Value Of Dollar To Decline Further
March 6, 2008
According to many currency experts, the US dollar is predicted to weaken further in the near future. The dollar has been enduring severe losses in the past few weeks, and according to analysts, it is only going to get worse.
Many analysts are of the view that the greenback is going to be in a bad state until the middle of the year. It is believed that it will receive some sort of relief after this point.
The main reason for the massive decline in value of the dollar this week, is due largely to statements made by the Federal Reserve chairman last week. Ben Bernanke, Federal Reserve chief, had mentioned during his testimony at Capitol Hill last week, that the Federal Reserve might implement another rate slash during the Federal Reserve’s meeting in March, which resulted in the dollar losing a lot of ground.
Bernanke’s words, along with the other issues already facing the dollar, where enough to send the value of the dollar down the drains. This drop saw the Dollar touching decade lows against many currencies; the Japanese yen, Swiss Franc and the Malaysian ringgit are some of the currencies against which the dollar took an especially large fall. Last week the dollar hit its all time low against the Euro.
Most currency strategists are saying that the weak value of the currency is indicating the economy of the nation is going to go from bad to worse. The dollar last week was very consistent in recording all time lows against the Euro.
Currency analysts are very sure that the dollar is going to stay in its current state for the next month at least, if not longer. The dollar is going to go even further down if the employment report that is scheduled to come out later this week also turns out to be as bad as economists are forecasting. If it indeed turns out to be a depressing report the result might be that the dollar hits rock bottom.
As per the forecasts that have been made recently the dollar is going to hit a top of $1.55 to the fifteen nation currency very soon and this it will drop further in front of the Japanese Yen. The fall might be as low as ¥101 or ¥102.
Although currency experts are united in saying that the dollar will recover towards the middle of the year, as the economy of the nation starts to get back on its legs. The dollar again would reach a more stable position as soon as the Federal Reserve puts a stop to the rate slashes it has been employing so frequently nowadays.
Microsoft done making HD DVD Players
February 25, 2008
On the 24th of February, the computer giant Microsoft announced that it is going to stop making HD DVD players which were used for its Xbox 360 video game system. The news comes after Toshiba Corp. abandoned the high profile video format war that was going on between them and Sony Corp.’s Blu-ray.
However, the company on Sunday also said that it will continue to provide customary warranty support for its HD DVD players. According to the estimate of the Toshiba president Atsutoshi Nishida almost 300,000 people all around world awn the Microsoft video player. This video player was usually sold as a $130 add-on for the Xbox 360.
In a written statement given last week Blair Westlake, a corporate vice president of the computer company, said that Microsoft would continue to provide its customers the same old choice to enjoy digital distribution of high definition movies and other television shows directly into their living rooms. This is along wit the playback of the DVD movies that they already own. He also said that HD DVD players were just one of the ways by which the company was trying to offer a high definition experience to all its customers. He said that by stopping the production of these players the company was not going to put its old customers in any form of hardship.
Microsoft was one of the biggest supporters of this HD DVD player. They along with Intel and the Japanese electronic maker NEC Corp. had played a big role in making the product popular among the Xbox consumers. The support of Microsoft for the format followed by the DVD Player was seen as a big credit for Toshiba’s design.
Anyhow, this popularity had gone down by a reasonable amount in the last few years as most of the important movie studios had chosen Blu-ray pictures for the distribution of high definition DVDs. Some of the major companies that chose Blu-ray ahead of the HD DVD are the Sony Pictures, Walt Disney Co., News Corp.’s Twentieth Century Fox and Warner Bros. Entertainment. This was a major blow to the HD DVD players as the movie makers were one of the biggest source of income for the player. The final and most deadly blow to the player came when the Wal-Mart Stores Inc. recently announced that they would not be selling any more HD DVD players and that it will only sell Blu-ray players and discs.
Microsoft let it be known that it is now considering how it can use the technology it created for the HD players for other platforms too. They say that the technologies like HDi and VC-1 will be helpful in adding interactive features to other platforms. The company however said that the choice to put a halt to the selling of HD DVD players is not going to create a he impact on the video game business. The outcome of the move is that Blu-ray is going to find its way ahead very easy indeed.
