Goldman to BofA Pitch Venezuela Deals to Drum Up Dollars

Goldman Sachs Group Inc. (GS) and Bank of America Corp. (BAC) are among Wall Street firms that offered deals to help Venezuela obtain U.S. dollars amid a plunge in the nation’s foreign reserves.

A swap proposed by Goldman Sachs would provide $1.68 billion in cash and be backed by $1.85 billion of the central bank’s gold, documents obtained by Bloomberg News show. Bank of America said it could be an intermediary for $3 billion in payments to firms seeking U.S. dollars, documents show. Neither deal has been completed, a government official with direct knowledge of the matter said, requesting anonymity because the talks are private.

Dollars are becoming scarce in Venezuela, limiting the supply of products from medicine to toilet paper in a nation that imports about three-quarters of goods it consumes. Foreign reserves dropped 28 percent this year, touching a nine-year low of $20.7 billion this month, largely because 70 percent of the assets are in gold. The metal plunged 26 percent in the period.

“The fact you have dollar shortages is symptomatic of an economy that’s completely broken down,” Robert Abad, who helps oversee $53 billion in emerging-market debt at Western Asset Management Co., said yesterday in a telephone interview from Pasadena, California.

“This is something that’s just incredibly unnecessary, very unfortunate, and the victim of all of this is the real economy, real people.”


Dollar Gains to 6-Month High on December Taper Bet

The dollar rose to a six-month high against the yen as an unexpected drop in U.S. jobless claims and a rise in leading economic indicators added to speculation the Federal Reserve may start reducing stimulus next month.

The euro strengthened to a four-year high against the yen as German lawmakers reached a coalition accord on wages and spending increases without raising taxes, spurring demand for the region’s assets. The Thai baht fell after the central bank cut interest rates,

while the Canadian dollar dropped as crude oil slipped for a fourth day. “The dollar is benefiting from a very small risk of taper in December,” Omer Esiner, chief market analyst in Washington at the currency brokerage Commonwealth Foreign Exchange Inc., said in a phone interview. “I’m still a little skeptical about December tapering. Granted the FOMC meeting minutes was a bit more hawkish than expected, but if you just focus on what Bernanke and Yellen said, the most likely scenario is taper in the first quarter.”

The dollar gained 0.9 percent to 102.16 yen at 5 p.m. in New York and touched 102.19, the strongest level since May 29. It slipped 0.1 percent to $1.3579 against the common currency, having dropped as much as 0.3 percent earlier. The euro advanced 0.9 percent to 138.73 yen after touching 138.79, the highest since June 2009.

The Bloomberg U.S. Dollar Index, which tracks the currency against 10 major counterparts, rose 0.3 percent to 1,021.55.


Swiss Economy Grows More Than Forecast on Better Exports

Switzerland’s economy expanded more than economists expected in the third quarter, with exports helping it perform better than neighboring Germany.

Swiss gross domestic product rose 0.5 percent in the three months through September from the second quarter, when it expanded by the same amount, the Secretariat for Economic Affairs in Bern said in a statement today. That beats the 0.4 percent median estimate in a Bloomberg survey of 19 economists.

The Swiss National Bank (SNBN) set a cap on the franc of 1.20 per in September 2011, citing the risk of deflation and a recession. Since then, the Swiss economy has seen a single quarter of contraction, while the debt-plagued euro area only emerged from an 18-month slump in the middle of this year.

If the SNB were to tighten monetary policy reflecting better growth, “it would have immediate negative domestic effects,” said Christian Lips, an economist at NordLB in Hanover. “Looking forward, neither the cap nor the rates can be changed before year-end 2014,” given weak growth in the neighboring euro area, Switzerland’s top trading partner, he said.

The franc, which has slipped two percent against the euro since the start of the year as the bloc’s debt crisis has waned, was trading unchanged at 1.2324 per euro at 8:43 a.m. in Zurich, off an intra-day high of 1.2321.


U.K. Recovery Seen at Risk as Rebalancing Eludes Economy

Britain’s consumer and housing-driven recovery, the fastest among Group of Seven nations, risks losing steam unless export growth picks up, economists said.

While the economy grew the fastest in more than two years in the three months through September, the expansion was led by consumer spending, construction and stock building. Net trade knocked 0.9 percentage point off GDP, the most since the second quarter of 2011.

Bank of England Governor Mark Carney this week extolled the strength of the economy’s revival, while acknowledging that weak growth in the euro area may weigh on the export outlook and limit rebalancing of the economy. Part of the domestic demand is linked to a revival in the housing market, which has fueled concerns of a brewing bubble. Carney will address those risks at a press conference in London today.

“The consumer is a big part of the economy, so it’s always going to be an important component of growth but it shouldn’t be the sole component,” said Carl Astorri, senior economic adviser to the EY ITEM Club. “To get the stronger recovery that we’re forecasting for next year does rely on it broadening out.”

The U.K. economy grew 0.8 percent in the last quarter, the Office for National Statistics said yesterday. Investment in private-sector dwellings climbed 5.9 percent, the most in two years. Consumer spending increased for an eighth consecutive quarter. Exports, which account for about one third of the economy, fell 2.4 percent, the most in more than two years.


Canada Dollar Falls to Weakest Since July as Crude Oil Declines

The Canadian Dollar touched the weakest level against its U.S. counterpart since July as the price of crude oil, the nation’s biggest export, declined for a fourth day.

The currency weakened as futures of crude oil fell 1.4 percent to $92.39 per barrel in New York. So-called commodity currencies, which include Canada’s and the Australian and New Zealand dollars also declined. Yields on Treasury (USGG10YR) 10-year notes have increased to 19 basis points more than Canadian debt, from negative nine basis points in January, amid speculation that U.S. policy makers will reduce monetary stimulus earlier than Canadian officials.

The market thinks “the Bank of Canada will lag the Fed in taking away the easier policy,” Ken Dickson, an Edinburgh-based director for foreign exchange at Standard Life

Investments Ltd., which oversees about $291 billion, said in a phone interview. “On that relative basis, we think that will favor the dollar against the Canadian dollar through 2014.”

The loonie, as the Canadian dollar is known for the image of the aquatic bird on the C$1 coin, fell 0.5 percent to C$1.0595 per U.S. dollar at 5:00 p.m. in Toronto, after reaching C$1.0603. One loonie buys 94.38 U.S. cents.

Bond Trade

The nation’s benchmark 10-year government bonds fell, pushing yields up three basis points to 2.55 percent. The price of the 1.5 percent securities maturing in June 2023 declined 20 cents to C$91.23.

BlackRock Inc., the world’s biggest asset manager, is recommending Canadian investors bet on a widening gap between short- and long-term debt in anticipation of less U.S. monetary stimulus next year.

Canadian debt maturing in one to three years returned 0.9 percent since May through Nov. 25, compared with losses of 5 percent for bonds with maturities of 10 to 15 years, Bank of America Merrill Lynch index data show.

Investors should bet against the Canadian currency versus the U.S. dollar, in what Goldman Sachs Group Inc. analysts in a client note called their third top-trade recommendation for 2014.

The Canadian dollar has lost 3.3 percent this year against nine developed-market peers tracked by the Bloomberg Correlation-Weighted Index. The U.S. dollar is up 4 percent, while the Australian currency fell 11 percent.

“We’ve seen steady interbank buying of dollar-Canada since today’s open and that appears to be what has pushed us up here,” said George Davis, chief technical analyst for fixed-income and currency strategy in Toronto at Royal Bank of Canada. “Oil also under pressure, which is not helping.”


Brazil Lifts Selic to 10% on High Inflation, Low Confidence

Brazil’s central bank raised its key interest rate for a sixth time, extending the world’s biggest tightening cycle as a weaker currency and widening budget deficit spur inflation pressures.

The bank’s board, led by President Alexandre Tombini, voted 8-0 to raise the Selic today to 10 percent from 9.5 percent, as forecast by 50 of the 52 economists surveyed by Bloomberg. Two analysts predicted a 25 basis-point increase.

The decision sought to “give continuation to the adjustment of the benchmark rate that began in the April 2013 meeting,” policy makers said in their statement posted on the central bank’s website. Board members removed from the statement a phrase used after the previous decision saying the increase would ensure inflation’s continued slowing in 2014.

Brazil’s central bank has raised borrowing costs by 275 basis points since April as the real dropped the most among major currencies and deteriorating fiscal accounts sparked concern of a credit downgrade. Investor pessimism on Brazil’s economy means there is no room to let up on inflation, according to Enestor Dos Santos, principal economist at Banco Bilbao Vizcaya Argentaria and the top Selic forecaster according to data compiled by Bloomberg.

