Euro Slides Toward Lowest Since 2003 as Data Falters Before QE

Posted by Forexsq 17 hours ago (
img The euro fell for a fifth day against the dollar, approaching the weakest level since 2003, as reports on services growth in Italy and Spain fell short of economist estimates.

Europe’s common currency extended its drop before a European Central Bank policy meeting on Thursday, at which officials may give details of their expanded bond-buying program known as quantitative easing. The dollar advanced before a private report today that analysts said will show the world’s largest economy added jobs at a faster pace in February.

“It’s worth noting that the market may want to increase their short-euro exposure ahead of the ECB actually starting their QE program,” said Sam Lynton-Brown, a currency strategist at BNP Paribas SA in London. “While the announcement led to euro weakness, we also think the flow impact of QE is going to be very important.”

The euro weakened 0.5 percent to $1.1123 at 9:20 a.m. London time. It fell earlier to $1.1116, the lowest since Jan. 26, when it reached

Euro Falls To The Lowest Since 2003 as Italy Bonds Gain

Posted by Forexsq 16 hours ago (
img The euro weakened while Spanish and Italian bonds gained as a gauge of business activity grew less than estimated before the European Central Bank meets to work on details of its bond-buying program. European stocks erased gains and U.S. equity-index futures fell.

Europe’s shared currency slid 0.4 percent to $1.1129 at 10:14 a.m. in London. The yield on 10-year Spanish notes fell two basis points to 1.37 percent and Italy’s rate dropped to 1.38 percent. U.K. 10-year yields rose to the highest this year. The Stoxx Europe 600 Index slipped less than 0.1 percent and Standard & Poor’s 500 Index futures declined 0.3 percent.

While a purchasing managers index for the manufacturing and services industries in the euro area rose to a seven month high, it was less than initially estimated, according to Markit Economics. Investors are looking for Thursday’s ECB meeting for details on its 1.1 trillion-euro ($1.2 trillion) quantitative-easing program announced in January.

“It’s worth noti

Yellen: Poor values may undermine bank safety

Posted by Forexsq 15 hours ago (
img Federal Reserve Chair Janet Yellen lashed out at the culture in the nation's biggest banks on Tuesday saying "there may be pervasive shortcomings in the values of large financial firms that might undermine their safety and soundness."

In a speech in New York City, Yellen, who as head of the Federal Reserve is the nation's leading bank supervisor, said that the Fed expects banks to follow the law and act ethically. "Too often in recent years, bankers at large institutions have not done so, sometimes brazenly," she said.

The remarks come amid ongoing investigations and settlements by big banks in key areas of their businesses, including mortgages, currency trading and setting interest rates. They appear to be her strongest comments yet on the issue, going further than previous speeches and other Fed officials in suggesting a pattern.

Yellen's comments come as the issues of bank regulation and financial system reforms are very much alive in the new Republican-controlled Congress

Why the drachma can’t save Greece: Goldman

Posted by Forexsq 15 hours ago (
img Fears Greece may exit the euro and revive the drachma abound, but attempting a return to the currency Athens left behind would have tragic results, Goldman Sachs said.

"Transitioning from the euro to a new national currency is no straightforward task either for Greece or for Europe," Goldman said in a note Monday. "Greece can't just (re)introduce a national currency."

Read More Greece lashes out as pressure to reform rises

Debating whether to rekindle the drachma, or drachmatization, isn't just an academic question. With negotiations over Greece's debt and finances proving touchy, the possibility the country may exit the euro zone, a scenario dubbed "Grexit," has become more likely, analysts say, although they still assign a relatively low probability.

"The probability of an accident is still there," Goldman said.

Modern tragedy

Greece has already had two bailouts since 2010, for a total of 240 billion euros. Athens has been playing a risky game in negotiations recen

Bank of Canada: stop drawing Leonard Nimoy Spock on money

Posted by Forexsq 14 hours ago (
img Canadians are paying a strange sort of tribute to the late Leonard Nimoy — they're drawing his most famous character, Star Trek's Spock, over a 19th-century politician on their banknotes.

Nimoy died on February 27, and got a variety of tributes, not least from President Barack Obama. But few are weirder than the drawings of Spock on Canadian banknotes. It has become known as "Spocking."

It looks like the fad goes back further. Apparently, Canadians have been turning Sir Wilfrid Laurier, the country's first French-speaking prime minister, into a Vulcan for years.

But the Bank of Canada is unimpressed.

