Business: Currencies

Showing posts with label Currencies. Show all posts

Wednesday, December 29, 2010

Chinese executives are reducing support for a stronger yuan

Chinese executives are reducing support for a stronger yuan, as U.S. critics easing to weaken the dollar and fueling asset bubbles in emerging market economies.

Shen Wenrong, president of Jiangsu Shagang Group Co., the nation's largest private steelmaker, said China should allow only a "token" recognition while the U.S. is "printing money to fuel inflation." Ma Weihua, executive director of China Merchants Bank Co.., Said the yuan should not go "too fast" and the Federal Reserve should show more restraint after announcing plans to buy 600 billion U.S. dollars of Treasury bonds. Jingjiang Xia, general manager of Topshow Outdoor Products Co., which makes baseball caps with logos of companies, said the government will not compromise growth more rapid exchange earnings.

Calls to limit the appreciation of Chinese executives, which in March supported an end to a two-year dollar link, reflecting the concern of the economic expansion may decrease as the central bank raises interest rates to cool inflation rapidly since 2008. Yuan forward contracts show traders are betting the currency will stop before the visit of Chinese President Hu Jintao to Washington next month and up by 2.1 percent next year.

"We expect the yuan to strengthen, but do not want the overly rapid pace of appreciation," Ma told China Merchants, the sixth largest bank by market value, in an interview on Dec. 17 in Beijing. "The U.S. is not taking responsibility. He called on China to adjust its yuan policy, but everyone is suffering from its measures of flexibility."

Forward Rates

Delivery within a month was trading at 6.6180 per dollar as of 11:41 am in Hong Kong, indicating little change from the spot rate of 6.6229. twelve-month contracts are stronger in 6.4863. Analysts predict that the yuan to appreciate another 5.5 to 6.28 percent in late 2011.

China's central bank allowed the currency to rise to 4.5 percent next year, said Rajeev De Mello, head of Asia investment in Singapore in Western Asset Management Co. The yuan has risen 3.1 percent since June 21, when the government ended a policy of fixing the exchange rate at about 6.83 per dollar to protect exporters during the global financial crisis. Thirty U.S. senators requested that the yuan is "appreciate significantly" before Hu's trip, in a letter on December 6 Chinese Vice Premier Wang Qishan.

'Ritmo faster "

"The sounds of U.S. executives probably did not worry China Chinese currency to appreciate more rapidly," said De Mello at Western Asset, which oversees 469 billion U.S. dollars of funds. "A currency appreciation would be too fast for the local economy as it has already been a lot of adjustment policies in place."

Shen, based in Jiangsu Zhangjiagang Shagang, said the government must balance to maintain export competitiveness and reducing purchasing costs of raw materials. imports of iron ore rose 26 percent last month to the second highest level this year, according to government data.

"China should not walk appreciation," said Shen. "As a major buyer of iron ore, has some benefits. But the benefits are limited."

Topshow

Xia in Yangzhou, Jiangsu, based in Topshow said his company raised prices of their hats by 3 percent to account for the yuan in the second half.

"The yuan's appreciation will be gradual," he said in an interview Dec. 22. "The central government clearly understands that a stronger yuan can do to the economy of China. I hope not risk that."

Executives at companies targeting the Chinese market, including Beijing-based computer maker Lenovo Group Ltd., a Shanghai-based China Eastern Airlines Corp. and China Merchants Bank, said in March that a stronger currency would reduce costs imports, increasing the purchasing power of consumers and promote world trade by currency.

buying dollars to weaken the yuan has boosted China's foreign exchange reserves at 2.65 trillion U.S. dollars and flooded the financial system with yuan. The trade surplus exceeded U.S. $ 20 billion for the fifth time in the sixth month of November as overseas sales rose 35 percent from the previous year, the customs agency said Dec. 10.

'Reality'

"Chinese companies have to face the reality of a kind of yuan to rise as the economy grows rapidly and increase foreign exchange reserves," said Zhang Wei, vice director of China Chamber of International Commerce, an organization run by the government to represent exporters and importers, told reporters on 17 December in Beijing. "They should also receive everything needed for the growing international pressure on China to allow the yuan to appreciate."

