Dollar climbs at start of 2011 on hopes for growth

Dollar climbs at start of 2011 on hopes for growth
The dollar climbed broadly Monday at the start of a new year on hopes that U.S. Economic Growth will accelerate in 2011. U.S. Stock Markets also rose 1 percent or more after a key U.S. Manufacturing survey said growth rose last month to its fastest pace since May. The Institute for Supply Management, a trade group, said its index of Manufacturing activity rose to 57 in December from 56.6 in November. Any reading over 50 indicates growth. New orders, a gauge of future factory activity, also jumpe...

What's Up, What's Down: Spotlight on Currencies
CURRENCIES: 1/3/11 Higher closes for the last trading day of the year, for the Japanese Yen,Euro Fx, Swiss Franc, Aussie Dollar, British Pound and Canadian Dollar while lower for The Dollar index.The euro and franc settled higher with the franc making a new CONTRCT HIGH AND CLOSE while the euro is now close to a buy signal. Also the swiss/ euro spreading continues to work. The yen made best high and close since Nov. 11th(higher 11 trading sessions in a row) but now in a resistance area. The Cana...

Inflation Jumps in Europe...
PARIS — Higher prices for food, oil and other commodities are starting to stoke Inflation in the euro area, data released Tuesday indicated, while British residents got their first taste of higher taxes on retail goods and services. Annual Inflation in the euro area jumped to 2.2 percent in December from 1.9 percent in November, according to an initial estimate from Eurostat, the European Union’s statistics agency. The release was significant because it means that Inflation has breac...

Inflation in eurozone hits 2.2 percent
In a release, Eurostat said the estimate is unofficial and considered a "flash estimate." Nevertheless, prices are escalating significantly faster than the 1.9 percent annual Inflation rate recorded in November, Eurostat said. The euro zone is made up of 17 Member States with Estonia joining the group this week and not included in the estimate. The flash estimate includes no details or data breakdowns country by country. But the estimate is considered "reliable," Eurostat said, with 21 of the pa...

Estonia gets cool welcome from a eurozone in crisis
It is a sign of how tough 2010 has been for Europe that the talk is not of the country joining the club but of those that might no longer be members by the end of 2011. A break-up of the single currency is still thought unlikely, but 12 months ago so too was the idea that both Greece and Ireland would need to call in the International Monetary Fund to help them through their Sovereign Debt crises. The past two months have been marked by daily reports of rising bond yields, Debt downgrades from t...

The unknown
Economic concerns rank high as we enter 2011, though the problems vary in different parts of the world. One major risk facing the world economy at the moment is related to a slow transition of economic power from the West to the East. The rise of the emerging world, in particular China, and the coinciding weakening of the West, in particular the US, has resulted in a "collapse of consensus of how the global monetary system should be run", Mr Ward continues. In simple terms, China favou...

Central banks underpin euro and diversify toward "other currencies"
The IMF released its Q3 2010 Currency Composition of Official Foreign Exchange Reserves (COFER) report. The COFER database provides the breakdown of official Central Bank portfolio holdings by currency across advanced and emerging/developing market economies. The picture is roughly half complete, as 44% of the global reserve positions go unallocated. But the trend in reported FX holdings indicates that central banks are supporting the euro, giving it a lower bound. Furthermore, there has been ...

Economic Outlook: A rising challenge
Published: Jan. 4, 2011 at 9:53 AM Expect to see the media in Asia, the United States and Europe pay more attention to Inflation this year. That's right: There will be an inflated focus on Inflation this year, especially if a global recovery marches along as policymakers order it to do. Inflation is that dicey counter-transference, if you will, the way economic success bites back at the hand that feeds it. It is supposed to be a symptom of the ebb and flow of commerce, rising when demand is high...

VAT rate rises from 17.5% to 20%
The top rate of VAT has risen from 17.5% to its highest level of 20% as the government looks to boost Tax Revenues to cut the UK's Debt levels. Business groups have warned that Retailers will be hit by the increase, while opponents of the rise have said the poorest will be hit hardest. The government says the rise is necessary to help bring down the UK's high Budget Deficit. Food, Children's clothing, Newspapers and magazines are not subject to VAT. Research by the Centre for Reta...

