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  • UPDATE:Trichet:Idea Europe Has Liquidity Problem’Plain Wrong’
    By Steven K. Beckner JACKSON HOLE,Wyo. (MNI) – European Central Bank President Jean Claude Trichet insisted Saturday that the euro-area does not face a liquidity problem. Trichet,answering questions at the Kansas City Federal Reserve Bank’s annual Jackson Hole symposium,also reemphasized the ECB’s commitment to price stability and said that its anchoring […]
  • Trichet does not address Economic outlook
    […]
  • Trichet:Unconv’l Mon Pols Needne’t Interfere W/Price Stab
    By Steven K. Beckner JACKSON HOLE,Wyo. (MNI) – European Central Bank President Jean Claude Trichet suggested Saturday that the ECB needs to keep unconventional monetary policy weapons in its arsenal at a time of economic weakness,saying that they need not interfere with its price stability objective. Trichet,addressing the Kansas City Federal Reserve [... […]
  • IMF’s Lagarde:World Econ ‘In Dangerous New Phase’;Act Now
    By Steven K. Beckner JACKSON HOLE,Wyo. (MNI) – Sounding alarmed,the head of the International Monetary Fund said Saturday that the world economy has entered a “dangerous new phase” and called for urgent action to sustain a flagging global recovery. While advanced countries need to reduce their government debts,they must not do so […]
  • Bank of Mexico’s Carstens:Fin Crisis to Keep US Econ Weak
    By Steven K. Beckner JACKSON HOLE,Wyo. (MNI) – Agustin Carstens,governor of the Bank of Mexico,said Saturday that the economic experience of his country since the “peso crisis” of the mid-1990s suggests that the United States is likely in for a long period of slow growth. Carstens,commenting during a session of the […]
  • Jackson Hole:G20 Insurance Pool Proposed,Debt Risks Mount -2
    By Steven K. Beckner Prasad proposes that “the level of the premium would depend not only on the level of insurance desired but also the quality of a country’s policies. There would be higher premiums for a country that chose to run large budget deficits or that accumulated large amounts of debt,increasing its vulnerability […]
  • Jackson Hole:G20 Insurance Pool Proposed As Debt Risks Mount
    By Steven K. Beckner JACKSON HOLE,Wyo. (MNI) – Faced with “serious risks” to global stability from heavily indebted countries which cannot be fully insured against through massive foreign exchange reserve accumulation,the Group of 20 should launch an “insurance pool,” central bankers from around the world were told Saturday. Emerging market countries have […]
  • Jackson Hole:New Bank Reg’ns,Cap Standards Could Backfire -2
    By Steven K. Beckner Levine also suggests that strengthened capital regulations are not the guarantor of financial stability than many perceive them to be. “Tightening capital regulations will not necessarily improve the asset allocation decisions of banks and promote economic growth,” he writes. “While many analysts look to capital regulations as a sort of […]
  • Jackson Hole:New Bank Reg’ns,Cap’l Standards Could Backfire
    By Steven K. Beckner JACKSON HOLE,Wyo. (MNI) – The benefits of more government regulation and higher capital standards have frequently been extolled in wake of the financial crisis,but those benefits are not automatic and could be offset by adverse effects,according to a paper presented to top Federal Reserve officials and economists here […]
  • Fed:To Hold Public Hearings On Cap One/ING Merge Proposal
    WASHINGTON (MNI) – The following was issued late Friday by the Federal Reserve:The Federal Reserve Board on Friday announced that it will hold three public meetings on the notice by Capital One Financial Corporation,McLean,Virginia,to acquire ING Bank,Wilmington,Delaware,and indirectly to acquire shares of Sharebuilder Advisors,LLC,and ING Direct [. […]
  • ForexLive US wrap:Bernanke kicks the can to September FOMC
    US Q2 GDP revised to 1.0% annual rate from 1.3% previously University of Michigan consumer sentiment index slides 55.7 from 63.7 in July Bernankedoes not make the case for immediate further monetary stimulus;Fed has tools and will explore more tools at September FOMC meeting UBS warns clients it may charge excess balance fees on […]
  • The QE will come out tomorrow,bet your bottom dollar
    That seems to be Mr. Market’s take on today’s Bernanke speech. He may not have tipped a move at Jackson Hole but he didn’t slam the door either,merely turning the focus to the now-two day FOMC meeting in September. This market won’t believe QE is well and truly dead until they see a corpse […]
  • NYC issues evacuation order for low-lying area
    No fooling around as Irene nears the US coast… […]
  • China slowdown calls proliferate
    Business Insider picks up a report from the Shanghai Daily… […]
  • Blinky Blinder gets it right
    Alan Blinder,the former Fed governor,now back at Princeton,says that Bernanke tried and succeeded at not being newsworthy today. That’s the best summation I’ve heard thus far. Blinder,a hard core dove,does not see the FOMC announcing QE3 in September,he says in a Bloomberg interview.   […]
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Dollar Trades Near 15-Year Low Against Yen on Speculation Fed to Ease More