The People's Bank of China raised its benchmark rate for one-year deposits by 25 basis points, or 0.25 percentage point, on 25 December at 2.75 percent below the November inflation rate of 5.1 percent. The spread between the savings rate and its equivalent in U.S. came to 197 basis points this week, the most since at least 1996, increasing the attractiveness of holding assets yuan.

The economy grew 9.6 percent in the third quarter last year, after growing 10.3 percent in the second quarter and 11.9 percent in the first.

Vice Finance Minister Zhu Guangyao told reporters in Beijing on November 8 Fed's asset purchases could "shock" of emerging markets by flooding the capital.

Dollar Index

Emerging markets funds have taken action on a record of 92.5 billion U.S. dollars and bond mutual funds in developing economies the income of 52.5 billion U.S. dollars this year, EPFR Global, a research firm Cambridge, based in Massachusetts, said last week.

So far, Fed policy has not led to a weaker dollar or faster inflation in the country.

IntercontinentalExchange Inc. 's dollar index, which tracks the greenback against the currencies of six major U.S. trading partners, is up 5 percent from 03 November, when the Fed announced the second round of purchases of debt under its plan of quantitative easing. U.S. consumer prices increased at an annual rate of 1.5 percent in 2011, compared with a rate of 1.6 percent in 2010.

A "stable" evaluation is sufficient to promote the use of yuan in trade and global finance, Hong Weipeng, head of fixed income investments Haitong International Asset Management, said in an interview Dec. 22 in Hong Kong. The unit of China's largest brokerage by assets to establish a fund of 5 billion yuan (754 million U.S. dollars) in August, which invests in bonds renminbi offshore.

Promote stability

"Investors do not want to see the yuan rise 10 percent a month and then go down by 20 percent next year," he said. "In the short term, if global financial markets become more volatile, either due to the debt crisis of the European emerging markets or face higher inflation, then that can slow the yuan's appreciation."

Yuan settlements trade increased 160 percent in the third quarter from three months to 126.5 billion yuan, the central bank said on 2 November.

Sinosteel Corp., the nation's largest iron ore trader, favors those transactions, because of the potential gains in local currency, the president Tianwei Huang said. Ma at the China Merchants Bank said, although the bank is profiting from this business, "too fast" for a finding would be harmful.

"The trend for the yuan to rise is, without doubt, as China's economy has grown rapidly and it is impossible that the country will always maintain as large foreign exchange reserves and trade surplus," he said. "But if the appreciation is very fast, many Chinese companies may go bankrupt."

Brazil raised its tariffs on toy imports from China

Brazil raised its tariffs on toy imports from China in a bid to help the South American country, manufacturers of administrative officers affected by an increase of 37 percent of the real against the yuan over the past two years.

Tariffs on 14 types of toys ranging from dolls and puzzles for tricycles and electric train sets will increase to 35 percent from 20 percent until late 2011, the Chamber of Foreign Trade said in an emailed statement yesterday .

The chamber said it was acting at the request of toy manufacturers to help Brazil, Äúfight, AU increased imports, 90 percent of whom come from China. The higher tariffs affect goods whose imports totaled 290 million U.S. dollars between January and November this year, according to the Ministry of Commerce.

China, the Ministry of Commerce AM "No, AOT respond to a faxed request for phone calls and comments were not a spokesman, TWA said.

Brazilian imports of Chinese products in the 12 months to August increased 37 percent to $ 21,400,000,000, of $ 15 billion throughout 2009, according to a study published this month by Brazil, the AM state development bank. The increase in imports from China, driven by the yuan, the rate of competitive exchange administrative officers, threatening to displace domestic sales of manufacturers from Brazil and has implications Äúimportant, the AU for the country's industrial development administrative officers, said the bank, known as BNDES.

True, the AM 37 percent gain against the yuan over the past two years is the third best performer among major currencies after the Australian dollar and South African rand. The front of 12 months without delivery suggests traders are betting the yuan will strengthen to 2.2 percent in a year of its current cash value of 6,625 per U.S. dollar.

Toy sales in Brazil will reach 3 billion reais (1.8 billion) this year, 49 percent of which come from products made abroad, according to estimates from Brazil, MA Manufacturers Association toys. In 2009, imported toys accounted for 46.8 percent of 2.7 billion reais in sales, the group said.

