USD Highly Vulnerable this Tuesday Morning 15 January 2013
by Jonathan Millet
Dollar vulnerable of Bernanke’s speech
The Australian Dollar took up a higher stand than its U.S. currency Counterpart ahead of a speech to be delivered by Dr. Ben Bernanke, the US Federal Reserve Chairman. At 07:00 this Tuesday, the Australian dollar was seen trading at 105.64 US cents, rising up from its previous mark of 105.56 US cents on Monday afternoon. It is expected that Ben Bernanke would provide some further insights into the Fed’s plans for arranging stimulus packages amidst all the speculation that the central bank is planning to end the quantitative easing for the fourth financial quarter.
Euro rises against dollar
The euro upheld considerable gains against the US Dollar on Monday as the sentiment in the markets seemed largely positive, spurred by risky asset buying. The euro was seen at around $1.3376 late last night, as it rose from its preceding mark of $1.3341 at the same time in the previous week on Friday.
Earlier, the euro was noticed as brushing along the $1.3404 mark, which is the highest for the currency pair in almost eleven months.
Many experts are of the opinion that the euro rise had been buoyed by the comments made by the European Bank President Mario Draghi.
Capital outflows to limit risk
Many experts have voiced their opinion that the appreciation risk in the Japanese Currency must be limited by accounting for the Capital Outflows. An interesting aspect pointed out by experts was that in autumn 2011, a shift in the JPY outlook among traders towards depreciation in the strength of the momentum of the Japanese Corporate sector led to considerable growth in the amount of FDI or Foreign Direct Investments.
Although the shift by large enterprises in the manufacturing sector caused an overnight shifting of portfolios overseas, the SMEs and the service industry are likely to shift their business portfolios in order to avoid ageing population risk and high retail competition. Shortage of a mature labor force also happens to be one of the risks.
So it is expected that the Bank of Japan would continue encouraging investments in Japanese Corporate sector by overseas investors.
Crude and gas rise higher!
The oil contracts for the month were seen down on the board while natural gas continued its climb, however both crude oil along with natural gas were seen having net increases in New York for the business week.
While crude oil was seen trading about one percent higher after news of a Saudi Arabian cut in production, the natural gas stocks gained modestly after witnessing bullish inventories for the first time this winter.
Mixed trading day for US stocks
The stock market in New York was seen having a mixed day on Monday, as it was the Dow Jones whose stocks finished in the green while most other leading indices were seen in negative territory. After the closing of trading for the Dow Jones was noted to be 21.65 points higher for the day (which is approximately 0.16 percent) at the value of 13510.08. However, on the other hand the NASDAQ composite took a dip of 8.13 points while the S&P 500 fell by about 1.22 points to the 1470 level.
The shares for Dell soared after rumors spread that computer manufacturer are planning to go private.
However, that did not help much for the NASDAQ to stay out of the red, as it weakened further after reports came in of lesser demand than expected for the latest iPhone by Apple.
Jonathan Millet Chief Editor of ForexMinute.com
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