Stocks remained largely unchanged as a result of disappointing economic data
February 18, 2008
The prices of stocks remained in a mixed state as a result of the rather depressing economic data that came out in the last week. The disheartening data about the manufacturing, import prices and the consumer confidence proved to be enough to remind the investors that the economy is not doing all that well currently. As a result of all this lackluster economic data that came out, the week that had begun with a rally came to a rather subdued end.
A Federal Reserve survey conducted in New York on the regional manufacturing showed that conditions have worsened further in this month. Another survey on the consumer sentiments of the country which was conducted by the University of Michigan showed that the consumer sentiments have fallen by a great deal as compared to last month’s standing. Another piece of data which paved path for more worries was the report that the Labor Department came up with. It showed that the import prices have jumped the roof just when the oil prices in the world were soaring.
The decline the market suffered on last Friday came just one day after the investors across the country let it be known that they were not too hopeful about the economy and sent the prices of the stocks down by more than one percent. This was a major hit for the economy as only earlier that week the market had gained strongly. The pull back by the investors were followed by some depressing remarks from the chairman of the Federal Reserve about the nation’s economy.
The investors all across the country appeared to be uninterested in making any sizable move even as the stocks closed on Monday because of the Presidents Day Holiday and other fresh economic concerns.
The fear factor is still very high in the minds of the investors. The Dow Jones industrial average fell by 0.23 percent and the Blue-chip index on the other hand finished the week with a small profit of 1.36 percent. The tech heavy NASDAQ took a fall of 0.46 percent to close the week. The value of government bonds also rose as the week came to an end. The US dollar yet again was in a mixed state as compared to the other major currencies in the world. The gold prices in the country however took a fall. The price of crude oil went up by four cents to come to a hault at $95.50 a barrel on the New York Mercantile Exchange.
Even though some of the data that came out on Friday was discouraging the investors largely remained uninterested. The central bank in the nation reported that the industrial output increased ever so slightly last month. This was something most experts were predicting because of the strength that was coming from the utilities.
The reason the investors are hesitant to go forth with investments is because they feel that the consumers are still uneasy about spending money. This they find to be a mortifying prospect as the consumer spending usually accounts for more than two-thirds of the total economic activity.
Dollar Further Down Against Euro
September 26, 2007
The value of the dollar has fallen yet again to a new all-time record low against the euro, after ongoing unrest within the US economy has led to more widespread sell offs on international currency exchanges.
With US consumer confidence down to its lowest point in over two years, and average US house price plummeting off the back of a continuing demand shortage in spite of the Federal Reserve interest rate cuts, investors are turning away from the dollar, seeing its value fall even further against the euro.
Analysts have also added that the Federal Reserve could be poised to cut interest rates even further in an attempt to get the US economy back on track - news which has served to further dissuade investors in the dollar.
Simultaneously, the euro has been increasingly gaining in strength over the last few sessions with the promise of a central bank interest rate rise throughout the eurozone and strong growth forecasts from France sufficient to attract investors to the single currency.
In early Wednesday trading, the value of the euro was up to $1.4163 - an all time high - before slipping back to just over $1.41 by mid-morning throughout European markets.
The ongoing strength of the euro is causing problems for those exporting outwith the eurozone, as they are forced to slash prices in order to remain competitive.
Meanwhile US exports are enjoying something of a revival, particularly within the eurozone as a result of the weakened currency, which has seen US manufacturing industries performing well in recent weeks.
Analysts and currency traders are now further awaiting results from the US in order to make their next investment decisions. Depending on the outcome of the report on durable good sales due at the end of this month, trading in the dollar could plummet further towards the danger $1.45 mark.
Dollar Continues To Weaken Against Euro
September 24, 2007
The value of the dollar has fallen to yet another record low on world currency exchanges against the euro, continuing its downward trend of recent weeks through another day of poor investment trading.
The value of the dollar has continued to plummet since the US Federal Reserve announced its decision to cut interest rates to 4.75% in order to ease financial markets and stimulate economic growth. The resulting currency sell-off has seen the dollar fall to all-time record lows against the euro, which has conversely see several weeks of strong performance as a result of the ongoing promise of a European Central Bank interest rate rise.
In trading through Monday, the euro had reached the dizzying heights of $1.4130, an all time record before slightly weakening through the rest of the day. The news comes as no surprise to industry analysts, many of whom have feared that prolonged euro exchanges of $1.45 may be realistic before too long.