Crisis In Euroland
The euro, that artificial Funny Money used by 331 million Europeans in17 nations -- the 17th, Estonia, joined the euro just this week -- was conceived in sin and born in Corruption. The New Year brings the prospect that the sins of the European Union's Founding Fathers will be visited on its hapless citizens in the form of financial turmoil and fiscal pain. The original sins at the euro's conception included stealth, lies, and hypocrisy. That at least was consistent with the creation of "Europe"...

Greece to build fence to stop migrants
ATHENS, Greece, Jan. 4 (UPI) -- Greece aims to build an 8-mile border fence and boost its Coast Guard to stem illegal Immigration via neighboring Turkey. Greece's Public Order Minister Christos Papoutsis, who announced the plan Monday, said it was necessary after more than 100,000 people entered Greece illegally in 2010. "This is the hard reality and we have an obligation to the Greek citizens to deal with it," Papoutsis said in a statement. "Greek society has exceeded its limit in its capacity ...

Gold tumbles nearly 2 percent as risk appetite grows
By Jan Harvey LONDON | Tue Jan 4, 2011 10:42am EST LONDON (Reuters) - Gold tumbled nearly 2 percent to a one-week low at $1,385 an ounce on Tuesday as investors opted instead for assets seen as higher risk, like stocks, the euro and some industrial commodities. Expectations that the euro zone Debt crisis could worsen, concerns over the potential for Inflation in developing economies and an increased focus on the U.S. Deficit are set to maintain investment demand for gold, however, analysts sa...

QE, Currencies and Commodities
One of the market developments that is capturing the imagination (and wallets) of investors is the rally in commodities. As an example, since late Aug ’10, when Fed Chairman Bernanke seemed to signal QEII and US economic data began improving more noticeably, the CRB index has rallied about 30%. Roughly a third of the gain was recorded since late Nov. If one is Bullish commodities, one can simply buy those commodities. This is especially true for equity investors given the various ETFs. How...

Euro opens 2011 up on dollar
The euro opened the new year up on the U.S. dollar and one country stronger, after Estonia adopted the currency. The common European currency, now used by 17 nations, bought $1.3297 in early Monday trading, up from $1.3286 at the end of last week. The British pound rose to $1.5498 on the first day of trading in 2011, up from $1.5415 at the end of last year. The Dollar continued to slide against the Japanese Yen, dipping to 81.32 yen from 81.52 yen last Friday. Estonia on Saturday became the late...

Gold tumbles nearly 2 percent as risk appetite grows
LONDON (Reuters) - Gold tumbled nearly 2 percent to a one-week low at $1,385 an ounce on Tuesday as investors opted instead for assets seen as higher risk, like stocks, the euro and some industrial commodities. Expectations that the euro zone Debt crisis could worsen, concerns over the potential for Inflation in developing economies and an increased focus on the U.S. Deficit are set to maintain investment demand for gold, however, analysts said. Spot gold was bid at $1,388.39 an ounce at 1501 GM...

Dollar could face wild ride in 2011
NEW YORK (CNNMoney) -- If the past 365 days are any indication, 2011 could be a wild ride for the U.S. dollar. The Dollar and euro have had a love-hate relationship. The greenback has gained more than 8% since January but one look at the chart above shows the year has been a series of ups and downs. In June, the euro tumbled to a four-year low against the dollar, when the near-collapse of the Greek Economy caught the market by surprise. Email Print Comment Progress was made in repairing the g...

Markets Explode Higher*: Here's What You Need To Know (GLD, SPY, UUP, GM, FXI)
Email Sent! You have successfully emailed the post. Seriously, we're going to chalk this one up as a huge win for the bulls. For real. It was a very quiet evening overseas. China rallied big in its first trading day of the year. Same, too, with Japan, both of which were playing catch up to the US yesterday. In the Europe it was quiet too, but we want to draw your attention to more signs of recovery in this market... UK PMI was strong. And in Spain we saw a surprise drop in Unemployment and bett...