By zagros,on October 19th,2010

The dollar traded near its weakest level in 15 years against the yen before a U.S. housing report that may fuel speculation the Federal Reserve will take more credit-easing measures to revive economic growth.

The greenback was about two U.S. cents from an eight-month low versus the euro before data forecast to show housing starts declined for the first time since June. Australia’s dollar traded near parity with the greenback after minutes released today said the Reserve Bank’s decision to keep the benchmark interest rate unchanged earlier this month was “finely balanced” with economic growth strengthening.

“Expectations for additional monetary easing are still weighing on the dollar,” said Kazuya Yashiro,a currency analyst at Himawari Securities,Inc. in Tokyo. “This is likely to continue at least until the next Fed meeting.”

The dollar traded at 81.37 yen at 12:31 p.m. in Tokyo from 81.27 in New York yesterday,after reaching 80.88 yen last week,the lowest since April 1995. The greenback was at $1.3935 per euro from $1.3934 after touching $1.4159 on Oct. 15,the weakest since Jan. 26. The yen fetched 113.38 per euro from 113.25.

U.S. builders broke ground on 580,000 homes at an annual rate in September,down 3 percent from August,according to economists in a Bloomberg News survey before today’s data.

Interest-rate futures contracts on the Chicago Board of Trade showed a 33 percent chance U.S. policy makers will cut the target lending rate to zero by January. The probability was 25 percent a month ago.

RBA Outlook

The so-called Aussie halted a two-day drop versus the U.S. dollar after minutes of the Reserve Bank of Australia’s meeting on Oct. 5 showed policy makers reiterated that benchmark rates would have to increase “at some point.”

“The minutes reinforce the argument that there could be another hike coming in November or December given that the RBA seems very comfortable with where the currency is,” said Tim Waterer,a foreign exchange dealer with CMC Markets in Sydney. “Unless we see something in the U.S. which changes the timetable on quantitative easing from the Fed,we will continue to see broad U.S. dollar selling in favor of traders wanting to jump into better-returning assets.”

Australia’s currency touched 99.60 U.S. cents before trading at 98.87 from 98.89. It rose above parity on Oct. 15. The currency was at 80.43 yen from 80.37.

Swaps traders raised to 40 percent the chance that the central bank will end a five-month pause and boost the key rate to 4.75 percent on Nov. 2,a Credit Suisse AG index showed. The probability of an increase was 36 percent yesterday.

Geithner’s Comments

Losses in the dollar were limited after U.S. Treasury Secretary Timothy F. Geithner said yesterday the government will preserve confidence in a strong dollar and “will not engage” in currency devaluation.

“Comments by Geithner helped the dollar regain some ground,” Brian Kim,a currency strategist in Stamford,Connecticut,at UBS AG,wrote in a research note. “He commented that he does not see a time in our lifetime when the dollar is not the world’s key reserve currency.”

Geithner will travel to South Korea this week to meet with Group of 20 finance ministers and central bankers to discuss currencies,government stimulus efforts and other economic policies. Brazil’s Finance Minister Guido Mantega said yesterday nations trying to defend exports must end the “currency war.”

Malaysia’s ringgit fell for a third day,its longest losing streak in more than two months,on concern slowing export growth in the region will prompt Asian policy makers to step up efforts to limit currency gains.

“There are noises about a currency war with everybody trying to weaken their currencies against the dollar,” said Ahmad Zubaidi Samse,a foreign-exchange trader at Bank Muamalat Malaysia Bhd. in Kuala Lumpur. “That should keep the ringgit in the recent trading range.”

Blomberg

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