According to the BBC, Canada's central bank, which is responsible for the notes, confirmed that the practice isn't illegal, but that people shouldn't be doing it anyway:

"The Bank of Canada feels that writing and markings on bank notes are inappropriate as they are a symbol of our country and a source of national pride," Menard told the Canadian Broadcasting Corporation i

For first time in years, euro economy starts surprising on upside

Posted by Forexsq 14 hours ago (
img The euro zone economy is sprouting more green shoots than anticipated just as the European Central Bank fires up a money printing program worth more than 1 trillion euros.

An analysis of Reuters polls shows more than half the most important economic reports since the start of the year, as well as data across the bloc's four largest economies, have beaten the consensus forecast and many have topped the highest prediction.

This latest turn, which comes despite concerns over Greece's future membership in the euro and no real respite to conflict in Ukraine, suggests fears of a deflationary spiral in Europe have been overdone.

Germany, Europe's largest economy, is the clear leader. Retail sales growth for January almost tripled the highest forecast and helped propel the wider euro zone figure to over 10 times the Reuters median on Wednesday.

Two other Germany releases - fourth quarter GDP growth and the flash services PMI reading for January - also topped the highest forecast.

Fed's Evans wants no rate hikes until early 2016

Posted by Forexsq 7 hours ago (
img The Federal Reserve should wait until next year before raising interest rates or risk undermining the very recovery it has helped engineer, a top U.S. central banker said on Wednesday.

"Given uncomfortably low inflation and an uncertain global environment, there are few benefits and significant risks to increasing interest rates prematurely," Chicago Federal Reserve Bank President Charles Evans told the Lake Forest-Lake Bluff Rotary Club. A rate hike will be not be appropriate until "early 2016," he told reporters afterward.

Evans, a voting member this year on the Fed's policy-setting panel, stands nearly alone at the central bank with that view.

Many of his colleagues have said they are open to, if not eager for, rate hikes to begin as soon as June, and investors are keenly focused on whether Fed policymakers this month will open a door to that possibility by removing a vow to be "patient" in raising rates.

Perhaps surprisingly, Evans suggested he would not necessarily op

Dollar gets boost from U.S. data as euro sags below $1.11

Posted by Forexsq 5 hours ago (
img The dollar climbed to a fresh 11-1/2-year high on Wednesday, boosted by strong U.S. private-sector jobs growth ahead of the launch of quantitative easing by the European Central Bank.

The dollar hit its highest since September 2003 against a basket of currencies .DXY and was last up 0.6 percent at 95.958. Earlier it struck a high of 96.059.

The ADP National Employment Report showed a gain of 212,000 private-sector jobs. Economists surveyed by Reuters had forecast the ADP to show a gain of 220,000 jobs.

Separately, the Institute for Supply Management said its services index was 56.9 in February, up slightly from 56.7 in January. Analysts were looking for a reading of 56.5 for the sector that makes up the bulk of the U.S. economy, according to a Reuters poll.

The ADP data signals strength in Friday's potentially market-moving U.S. jobs report for February, according to Camilla Sutton, chief currency strategist at Scotiabank in Toronto.

"What's really important now is that

Barclays ‘Last Look’ at Forex Trades to Face U.S. Review

Posted by Forexsq 1 day 8 hours ago (
img The Justice Department has begun looking into a common practice in foreign-exchange markets that allows banks to back out of unfavorable trades at the last moment, a person briefed on the matter said.

Prosecutors, along with the Securities and Exchange Commission, have asked Barclays Plc for information related to its electronic-trading platform, which contains a program that allows traders to take a “last look” at an order before executing it, according to the person, who asked not to be named because the matter isn’t public.

Prosecutors’ interest in the last-look practice has grown out of a broader investigation into the manipulation of benchmarks and client orders in the $5.3 trillion-a-day currency market. The inquiries follow an investigative path laid out in recent months by Benjamin Lawsky, New York’s banking regulator.

Barclays said earlier Tuesday that it set aside an additional 750 million pounds ($1.2 billion) to cover the cost of settling the currency-rigging inve

The Fed Is Weird. Get Over It

Posted by Forexsq 1 day 5 hours ago (
img The Federal Reserve System is a strange, ungainly beast. Its strangest and ungainliest appendages are the regional Federal Reserve Banks, 12 technically private institutions scattered unevenly across the nation. The Federal Reserve Bank presidents are chosen by boards of local citizens -- although not, since the Dodd-Frank Act, by local bankers -- and are paid on a scale that actual government officials below the level of U.S. president can only dream of (unless you count state-university football and basketball coaches as government officials).

Yet these well-remunerated private citizens get to help set the nation’s monetary policy. The New York Fed president has a permanent say in the deliberations of the rate-setting Federal Open Market Committee; the other 11 presidents rotate through four voting spots -- and they can come to the meetings even when they don’t vote.