“The burden is on the central bank’s shoulders,” Dos Santos said by phone before today’s decision. “The central bank is fighting to regain lost credibility. Inflation expectations for next year remain elevated.”

Swap rates on the contract maturing in January 2015, the most traded in Sao Paulo today, fell one basis point to 10.82 percent. The real fell 1.5 percent to 2.3305 per dollar, extending its decline this year to 12 percent.


Dollar Reaches Six-Month High as Improving Economy Boosts Allure

The dollar touched a six-month high against the yen after signs of improvement in the world’s largest economy boosted the allure of U.S. assets.

The Bloomberg U.S. Dollar Index was near a two-week high before data next week forecast to show U.S. manufacturing expanded for a sixth month. The euro retreated from a four-year high against the yen as technical indicators signaled its recent gains were excessive. The Australian dollar rallied from a two-month low after business investment unexpectedly grew.

“A string of reasonably positive data in the U.S. is probably going to help the dollar via higher treasury yields,” said Michael Turner, a debt and currency strategist at Royal Bank of Canada in Sydney. Yields on Japanese government bonds “have been falling fairly consistently for the past four or five months and that’s kept the yen fairly weak.”

The dollar was little changed at 102.13 yen as of 6:42 a.m. in London from yesterday, after touching 102.28, the strongest level since May 29. It traded at $1.3583 against the euro from $1.3579. The shared currency was unchanged at 138.73 yen after touching 138.84, the highest since June 2009.

The Bloomberg U.S. Dollar Index, which tracks the currency against 10 major peers, declined 0.1 percent to 1,020.55. It rose 0.3 percent to 1,021.55 yesterday, the highest close since Nov. 12.

The benchmark U.S. 10-year yield gained three basis points, or 0.03 percentage point, to 2.74 percent yesterday. U.S. markets are closed for Thanksgiving holiday. Similar-dated Japanese government bonds yielded 0.60 percent today.


EUR/USD to remain neutral

Emmanuel Ng, FX Strategist at OCBC Bank is expecting EUR/USD to remain neutral to supported.

Key Quotes

“Despite the updraft from the GBP, dovish ECB rhetoric may also continue to place a damper on excessive upside against the USD. “

“Look for initial support on dips around the 55-day MA (1.3548) while key resistance is expected on approach of 1.3600 ahead of the EZ inflation number tomorrow. “



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Infinity Studying Failed Hong Kong Mercantile Exchange

A private equity firm backed by the China Development Bank Corp. is studying the Hong Kong Mercantile Exchange Ltd., a commodities market that suspended operations this year, for investment opportunities.

“I’m going in as a director to simply get an understanding,” said Jianrui Xiong, a Hong Kong-based venture partner at Infinity Group, which manages 10 billion yuan ($1.6 billion) in assets. “I want to understand whether this company can solve its previous issues and whether it’ll be a clean company going forward. If it is clean, then we may have some investment opportunities.”

An investment by Infinity could help revive the exchange, which surrendered its trading license in May after failing to attract enough revenue to support operations. Barry Cheung, the largest shareholder and chairman, is seeking to raise funds to repay debts and unpaid wages.

Police investigated Hong Kong Mercantile Exchange, also known as HKMEx, after the regulator said it found suspected financial irregularities. Cheung said the bourse is a victim, having been provided with financial documents it didn’t know were false.


Euro Rises for Fifth Day Versus Yen on German Accord

The euro strengthened for a fifth day against the yen as lawmakers in Germany, the 17-nation region’s biggest economy, reached a coalition accord on wages and spending increases without increasing taxes.

The shared currency rose versus all except one of its 16 major peers as the deal ended the longest period of coalition talks in Chancellor Angela Merkel’s time in office. The dollar climbed against the yen before U.S. data forecast to show durable-goods orders fell, while consumer sentiment was higher than initially estimated, signaling a mixed recovery that may keep the Federal Reserve from reducing stimulus. The Thai baht fell after the central bank unexpectedly cut interest rates.

“The euro was boosted by the news that Germany is close to reaching a coalition accord,” said Shinichiro Kadota, a foreign-exchange strategist at Barclays Plc in Tokyo. “I don’t think the euro will extend gains much from here.”

The euro advanced 0.4 percent to 137.97 yen at 8:12 a.m. in London, extending its gain during the past five days to 2.6 percent. The common currency was little changed at $1.3576 after climbing to $1.3599, the strongest level since Oct. 31. The dollar rose 0.4 percent to 101.63 yen.

Merkel clinched the coalition agreement with the Social Democratic Party that calls for a national minimum wage and pledges to increase spending on pensions and infrastructure.

The accord reached shortly before 5 a.m. in Berlin today after 17 hours of negotiations sets Merkel on track for a third term leading the nation until 2017. The agreement must still be passed by the entire SPD, which plans a referendum among its roughly 470,000 members.

The baht weakened 0.2 percent to 32.145 per dollar after weakening 1.6 percent in the previous six days.



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Thailand Unexpectedly Cuts Rate as Protests Crimp Outlook

Thailand unexpectedly cut its key interest rate for a second time this year, as escalating anti-government protests threaten investor confidence and local demand, hurting the nation’s growth outlook. The baht fell.

The Bank of Thailand cut its one-day bond repurchase rate by a quarter of a percentage point to 2.25 percent, with monetary policy committee members voting six-to-one in favor of the decision, it said in Bangkok today. All 19 economists in a Bloomberg survey predicted the rate would be held.

Thai protesters this week besieged government ministries and urged civil servants to join a push to oust Prime Minister Yingluck Shinawatra, an escalation of rallies that began a month ago against an amnesty for most political offenses stretching back to the 2006 coup that ousted her brother Thaksin. The economy expanded a less-than-estimated 1.3 percent in the third quarter from the previous three months.

“The central bank seems to be concerned about growth and the sluggish exports, and on top of that, there’s the political concern,” said Kozo Hasegawa, a Bangkok-based foreign-exchange trader at Sumitomo Mitsui Banking Corp. “Should the protests prolong and impact government spending, tourism and the economy further, they could consider another cut.”

The baht reversed earlier gains to slip 0.2 percent to 32.16 against the dollar as of 3:25 p.m. local time, the weakest level since Sept. 11. The SET Index of shares extended gains, climbing 0.6 percent.

Higher Risks

Protest leader Suthep Thaugsuban, who oversaw a deadly crackdown on Thaksin supporters when he was deputy premier in 2010, has called for a nationwide program of civil disobedience to bring down the administration of Yingluck, whose Pheu Thai party won a parliamentary majority in elections in 2011. A confidence vote is scheduled for tomorrow.

The Thai central bank today cut its 2013 growth forecast to about 3 percent from 3.7 percent earlier, and its 2014 estimate to about 4 percent from 4.8 percent. “There are higher downside risks to growth stemming from delays in government investment and fragile private confidence, which could be compounded by the ongoing political situation,” Assistant Governor Paiboon Kittisrikangwan said at a briefing today. “Given the benign inflation outlook and moderating household credit growth, there is room for monetary policy to mitigate downside risks to the economy.”

Yingluck’s administration has tried to speed up budget disbursement and boost local demand as plans to spend 2 trillion baht ($62 billion) on infrastructure and 350 billion baht on water management projects have stalled. Consumer confidence in October fell to the lowest since March 2012, while exports slipped for a second straight month, data earlier today showed.

The state forecasting agency this month cut its full-year expansion estimate to 3 percent from a range of 3.8 percent to 4.3 percent, and said it expected no export growth this year.

“Political instability has retarded progress on infrastructure development and thereby constrained Thailand’s growth,” Fitch Ratings said in a statement earlier today. “Moreover, political noise could increase investor skittishness as the U.S. Fed’s tapering of quantitative easing draws closer.”


EUR/USD capped by 1.3590

The shared currency is inching higher on Thursday, with the EUR/USD advancing through 1.3580 after testing lows near 1.3560 overnight.

EUR/USD focus on German, EMU data

Despite the holiday in the US and the absence of a docket, the releases in the euro area should be relevant enough to keep investors entertained during most part of the session. The final revision of Spanish GDP figures is expected to show a 0.1% expansion inter-quarter of the Mediterranean economy, finally leaving the recession territory. German employment figures are due next, with consensus expecting the jobless rate to stay put at 6.9% during November. EMU’s gauges of Economic/Consumer/Business Confidence will follow, with prior surveys pointing to mixed results. So, with the pair well supported around 1.3560 and mixed results on the cards and having tested 1.3600 yesterday, decent readings today would be supportive of the prevailing bid tone around the EUR, allowing another test of the 1.3600 handle.

