Weak corporate earnings and more bad European data helps the Dollar
Wednesday, April 8, 2009
USD
The US Dollar gained broadly on Tuesday as stocks worldwide dropped in advance of what is expected to be a dismal corporate earnings season. The flight from equities helped the dollar as investors continued Monday's push toward the safe-haven greenback. Investors will learn more about the recession's toll on U.S. corporate profits in the comings weeks. It is expected that first-quarter earnings for the biggest companies will fall by almost 37 percent versus last year as global demand slumps.
As of 11:30PM GMT, The Dollar was up almost 1/2% against the Yen to 100.62, keeping above the important 100 level. Up 1/4% to the British Pound to 1.4737, down .1% to the Canadian Dollar to 1.2364 and up 1/4% to the Swiss Franc to 1.1427.
EUR
The European Union revised earlier data that showed a 1.6% contraction in the EU economy, .1% worse than originally reported. This news sent the Euro down on Tuesday as investors were also trying to digest a report that showed England's 12th straight month of manufacturing production decline as well as a staggering 50% decline in German steel output in March. As signs of the recession reappear, investors are nervous as to when they will finally see a turnaround.
At 11:45 PM GMT, the Euro was trading down 2% to the Yen to 132.90, down 1.1% to the US Dollar to 1.3255, down 1/2% tot he British Pound to .9005 and down .3% to the Canadian Dollar to 1.6412.
Other Happenings
The Australian dollar was back and forth all day against the USD after the Reserve Bank of Australia dropped interest rates by another 25 basis points to a record low 3.0 percent.
The Bank of Japan said it would leave interest rates at 0.1 percent for now. This was expected although they surprised the market by announcing additional steps to ease credit strains, saying they would start lending against a wider range of municipal debt to support ailing regional banks.
The US Dollar gained broadly on Tuesday as stocks worldwide dropped in advance of what is expected to be a dismal corporate earnings season. The flight from equities helped the dollar as investors continued Monday's push toward the safe-haven greenback. Investors will learn more about the recession's toll on U.S. corporate profits in the comings weeks. It is expected that first-quarter earnings for the biggest companies will fall by almost 37 percent versus last year as global demand slumps.
As of 11:30PM GMT, The Dollar was up almost 1/2% against the Yen to 100.62, keeping above the important 100 level. Up 1/4% to the British Pound to 1.4737, down .1% to the Canadian Dollar to 1.2364 and up 1/4% to the Swiss Franc to 1.1427.
EUR
The European Union revised earlier data that showed a 1.6% contraction in the EU economy, .1% worse than originally reported. This news sent the Euro down on Tuesday as investors were also trying to digest a report that showed England's 12th straight month of manufacturing production decline as well as a staggering 50% decline in German steel output in March. As signs of the recession reappear, investors are nervous as to when they will finally see a turnaround.
At 11:45 PM GMT, the Euro was trading down 2% to the Yen to 132.90, down 1.1% to the US Dollar to 1.3255, down 1/2% tot he British Pound to .9005 and down .3% to the Canadian Dollar to 1.6412.
Other Happenings
The Australian dollar was back and forth all day against the USD after the Reserve Bank of Australia dropped interest rates by another 25 basis points to a record low 3.0 percent.
The Bank of Japan said it would leave interest rates at 0.1 percent for now. This was expected although they surprised the market by announcing additional steps to ease credit strains, saying they would start lending against a wider range of municipal debt to support ailing regional banks.
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