Federal Reserve Bank of Philadelphia, Charles Plosser, president and chairman of the Dallas Fed Richard Fisher, the dissent can plan s Fed chairman, Ben S. Bernanke, for purchase of $ 600 billion in Treasury bills, former Fed governor Lyle Gramley said.

"I think Philadelphia's Charles Plosser and Richard Fisher of Dallas are likely to dissent from time to time," Gramley said today in an interview, "Fast Forward" with Peter Cook. "You probably will not affect the outcome of monetary policy decisions. Ben Bernanke, is still in control of the commission."

Plosser said in an interview last week was a "close call" on whether to have dissented from the Fed's December 14, reaffirming plans to buy $ 600 billion in Treasuries in June, expanding to record stimulus try to reduce the 9.8 percent unemployment and keep inflation from falling. Fisher said in November that the measure may be "the wrong medicine" for the U.S. economy.

As part of an annual rotation in the vote on the policy of the Fed, Plosser Fisher, and the bankers of Chicago and Minneapolis Fed votes cast in 2011. The leader of the New York Fed has a permanent voting.

"This is a year that the Fed probably will not have to do anything, just sit still, let the economy take care of itself," said Gramley, senior adviser Potomac Research Group in Washington. "We're looking at an economy that is improving, so the Fed is not going to have to add more stimulation."

This month, the president of the Kansas City Fed, Thomas Hoenig, the senior political leaders, voted against the policy of the Fed for the eighth straight time and reiterated its view that "continued high level of monetary accommodation "may" destabilize the economy. " Record tied former Governor Henry Wallich in 1980 for most in a year dissents.

The dollar weakened against their counterparts from Australia

The dollar weakened against their counterparts from Australia, New Zealand and Canada, as rising commodity prices boosted demand for currencies linked to commodity exports.

The U.S. currency fell to half of its 16 most actively traded peers as U.S. reports indicate a weaker economic growth than expected, reinforcing the Federal Reserve's plan to keep U.S. interest rates low. The Canadian dollar reached parity with the greenback for the first time since Nov. 11. The Swiss franc strengthened to a record low against the dollar as investors demand an alternative to the euro amid the crisis in the region of sovereign debt.

"The Australian continues to shine and with it the New Zealand dollar and Canadian dollar," said Omer Eisner, chief market analyst in Washington at the Commonwealth Foreign Exchange Inc., a forex brokerage firm. "That is a function of dollar weakness in general, but also the strength of commodities in general."

The dollar fell 0.6 percent to $ 1.0109 per Australian dollar at 1:04 pm in New York from $ 1.0046 yesterday. Declined 0.7 percent to 75.53 cents per New Zealand dollar weakened 0.7 percent to 99.93 Canadian cents. The Canadian dollar touched 99.76 Canadian cents, the strongest since April 26.

Euro, Yen

The dollar gained 0.5 percent to $ 1.3105 per euro after touching $ 1.3275, its lowest level since 17 December. The U.S. currency fell 1.2 percent to 81.82 yen, the lowest level since 12 November.

The Reuters / Jefferies CRB Index of commodities rose by 0.7 percent. Gold futures for February delivery gained 21.40 dollars, or 1.6 percent, to $ 1,404.30 in the Comex in New York.

The euro erased gains against the dollar after European Central Bank said it could not completely neutralize the extra liquidity created by its purchases of bonds for the second time since the program began in May.

The ECB, based in Frankfurt, said that drains € 61780000000 (U.S. $ 81 billion) in money markets through deposit within seven days, almost 13 billion euros less than the € 73,500,000,000 its intention absorb.

ECB Sterilization

"If you are not completely sterilized, it is true quantitative easing, which is bad news for the euro," said Richard Franulovich, currency strategist at Westpac Banking Corp. in New York.

The S & P / Case-Shiller index of property values fell 0.8 percent from October 2009, the largest drop year after year, since December 2009, the group said today in New York. The decline surpassed the 0.2 percent decline.Consumer confidence fell in December to 52.5.

Although the figures show U.S. property values fell, reports over the next three days will show an improvement in employment.
30 December figures show initial jobless claims declined and pending home sales advanced forecasting survey.