EUR/USD levels to watch

As of writing the pair is up 0.03% at 1.3578 with the next resistance at 1.3613 (high Nov.27) followed by 1.3628 (61.8% of 1.3822-1.3295) and finally 1.3696 (low Oct.30). On the downside, a dip beyond 1.3558 (low Nov.27) would target 1.3515 (low Nov.26) en route to 1.3504 (MA21d).


WTI Oil Drops for a Fourth Day as U.S. Crude Inventories Advance

West Texas Intermediate fell for a fourth day after industry data showed crude stockpiles rose for a ninth week in the U.S., the world’s biggest oil consumer.

Futures slid as much as 0.3 percent in New York. Crude inventories increased by 6.92 million barrels last week, the American Petroleum Institute said yesterday. An Energy Information Administration report today is projected to show supplies climbed by 750,000 barrels, according to a Bloomberg News survey. The Organization of Petroleum Exporting Countries will keep its production quota unchanged at a meeting next week in Vienna, a separate survey shows.

“The key for the market will be those numbers” from the EIA, said David Lennox, a resource analyst at Fat Prophets in Sydney who predicts OPEC will keep its output target unchanged at the Dec. 4 gathering. “New supply in the U.S. is causing a build-up of inventories.”

WTI for January delivery dropped as much as 32 cents to $93.36 a barrel in electronic trading on the New York Mercantile Exchange, and was at $93.39 at 3:45 p.m. Singapore time. The contract lost 0.4 percent to $93.68 yesterday. The volume of all futures traded was more than double the 100-day average.

Brent for January settlement gained 2 cents to $110.90 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude was at a premium of $17.51 to WTI. The spread was $17.20 yesterday, the widest in more than eight months based on closing prices.


GDP rises 1.9% in Q3

On an annuual basis Swiss GDP increased 1.9% in Q3, following a 2.5% rise registered the previous quarter, according to data released today the State Secretariat for Economic Affairs SECO. This result higher than market consensus of +1.7%.

Quarter-over-quarter GDP rose 0.5% in Q3, following +0.5% in Q2 and slightly above expectations of 0.4% growth.


Brazil Extending World’s Biggest Rate Rise to Regain Credibility

Brazil’s central bank probably will raise the benchmark interest rate for a sixth straight meeting in an effort to convince investors that policy makers are serious about slowing inflation back to its target.

Policy makers led by central bank President Alexandre Tombini will lift the Selic rate to 10 percent from 9.50 percent today, according to 50 of 52 economists surveyed by Bloomberg. Two analysts expect a 0.25 percentage-point boost. The bank is scheduled to announce its decision after 6:00 p.m. local time.

Before embarking on the world’s biggest interest rate increase this year, policy makers slashed borrowing costs to a record even as consumer price increases exceeded the 4.5 percent goal. The past decisions coupled with higher public spending led investors to speculate the government had abandoned its inflation target, hurting the central bank’s credibility, former bank President Carlos Langoni said. Now, the effort to tame above-target inflation is also being undercut by a weaker currency and a widening budget gap. “The central bank is trying to make up for past mistakes,” Langoni, who is head of the World Economic Center at Fundacao Getulio Vargas, said in an interview at his office in Rio de Janeiro. “Since they lost credibility, they probably have to overshoot the interest rate.”

Analysts forecast Tombini will fail to meet his pledge to slow inflation in 2014 from 2013 as the biggest decline amid major currencies in the past six months reignites price increases. They predict inflation will accelerate to 5.92 percent in 2014 from 5.82 percent this year, according to a central bank survey published Nov. 25.


Import Price Index drops 0.7% in October

The German Import Price Index fell 0.7% in October, after remaining unchanged the previous month, Deutsche Bundesbank revealed on Thursday. Analysts expected less decrease of 0.5%.

Year-over-year the Import Price Index declined 3%, down from the 2.8% fall and below expectations of -2.8%.


AUD/USD spikes to 0.9140

The Aussie dollar found decent support in the area of 0.9090 on Tuesday, with the AUD/USD now attempting a return to the positive ground around 0.9140.

AUD/USD all eyes on tomorrow’s Capex

The most relevant event for the AUD this week will be the Private Capital Expenditure for the third quarter, although consensus amongst traders would point to a soft reading, adding to the selling pressure. Today’s Construction Work Done in Australia expanded 2.7% in Q3, largely surpassing the median at 0.5% and the previous quarter 0.1% gain. According to Greg Gibbs, “The Trading performance of the AUD in recent sessions has been poor reflecting the increasing uncertainty in China and the rhetoric by the RBA focussing on the expected decline in resources investment over the coming several years and desire for a weaker AUD to support investment growth in the non-resources sector”.

AUD/USD levels to watch

As of writing the pair is down 0.05% at 0.9125 with the immediate support at 0.9090 (lower channel support) ahead of 0.9088 (low Nov.26) and then 0.9038 (low Sep.4). On the flip side, a break above 0.9204 (high Nov.26) would expose 0.9249 (high Nov.22) and finally 0.9355 (high Nov.21).


Dollar off highs vs Yen

The dollar pulled back from six-month highs against the yen on Tuesday, and the euro remained higher against the dollar, shrugging off dovish comments by a senior European Central Bank official.

During European morning trade, USD/JPY slid 0.29% to 101.37, after rising as high as 101.91 on Monday, the highest since late May.

The yen found support after Tuesday’s minutes of the Bank of Japan’s October meeting showed some policymakers see a greater downside risk to the economy.

The BoJ noted that the economy is following the path to the bank’s 2% inflation target at a moderate pace. The members also said that there remains a high degree of uncertainty over the medium to long term inflation outlook.

Elsewhere, EUR/USD was up 0.29% to 1.3555 from 1.3515 on Monday. The euro shrugged off remarks by ECB board member Benoit Coeure, who said that negative deposit rates are still a possibility.

The pound was also higher against the dollar, with GBP/USD rising 0.21% to 1.6188 ahead of testimony by Bank of England Governor Mark Carney on the bank’s inflation report before the U.K. Treasury select committee.

The dollar was down against the Swiss franc, with USD/CHF losing 0.40% to trade at 0.9080.

The greenback was little changed against the Australian, New Zealand and Canadian dollars, with AUD/USD slipping 0.09% to 0.9152, NZD/USD edging up 0.07% to 0.8212 and USD/CAD inching up 0.09% to 1.0551.

Australia’s dollar remained supported after Reserve Bank Deputy Governor Philip Lowe said Tuesday that intervention to weaken the currency is an option, but added that the threshold for intervention is high.

The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.28% to 80.73.


Yen strengthens after BoJ minutes

The yen strengthened in Asian trade Tuesday despite three of the nine Bank of Japan board members seeing a greater downside risk to the economy than the majority view of balanced risk, according to the minutes of the Oct. 31 policy meeting released earlier in the day.

USD/JPY traded at 101.49, down 0.19%, in a range of 101.34 - 101.73 after the minutes.

Bank of Japan board member Takehiro Sato said downside risks to weaker prices is somewhat higher than the upside, while colleague Takahide Kiuchi repeated his call for greater price target flexibly. Sayuri Shirai said attention needs to be paid to downside risks to economic activity and prices.

The Bank of Japan is aiming for sustained annual inflation at 2% by 2015 through an aggressive easing policy that is supposed to work in combination with government economic reforms.

At the meeting, the Bank of Japan board, by a unanimous vote, kept the bank's policy target unchanged as expected.

AUD/USD traded at 0.9191, up 0.32%, shrugging off remarks by Reserve Bank of Australia Deputy Governor Philip Lowe that the currency should weaken over time.

The Australian dollar could fall further in the period ahead as investments in Australia decline, but as the terms of trade is expected to remain high the exchange rate will be high on a historical basis, Lowe said in remarks at a question and answer session following a speech.

Iran's decision to rein in its nuclear ambitions enticed investors out of safe-haven yen and other positions on Monday and sparked demand for the dollar, which tends to edge lower when U.S.-Iranian tensions flare up.

Weekend talks among the U.S., Russia, China, Britain, Germany, France and Iran ended in agreement that halted advancements in Iran's nuclear program in exchange for easing economic sanctions against Tehran.

Under the terms of the agreement, Iran will stop enriching uranium beyond 5%, and neutralize its stockpile of uranium enriched beyond that point.

Tehran will also grant more access to its facilities to nuclear inspectors in exchange for no new sanctions for six months.

Iran will also receive sanctions relief worth approximately USD7 billion in trade on oil, auto and airplane parts, gold and precious metals for six months.