The news is beneficial for US exports, making them more affordable against other world currencies. As a result, US manufacturing firms have seen strong growth in output and new orders in recent weeks, as a direct response to the cheaper cost of exporting goods.
However the weak dollar is causing problems for importers and those firms that rely on international custom in services and foreign supply in manufacturing sectors. With one dollar buying less foreign currencies, more dollars are required to sustain operations at their previous level.
Many firms in Europe have warned that the high value of the dollar could result in widespread unemployment in those manufacturing businesses dealing outwith the eurozone, which many analysts are fearing could further compound the effects of the global credit crunch in bringing on a recession.
With the dollar very much a face value currency for business transactions, world commerce is already feeling the effect of a consistently weakening dollar.
Dollar Continues To Trade Down
September 14, 2007
The dollar has fallen to near record lows against the euro as the US economy is poised to hear data that indicates the depth of the sub-prime lending crisis.
The value of the dollar was at $1.3870 to the euro among fears of the pending outcome of retail sales data, which analysts are predicting will hold the key to the extent of the damage in the sub-prime sector.
Further, with the prospect of an interest rate cut to bring stability to the markets, currency investors have turned away from the dollar in trade through Asian markets over the course of today.
The retail sales data is expected over the course of this week, and analysts are suggesting that it could indicate whether or not the trouble in the sub-prime crisis has had a bearing on consumer buyers.
The results of the data are likely to have a significant impact on trading on the US markets and indeed across the world, with analysts literally hanging on the results as providing some indication of the range of the troubled market.
Analysts have already suffered the impact of an unexpected loss of 4,000 jobs last month, despite predictions that employment figures would actually rise by 11,000 over the same period, sending market trading into turmoil and significantly hindering investor confidence for the short term.
Forecasts are currently suggesting that sales will rise by 0.4% from the month, up from 0.3% last month. Any rise short of this is likely to send markets into further turmoil, as an indication that over exposure to the sub-prime sector could have spread to consumer sectors.
With expectations suggesting the Federal Reserve could cut rates by two steps down to 5.25% and the potential for further market upset, the dollar has weakened significantly over consecutive sessions, taking it near record lows.
Dollar Slides Even Lower Against Euro
September 13, 2007
The dollar has fallen even further down against the euro through trade yesterday, as currency investors continue to fear the implications of a worldwide credit squeeze on the US economy.
Through trading yesterday the dollar was down as low as $1.3920 per euro, gathering momentum from yesterday’s record lows. With markets continuing to trade over volatile US economic conditions, analysts are predicting that the dollar could continue to fall over the next few weeks.
The dollar has seen seven consecutive drops across trading sessions over the last week as a result of fresh hopes that the Federal Reserve is poised to slash interest rates, which would ultimately fuel an economic recovery to a certain extent.
Additionally, the ongoing economic climate in the US as a result of the continuing housing market situation has turned investors off US investments, which has seen the value the dollar plummet in recent days.
The European Central Bank also suggested yesterday that Eurozone interest rates could rise after markets settle, leading to heavier investment in the euro as opposed to the dollar, further suppressing the dollar.
And with the European economy buoyed today off the back of strong French economic figures, many analysts are predicting the euro could soon break the landmark $1.40, which would see the dollar reach its lowest ever point against the euro, and underline the underlying weakness of the dollar and the US economy as a whole.
The sub-prime saga is continuing to weigh down the US economy and the dollar, with investment becoming increasingly hard to come by as banks look to preserve liquidity.
Analysts are predicting that until the Federal Reserve take measures to improve stability, markets will remain volatile. Ultimately, this will come at the expense of the value of dollar, as interest rates look to be cut.
Dollar Continues to Drop in Value Against World Currencies
August 6, 2007
The dollar’s value has fallen to the lowest point in four months after another day of poor trading worldwide, causing further concerns about the condition of the US economy.
Trade today witnessed the dollar slope against the euro and the yen, continuing to struggle as a worldwide currency, after continuing economic problems, and a reliance on imports continued to bog down the dollar.
Trade on all major world currency exchanges saw the dollar weaken yet again against the backdrop of strengthening yen, euro and pound, reflecting the truly unique situation facing the world’s largest economy in a global context.