"The fundamental economic history in the U.S. is positive and moving in a positive direction," said Mark McCormick, currency strategist at Brown Brothers Harriman & Co. in New York.

Tax Plan

Barack Obama President on December 17 signed into law a bill 858 billion U.S. dollars of tax cuts.

The Fed this month reiterated its commitment to keep borrowing costs low for an extended period will, keeping the target rate for overnight bank loans a day zero to 0.25 percent, where it has been since December 2008. The Fed said last month it would buy 600 billion U.S. dollars of treasury bonds in June to boost the economy, a policy that has been called the Queen Elizabeth 2 for a second round of quantitative easing.

An increase in the futures traders betting that the Swiss franc strengthened against the dollar shows investors are worried that Europe's crisis may deepen debt, according to UBS AG.

The Swiss franc appreciated as much as 1.8 percent against the dollar to a record 94.35 cents. It strengthened 1.4 percent to 1.2468 against the euro, almost record high of 1.2439.

Franco Register

The franc hit a record high against the euro last week as investors sought the safety of Europe's crisis of sovereign debt. The Swiss National Bank President Philipp Hildebrand, who completed 15 months of intervention in currency markets this year may be unable to stop the currency to extend a record rally he calls a "burden."

"The Swiss franc continues to progress and the Japanese yen is also stronger," said Nick Bennenbroek, head of currency strategy at Wells Fargo & Co. in New York. "We're seeing some of the safe-haven currencies click OK and the euro value of losing."

The euro has fallen 10.9 percent so far this year, the biggest loss among the 10 developed nations is measured in foreign exchange rates. The dollar has lost 1.6 percent and the yen has added 12.9 percent.

The euro has added 0.9 percent against the dollar this month and the yen has risen 1.8 percent.

South African rand was the second artist ever against the dollar most traded currency in increasing precious metals prices attracted investors.

The rand rose 1.1 percent to 6.6637 per dollar and touched 6.6443, the highest since December 2007. Gold, which together with platinum accounts for about a fifth of South Africa's exports, rose for a third day, adding 1.6 percent.

Japanese Finance Minister Yoshihiko Noda told a news conference today in Tokyo to take bold action if necessary in the currency market, calling the yen's recent movements on one side. Noda also said it will continue to monitor markets closely.

Bernanke may be about to get help in an attempt to boost the economy

Federal Reserve chairman, Ben S. Bernanke, may be about to get help in an attempt to boost the economy, an industry bedrock: housing.

Employment growth, even with unemployment at 9.4 percent or higher since May 2009 and an increase in U.S. population housing means likely to improve in 2011 from its record low, said Charles Lieberman, chief investment officer of Advisors Capital Management LLC in Hasbrouck Heights, New Jersey. Mortgage rates are less than 5 percent, further supporting affordability.

An increase in housing construction would increase employment for construction workers and also for people in the supply industries stoves and sinks that go to new homes. In the house was reduced to less participation in the economy in history, 2.23 percent, employment growth slowed. The economy created 39,000 jobs in November, 5,000 construction jobs were lost.

"The housing market is going to shock people," said Lieberman, former head of monetary analysis in the Federal Reserve Bank of New York. "Once we got the ball rolling, it becomes easy to roll. The most important thing the Fed can do, it is not easy, is to promote job growth. If we see employment growth that is going to market very strong property. "

Employment increased by an average of 200,000 per month next year, bringing the unemployment rate, 9.8 percent in November, almost one percentage point, he said.

Interest Rates

At the Fed meeting to discuss monetary policy on December 14, Bernanke and other members of the Open Market Committee revised its 600 billion U.S. dollars of the bond program with purchase option. One hope is that by 2011 nearly zero Fed interest rates will finally be able to begin to reverse a half-decade decline in the housing.

residential investment share of the economy fell to 2.23 percent in the third quarter of 2010, the lowest since records began in 1946, up from 6.3 percent in the fourth quarter of 2005, the highest in 55 years. That decline has led to the loss of jobs in the construction industry: He fell to 5.6 million this year from 7.7 million in 2006.

Housing starts probably will reach a maximum of three years from 739,000 in 2011, creating enough jobs to shave half a percentage point the unemployment rate, said David Crowe, chief economist for the National Association of Home Builders in Washington.