Trade sanctions slapped on Iran due to its alleged nuclear ambitions have taken out more than 1 million barrels of oil per day from the global market in the past two years.

World powers have accused Iran of using its nuclear program to secretly develop nuclear weapons, an assertion the country has consistently denied.

The news offset otherwise bearish data for the dollar in the U.S. housing sector that revealed pending home sales fell unexpectedly in October.

In a report, the National Association of Realtors said its pending home sales index declined by a seasonally adjusted 0.6% in October, disappointing market expectations for a 1.3% gain.

Year-on-year, pending home sales fell at annualized rate of 2.2% last month, outpacing expectations for a 1% decline after rising 2% in September.

The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was at 80.85, down 0.13%.

On Tuesday, the U.S. is to produce data on building permits, a leading indicator of future construction activity as well as a report on housing starts. The nation is also to release private sector data on consumer confidence and house price inflation.


AUD/USD edges higher but gains seen limited

The Australian dollar edged higher against its U.S. counterpart on Tuesday, but gains were seen to remain limited as expectations for the Federal Reserve to soon begin tapering its stimulus program continued to support the greenback.

AUD/USD hit 0.9203 during late Asian trade, the pair's highest since November 22; the pair subsequently consolidated at 0.9187, rising 0.28%.

The pair was likely to find support at 0.9120, Monday's low and a one-and-a-half month low and resistance at 0.9250, the high of November 22.

Investors consolidated their positions following sharp gains in the past several days, but the greenback remained supported after last week’s minutes of the Fed’s October meeting said the bank could start tapering its USD85 billion-a-month asset purchase program in the “coming months” if the economy continues to improve as expected.

The Aussie was fractionally higher against the euro with EUR/AUD easing 0.09%, to hit 1.4742.

Later in the day, the U.S. was to produce data on building permits, as well as private sector data on consumer confidence and house price inflation.


AUD/USD capped by 0.9200

The selling bias seems to have abandoned the Aussie dollar on Tuesday, with the AUD/USD extending the recovery although the area around 0.9200 remains yet elusive.

AUD/USD bolstered by RBA

The pair found the much-needed oxygen in the speech by RBA Deputy Governor Philip Lowe last night, where he removed some pressure from the recent comments regarding the likeliness of an intervention in order to keep the AUD weak. Annette Beacher, Strategist at TD Securities, commented, “RBA Deputy Governor Lowe’s speech in Sydney on productivity, drivers and trends covered familiar ground, focusing on the need to lift productivity growth as Australia adjusts to a decline in terms of trade in future. Price action kicked in during the Q&A when he said that the ‘threshold for intervention is fairly high’ although he did not rule it in or out”. The next big event in Australia will be the Private Capital Expenditure during Q3, on Thursday.

AUD/USD levels to watch

As of writing the pair is up 0.32% at 0.9192 and a surpass of 0.9249 (high Nov.22) would aim for 0.9300 (psychological level) and then 0.9335 (high Nov.21). On the flip side, the initial support aligns at 0.9120 (low Nov.25) followed by 0.9115 (lower channel support) and finally 0.9038 (low Sep.4).


Dollar eases back from recent highs against yen

The dollar eased back from recent highs against the yen on Tuesday, as investors consolidated their positions following sharp gains in the past several days.

USD/JPY was down 0.22% to 101.46 after rising to highs of 101.91 on Monday, the highest level since late May.

The pair was likely to find support at 100.94, Friday’s low and near-term resistance at 101.91.

The yen found support after the minutes of the Bank of Japan’s October meeting showed some policymakers see a greater downside risk to the economy.

The board noted that the economy is following the path to the bank’s 2% inflation target at a moderate pace. The members also said that there remains a high degree of uncertainty over the medium to long term inflation outlook.

The dollar continued to remain supported by expectations that the Federal Reserve will start rolling back stimulus at one of its next few meetings.

The euro was almost unchanged against the yen, with EUR/JPY dipping 0.02% to 137.39, holding below the four-year high of 137.97 struck on Monday.

Elsewhere, the euro pushed higher against the dollar, with EUR/USD rising 0.19% to 1.3542 from 1.3515 on Monday.


Gold Rallies From Four Month Low as Weaker Prices Boost Demand

Gold rebounded from a four-month low to the highest level in almost a week as the dollar weakened and lower prices spurred demand in China, the second-largest consumer, countering outflows from exchange-traded products.

Bullion for immediate delivery rose as much as 0.6 percent to $1,258.30 an ounce, the highest level since Nov. 20, before trading at $1,252.64 by 12:26 p.m. in Singapore. Prices touched $1,225.55 yesterday, the lowest since July 8, as an accord between Iran and world powers damped demand for haven assets.

Volumes for cash gold of 99.99 percent purity on the Shanghai Gold Exchange rose to 15,077 kilograms yesterday, the most since Nov. 13. Assets in the SPDR Gold Trust, the biggest ETP backed by bullion, shrank to 848.91 metric tons yesterday, the least since January 2009, contracting for a sixth day in the longest slump since August. The Bloomberg U.S. Dollar Index, which tracks the currency against 10 major counterparts, fell 0.1 percent to 1,020.06.

“The slight pullback in the dollar may be helping gold but that said, the issue of U.S. monetary policy continues to weigh on the market,” said Mark To, head of research at Wing Fung Financial Group, a Hong Kong-based trader and refiner. “Gold may be oversold and have a technical bounce in the near-term.”

Prices that last week capped the worst weekly performance in two months pushed gold’s 14-day relative-strength index to 30 for a fourth day yesterday, a level that suggests to some analysts who study technical charts that bullion may rebound.

Fed Stimulus

Gold tumbled 25 percent this year, entering a bear market in April. Investors sold metal from ETPs at a record pace as inflation failed to accelerate and on expectations the Federal Reserve will begin scaling back its $85 billion-a-month of asset purchases that helped bullion cap a 12-year bull run in 2012.

Gold for February delivery on the Comex in New York gained as much as 1.3 percent to $1,258.20 an ounce, before trading at $1,252.30, in volume that was 10 percent above the average for the past 100 days at this time.

Spot silver fell as much as 0.6 percent to $20.1186 an ounce after a 1.9 percent advance yesterday, the most in a month. Prices touched $19.5955 yesterday, the lowest since Aug. 8. Metal in ETPs dropped to 19,794.6 tons yesterday, the least since Aug. 13, according to data tracked by Bloomberg, and has declined 1.6 percent from a record in October.

Platinum traded at $1,387.60 an ounce from $1,385.75 yesterday, when prices dropped to a six-week low of $1,374.40. Palladium gained 0.3 percent to $723.25 an ounce, advancing for a fourth day.


USD/JPY ranges into European session

USD/JPY has ranged overnight and into the European session, posting a high at 101.74 and a low at 101.33 and presently trading at 101.45, down -0.01% on the days trading.

Yen on defensive overnight

Overnight Japanese Economy Minister Aso spoke to the media and claimed that market principles were reflected in the weak yen under Abenomics, and that momentum is rising to reach a year end conclusion too TPP talks. Further, the government announced that it would end four decades of rice price support for farmers. Elsewhere the latest BoJ minutes were released showing that board members agreed that the 2% inflation target would be reached by the latter half of the production period, but also seeing downside risks to the economy too. They added their belief that higher corporate earnings would feed through to higher salaries for workers, supporting consumption ahead.

What are today’s key USD/JPY levels?

Today’s central pivot point is at 101.5145 with support for the pair below at 101.0990 (S1), 100.7195 (S2) and 100.3040 (S3), and resistances above at 101.8940 (R1), 102.3095 (R2) and 102.6890 (R3). Special attention should be paid to the price range 101.46-101.80 where several technical levels are confluent today.


GBP/USD inching higher

The bullish momentum in the sterling is now gathering steam, lifting the GBP/USD to the vicinity of 1.6200 the figure on Tuesday.

GBP/USD attention on the Inflation Report Hearings

The risk appetite is reining in the markets in the European morning, allowing the pair to break above the recent attempt of consolidation between 1.6040 and 1.6060. In today’s main event for the pound, BoE’s Carney, Bean and Dale will testify before the Treasury Committee on the last Quarterly Inflation Report, although consensus almost ruled out a different tone from the last report. “We expect the BoE to repeat that the unexpectedly strong growth momentum is the reason that the MPC lowered its unemployment rate projection and that there could be a case for not raising the Bank Rate immediately at the 7% unemployment threshold”, observed Signe Roed-Frederiksen, Senior Analyst at Danske Bank.

