TheLFB-Forex.com A Forex Trader Portal
Currency Thoughts:
Global View- Regional Chaos
Trichet’s unbending remarks that Greece will not get special policy favors to address its huge government deficit has weighed sharply on the euro, which, along with the Swiss franc, fell 0.8% against the dollar, says Larry Greenberg of CurrencyThoughts.com. Catch Larry, and TheLFB trade team on ForexTV Live.
One wonders if one intent of Trichet’s stance on Greece was in fact to temper the euro. The dollar also gained against commodity-sensitive currencies, rising 0.6% against the Australian dollar, 0.5% against the kiwi, and 0.3% against the Canadian dollar. The greenback is 0.3% higher against sterling but off 0.2% against the yen.
The Dax is off 0.6%, hurt by speculation German Chancellor might resign, which were denied by a government spokesperson. Other bourses have done better, with gains of 0.7% in Japan, 0.8% in Taiwan, 0.4% in China, 1.2% in Pakistan, 1.0% in South Korea, and 0.3% in Great Britain. Stocks are unchanged in Australia and France.
Oil and gold prices fell 0.9% apiece on concerns about the world recovery, dropping to $78.66/barrel and $1132.30 per ounce. Ten-year JGB, bund, and gilt yields are each two basis points lower. Greek 2-year notes are 50 basis points higher than two days ago.
Chinese reserves rose $127 billion last quarter, only slightly less than their gain in 3Q09, and are 23% higher than a year ago at $2.399 trillion. Yuan loans were also reported to have climbed another CNY 380 billion last month, some 22% more than anticipated. Chinese M2 soared 27.7% on-year in December.
Foreign investment inflows shot up 103% last year. The kind of runaway expansion reflected in these data are making the prospect of a controlled appreciation of the yuan increasingly plausible. China reports 4Q GDP growth next Thursday along with many monthly indicators.
Japanese stock and bond transactions generated a Y 949 billion inflow last week after an inflow of Y 285 billion in the week to January 2. Full Article...