Nov. 29 (Bloomberg) -- The yen gained for a fourth straight month against the euro, the longest wining streak since 1999, as the deepening global economic slump prompted investors to sell high-yielding assets and pay back loans made in Japan. The euro weakened against the dollar for a fifth month as investors added to bets the European Central Bank will cut interest rates next week after inflation in the region slowed by the most since at least 1991. Russia's ruble declined against the dollar to the weakest level since March 2006 as the central bank let the currency depreciate and raised interest rates to halt an exodus of foreign capital. "The yen is still our favorite currency," said Derek Halpenny, head of global currency research at Bank of Tokyo- Mitsubishi Ltd. in London in an interview on Bloomberg Television. "The interest-rate differential argument is still very, very powerful for the Japanese yen as yields around the world continue to plunge. Past performance tells you that the Japanese yen is going to be the currency that outperforms."
Nov. 29 (Bloomberg) -- The yen gained for a fourth straight month against the euro, the longest wining streak since 1999, as the deepening global economic slump prompted investors to sell high-yielding assets and pay back loans made in Japan.
The euro weakened against the dollar for a fifth month as investors added to bets the European Central Bank will cut interest rates next week after inflation in the region slowed by the most since at least 1991. Russia's ruble declined against the dollar to the weakest level since March 2006 as the central bank let the currency depreciate and raised interest rates to halt an exodus of foreign capital.
"The yen is still our favorite currency," said Derek Halpenny, head of global currency research at Bank of Tokyo- Mitsubishi Ltd. in London in an interview on Bloomberg Television. "The interest-rate differential argument is still very, very powerful for the Japanese yen as yields around the world continue to plunge. Past performance tells you that the Japanese yen is going to be the currency that outperforms."
The euro fell to a four-session low against the dollar after data showing a drop in euro-zone inflation forced the European currency to give up much of its gains from earlier in the week. The European Union's Eurostat statistics agency said the annual rate of inflation in the 15 countries that use the euro fell to 2.1% in November from 3.2% in October. That was the largest decline in a month since euro-zone inflation records began in 1997. The inflation report hurt the euro because it means the European Central Bank will probably be less worried about inflationary pressures, and therefore more likely to cut interest rates this coming week in an effort to jump-start the region's economy. Lower ECB interest rates (the benchmark rate is 3.25%) would tend to reduce returns on euro-based assets, making the currency less appealing. "The market is no doubt looking for an ECB rate cut next week of at least [half a percentage point]after the 'flash' euro-zone CPI estimate collapsed," Stephen Malyon, senior currency strategist at Scotia Capital, said Friday. "We remain bearish toward the euro versus the dollar."
The euro fell to a four-session low against the dollar after data showing a drop in euro-zone inflation forced the European currency to give up much of its gains from earlier in the week.
The European Union's Eurostat statistics agency said the annual rate of inflation in the 15 countries that use the euro fell to 2.1% in November from 3.2% in October. That was the largest decline in a month since euro-zone inflation records began in 1997.
The inflation report hurt the euro because it means the European Central Bank will probably be less worried about inflationary pressures, and therefore more likely to cut interest rates this coming week in an effort to jump-start the region's economy. Lower ECB interest rates (the benchmark rate is 3.25%) would tend to reduce returns on euro-based assets, making the currency less appealing.
"The market is no doubt looking for an ECB rate cut next week of at least [half a percentage point]after the 'flash' euro-zone CPI estimate collapsed," Stephen Malyon, senior currency strategist at Scotia Capital, said Friday. "We remain bearish toward the euro versus the dollar."
Is it just market CW based on smoke and nonsense, are they over-exagerrating germany's issues or is there something else again causing this ? keep to the Fen Causeway
3) Everybody knows the ECB is about to bring interest rates down, and "markets are anticipating".
4) World stability hangs by a thread as economies continue to unravel - Telegraph
Investors are retreating into 3-month US Treasury bills - the ultimate safe-haven. The yield has fallen to 0.02pc, less than zero after costs. You pay Washington to guard your money.
(Read the whole article, go on)
5) Europe.Is.Doomed
It makes sense to me. Never underestimate their intelligence, always underestimate their knowledge.
Frank Delaney ~ Ireland