GBP/USD key levels

The pair is now up 0.20% at 1.6186 with the next resistance at 1.6241 (high Nov.25) ahead of 1.6248 (high Oct.25) and then 1.6258 (high Oct.23). On the flip side, a breakdown of 1.6134 (low Nov.25) would target 1.6105 (MA10d) en route to 1.6081 (MA50d).


Europe flat ahead of BoE inflation report hearing

European indices are expected to open relatively flat on Tuesday, with FTSE and CAC futures a couple of points lower, while DAX futures are slightly higher. It’s looking like being another quiet day in the financial markets, similar to what we saw on Monday, with trading volumes being reduced as a result of a lack of economic data or market moving news. Today is looking no different, particularly in the European session, when no medium or high impact data is scheduled for release. The only noteworthy event this morning will be the inflation report hearing, when BoE Governor Mark Carney will testify, along with other members of the MPC, in front of Parliament’s Treasury Committee. While this can bring with it a certain amount of volatility, as MPC members go into more detail about certain aspects of recent policy decisions, I’m not expecting much from the testimony today. The main reason for this is simply that Carney and the MPC have been very transparent about what they expect from the economy and how they intend to react to it, particularly at the inflation report press conference a couple of weeks ago. They provided the new forecasts for growth, inflation and unemployment and stated that they will stick with the initial forward guidance, despite the revised forecasts showing unemployment dropping to 7% much earlier than originally expected. I’m not sure what we can learn from today’s testimony that we don’t already know, although that doesn’t mean we shouldn’t pay attention. These things have a tendency to surprise us when we’re least expecting it. Aside from this, we’ll have to wait for the US session this afternoon for the markets to pick up, but even then it’s expected to remain relatively quiet. What we’re seeing this week is the calm before the storm, with next week bringing a number of central bank meetings, including the RBA, ECB and the BoE, the Fed Chair nomination, the Beige Book and a large number of economic releases, including the all important US jobs report on Friday. What this means for this week is that we’ll probably continue to see the likes of the S&P and the Dow grinding higher and hitting new record highs along the way, but when it comes to the end of the week, investors may become a little more risk averse. That said, this could depend on what we get from the data and whether it changes peoples view that the government shutdown in October had no direct impact on the economy, and more importantly, consumer and business confidence. We have some data being released later that could impact people’s view on this, starting with housing starts and building permits for September and October. While this is less likely to have a significant impact on housing than say, consumer spending or business investment, it can still have some impact. I don’t expect that to be the case though, with both actually seen improving slightly compared to August. The biggest release today will be the November consumer confidence figure. This should give important insight into whether the shutdown and near-default had any lasting impact on consumer sentiment, which could then affect spending. Last month we saw a huge drop in the figure, from 80.2 to 71.2 in response to the shutdown. Although this was then followed by retail sales that exceeded expectations, rising 0.4%, which goes to show that while this is a good indicator of future consumer behaviour, it’s not always reliable. That said, I expect today’s figure to better reflect the October retail sales figure, which means the expected figure of 72.9 could be a little conservative. Ahead of the open we expect to see the FTSE down 3 points, the CAC down 1 points and the DAX up 7 points


Euro Reaches Highest This Month on Asian Stocks

The euro touched its highest level this month as Asian stocks pared losses and lawmakers in Germany, the 17-nation region’s biggest economy, reached a coalition accord on wages and spending increases.

The Bloomberg U.S. Dollar Index held a loss from yesterday before figures that may show jobless claims increased and durable goods orders fell, while U.S. consumer sentiment improved, signaling a mixed recovery that may keep the Federal Reserve from reducing stimulus this year. The euro strengthened versus most of its 16 major counterparts amid speculation a report this week will show a pick up in inflation, reducing the need for the European Central Bank to expand monetary easing.

“The euro was boosted by the news that Germany is close to reaching a coalition accord and after the currency broke above key psychological level,” said Shinichiro Kadota, a foreign-exchange strategist at Barclays Plc in Tokyo. “I don’t think euro will extend gains much from here.”

The euro bought $1.3583 at 6:50 a.m. in London after climbing to $1.3599, the strongest since Oct. 31. It gained 0.3 percent to 137.89 yen after touching 138.16, the highest since October 2009. The dollar added 0.3 percent to 101.54 yen.

The MSCI Asia Pacific Index of shares pared its decline to 0.1 percent from as much as 0.2 percent earlier. The Shanghai Composite Index rose 0.8 percent.

German Chancellor Angela Merkel clinched a coalition agreement with the Social Democrats that calls for a national minimum wage and pledges to increase spending on pensions and infrastructure without raising taxes.


Strong Euro to Cut Region’s 2014 Growth

The euro, the second best-performing major currency this year, has increased so much that it will weigh on economic growth in the euro region going into 2014, according to Nomura Holdings Inc.’s Jens Nordvig. The strength of the 17-nation shared currency, which has increased 2.4 percent versus the dollar year-to-date, the most after Denmark’s krone, will trim euro area growth by 0.5 percent in 2014, said Nordvig. The shared currency was the fifth-worst performer among the greenback’s 16 most-traded counterparts in 2012.

“If you look at how much the euro has moved, and the impact that’s going to have on exports, it’s starting to be a real issue,” Nordvig, the New York-based managing director of currency research at Nomura, said in an interview on Bloomberg Radio’s “Surveillance” with Tom Keene and Michael McKee. “Last year, it was a dilemma about coming up with policies that really stated very clearly the euro is here to stay. It’s an ironic situation.”

The euro depreciated 0.4 percent to $1.3508 at 12:19 p.m. in New York after earlier falling as much as 0.5 percent. The shared currency rose to $1.3832 on Oct. 25, its highest level since November 2011.

Europe’s currency climbed to a four-year high against the yen on Nov. 19 after a European Central Bank board member said policy makers must be “very careful” about using negative interest rates to counter low inflation.

The ECB is the only major central bank that hasn’t entertained the idea of quantitative easing, which means it has to consider different ways to come across as dovish in order to stem the rise in the euro, according to Nordvig.

“It’s absolutely crucial that the ECB signals more clearly that they have more tools and are willing to use them as needed,” Nordvig said. “We should see urgency, and I think hopefully the ECB will start to get more aggressive.”

The 17-nation euro has gained 6.8 percent this year, making it the best performer out of 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The dollar gained 4 percent and the yen slipped the most, 13 percent.


Yen Snaps Drop as BOJ Member Concerned on Economy

The yen snapped a three-day decline versus the dollar after some Bank of Japan officials said they saw risks to the outlook for the economy. The yen was supported after minutes of the BOJ’s October meeting published today showed one member said it was “highly uncertain” whether inflation would rise toward the 2 percent target. The euro gained after China’s central bank governor said the currency is important to his nation’s reserve management. European Central Bank Executive Board member Joerg Asmussen, who has said negative deposit rates are a possible tool, will speak today. Australia’s dollar rose after Reserve Bank Deputy Governor Philip Lowe said the bar for intervention is high.

BOJ officials are “somewhat tentative and cautious,” said Callum Henderson, the global head of currency research at Standard Chartered Plc in Singapore. “Our expectation is for further gradual gains in dollar-yen, but it’ll be a slow grind rather than a dramatic move higher.”

Japan’s currency gained 0.1 percent to 101.55 per dollar at 7:02 a.m. in London after reaching 101.92 yesterday, the weakest since May 29. The yen was little changed at 137.40 per euro, above a four-year low. The euro rose 0.1 percent to $1.3531 from yesterday, when it slid 0.3 percent.

The BOJ said in April it wanted to achieve 2 percent inflation (ECCPEST) in about two years. Consumer prices excluding fresh food climbed 0.7 percent in September from a year ago. Central bank board member Sayuri Shirai proposed adding “attention should be paid to the downside risks” to the bank’s outlook report as “there was a high degree of uncertainty regarding developments in overseas economies and households’ employment and income situation,” the BOJ minutes showed.

Yen Gain

The yen will probably strengthen to 100 per dollar by Dec. 31, according to the median estimate of analysts surveyed by Bloomberg. The euro will probably be at $1.34 by then, a separate poll showed.

People’s Bank of China Governor Zhou Xiaochuan’s remarks on the euro were made in Beijing today, according to Market News International.

The ECB’s Asmussen is scheduled to speak in Berlin later today. He said on Nov. 23 he wouldn’t fundamentally exclude setting a negative deposit rate and that the central bank will continue to act if necessary to ensure price stability. Council member Ardo Hansson said in an interview in Tallinn on Nov. 22 that the Frankfurt-based central bank’s “options on rate cuts are still not fully exhausted and there are all kinds of other measures that are still on the table.”