Believe it or not, despite the Eurozone crisis, most countries sovereign credit risk fares better at the end of 2010 vs. 2009
The funny thing is that most people wouldn't believe the premises of the story that in the diourse of the last year, risk has fallen dramaally. Well, it is true considering where we were at the end of 2009 we thought that the world was going to end. When it didn't the market breathed a sigh of relief. Via Moody's: The “man-bites-dog” story of 2010 is that global sovereign credit risk actually generally improved in 2010, even in Europe, where the Sovereign Debt crisis intensified and ...

Speculators and Instability
MarcK asked in the requests thread about commodity speculators: “I would like to hear more about the commodities market and how banks like Goldman have been manipulating the prices. No one seems to focus on these speculators when the price of oil and even copper goes up for no good reason.” I think speculators get a bad rap and speculation is a stabilizing impact on Commodity Prices. The easiest illustration of this comes from the price of onions. Onion futures trading was banned i...

Stocks poised to extend gains
NEW YORK (CNNMoney) -- U.S. stocks were poised to follow world markets higher Tuesday, building on the previous session's big rally. Dow Jones industrial average (INDU), S&P 500 (SPX) and NASDAQ (COMP) futures were higher ahead of the opening bell. Futures measure current index values against perceived future performance. Email Print Comment Stocks started the year off strong Monday, with the Dow closing at a fresh two-year high, after Manufacturing and construction reports stoked investor...

Stocks poised to start year higher
NEW YORK (CNNMoney) -- U.S. stocks were poised to kick off the new year with gains Monday, as investors return from the holidays and await a key report on Manufacturing. Dow Jones industrial average (INDU), S&P 500 (SPX) and NASDAQ (COMP) futures were higher ahead of the opening bell. Futures measure current index values against perceived future performance. Stocks ended a rollercoaster year with a lackluster showing Friday, but all three major indexes logged double-digit gains for the ye...

Asia shares rise, oil near 27-month high on data
By Sanjeev Miglani Singapore | Mon Jan 3, 2011 11:19pm EST Singapore (Reuters) - Asian stocks advanced on Tuesday and oil hovered near a 27-month high, supported by U.S. data suggesting a recovery in the world's biggest economy was gathering momentum. Japanese shares hit a 7- high on Tokyo's first trading session of the New Year, a day after the United States reported Manufacturing grew at its fastest clip in seven months in December. U.S. stocks hit new two-year highs overnight. .N The next ...

Commodities: The bull that won't die - The Buzz
NEW YORK (CNNMoney) -- Gold, oil and other commodities enjoyed a stellar run in 2010. The party may not be over just yet ... but investors have to be wary. Several experts say that the main forces behind the bull run in commodities last year, namely strong economies in Emerging Markets coupled with worries about the health of the U.S. and Europe, are likely to remain in place this year. Email Print Comment Concerns about the Sovereign Debt crisis in Europe and the slow grind of a recovery in t...

Feds claim dollar will rise in 2011
Never mind the lackluster economy, the huge Trade Deficit or the government’s piles of Debt: The U.S. dollar is still expected to outperform most of the world’s major currencies next year. “By all rights, The Dollar should be declining in value, but it’s not,” says Eswar Prasad, Economics Professor at Cornell University. “For The Dollar to decline in value, you must have currencies on the other side that will” rise. Bad as things are in the United States...

Oil fades on questions about rallys strength
Oil prices dropped Tuesday after climbing above a 26-month high, as investors wondered if the price of crude has climbed too high, too fast. Benchmark oil for February lost $2.55 — about 3 percent — at $89 a barrel in afternoon trading on the New York Mercantile Exchange after hitting $92.07 a barrel earlier in the day. It last settled above $92 on Oct. 3, 2008, when it reached $93.88. After weeks of mostly positive global economic news, the price of oil has risen over the past month...