Ugly Cycle

"This is an ugly business cycle," he said in a telephone interview. "We need job creation to people comfortable with buying a home. If they do, we will create jobs that will enhance the home buying and employment growth of extra fuel." Building more in 2011 add about 500,000 jobs, he said. The association of home builders' expected an unemployment rate of 9.1 percent in late 2011.

A background in the housing market could improve the prospects of companies in Midcap Index Standard & Poor's Homebuilding, which has fallen 68 percent since its peak in July 2005. Douglas Yearley, the head of the index members of Toll Brothers Inc., said in an interview.
"The recovery is here to stay," said Yearley, whose company, based in Horsham, Pennsylvania, is the largest U.S. builder luxury home. "I think that 2011 will be a year better, but I think 2012 will be a great year for us."

The number of contracts signed for the purchase of Toll Brothers homes rose 6.3 percent in the 12 months ended in October, compared with the previous year, the first increase since 2005, the company said in a report by December 2 .

Homebuilders ETF

The average price increased 6.1 percent to $ 565,079, the first increase since 2006. Shares of construction are 8 percent this month compared with a gain of 6.5 percent for the 500 Standard & Poor's.

The S & P Builders Exchange Traded Fund, which includes Los Angeles, KB Home, Fort Worth, based in the Dominican Republic Horton Inc., has risen 13.3 percent since Nov. 18, vs. 4.8 percent for the S & P 500 ETF.

Builders in the U.S. began work on 555,000 housing units in November to an annual rate, compared with 477,000 units in April 2009, which was the lowest in the census records dating from 1959.

Meanwhile, the U.S. population has continued to grow. The 2010 census data, published last week in Washington, show that the population amounted to 308.7 million 281.4 million in 2000, an average increase of $ 2.7 million a year.

More Homes

The number of U.S. households, an indicator of demand for real estate, is likely to increase by 0.7 percent to 118.7 million in 2011, the largest annual increase since the beginning of the crisis mortgages in 2007, according to Patrick Newport, an economist at IHS Global Insight in Lexington, Massachusetts.

The lack of new housing construction has been "to recovery, but you could say that drag is fading now that the financial system is recovering," said James O'Sullivan, chief economist of MF Global Ltd. in New York. It is expected an increase of 12 percent of residential investment in 2011, with job growth of 200,000 in June, as much as 225,000 a month in the second half and an unemployment rate of 8.8 percent the fourth quarter.

Housing construction is likely to improve from the current minimum and still be well below its long-term trend, he said. A key to this forecast is supported by low interest rates, which enhanced the capacity of home ownership to record levels in October.

To provide housing

Housing affordability, measured by the ease with which a middle-income family can afford a median-priced house, hit a record high of 184.2 in October, the highest index reading in more than two decades of data, according to the National Association of Realtors in Washington.

Home prices continued to decline. The S & P / Case-Shiller index of property values fell 0.8 percent from October 2009, the largest drop year after year, since December 2009, the group said today in New York. Eighteen of the 20 cities showed price declines in October, led by a fall of 2.1 percent in Atlanta, and the decline of 1.8 percent in Chicago and Minneapolis.

However, mortgage rates have shaken the damping effect of the program's initial purchase of the Fed, known as the Queen Elizabeth 2 for the second round of quantitative easing. The U.S. average for a 30-year fixed mortgage rose to 4.81 percent during the week ended Dec. 23 from a low of 4.17 percent in mid-November, according to Freddie Mac, the mortgage buyer McLean, Virginia.

Pending sales of existing U.S. homes unexpectedly rose by a record 10 percent in October, the real estate group, said earlier this month, indicating the industry could be stabilizing. transactions in November rose 5.6 percent to 4.68 million at an annual rate, NAR said last week. Purchases of new homes rose 5.5 percent to an annual rate of 290,000 in November, the Commerce Department said on December 23.
"Gradual improvement '

Robert Niblock, chairman and CEO of Lowe's Cos., the second largest U.S. retailer home improvement, and Ian McCarthy, CEO of Beazer Homes USA Inc., expressed optimism qualified for the housing outlook. Niblock said in a teleconference on November 15 income "even in a difficult environment, we are seeing a gradual improvement in the fundamentals of the housing market."