Subdued Inflation

Inflation in Europe probably stayed close to the lowest level in almost four years in November with a reading of 0.8 percent, according to the median prediction of economists polled by Bloomberg News before a Nov. 29 report.

ECB policy makers will “continue to suggest that they may go down these alternate paths of negative rates, or possibly some kind of asset purchase, if and when they feel it’s necessary as the lack of inflation is becoming more entrenched,” said Emma Lawson, a Sydney-based senior currency strategist at National Australia Bank Ltd. “We are likely to see the euro come under pressure as they discuss all of their options.”

The Aussie climbed versus most of its major peers, advancing 0.3 percent to 91.86 U.S. cents.

“We don’t rule intervention in or out, that’s been a long-standing practice,” the RBA’s Lowe said in response to an audience question following a speech in Sydney today. “In the past, we have been prepared to intervene in the currency market when it’s clear the currency was misaligned or the market wasn’t working well. The threshold for intervention though is fairly high.”


Turkey Pileup Signaling Discounts for Thanksgiving

The Henningsen Cold Storage Co. warehouse in Stilwell, Oklahoma, was so jammed with frozen turkeys from the likes of Butterball LLC and Cargill Inc. this year that manager Scott Mayberry turned down requests to store about 1 million more birds, or double his inventory. “We didn’t have any room,” said Mayberry, who manages 3.5 million cubic feet of space that is the size of two Home Depot Inc. (HD) stores and usually holds as much as 20 million pounds (9,072 metric tons) of frozen turkeys before the Thanksgiving holiday in November, the peak for U.S. demand.

Rising output last year and slowing sales left domestic stockpiles tracked by the government at four-year highs in August and September. That signals deeper seasonal discounts on retail prices that are the highest on record going back to 1980, because about 85 percent of the 46 million birds Americans eat at Thanksgiving meals are frozen rather than fresh, according to the National Turkey Federation. “We overproduced a bit in 2012, and we had quite a few excess birds left over in freezers,” said Tom Elam, the president of food-industry consultant FarmEcon LLC in Carmel, Indiana.

U.S. warehouses held 325.34 million pounds of frozen whole turkeys in September and 335.55 million pounds in August, the highest for each month since 2009, U.S. Department of Agriculture data show. Stockpiles typically peak at that time of year in preparation for Thanksgiving, said David Harvey, a USDA economist.


Canadian Dollar Falls as Oil Prices Drop on Iran Deal

The Canadian Dollar dropped to its lowest level in four months as the price of oil, Canada’s biggest export, fell after Iran and world powers reached an interim deal to set limits on its nuclear program.

The currency fell against the majority of its most-traded peers in the wake of the sixth-month agreement, which offers Iran about $7 billion in relief from sanctions in exchange for curbs on its nuclear program, while leaving in place banking and financial measures that have hampered its crude exports. World powers will continue negotiating for a more comprehensive deal to prevent Iran from developing nuclear weapons in exchange for ending sanctions.

“There’s a longer-term view being built in there that this is going to turn open the spigot for Iranian crude oil production which would obviously impact crude oil prices negatively,” said Mark Frey, chief market strategist at Cambridge Mercantile Group, a global foreign exchange and payments provider, by phone from Victoria. “In the short term, yeah I think oil is going to trade heavy, and I think it’s going to hurt the commodity currencies and I think you’re going to see that in the Canadian dollar.”

The loonie, as the Canadian dollar is known for the image of the aquatic bird on the C$1 coin, fell 0.3 percent to C$1.0543 per U.S. dollar at 5 p.m. in Toronto. The currency earlier touched C$1.0583 per U.S. dollar, the lowest since July 8. One loonie buys 94.85 U.S. cents.

Implied Volatility

The cost to insure against declines in the loonie against its U.S. counterpart touched the highest point in almost two weeks. The three-month so-called 25-delta risk-reversal rate rose to 1.3475 percent after earlier touching 1.375 percent, the highest since Oct. 15. Risk reversals measure the premium on options contracts to sell Canadian dollars versus buying U.S. contracts that do the opposite. The 2103 average is 1.26 percent.

Implied volatility for three-month options on the U.S. dollar against its Canadian peer touched its highest point in almost 10 weeks. It reached 6.54 percent, the highest intraday level since Sept. 18. The measure is used to set option prices and gauge the expected pace of currency swings. The 2013 average is 6.69 percent.

Futures on crude oil fell 0.7 percent to $94.17 per barrel in New York trading.

“Canada, of course, has been overwhelmed by the drop in oil,” said Jane Foley, senior currency strategist at Rabobank International by phone from London. “That factor alone is enough to dampen the Canadian dollar, but in the medium term, if lower oil prices come through in better growth data that will be good for Canada, as well as everyone else.”

Iranian Agreement

Oil exports from the Islamic republic will be held to about 1 million barrels a day under sanctions that remain in force after Iran and six world powers reached an agreement yesterday in Geneva, according to the White House.

The agreement offers what President Barack Obama called targeted relief from sanctions, all of which can be imposed again if Iran doesn’t stick with its end of the bargain. It is intended as a first step to a comprehensive accord to be reached in six months to constrain Iran’s nuclear activities so that it can’t be used to make an atomic weapon, in exchange for a planned lifting of nuclear-related sanctions.

“They see that as maybe opening up the door to more ample global supplies of oil if we can see supplies from Iran eventually lifted,” said Joe Manimbo, a market analyst in Washington at Western Union Business Solutions, a unit of Western Union Co. “So that’s seen as a step in the right direction in terms of global supply, so that’s putting some downward pressure on oil.”

Canada’s benchmark 10-year government bonds rose, with yields falling two-basis points, or 0.02 percentage point, to 2.56 percent. The 1.5 percent security maturing in June 2023 added 15 cents to C$91.01.

The loonie has gained 1.3 percent in the last month against nine developed nation currencies tracked by the Bloomberg Correlation Weighted Index. The Australian dollar has had the biggest loss with a 2.7 percent drop while the U.S. dollar posted the biggest gains, rising 2.3 percent.


Counter-trend action in Asia today

Once again on Tuesday, it was Australia and Japan providing the news flow and biggest moves during the Asian session.

Yen sold out – catches bid despite dovish sentiment in BOJ Minutes

The release of the Bank of Japan’s monthly Policy Meeting Minutes Tuesday probably should have meant more downside for the Japanese Yen, but when seemingly everyone in the world is already short or waiting for a rally to get short, there are no sellers to be found and a bounce can occur. That apparently is what may have been the case today.

RBA’s Lowe comments give AUD a brief lift

The Aussie Dollar also caught a little buying interest Monday despite being universally declared in a bear market. In an effort to assign causality to every move that occurs these days, the wires were giving credit for Tuesday’s Aussie upside to comments made by the Reserve Bank of Australia’s Phillip Lowe.


AUD/USD bounces Tuesday on RBA chatter

The AUD/USD finally showed some signs of life Tuesday after comments from the RBA’s Phillip Lowe – despite being somewhat dovish on the surface – failed to further tank the oversold cross.

AUD/USD traders hoping this is more than just an intraday bounce

Those brave souls that are long of the AUD/USD right now are hoping among hope that the bounce that occurred early Tuesday following the RBA’s Phillip Lowe’s speech will amount to something more than just another opportunity to sell. That may be a very difficult dream to realize, though, given the very bearish technical condition the AUD/USD finds itself in right now.

AUD/USD traders have no more data to which they can react until the US session commences later on Tuesday. At that point, though, they will get to react to S&P Case Schiller Home Prices; US Building Permits; US Housing Starts; US Consumer Confidence and the US Richmond Fed Manufacturing Index.

Technical outlook for AUD/USD

Technicians note that the AUD/USD has broken below very important technical “correction support” at 0.9190. That level represented the 100% Fibonacci price projection for what could have been an “abc” correction to the downside. Now that “correction support” has been broken, much more downside potential has been opened up in the short-term. The next projected support comes in at the Fibonacci-generated 0.906225 and 0.8983. The ultimate target, though, may be all the way down at the August low of 0.8847. Resistance for the cross starts at the very short-term “correction resistance” at 0.9195 and is backed up by the 11/12 close at 0.9301.


EUR/GBP stuck back in range

EUR/GBP is a slow start on the week, with a high of 0.8363 and a low of 0.8340, the pair awaits developments towards the end of the week

Strategists at TD Securities notes that a remark from an ECB member that the Bank is ‘ready’ to cut interest rates further is the only noteworthy fundamental development in the EZ since Friday. “However, the comment came from a non-key board member (Hansson) and was not really anything we haven't’ heard already, so the impact has not been particularly significant. Today and the days ahead are light on data which suggests neutral, rangey trading could continue to be the prevailing tone. With the ECB’s focus on deflationary concerns lately the flash CPI reports on Thursday/Friday should be the defining events of the week.