With most other major economies enjoying sustained growth, and even the grumblings of inflation , the US economy is lagging way behind, and has remained sloth-like in its poor growth over recent years.
And with the international trade deficit increasing, and continued housing market blunders and stagnation, the dollar has been crippled against all other major world currencies as foreign US investment reaches unparalleled lows.
The Federal Reserve has reversed global economic trends with interest rate cuts in order to boost housing and inject some form of life into business, in an attempt to bring the value of the US economy back on par with its worldwide contemporaries.
However, deep rooted economic problems are blamed for holding back the US economy, with many experts predicting we are yet to see the worst of the country’s economic woes.
Market analysts expect the Federal Reserve to direct some action towards readdressing the situation, whilst addressing the situation of interest rate settling.
“If this is not delivered, it is likely that we see further selling pressure for the dollar as the market analyses the Fed as falling behind the curve, failing to halt a financial problem and probably even inducing a harsher economic slowdown.”
Dollar stronger on new data
July 5, 2006
The US dollar strengthened on Wednesday after new figures were released, saying that 368,000 new jobs were created in June. It had been estimated that the month would see 155,000 new jobs created in the month. Analysts said that if the ADP National Employment Report numbers are accurate, the wage inflation that could result will likely spur the Federal Reserve to continue raising interest rates. In addition, a separate report showed that US factory orders were higher than had been anticipated. Some analysts warned, however, that the ADP report figures might not match Bureau of Labor Statistics numbers when they are announced on Friday.
The greenback added 0.4 percent to C$1.1123 in relation to the Canadian dollar, while it was up 0.5 percent versus both sterling and the euro, to $1.8345 and $1,272 respectively. The US currency gained 0.7 percent to ¥115.66 against the Japanese yen.
Dollar rises despite lack of news
June 22, 2006
Analysts were at a loss on Thursday to figure out exactly why the US dollar rallied. While some said that the greenback was benefiting from the unwinding of carry trades by US-based hedge funds and others cited greater interest rate differentials, others discounted these explanations. Still others simply termed the rally an “aberration”.
The US currency was up 0.6 percent versus the euro to $1.2590, while it gained 0.7 percent against the Swiss franc to SFr1.2413, added 0.8 percent to $1.8305 in relation to sterling, rose 0.9 percent to C$1.1181 versus the Canadian dollar, and advanced by 1.2 percent against the Japanese yen to ¥116.15. These gains included a seven-week high versus sterling and a two-month high in relation to the yen.
The US dollar also rose even more against some emerging currencies. The greenback added 1.4 percent to $0.6109 in relation to the New Zealand dollar, while it gained 1.9 percent to TL1.692 versus the Turkish lira and it was up 2.3 percent to R7.2999 in relation to the South African rand. The gain in relation to the Turkish lira took the US dollar to a three-year high against that currency, and the gains versus the kiwi and the rand came after both nations announced current account deficits that were much higher than they had been previously.
Dollar rallies on data, perceptions
June 9, 2006
The US dollar strengthened against some currencies over the week, helped by interest rate differentials, the perception of Treasury bonds as a safe place for investors to put their money, and a US trade deficit that didn’t widen as much as analysts had feared it would.
The greenback was up 2.2 percent to $1.2636 during the week versus the euro. The US currency also added 2.2 percent against sterling to $1.8428, while it was up 2.1 percent in relation to the Swiss franc to SFR1.2307 and gained 1.9 percent to ¥113.81 versus the Japanese yen. The Canadian dollar limited it’s loss to the US dollar to 0.5 percent as it gained 1.4 percent on Friday to C$1.1068.
Emerging currencies also lost ground to the dollar, with the exception of the Turkish lira, which added 1.8 percent versus the greenback to TL1.534. Otherwise, the Indian rupee dropped 0.3 percent versus the US currency to Rs45.81, the South African rand lost 0.5 percent to R6.6913, and the South Korean won and the Thai baht each lost 0.7 percent to the greenback, to Won 9054.4 and Bt38.32 respectively. The Mexican peso also dropped 0.7 percent to the US dollar, to 11.381 pesos, a 19-month low. The Icelandic krona lost 3.9 percent versus the greenback, to IKr73.90.