Atlanta-based Beazer, a builder of entry, the national waiting-family housing starts to increase in 2011, "probably in the low double-digit percentage," McCarthy said in a November 5th earnings call.

Decreasing share of the economy for the construction of new houses, improving record lows not promote growth as well as in the past, said Paul Dales, economist at U.S. for Capital Economics Ltd. in Toronto. He agreed that residential investment is about to be a modest boost to gross domestic product.

No Drag

"Before if there was an increase of 10 percent GDP increased by 0.6 percentage points," said Valles. "Now, if it rises by 10 percent is an increase of 0.2 percent. The construction of homes are actually on the floor. There will be a drag on growth."

In October, 1.4 million construction workers were unemployed with only 46,000 jobs, a ratio of 31 workers for every job available, according to Labor Department data.

The Fed has completed 155.7 billion U.S. dollars of the allocated $ 600 billion in purchases. The central bank is also reinvesting profits from its holdings of maturing debt of the home.

His decision to start a second round of asset purchases sparked a political backlash in Washington, with Republican lawmakers criticized the measure as likely to be inflationary. Indiana Rep. Mike Pence and Sen. Bob Corker of Tennessee have proposed eliminating the Fed's dual mandate for full employment and price stability, and have the central bank's focus only on price stability.

Unable to get weaker

Bernanke, appeared on the CBS Television's "60 Minutes" on Dec. 5 to face the criticism, saying he was "one hundred percent" sure that the central bank could control inflation.

Asked about his outlook for the economy, Bernanke said that a return to recession was unlikely, adding that "it is because, among other things, some of the more cyclical parts of the economy such as housing, for example, are very weak. And you can not get much weaker. "

Fed officials are not optimistic about the housing outlook at its meeting on November 2-3, citing the source of elevated due to foreclosures. Some "saw the disputes over the documents of the mortgage and foreclosure likely to delay any recovery in housing markets," according to minutes of that meeting.

"Residential investment has failed to make a positive contribution to growth in this recovery," said the president of the Richmond Fed, Jeffrey Lacker said in a speech on Dec. 6 in Charlotte, North Carolina.

"Legacy of overbuilding"

"This contrasts with the two worst recessions of the past 60 years, in which housing investment increased an average of 40 percent in the first year of recovery," he said. "Given the important legacy of overbuilding, unique to this recession, I do not think that housing to contribute significantly to growth in the next two years."

A high foreclosure rate can not derail a housing recovery, said Lieberman of Advisors Capital. The company realized 55.7 million U.S. dollars of U.S. stocks 30 September, including real estate investment trust Sun Communities Inc. and Colonial Properties Trust, according to Securities and Exchange Commission.

Foreclosures are "half the story," Lieberman said, because people who lose their homes must find homes elsewhere. "They do not disappear or move to Mars. They take another holiday away from the market."

Confidence among U.S. consumers unexpectedly fell in December

Confidence among U.S. consumers unexpectedly fell in December, restrained by community work will remain limited in 2011.

The confidence index fell to 52.5 Conference Board less than the most pessimistic forecasts and down from a revised 54.3 in November, the figures of the research group in New York, showed today day. The share of Americans saying jobs were hard to get rose to a maximum of 10 months.

The loss of confidence is at odds with a report from the University of Michigan showed that confidence improved to a maximum of six months in December, and the data showing the greatest increase in rental expense over five years. Federal Reserve policy makers have reiterated they will continue to inject money into financial markets in an attempt to maintain low interest rates, boosting growth and reducing unemployment.

"You're still seeing the labor market is the main concern for consumers," said David Semmens, a U.S. economist Standard Chartered Bank in New York. "It is a major concern for consumer spending."

The shares erased earlier gains after the report. 500 of Standard & Poor's fell 0.1 percent to 1,256.71 at 10:34 am in New York as the drop in confidence offset optimism about earnings of holiday spending. Treasuries fell, bringing the yield on the benchmark note 10 years to 3.38 percent from 3.33 percent yesterday afternoon.

Sales Rise

Retailers for 2010 holiday sales rose 5.5 percent for the best performance in five years, said SpendingPulse MasterCard Advisors, which measures retail sales in all forms of payment. That compares with a gain of 4.1 percent a year earlier. The figures include online sales and exclude purchases of automobiles.

