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Daily Forecast

Discussion in 'Forex Daily News & Outlook' started by Rider, Nov 24, 2009.

  1. Rider

    Rider New Member

    Nov 24, 2009
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    Dollar hits 6-week low against yen
    The yen strengthens on dour U.S. economic reports as investors seek safe-haven currencies.
    NEW YORK (Reuters) -- The dollar fell to a six-week low against the yen Tuesday after a mixed bag of U.S. data kept worries about an economic recovery alive, enhancing the safe-haven appeal of the Japanese currency.

    The greenback, however, held steady against the euro as declines in the U.S. stock market dented risk appetite and investors were reluctant to place big bets before the Thanksgiving holiday on Thursday.

    The U.S. economy grew more slowly than first thought in the third quarter, the Commerce Department said. In another report from the Conference Board, a private research group, the consumer confidence index edged higher, but still pointed to weak sentiment about the labor market.

    Kathy Lien, director of research at GFT Forex in New York, said the mixed economic reports this morning have "instilled a negative tone across financial markets."

    But overall, "the markets are very hesitant to take the dollar to any fresh lows, particularly against the euro and the other key currencies," she added.

    In afternoon trading, the dollar fell 0.5% to 88.48 yen, after hitting a session low at 88.36, the lowest in about six weeks, according to Reuters data.

    The euro rose 0.1% to $1.4975 in choppy trading, but fell 0.5% to 132.49 yen.

    In its second estimate of third-quarter gross domestic product, the Commerce Department said on Tuesday that the economy expanded at an annual rate of 2.8%, rather than the 3.5% pace it estimated last month.

    "This (GDP) number is slightly negative for risk appetite because of the downgrade in the personal consumption number," said Jacob Oubina, senior currency strategist at Forex.com in Bedminster, New Jersey.

    Separately, the Conference Board's index of consumer attitudes increased slightly to to 49.5 in November from 48.7 in October, while the Standard & Poor's/Case-Shiller index of home prices in 20 metropolitan areas rose 0.3% in September.

    The dollar showed little reaction to the minutes from the Federal Reserve's November meeting.

    Fed officials are increasingly confident in a durable recovery for the U.S. economy, even though they do not see employment picking up soon.

    The diminished appetite for risk also pressured higher-yielding currencies. The Australian dollar fell 0.5% to US$0.9191, while the New Zealand dollar slid 1.1% to US$0.7247.
  2. Rider

    Rider New Member

    Nov 24, 2009
    Likes Received:
    Oil falls 2% on GDP
    Prices fall near $76 after weaker reading on U.S. economic activity and ahead of inventory reports.
    NEW YORK (Reuters) -- Oil prices fell 2% Tuesday after data showed the U.S. economy grew at a slower-than-expected pace last quarter and ahead of weekly U.S. inventory data expected to show crude stocks rose.

    A slower recovery from the worst U.S. recession in seven decades may hurt demand for crude. The world's largest economy grew at an annual rate of 2.8% last quarter, the Commerce Department said, revising downward its earlier estimate of 3.5% growth.

    Consumer spending, which typically accounts for more than two-thirds of U.S. economic activity, also lagged behind estimates last month, the Commerce Department said.

    "We don't like the GDP figures, and we're worried about a potential build in crude stocks," said Tim Evans, oil analyst with Citi Futures Perspective in New York. "Consumer spending is weaker than expected -- and that's where we hoped to see a pickup in petroleum demand."

    U.S. crude for January delivery fell $1.54, or 2%, to settle at $76.02 a barrel.

    Data may show that U.S. crude oil and fuel stocks rose last week, as Gulf of Mexico production recovered after a tropical storm shut platforms in the previous week.

    Crude stocks likely rose 1.2 million barrels in the week to Nov. 20, while stocks of gasoline likely rose slightly and distillates fell slightly, according to the average analyst estimate in a Reuters poll.

    Inventory data from the private industry group American Petroleum Institute was due at 4:30 p.m. EST Tuesday, followed by official data from the Department of Energy early Wednesday.

    Oil prices have risen from below $33 a barrel last December, although they are still around 48% lower than a record above $147 reached in July 2008.

    Prices have risen amid rallying stock markets and a weaker U.S. dollar, which makes crude cheaper for holders of foreign currency. The S&P 500 index rose into positive territory in late trade after falling earlier Tuesday. The dollar index was slightly stronger.

    Global oil demand growth will outpace new oil supplies in 2010, eroding stockpiles of crude that have risen during the economic crisis, according to a Reuters survey Tuesday.

    The poll of 10 top oil-tracking analysts and organizations forecast oil demand to rise by 1.3 million barrels per day next year.

    U.S. consumer confidence rose in November, after an unexpected drop in October, industry group The Conference Board said Tuesday.

    But analysts remain worried about the pace of fuel demand recovery.

    U.S. retail gasoline demand fell 1.6% last week versus the previous week, and it was down 1.4% from the same week of 2008, according to a report from MasterCard SpendingPulse on Tuesday.

    OPEC, the exporters' group that pumps one in three barrels of oil worldwide, must be careful not to collapse oil prices by oversupplying the market, Nigerian Oil Minister Rilwanu Lukman told reporters in Washington on Tuesday.

    Members of the Organization of the Petroleum Exporting Countries next meet to discuss output policy in Angola on Dec. 22. The group has not changed its production targets this year.

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