent this week.
The yen was at 113.26 per euro from 113.37, set for a 0.2 percent decline this week. Japan’s currency traded at 134.62 yen per pound from 134.74, after dropping to 135.47 on Feb. 16, the weakest level since Aug. 11. The yen was at 83.26 per dollar from 83.31.
French Sentiment
An index of sentiment among factory executives in France rose to 109 in February from 108 the prior month, while factory orders in Italy climbed 2.1 percent in December from November, according to Bloomberg surveys. U.K. retail sales gained 0.5 percent in January from December, when they sank 0.8 percent, a separate survey showed. All three reports are due today.
The MSCI Asia Pacific index of shares gained for a third day, rising 0.6 percent, after the Standard & Poor’s 500 Index yesterday climbed to the highest since June 2008.
Ten-year Treasury yields have fallen three basis points this week as growth signs damped demand for debt.
“It’s hard for the greenback to gain any traction from a yield perspective,” said Tim Waterer, a foreign-exchange dealer at CMC Markets in Sydney. “If equities maintain their upward trend it will assist the growth currencies such as the Australian dollar.”
Australia’s currency traded at $1.0123 from $1.0119. It appreciated to $1.0131 earlier today, matching the strongest level since Feb. 10.
G-20 Meeting
Demand for the dollar was also damped on speculation Group of 20 policy makers meeting in Paris will put pressure to China to allow faster gains in the yuan.
G-20 finance ministers and central bankers gather today and tomorrow in the French capital. French Finance Minister Christine Lagarde has said her counterparts need to agree on several indicators to tackle global economic imbalances.
“The dollar may be sold and the yen may be bought if developed nations push China to appreciate the yuan during the G-20 meeting,” said Toshiya Yamauchi, a senior currency analyst in Tokyo at Ueda Harlow Ltd., which provides foreign-exchange margin-trading services.
Losses in the yen and dollar were tempered on speculation tensions will escalate in the Middle East.
Bahrain’s army deployed yesterday in the capital to quell an uprising by pro-democracy protesters. Dissent in Bahrain follows the toppling of autocratic rulers by popular movements in Egypt and Tunisia and marks the spread of unrest into the Persian Gulf, where most of the Middle East’s oil is produced.
‘Mideast Tensions’
The yen typically strengthens in times of political, financial and economic turmoil as Japan’s trade surplus makes the currency attractive because it means the nation doesn’t have to rely on overseas lenders.
“Mideast tensions are likely to remain high,” said Yuji Saito, director of the foreign-exchange department at Credit Agricole Corporate and Investment Bank in Tokyo. “This could weigh on market sentiment and cause buying of safe-haven currencies.”
The Korean won completed a weekly gain on speculation the central bank will increase interest rates to curb inflation.
The consumer-price index rose 4.1 percent in January from a year earlier, after gaining 3.5 percent in December, the government said Feb. 1. The Bank of Korea unexpectedly kept rates unchanged at 2.75 percent at its Feb. 11 meeting even as Inflation breached the central bank’s 4 percent target ceiling.
“Inflation is a hot topic and one of the reasons for the won gains is that Bank of Korea may raise rates next month as they didn’t do it in February,” said Ko Yun Jin, a currency trader at Kookmin Bank in Seoul. “The overall atmosphere in the global stock market is also better.”
The won rose 0.5 percent to close at 1,112.10 per dollar extending this week’s gain to 1.5 percent.
To contact the reporters on this story: Monami Yui in Tokyo at myui1@bloomberg.net; Ron Harui in Singapore at rharui@bloomberg.net
To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net
Resource : bloomberg.com
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