The median forecast of confidence, based on a survey of 61 economists projected confidence increased to 56.3. The Conference Board revised the November figure to 54.3 from a previous estimate of 54.1. Projections ranged from 53 to 60. The average rate of 96.8 during the last economic expansion ended in December 2007.

The report highlighted today in contrast to preliminary figures from Thomson Reuters / University of Michigan showed confidence rose to a maximum of six months in December.

Fall Values

In a report today showed home prices fell more than expected in October, a sign of the housing will remain a weak link in the recovery accelerates in the new year. The S & P/Case- Shiller index of property values fell 0.8 percent from October 2009, the largest drop year after year, since December 2009. The decline surpassed the 0.2 percent.

The Conference Board's measure of sentiment on current conditions fell to 23.5 in December from 25.4 the previous month. The indicator of expectations for the next six months fell to 71.9 from 73.6 in November.

The percentage of respondents expecting more jobs to become available in the next six months declined to 14.3, lowest since July. The proportion of people who expect their incomes to rise over the next six months fell to 9.9 percent from 11.1 percent.

The proportion of consumers saying jobs are plentiful now fell to 3.9 percent this month, while those who said jobs are hard to get rose to 46.8 percent, the most since February.

Employment Earnings

Employers added 951,000 workers to payrolls in the first 11 months of the year, according to Labor Department figures. December data are due January 7.

The gains have not been large enough to reduce unemployment, which was 9.8 percent last month after the end of 2009 to 10 percent.

Barack Obama President on December 17 signed into law a bill that 858 billion U.S. dollars is spread over two years of the Bush cuts taxes for all income levels, continues to expand unemployment benefits to insurance payroll taxes long-term unemployed 13 months and reduced during 2011.

Some Americans are more willing to make some purchases of high cost. Car sales in November rose to 12.26 million unit pace, the highest since the government cash for clunkers program in August 2009, industry data showed this month. Demand in the past three months is the strongest in two years.

Increased confidence is helping to raise purchases of goods with high price call. Ford Motor Co. said sales of U.S. cars in December are running at a rate of 12 million units per year, and forecast sales could rise to nearly 13 million next year.

"We have a high degree of confidence that 2011 will be a strong sales year," said George Pipas, Ford sales analyst, in a December 20 information to reporters in Dearborn, Michigan, which has its headquarters company. "We are much better than they were a year ago."

investors remain bullish on commodities that beat stocks and bonds for a second year

At one point in regard to money managers "have ranged from government stimulus file and the possibility of a new recession, investors remain bullish on commodities that beat stocks and bonds for a second year.

Measurement of Standard & Poor's GSCI advanced 20 percent more than the 9.1 percent gain in the MSCI World Index of shares and 5.3 percent return at a rate of Bank of America Merrill Lynch bond Treasury. Currency traders are betting on a stronger dollar, sending a signal to the contrary, because the products are moved in a direction opposite to the currency in 16 of the last 20 quarters, according to data compiled by Bloomberg.

Silver, an investment and industrial equipment, jump as much as 37 percent next year, leading gains in the 15 products in a Bloomberg survey of over 100 analysts, traders and investors. Zinc, metal worst performer this year, is seen by 21 percent. Arabica coffee, which reached 13 years last week, will be the weakest performer, adding no more than 7 percent.

The strength of demand "was a surprise considering that just out of the worst recession since the 1930 massacre and the most active classes", based in London Roxana Mohammadian-Molina, one of a team 18 Barclays Capital analysts who correctly called the bottom of oil and copper last year, said by telephone on December 22. The bank said that the U.S. natural gas will be the only one of the 25 prices of commodities it follows that an average of less next year.

Shares Short

Global stocks are still near record $ 11 trillion 62.6 trillion U.S. dollars of market capitalization reached in October 2007, data compiled by Bloomberg. During the same period, assets under management of commodities increased about 80 percent to 354 billion U.S. dollars, and attract a total of $ 60 billion in new money this year, the second largest after 2009, estimates Barclays.

The S & P GSCI Index to extend last year's 50 percent advance, which also exceeded 27 percent jump in the MSCI World Index and the loss of 3.7 percent for Treasuries.

