Greenback steady and Yen falls on rising Asian equities

08-20-2009 14:02

The Greenback was stable against other important currencies this Thursday morning in New York, recovering after tapping a record low against the Pound. Equities in South Korea and China rose, on which the Japanese Yen dropped at the start of this Thursday’s trading session in Asia. This resulted in some confidence that prompted investors to seek higher-return investments, decreasing the attractiveness of the Yen.

Jobless claims

Traders anticipated on the commonly week-to-week jobless claims with relation to last week, which will be published today at 8.30 a.m. ET. Forecasts by economists demonstrated that jobless claims will moderate to 550.000. Traders also look ahead to July’s results of the Leading Index by the Conference Board, as they also focus on the reading of the manufacturing survey by the Philadelphia Federal Reserve. Signs of economic recovery seem to have vanished during last weeks, while a wave of green shots may result in the same enthusiasm which caused equities to rise strongly previously this summer.

Greenback steady

The Greenback hardly moved against the common European currency, consolidating 1.4225, while important economic figures from Europe were lacking. Previously in August, the US Dollar posted the weakest level in 8 months of 1.4446 before stabilizing. The US Dollar climbed against the Pound, reaching 1.6480, while it tapped the lowest level of this week at 1.6600 during last night’s trading.

Retail sales rose

Retail sales in the UK increased 3.3% in comparison with last year, which was the largest increase since May 2008, according to figures by the Office for National Statistics. The rise in July exceeded expectations of a 2.7% increase. Retail sales rose 0.4% on a month-to-month basis, which matched forecasts. This morning, the Greenback surpassed the level of 94 against the Japanese Yen, after it touched this month’s weakest level of 93.66 yesterday.

Yen falls

Atsushi Mizuno, Bank of Japan policy board member, stated that the improvement of the worldwide economy remains weak and will not be durable if the central banks and administrations don’t provide support. He continued by saying that the possible economic expansion rate for Japan will probably be weaker than the central bank’s forecasts of 1% in April. The Japanese Yen fell against many of the 16 most-traded currencies on the back of rising equities globally, which enabled the MSCI World Index to climb for the second consecutive day, resulting in more confidence among investors worldwide.

Krone, Rand, Won

Norway’s Krone posted one of the best results against the Japanese Yen this Thursday, due to a report that proved the end of the slump in Norway. The country’s economy grew 0.3% in the second quarter. The South African Rand and the South Korean Won were the best performers against the Japanese Yen, while the Sterling resides close to the highest level in one month against the Yen due to improved retail sales for the second month in the UK.

Corrective movement

As the end of this week approaches, the development in stock markets is striking the Japanese Yen, which is confirmed by currency specialists. At the start of this week, the Japanese currency rose strongly due to negativism spreading out in markets, while indications of a prolonged recession arise globally. The Japanese Yen could face a corrective movement as equities rise.