Comments lead to rate hike expectations
June 7, 2006
The US dollar strengthened for a third straight session on Wednesday as officials of the Federal Reserve continued to make comments indicating that interest rates will likely be raised again when the Fed meets later in the month. Several regional Fed presidents as well as Fed chairman Ben Bernanke have said in recent days that inflation is now at the upper end of what has been referred to as the “comfortable” range. Earlier, analysts had been convinced that the Fed would break its chain of 16 consecutive rate hikes.
The greenback added 0.4 percent to SFr1.2270 in relation to the Swiss franc, 0.2 percent to $1.2796 versus the euro, and was up 0.1 percent each against the Japanese yen and against sterling, to ¥113.37 and $1.8575 respectively. Additionally, the US currency added 0.3 percent to T$32.166 versus the Taiwan dollar and was up 0.6 percent to Won947.9 in relation to the South Korean won.
Analysts are not in agreement as to whether the dollar will continue to strengthen or whether it will begin to weaken again. While some feel that the dollar will continue to strengthen, others believe that if the Fed continues to raise interest rates, it will harm the US economy, affect the global economy, and will weaken the greenback further.
Analysts expect US interest rate hike again in June
June 1, 2006
The US dollar was a bit stronger on Thursday, but it had been stronger still before some data hinted that concerns about inflation were at least partly misplaced. The Institute of Supply Management’s May survey had US factory activity at 54.4, lower than the 55.5 reading that had been expected. In addition, unit labor costs for the first quarter came in at a 1.6 percent gain, year-on-year. This was lower than the 2.5 percent rise reported last month and lower than the gain of 1.9 percent that had been expected.
Still, with the release of the minutes from the US Federal Reserve meeting in May showing that the Open Market Committee had considered lifting interest rates by 50 basis points at that time, most analysts now expect another rate hike this month. US interest rate hikes have been coming in 25 basis point increments since the current cycle of increases began.
All this news combined to give the greenback a gain of 0.2 percent to $1.2821 versus the euro and sent it 0.3 percent higher in relation to the Japanese yen, to ¥112.43.
Dollar weakens after one-day rally
May 16, 2006
The US dollar was down again on Tuesday after a day of gains on Monday. The declines came on reports that housing starts in the United States were down more than had been predicted. Producer price data was also under expectations. Both items convinced analysts that there is a good chance that the Federal Reserve will not raise interest rates at its next meeting.
By the middle of the trading day in New York, the greenback had lost 0.5 percent in relation to the euro to $1.2853. The US currency was also down 0.4 percent to ¥110.05 against the Japanese yen and it declined by 0.3 percent to $1.8855 versus sterling.
Emerging currencies also against the greenback on Tuesday. The Turkish lira added 3.3 percent to TL1.4355 in relation to the US dollar, gaining back more than half its 6.1 percent slide on Monday. The South African rand got back a third of its 3 percent drop on Monday, rising 1.1 percent to R6.3550 versus the US currency.
US dollar strengthens against almost all currencies
May 15, 2006
The US dollar strengthened Monday despite new capital inflows data showing that March inflows were at $69.8 billion, lower than had been predicted. Gains came as investors exited short positions not only against the dollar but against a number of other currencies as well.
At mid-afternoon in New York, the greenback had gained 0.7 percent to $1.2840 versus the euro. The US currency also was up 0.5 percent against sterling, to $1.8840, while it added 0.8 percent to SFr1.2080 in relation to the Swiss franc and advanced 0.4 percent to C$1.1124 versus the Canadian dollar. The Japanese yen was generally stronger on the day, but dropped 0.1 percent to ¥110.16 in relation to the US dollar.
Emerging currencies were mostly lower in relation to the greenback, as well. The only notable exception was the Chinese renminbi, which closed at Rmb8.0030, its highest position against the US dollar in more than 12 years. Elsewhere, the Turkish lira dropped 6.1 percent to TL1,4850 versus the greenback, the South African rand was down 3 percent against the dollar to R6.4255, and the South Korean won fell 1.1 percent to Won 943.40 in relation to the US currency. The Australian and New Zealand dollars were down 1 percent and 1.3 percent respectively against the greenback, to $0.7644 and $0.6215.