EUR/GBP Levels

The 20 DMA is 0.8416, the 50 DMA is 0.8431 and the 200 DMA is 0.8521. RSI (14) reads 53.20. Supports are ascending from 0.8266, 0.8285, 0.8300, 0.8317. Spot is 0.8347 while resistances are 0.8370, 0.8395, 0.8415 and 0.8464.


EUR/USD sidelined around 1.3530

The shared currency is comfortably trading in a very narrow range so far, taking the EUR/USD to the area of 1.3530 pre-European open on Tuesday.

EUR/USD focus on US docket

Flat calendar in the euro area today, with only a gauge of the Italian Consumer Confidence (97.3 exp.) and Spanish auction of 3m and 9m Letras. Across the pond, key housing data are due: Building Permits, Housing Starts and the S&P/Case Shiller index, all ahead of the Consumer Confidence, with consensus expecting an improvement to 72.9 for November. In the opinion of Jason Sen, Analyst at, “Immediate trend line support is 1.3530/20 but below here signals further weakness to 1.3499/95… More chance of a move to the downside this week & perhaps a test of last week's low at 1.3399. Only above 1.3595 is positive this week & can target October highs at 1.3832”.

EUR/USD key levels

The pair is now advancing 0.07% at 1.3529 with the next resistance at 1.3544 (daily cloud top) followed by 1.3561 (high Nov.25) and then 1.3584 (high Nov.20). On the downside, a break below 1.3490 (low Nov.25) would expose 1.3463 (low Nov.22) and then 1.3404 (daily cloud base).


EUR/USD down to 1.3350 on ECB

The single currency is rapidly depreciating against the single currency on Thursday, dragging the EUR/USD to fresh multi-week lows around 1.3350

EUR/USD hurt by ECB

The ECB cut the lending benchmark 25 bp, taking it to a record low at 0.25%, catching investors off guard as most of them were expecting the central bank to stay put. The focus now is on the press conference by President M.Draghi, where more fireworks are expected.

EUR/USD levels to watch

The pair is now losing 1.13% at 1.3369 with the next support at 1.3300 (psychological level). On the upside, the initial hurdle lines up at 1.3548 (high Nov.6) followed by 1.3589 (high Nov.1) and finally 1.3591 (38,2% 1.3833-1.3442).


EUR/USD falls below 1.3300 on US data, Draghi

The EUR/USD took other step lower and extended losses to fresh 2-month low after the latest string of US data and ECB Draghi's speech

EUR/USD extends losses after US data

US data showed US jobless claims came in line with expectations at 336K last week, while the Q3 GDP grew by 2.8% annual pace against 2.0% expected. Also Draghi's dovish words contributed to the EUR/USD bearishness, with the pair breaking below the 100-day SMA at 1.3340 and the 1.3300 psychological level toward a low of 1.3295 so far.

EUR/USD levels to watch

Immediate support is now seen at 1.3253 (Sep 13 low) followed by 1.3215 (200-day SMA). On bounces, EUR/USD could find resistances at 1.3340 (100-day SMA) and 1.3400


Canadian Dollar Reaches Seven-Week Low as Fed Maintains Stimulus

The Canadian dollar fell to a seven-week low after the Federal Reserve maintained its $85 billion in monthly bond purchases while leaving open the possibility for future reductions by saying economic growth persists.

The currency weakened versus most of its 16 major peers as the U.S. central bank removed a sentence from the previous policy announcement that had said tighter financial conditions could slow the improvement in the economy, Canada’s largest export market. Canada’s dollar posted its biggest weekly drop against the greenback in four months last week after the Bank of Canada lowered economic growth estimates and removed language about the need for higher interest rates it had kept in every policy statement for more than a year.

“In view of the fact they see growth continuing without any major red lights, it’s conceivable they could look to cut back on the bond buying in December,” said Don Mikolich, executive director of foreign exchange sales at Canadian Imperial Bank of Commerce, by phone from Toronto. “So where the market really started to push off tapering into the new year, the suggestion it could happen sooner did evoke a bit of a reaction.”

The loonie, as the currency is known for the image of the aquatic bird on the C$1 coin, fell 0.1 percent to C$1.0479 per U.S. dollar at 5 p.m. in Toronto. It rose as much as 0.3 percent before falling C$1.0497, the weakest level since Sept. 6. One loonie buys 95.43 U.S. cents.

Fed Reaction

The market has been running a bit short-dollar ahead of the meeting, and there was nothing obviously more dovish than expected, so we’re seeing a bit of a squeeze up in dollar-CAD,” Shaun Osborne, chief currency strategist at Toronto-Dominion Bank’s TD Securities unit in Toronto, said by phone. “With the Fed out of the way now, we may see more U.S. dollar strength coming through.” A short position is a bet that an asset will decline in value.

The Canadian currency is down 1.6 percent this month and off 5.3 this year versus the greenback, according to data compiled by Bloomberg. Against its 16 most-traded counterparts, the loonie lost the most this month against Norway’s krone and gained the most this year versus the South African rand.

Canada’s benchmark 10-year government bonds fell, pushing the yield up two basis points, or 0.02 percentage point, to 2.42 percent, after touching the lowest level since July 22. The 1.5 percent security maturing in June 2023 lost 13 cents to C$92.16.

The Bank of Canada will provide details tomorrow about a five-year note auction scheduled for Nov. 6.

Price Swings

Implied volatility for one-month options on Canada’s dollar versus its U.S. counterpart fell to 5.6 percent from this year’s high of 9.4 percent in June. The measure is used to set option prices and gauge the expected pace of currency swings. The average for this year is 6.6 percent.

Trading in over-the-counter foreign-exchange options on the U.S.-Canada dollar exchange rate amounted to $1.4 billion or about 4 percent of trades, according to data reported by U.S. banks to the Depository Trust Clearing Corp. and tracked by Bloomberg. Yesterday, U.S.-Canada dollar trades were $9.7 billion, or 20 percent of volume.

A report tomorrow is projected to show economic growth in Canada slowed in August to 0.1 percent from 0.6 percent the previous month, according to the median estimate of a Bloomberg survey of 18 economists.

“I think GDP will get some interest, but anything that at least shows a positive number will, I don’t think, get too much of a market reaction,” CIBC’s Mikolich said. “But if we’re negative on growth for a particular month, that could push Canada a bit weaker.”

The Canadian dollar has posted the second biggest drop the past six months among nine developed nation currencies tracked by the Bloomberg Correlation Weighted Index. The loonie has fallen 3.9 percent, compared with the Australian dollar’s 9.1 percent loss. The U.S. dollar has increased 0.4 percent.


GBP/JPY little changed after solid Japanese data, BoJ decision

The GBP/JPY is trading under very slight pressure after the well expected unanimous BoJ decision to keep its monetary policy monetary policy unchanged and the solid Japanese data.

The GBP/JPY is hovering around 157.58 area the last couple of hours but since the solid Japanese data released it seems to gain an uptrend momentum, even a soft one. Briefly, the Japanese construction orders, as well as the Annualized Housing Starts were released at much better levels than forecasted, giving credit to the “Abenomics”. On the other side, the cross decline from opening as of 158.00 area to the 157.60 zone, can be partly attributed to the soft Nikkei decline, but mostly to the heaviness of the cable.

Technical Aspects on the GBP/JPY

The cross is under heavy pressure but can be mostly attributed to the heaviness in the GBP/USD coupled with Nikkei decline, lingering Chinese liquidity fears and other factors. Markets participants interested in the cross should realize that as long as the pair is well above the 50-daily EMA at 156.46 and the 21-daily EMA (157.49), if it manages to overcome the handle as of 157.87 where the 10-daily MA lies as well the 158.20 (the 24th October daily high), then the road to the 2009 highs as of 163 it can be maybe achievable. Briefly, traders in favor of the bullish above depicted scenario, point out that between 158.20 area and the 2009 high as of 163.00, there are no resistances to be found, apart from tiny ones. On the other side, if the 50-daily EMA at 156.46 is breached, then the cross might kick off a downtrend shift.


Dollar Gains After FOMC Meeting, Shrugs Off Poor Employment

The US dollar was firm after the meeting of the Federal Open Market Committee as the resulting statement was less dovish than market participants have expected. The greenback retained strength despite poor employment data.

The employment report from Automatic Data Processing showed growth by just 130,000 jobs in October that trailed the forecast of 151,000. Such data indeed does not give incentive for the US central bank to change policy, yet the dollar was not bothered by it.