Is this weird? Absolutely (Texas Congressman Wright Patman once called the Fed "a pretty queer duck"). Is it of

Euro falls to 6-week low in early deals in Europe - Forex News

Posted by Forexsq 18 hours ago (
img The euro fell through support at $1.1150 to hit a 6-week low on Wednesday, down 0.3 percent on the day as pressure on the single currency from the imminent launch of outright quantitative easing grew.

The falls early in European trading helped drive the dollar to 95.662, its highest since September 2003 against the basket of currencies used to measure its broader strength.

"The euro has popped the 1.1150 barrier and triggered stops. That seems flow driven - the liquidity is not great," said a dealer with one international bank in London.

Hockey Concerned Aussie Spiked Before RBA Rate Announcement

Posted by Forexsq 18 hours ago (
img Australia’s Treasurer Joe Hockey called the central bank governor to express concern about a sudden jump in the nation’s currency before Tuesday’s interest-rate decision, a move that’s being investigated by the securities regulator.

Hockey said Glenn Stevens told him that the Australian Securities and Investments Commission had been informed and is looking into it.

“Obviously I was, like he was, concerned about reports that there have been extraordinary trades before the release of the Reserve Bank decision yesterday,” Hockey said at a press conference Wednesday in Canberra. “I’m satisfied that that investigation will be properly undertaken.”

Australia’s dollar surged more than 0.6 percent in the minute before the central bank unexpectedly refrained from cutting interest rates on Tuesday, spurring speculation the decision had been released early. The Reserve Bank verified that the decision was published at exactly 2:30 p.m. Sydney time on March 3 and was released according to

Yellen Turns from Friend to Foe for Forex Traders

Posted by Forexsq 1 day 13 hours ago (
img Janet Yellen is turning from currency traders’ best friend to their biggest foe.

The most popular trade in the $5.3 trillion-a-day foreign-exchange market has been betting on a stronger dollar, leaving investors exposed when the Federal Reserve chair damped speculation last month of an imminent increase to interest rates. As the dollar slowed its advance, an index of currency returns snapped a record winning streak, prompting traders to reassess how much higher the greenback can go.

“Currency managers had been doing well because they’ve been long dollars, and the dollar had been pretty much on a straight-line trajectory higher,” said Adam Cole, the global head of currency strategy at RBC Capital Markets in London. The dollar’s slowdown is “a major factor behind returns looking less positive,” he said.

While Bloomberg’s Dollar Spot Index climbed to a record on Tuesday, the measure is rising at the slowest pace since June and speculators including hedge funds are paring bets on

Barclays takes 750 million-pound charge as forex settlement looms

Posted by Forexsq 1 day 14 hours ago (
img Barclays took a 750 million pound charge in the fourth quarter as it prepares to settle allegations its traders manipulated foreign exchange markets, overshadowing the bank's efforts to slash costs and boost profits.

Past conduct problems continue to dog Barclays Chief Executive Antony Jenkins, but despite the burgeoning budget for litigation he accepted his first bonus since taking charge three years ago, helping to boost his total pay to 5.5 million pounds from 1.6 million in 2013.

The British bank said on Tuesday it had made an adjusted pretax profit of 5.5 billion pounds last year, up from a restated 4.9 billion in 2013 and above the average analyst forecast of 5.3 billion.

But including charges, provisions and restructuring costs of 1.2 billion pounds, pretax profit fell 21 percent to 2.3 billion.

The bank's shares were the top fallers in a flat European banking sector .SX7P, down almost 3 percent at 255.2 pence in early trade.

Barclays increased its litigation pro

Grexit risk rising despite cash lifeline

Posted by Forexsq 1 day 15 hours ago (
img Chances of Greece leaving the euro zone in the next 12 months are the highest since late 2012 even though Athens's financial lifeline has been extended, a survey of investors based mainly in Germany showed on Tuesday.

The survey of 980 individuals and institutional investors registered with consultancy firm sentix, found that 37.1 percent of respondents expect Athens to leave the currency bloc, up from 22.5 percent in January.

These expectations have risen steadily from a record low 5.7 percent hit last July, but remain below highs of 70.7 percent seen at the height of the euro zone debt crisis in July 2012.

A fxstay poll of economists in mid-February gave a one-in-four chance of Greece leaving the currency area in 2015.

"The new aid programme for the country does not seem to be convincing, rather a "Grexit" is now bound to be a constant topic among investors for the months to come," said Sebastian Wanke, a senior analyst at sentix.

The poll was conducted between Feb. 2

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