The cost of borrowing dollars fell on Wednesday and eurodollar futures rose amid growing market conviction financing rates will remain low for a longer period.
The average cost of 3-month funds in Singapore SIUSD3MD=ABSG fell to a 15-week low of 0.35778 per cent from 0.37611 percent. The rates have fallen every day since July 16, the last time they had risen. Dollar funding costs have fallen by over 10 bps this month.
The euro struggled near key technical support levels on Wednesday as debt worries weighed, while the Canadian dollar was supported by a huge takeover bid by global miner BHP Billiton for Canada's Potash Corp.
The yen rose on Wednesday, with traders citing yen-buying by Japanese players, while the Canadian dollar held gains made on news of a huge takeover bid by global miner BHP Billiton for Canada's Potash Corp.
Poor growth data released in Japan yesterday was enough for investors to once again eschew riskier assets which saw the Australian Dollar dip towards 0.8860 early in the Asian session.
The AUD has opened stronger this morning gaining overnight with news that China will take over Japan's place as the world's second largest economy.
The yen and the Swiss franc led a broad rally in safe-haven currencies on Monday, while the euro recovered as investors bet recent declines went too far, too fast, even as investors remained sensitive to risk in euro zone bond markets.
The euro fell sharply versus Swiss franc on Monday and safe-haven U.S. and German government bond yields hit new lows after much weaker than expected growth numbers from Japan added to worries over a faltering global economic recovery.
The euro hovered near one-month lows against the dollar and fell sharply versus a broadly firmer Swiss franc on Monday, amid heightened sensitivity to risk in euro zone bond markets.
The premium investors demand to hold 10-year Irish and Greek government bonds rather than German Bunds rose on Monday, while the cost of insuring their debt against default also increased.
The euro recovered from near one-month lows against the dollar on Monday, aided by a bounce in equity markets, but rallies were hampered by sovereign sales and concerns about the euro zone periphery.
The single currency initially headed lower for a sixth straight day before a slight recovery in European dealing.
The yen rose broadly on Monday as high-yielding currencies and Asian equities faltered, with talk of possible demand from Japanese exporters and investor fund repatriation also giving the yen a boost.
Data showing that Japan's economic growth slowed markedly in April-June helped drag Tokyo shares lower. The dip in equities gave support to the yen, which is a funding currency for carry trades and tends to rise in times of market stress.
The U.S. dollar was holding most of last week's hefty gains in Asia on Monday with shares in the region likely to follow Wall Street lower and add to the general mood of risk aversion.
Still, the early inclination was to take some profits on the dollar, and its index .DXY drifted down by 0.120 percent. That follows a 3.2 pct surge last week, which was the strongest performance since late 2008.
The Australian Dollar has opened weaker this morning trading around the 0.8950 level after a fairly quiet US session on Friday night in which US data releases were not that bad in relation to consensus.
The Australian Dollar opens a shade lower on Monday at 0.8928 as risk aversion keeps a lid on high-yielding currencies.
The euro fell on Friday after lackluster results in an Italian bond auction renewed worries about the euro zone peripheral economies and offset strong German growth data.
The U.S. dollar headed for its best weekly performance since early 2009 against a basket of currencies after concerns about the U.S. and global economic outlook prompted investors to dump riskier assets and seek safety in the greenback.
The European Commission welcomed data on Friday showing strong economic growth in the euro zone in the second quarter of the year but said the recovery in the currency area remained fragile.
Commission spokesman Amadeu Altafaj said that while the figures -- which showed the economy expanded 1.0 percent quarter-on-quarter -- were encouraging, euro zone economies still needed to focus on fiscal consolidation and structural reforms, which could have an impact longer-term.
It was a quiet night for currencies overnight, the AUD grinding higher at one stage, back above USD0.9000.
The Aussie dollar experienced a roller coaster ride over the last 24 hours dropping to 0.8920 in Asia before bouncing back to 90 cents in early Europe only to retest 0.8920 in North American trade overnight.
The yen's surge to a 15-year peak against the dollar this week comes amid mounting worries that the U.S. economic recovery is losing steam and follows a broad, two-month slide in the dollar.
A drop in U.S. Treasury yields, a perception among market players that the U.S. Federal Reserve may be more willing to conduct aggressive monetary easing than the Bank of Japan, and talk of seasonal fund repatriation by Japanese investors have all contributed recently to the yen's rise.
The European Commission called Slovakia's decision not to participate in a euro zone bailout of Greece unusual on Thursday, but said it would not speculate on any repercussions for the country at this stage.
Commission spokesman Amadeu Altafaj said there were no indications any other members of the euro zone would follow Slovakia's move, which will not have an impact on Greece receiving funds from the 110 billion euro aid fund.
The euro fell on Thursday after weak Greek data reinforced concerns about weaker euro zone economies, while the yen pared losses versus the dollar as fears eased of immediate intervention by the Bank of Japan.
The single currency had risen in earlier trade on early signs that euro zone peripheral spreads were stabilizing after widening over the course of the week on concerns over Ireland's economy in particular
The euro bounced on Thursday, as heavy selling abated on early signs euro zone peripheral spreads were stabilizing, while speculation of intervention to weaken the yen drove down the Japanese currency.
The dollar steadied versus a basket of currencies after posting its biggest one-day gain in two years the previous day when concerns about the U.S. and global economies triggered a wave of unwinding in short dollar positions.
The dollar dipped on Thursday after scoring its biggest daily gain for nearly two years against most major currencies the previous day as concerns about the U.S. and global economies triggered a wave of unwinding in short dollar positions.
But the greenback rose to the day's high of around 85.50 yen from a 15-year trough against the yen marked the day before, after market sources told Reuters the Bank of Japan checked exchange rates with banks earlier on Thursday.
Weak Japanese economic data and a fall in the dollar to an eight-month low against the yen on Wednesday prodded Tokyo closer to fresh action to support an already fragile economic recovery.
The dollar hovered within sight of a 15-year low versus the yen on Wednesday after the Federal Reserve announced plans to boost a flagging economy by reinvesting money from maturing mortgage bonds in government debt.
The move did not come as a complete surprise to the market but it marked a policy shift for the Fed, which only a few months ago debated how to start winding down some of its monetary stimulus programmes.
The Aussie dollar traded lower yesterday dropping from 0.9160 to an Asian session low of 0.9105 following a disappointing NAB Business survey and Chinese Trade data which soured sentiment towards growth in the region.
The Australian Dollar continued to be sold off late yesterday and into the evening trading session ahead of the widely anticipated FOMC Meeting overnight.
The dollar staged a rebound against major currencies on Tuesday as traders pared short positions on looming uncertainty over whether the U.S. Federal Reserve will start a new phase of quantitative easing to deal with a slowing economy.
The AUD has opened slightly weaker this morning currently trading at USD 0.9160 as many investors square up some positions before the Federal Reserve's meeting tonight.
A larger than forecast 3.9% decline in Australian home loans during June and disappointing ANZ job advertisements data halted the progress of the Aussie dollar in Asia yesterday as it entered offshore exchange relatively unchanged from the weeks open at 0.9185.
The dollar was on the defensive against major currencies on Monday, as disappointing U.S. jobs data on Friday highlighted a weakening U.S. economic outlook and added to speculation about further monetary easing.
Market players refrained from chasing prices aggressively, having already priced in some form of modest easing at the U.S. Federal Reserve's policy meeting on Tuesday.
