Friday, 2 September 2011

Swedish Krona Falls as Manufacturing Declines

The Swedish krona fell in the report showed that manufacturing contracted in Sweden last month, reinforcing the view that the central bank could cut interest rates.

The manufacturing index fell to 48.7 from 50.1 in August Swedbank in July, while the average forecast was 49.8. A reading below 50.0 indicates decreased. That was the first decline in two years.

The adverse report agree that the Swedish economy is too week to support the current level of borrowing costs, let alone to survive further adjustment. According to Credit Suisse rates the central bank cut interest rates in the next 12 months.

USD/SEK jumped from 6.3377 to 6.4127. The currency pair has recovered somewhat today, trading at about 6.3936 as of 1:45 GMT.
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US Manufacturing Expands, Dollar Profits

The U.S. dollar advanced today as the unexpected growth in the U.S. manufacturing spurred speculation the Federal Reserve will not need to stimulate the economy by debasing the U.S. currency.

The Institute for Purchasing Managers Index Supply Management "was at 56.6 in August, with little change in the July figure of 56.9. The index is expected to fall to 48.7. A reading below 50, 0 indicates deterioration and above this value indicates expansion. Positive data suggest that perhaps the U.S. economy is in a state not bad enough to justify a new round of quantitative easing.

Unemployment claims fell from 421,000 to 409,000 last week, reducing concerns about the use to some degree. Another important reason for the concerns of the Fed, the housing market, made worse because the construction cost has not increased by 0.2 percent, as promised by the forecasts, but fell by 1.3 percent.

EUR/USD opened at 1.4374 and dropped to 1.4226 before trading near 1.4259 as of 22:57 GMT today. GBP/USD fell from 1.6249 to 1.6183, while reached the intraday low of 1.6130 earlier. USD/JPY advanced from 76.64 to 76.86 and earlier touched the high of 77.24.
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Australian Retails Sales Go Up, Aussie Follows

The Australian dollar advanced today against the euro and Japanese yen after the report showed that retail sales in July rose more than expected.

Australia retail sales rose 0.5 percent in July, while growth was 0.3 percent forecast. Retail sales fell 0.1 percent in June. MSCI Asia Pacific index gained 0.7 percent and the Standard & Poor's 500 Index advanced 0.5 percent.

EUR/AUD slipped from 1.3427 to 1.3349, while AUD/JPY climbed from 82.04 to 82.37 today as of 10:54 GMT.
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Franc Rallies as SNB Doesn’t Intervene

The Swiss franc gained for a second day today, yesterday broke his three-day drop against the U.S. dollar and the euro, as the Swiss National Bank has announced new measures to curb the strength of the franc.

Previously, the Swiss currency was swept by speculation that the central bank parity of the franc to the euro's performance. Market participants expect the SNB would release some information about euro-or, perhaps, other measures to drain the strength of the Swiss currency. No one, traders spurred speculation that the Bank is satisfied with the current rate of the franc in relation to the euro.

USD/CHF fell from 0.8059 to 0.8001 and EUR/CHF dropped from 1.1585 to 1.1427 as of 10:38 GMT today.
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