Dollar down on retail sales data
May 11, 2006
The US dollar tried to stage a rally on Thursday after the US Treasury declined to label China as a “currency manipulator” in its semi-annual foreign exchange report and after the Federal Reserve raised the interest rates another 25 basis points to 5 percent, but the rally fizzled out after new data on retail sales in the US showed a gain of only 0.5 percent in April overall, and an even lower 0.1 percent rise when gasoline sales were taken out of the equation.
After an initial gain of 0.9 percent in relation to the euro and the Japanese yen, by mid-afternoon in New York the greenback had lost 0.1 percent to the yen, to ¥110.47. In addition, the euro had recovered to gain 0.2 percent versus the dollar to $1.2823.
Concerns send dollar lower
May 10, 2006
The US dollar weakened further on Wednesday ahead of the Federal Reserve’s decision on whether to raise interest rates again, this time to 5 percent, as well as in anticipation of comments that might give a hint about whether there might be a pause in the series of rate raises in June. Investors were still nervous, as well, about a US Treasury report due later in the day that some say could label China as a “currency manipulator”. Even if this does not happen, triggering Asian currencies to advance against the greenback, comments from Harvard economics professor Martin Feldstein that the dollar might need to weaken a further 30 to 40 percent in order to bring the US trade deficit down were worrying to investors.
By the middle of the day in New York the US dollar had dropped 0.3 percent to $1.2792 versus the euro. The greenback was also down by 0.5 percent against the Japanese yen to ¥110.55 and it dropped 0.1 percent to SFr1.2192 in relation to the Swiss franc. The US currency hit yet another new 28-year low of C$1.0980 versus the Canadian dollar. The only major currency that the dollar did not weaken against was sterling, which was down just a bit to $1.8650.
US dollar weaker on sell-off
May 9, 2006
The US dollar was down again on Tuesday in an unexpected sell-off that analysts said had no obvious reason behind it. It was expected that there would be few fireworks the day before the Federal Reserve is set to make a decision on interest rates and ahead of a report from the US Treasury that could call China a “currency manipulator”. Several theories emerged to explain the sell-off, including a plan by the G7 to let the dollar weaken to ease imbalances and a delayed reaction to a report that Iran is considering setting up a market to trade oil in euros.
The greenback dropped 0.5 percent to $1.2754 in relation to the euro. It lost 0.4 percent versus the Japanese yen and sterling, to ¥111.27 and $1.8644 respectively. In addition, the US currency was down 0.6 percent to SFr1.2214 in relation to the Swiss franc and dropped 1 percent to a 28-year low of C$1.1014 versus the Canadian dollar.
According to reports, opinion was mixed on whether the upcoming Treasury report would actually go so far as to name China as a currency manipulator, but the majority seems to be coming around to the consensus that it will not. If the report does label China in this way, some analysts say that the dollar will likely weaken even more than it already has, while Asian currencies will strengthen. In this scenario, the euro and the Swiss franc could benefit.
US dollar weaker on European data
May 2, 2006
The US dollar was down on Tuesday after new economic data from the UK and the Eurozone provided boosts for the currencies of those nations.
The greenback was down 0.6 percent to $1.2647 versus the euro, lost 0.8 percent to $1.84 in relation to sterling, and dropped 0.2 percent to ¥113.22 versus the yen. The US currency also lost 0.6 percent to C$1.1073 against the Canadian dollar, which was helped by the possibility of future interest rate hikes and rising prices for gold and crude oil.
Elsewhere in the world, the Australian dollar gained 0.6 percent to $0.7626 versus the US dollar and the South Korean won added 0.2 percent against the greenback to Won939.60, an eight-year high.
US dollar weaker on European data
May 2, 2006
The US dollar was down on Tuesday after new economic data from the UK and the Eurozone provided boosts for the currencies of those nations.
The greenback was down 0.6 percent to $1.2647 versus the euro, lost 0.8 percent to $1.84 in relation to sterling, and dropped 0.2 percent to ¥113.22 versus the yen. The US currency also lost 0.6 percent to C$1.1073 against the Canadian dollar, which was helped by the possibility of future interest rate hikes and rising prices for gold and crude oil.
Elsewhere in the world, the Australian dollar gained 0.6 percent to $0.7626 versus the US dollar and the South Korean won added 0.2 percent against the greenback to Won939.60, an eight-year high.
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