EUR/USD fell from 1.3734 to 1.3726 as of 00:00 GMT today. GBP/USD went down from 1.6036 to 1.6028, while USD/JPY was flat at 98.48 following yesterday’s advance.


Markets Primed for Dovish FOMC Outcome May Be Disappointed

German Unemployment and CPI figures headline the economic calendar in European hours. The former data set is expected to show no change in headline labor market indicators in October, with the ranks of the jobless holding steady from the prior month while the unemployment rate remains at 6.9 percent. The latter report is forecast to see the baseline year-on-year inflation rate holding at 1.4 percent, matching September’s result.

On balance, such outcomes offer no meaningful impetus for markets to re-appraise status-quo ECB policy expectations, and as such seem unlikely to yield much of a reaction from the Euro. Overall Eurozone economic news-flow has deteriorated relative to expectations over the past two months according to data compiled by Citigroup. While this opens the door for downside surprises, the probability of an outsized reaction from the single currency (much less of seeing lasting follow-through) seems rather low before the markets can put today’s FOMC policy announcement behind them.

Needless to say, investors are looking to the Fed meeting to offer guidance on when officials will begin to “taper” the size of the QE3 stimulus program. Fiscal drag considerations following October’s US government shutdown have pushed back expectations on when the policy normalization process will commence, with the baseline view now looking for the first cutback in March 2014.

The incorporation of this view into asset prices weighed on the US Dollar over recent weeks, dulling the impact of any overtly dovish rhetoric that may emerge in the FOMC policy statement. That means that any large-scale volatility that occurs after the results of the Fed sit-down cross the wires is likely to come from an indication that the unwinding of QE may be closer on the horizon than current expectations are accounting for. In this context, broadly unchanged Fed commentary may be seen as comparatively hawkish considering investors seem primed for a noticeable lurch toward the accommodative side of the spectrum.

The absence of a discernible dovish tone shift may thus weigh on risky assets and boost the greenback. Such a scenario seems reasonable. Recalling the ultimately unfounded fears of the fiscal drag from the payroll tax hike and “sequester” spending cuts on the US recovery earlier this year, the chance that worries about the shutdown’s impact are overstated is a real one. Furthermore, the Fed’s recently spotty record of managing expectations means officials will probably want to see more hard evidence before tinkering with existing guidance.


EUR/USD retesting 1.37 support bears in control

The EUR/USD is extending its losses along Asia, currently testing bids at the 1.37 handle, exact same area where it stalled post FOMC, representing a technical support aligning with Oct 18 peak.

EUR/USD maintains a strong bearish tone according to the hourly chart, says Valeria Bednarik, Chief Analyst at, adding that "failure to quickly regain 1.3750 will likely keep the pressure to the downside, with next big hurdle of buyers waiting around 1.3640."

The move, which has come in impulsive waves, reflects the somewhat increased optimism that the Fed left the door open to start the tapering of its bond purchasing program by December this year or January 2014.


What is BitCoin

Bitcoin is the first decentralized Digital Currency or E-currency which enable instant payment to anybody and anywhere in the world, created and electronically held. Bitcoins are not paper not or printed like Euros or Dollars or even Pounds. One of the interesting part from Bitcoin is they are produced by lots of people running their computer around the world using the software which solve mathematical problems. Bitcoin is the very first sample of growing category of money which currently known as cryptocurrency.

Some of you might found it on HYIP program as well and also Revenue share program. The truth is, it will be great if they can support this Digital Currency Bitcoin. It will allow you to trade bitcoin in other trading platform while investing your bitcoin in HYIP at the same time. Bitcoins have a number of advantages such as it is directly transferred from person to person via the net without going to the bank or clearing house.

  • Instant peer-to-peer transactions
  • Worldwide Payments
  • Zero or Low Processing Fees

You can think of Perfect Money or Solid Trust Pay which is also has the same advantages with bitcoins but they are significantly differ in many ways. You can use bitcoin in every country and your account can not be frozen by anyone else. And as I mentioned before, Bitcoins are generated by many people all over the internet by anybody running a free application called The BitCoin Miner. While mining a bitcoin, it will require you a certain amount of work for each block of coins. This amount is automatically adjusted by the internet network and the total amount of bitcoins is predictable and limited. Therefore, your bitcoins are stored in digital wallet or E-wallet and when you transfer a bitcoins an electronic signature are added and within a few minutes the transactions will be verified by a miner and prominently and anonymously saved in the network.

What is Bitcoins, and How Does it differ other digital currency ?

Bitcoins can be used to buy things electronically. You can buy everything using Bitcoins as long as the merchant accepted this digital currency called Bitcoin. You may notice that this digital currency is also accepted by HYIP admin in their website to attract more investors as it will give us a unique payment when investing in HYIP program which of course many people will be interested to join them. Bitcoin is just like a conventional.

The unique thing of Bitcoin is that it is decentralized which given them the most important characteristic and also makes it different to conventional money such as dollars and yen. It is also a great characteristic which differ significantly to Perfect Money, Solid Trust Pay and even Ego Pay. There is not even one single institution that controls the Bitcoin network. Furthermore, it will put you at ease since there is no bank and even large bank can’t control their money. Bitcoin also got some company with the form of rival digital currencies such as Ripple, Freicoin, Namecoin.dollars, Euros, or yen which also traded online.

So who created Bitcoin ?

Bitcoin was propsed by software engineering called Satoshi Nakamoto which was a digital payment system based on mathematical proof. It was a complicated coding which was created by and him and now it is widely used in digital world. The idea was to create and produce an independence currency of any central authority getting involved, digitally transferable, more or less instantly with very or maybe no fees at all. Today, the idea was created, proven and has been widely use by people in digital world.

Then Who prints Bitcoin ?

No body.. It wasn’t physically produced from the beginning by the bank. It is uncountable and it has it’s own rules. If the bank can easily print out this Dollars paper note than bitcoins are mined using computing power in a distributed network by the community of the people in digital world. Therefore, the network also handle the transaction processes made by bitcoins and effectively creating the bitcoin as its own payment method. There is also another rule for example, say that only 25 million bitcoins can ever be made by miners in digital world. Thus, these bitcoins could be divided into a smaller pieces and the smallest divisible is for 100 millionth of Bitcoins which is called ‘satoshi’ after the founder of the Bitcoins digital currency.

And What is it ‘Based’ on

Usually conventional currency may be in form of Gold or Silver. Basically, you understood that if you deposited $10,000 in the bank, you could get your deposit in form of gold. Thus, Bitcoin is not based on gold but instead it is based on mathematical formula created by Satoshi. its values is not rooted by precious metals such as Gold or silver. Therefore, the community are using software program that follow these mathematical formula to produce and create bitcoins around the world. You would probably need a high computer performance to boost up your bitcoins mining. The mathematical formula is free to be accessed and any body can see and use it. Furthermore, it is an open source software which you can edit or delete the code to ensure it does what it is supposed make. As long as you know and understand the code, you can edit it according to your will.

What are the important Characteristics of Bitcoin ? Bitcoin has several Important Characteristics that others don’t

1. It’s decentralized

Which mean the network is not controlled by one central authority. It’s backed by no government agency or bank which means that they won’t be able to interfere the monetary policy and cause a meltdown is simply able to take other people’s bitcoin away as what Central European did on Cyprus in early 2013 which caused an uproar. And even if the network goes offline, for any reasons the the money will still flowing without problem.

2. Easy to Set Up

Setting up merchant account in Bank may be a bit complicated but setting a merchant account is as easy as flipping your bitcoins. You can set the account within seconds without any question being asked and there is completely no fees.

3. It’s Anonymous

I would say this is the best feature for HYIP admins and investors as well. It gives a complete anonymous when hold a multiple or single account. They are not linked to your name, addresses or any other personal information which means they are the best when used in illegal stuffs such as HYIP.

4. It’s completely transparent

However your bitcoin balance is completely revealed to anyone and they can tell how much you have. However, they just don’t know that it’s yours bitcoins since it is completely anonymous account. If you have this publicly bitcoin addresses then this might happened in the future but they won’r recognize the personal information or your name of this account owner.

5. Transaction fees are teeny

You bank charged you $35 for international bank transfers. You bitcoin wallet charged you $0 for international bitcoin transfers. Simple and profitable for investment.

6. Fast & Furious

Receive your Bitcoins within minutes after the network processes the transactions.

7. It’s Non-refundable

When bitcoins are sent, it is Sent ! Dispute ? Impossible ! for Bitcoins unless the recipient send you back.


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