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Market Review - 13/02/2009 22:20 GMT
Dollar rises versus the Japanese yen ahead of G-7 meeting
The greenback rose against the Japanese yen from 90.54 to 92.14 on Friday as Japan’s Finance Minister Shoichi Nakagawa said he is not planning to bring up the subject of currencies at this week’s G-7 meeting, however, some investors worried the Bank of Japan may try to cap any further gains in the currency. Euro, sterling and aussie strengthened versus the Japanese currency from 116.54 to 116.81, from 129.23 to 133.87 and from 59.14 to 60.99 respectively.
A U.S. Treasury official said finance ministers and central bankers from the Group of Seven major industrial nations meeting in Rome on Friday and Saturday will discuss exchange-rate developments.
The British pound rose initially from 1.4252 to 1.4606 on dollar’s weakness against other European currencies, however, cable retreated strongly to end at 1.4358 as U.K. Prime Minister Gordan Brown said the fall in sterling has helped Britain to become more competitive in international trade while Chancellor Darling said G7 are likely to discuss currencies only in general terms. The British pound was under pressure due to the selloff in U.K. bank shares after Lloyds Banking Group announced a large loss (7 billion pounds) due to rising bad debts for HBOS. Lloyds shares dropped over 35% and shares of RBS and Barclays also fell 8% n 7% respectively.
The U.S. House of Representatives passed a $787 billion economic stimulus plan designed to help repair the economy through tax cuts for businesses and families and a half-trillion dollars in federal spending. The chamber voted 246 to 183 for the measure with no Republicans in favor. The Senate plans to approve the package later and send it to President Barack Obama for signing. However, U.S. stocks fell in late trading on persistent worries about banks eclipsed news and the lack of detail in the U.S. Treasury’s financial recovery plan. Investors also expected the bank plan announced by the U.S. Treasury earlier this week is not likely to have an immediate effect on the financial and housing sectors. Dow Jones industrial average fell 82.35 points to close at 7850.41. The Standard & Poor’s 500 index dropped 8.35 points to 826.84. The Nasdaq Composite index weakened by 7.35 points to 1534.36.
Earlier in the day, German GDP declined by 2.1% in the last quarter of 2008, more than the forecast of a decrease of 1.8%, suggesting the eurozone economy is in a deeper recession than expected. The single currency retreated against the U.S. dollar from 1.2943 to 1.2821 and closed at 1.2866. Trading volume on Friday was lower than average ahead of the G7 meeting and also due to U.S. markets being closed on Monday for Presidents Day.
Next week will see the release of Japan’s GDP, U.K. Rightmove house price, Japan’s industrial production and German WPI on Monday; Japan’s tertiary industry index and machine orders, U.K. CPI, RPI and DCLG house prices, German and eurozone ZEW index, eurozone trade balance, U.S. Empire state manufacturing index, foreign treasury buys and NAHB housing market index on Tuesday; Japan’s leading indicators, U.K. CBI industrial trend survey, U.S. building permits, housing starts, import price index, export price index, industrial production and capacity utilisation on Wednesday; U.K. PSNCR, U.S. jobless claims, PPI, leading indicators and Philadelphia Fed survey on Thursday; Japan’s all industry index, German services and manufacturing PMI, U.K. retail sales, U.S. CPI and real earnings on Friday.
Dollar rises versus the Japanese yen ahead of G-7 meeting
The greenback rose against the Japanese yen from 90.54 to 92.14 on Friday as Japan’s Finance Minister Shoichi Nakagawa said he is not planning to bring up the subject of currencies at this week’s G-7 meeting, however, some investors worried the Bank of Japan may try to cap any further gains in the currency. Euro, sterling and aussie strengthened versus the Japanese currency from 116.54 to 116.81, from 129.23 to 133.87 and from 59.14 to 60.99 respectively.
A U.S. Treasury official said finance ministers and central bankers from the Group of Seven major industrial nations meeting in Rome on Friday and Saturday will discuss exchange-rate developments.
The British pound rose initially from 1.4252 to 1.4606 on dollar’s weakness against other European currencies, however, cable retreated strongly to end at 1.4358 as U.K. Prime Minister Gordan Brown said the fall in sterling has helped Britain to become more competitive in international trade while Chancellor Darling said G7 are likely to discuss currencies only in general terms. The British pound was under pressure due to the selloff in U.K. bank shares after Lloyds Banking Group announced a large loss (7 billion pounds) due to rising bad debts for HBOS. Lloyds shares dropped over 35% and shares of RBS and Barclays also fell 8% n 7% respectively.
The U.S. House of Representatives passed a $787 billion economic stimulus plan designed to help repair the economy through tax cuts for businesses and families and a half-trillion dollars in federal spending. The chamber voted 246 to 183 for the measure with no Republicans in favor. The Senate plans to approve the package later and send it to President Barack Obama for signing. However, U.S. stocks fell in late trading on persistent worries about banks eclipsed news and the lack of detail in the U.S. Treasury’s financial recovery plan. Investors also expected the bank plan announced by the U.S. Treasury earlier this week is not likely to have an immediate effect on the financial and housing sectors. Dow Jones industrial average fell 82.35 points to close at 7850.41. The Standard & Poor’s 500 index dropped 8.35 points to 826.84. The Nasdaq Composite index weakened by 7.35 points to 1534.36.
Earlier in the day, German GDP declined by 2.1% in the last quarter of 2008, more than the forecast of a decrease of 1.8%, suggesting the eurozone economy is in a deeper recession than expected. The single currency retreated against the U.S. dollar from 1.2943 to 1.2821 and closed at 1.2866. Trading volume on Friday was lower than average ahead of the G7 meeting and also due to U.S. markets being closed on Monday for Presidents Day.
Next week will see the release of Japan’s GDP, U.K. Rightmove house price, Japan’s industrial production and German WPI on Monday; Japan’s tertiary industry index and machine orders, U.K. CPI, RPI and DCLG house prices, German and eurozone ZEW index, eurozone trade balance, U.S. Empire state manufacturing index, foreign treasury buys and NAHB housing market index on Tuesday; Japan’s leading indicators, U.K. CBI industrial trend survey, U.S. building permits, housing starts, import price index, export price index, industrial production and capacity utilisation on Wednesday; U.K. PSNCR, U.S. jobless claims, PPI, leading indicators and Philadelphia Fed survey on Thursday; Japan’s all industry index, German services and manufacturing PMI, U.K. retail sales, U.S. CPI and real earnings on Friday.