Investors favored commodities this year as China, the largest user of everything from coal to iron ore to zinc led to the recovery of the first global recession since the Second World War. The savings and expansion, competition for raw materials is increasing.

U.S. growth will rise to 3.25 percent in the fourth quarter of 2011 from 2.5 percent in the first, according to the average estimate of up to 66 economists surveyed by Bloomberg. China will slow to 9 percent next year from 10 percent in 2010, is still three times the U.S. rate and six times the speed of the euro area, polls show. China on Dec. 26 raised interest rates to counter inflation.

Goldman Picks

Commodities will be earning more than those in China is at least self-sufficient and less spare production capacity, according to analysts at Goldman Sachs Group Inc., led by London-based Jeffrey Currie. Oil, copper, cotton, soybeans and platinum are top picks of the bank.

Goldman forecast on 13 December, an increase of 18 percent of raw materials in 12 months, led by an increase of 28 percent in precious metals. This is consistent with the results of the Bloomberg survey.

Silver, precious metal commonly used in industry, rose 37 percent to a maximum of $ 40 an ounce next year from $ 29.1238 per ounce in trading in London on December 24, the survey shows. Palladium used in catalytic converters for cars, jump as much as 18 percent to $ 900 an ounce from $ 764 in operations in London on December 24.

Silver futures for March delivery rose 53 cents, or 1.8 percent, to $ 29,785 an ounce at 10:14 am on the Comex in New York. Palladium futures for March delivery gained $ 11.90, or 1.6 percent, to $ 779 an ounce on the New York Mercantile Exchange.

London markets are closed today for the second day of the holidays.

Gold Outlook

"Investors will be cycling gold and silver, platinum and palladium, if the financial and economic conditions improve," said Jeffrey Christian, managing director of CPM Group, a research company in New York.

Christian correctly predicted in January that gold could reach $ 1.400 an ounce this year and is now price forecast to peak at $ 1550 in the first quarter before falling as low as $ 1,200. The median forecast in the Bloomberg survey is for a gain of 23 percent to a maximum of $ 1,700. Gold reached a record $ 1431.25 on December 7 in London to close at $ 1381.47 on December 24.

Gold futures for February delivery rose $ 18.70 or 1.4 percent, to $ 1,401.60 in the Comex.

The popularity of the precious metals, suggests that investors are seeking assurances that governments and central banks to inject money into the economies to sustain the recovery.

The Federal Reserve has kept its benchmark interest rate near zero since December 2008 and plans to inject 600 billion U.S. dollars in June the economy by purchasing bonds through the so-called quantitative easing. Already bought 1.7 trillion U.S. dollars of securities in a first phase that ended in March.

"Concern" fiscal

"I like gold because I worry that our fiscal and monetary policies make no sense," said David Einhorn, president of Greenlight Capital Inc., which manages about $ 6.8 billion of assets, in an interview in New York. "It potentially leads to a greater risk of further instability."

Investors increased their holdings of precious metals by 22 percent to a record 17,390 metric tons in the 10 months to 17 December, according to data compiled by Bloomberg. That is worth about 111 billion U.S. dollars, of which 84 percent is 13 percent gold and silver, and the rest of platinum and palladium.

GSCI Returns

Returns for investors in commodities may be less than the spot rate suggests. The S & P GSCI Total Return, monitoring the net amount received, up 8.4 percent this year, reflecting the cost to maintain positions in futures markets. When longer-dated contracts cost more than the immediate delivery, a market structure known as contango, investors pay a premium to keep their farms as positions expire.

The commodity gains can evaporate if currency traders betting that the dollar will strengthen right.

Contracts dollar appreciation against the euro are at a maximum of three months and the U.S. Dollar Index against six counterparts gauge rose 6 percent from 4 November. The inverse relationship between foreign exchange and commodities last month reached the highest level in over a year, according to data compiled by Bloomberg.

commodity experts surveyed by Bloomberg are betting this time will be different in the middle of the growing demand and dwindling stocks.

Copper deficiency

copper use will outpace supply by 825,000 tons next year, more than double the inventory in LME warehouses-up, according to Barclays Capital. The prices reached a record $ 9,392 a tonne on December 21 in London will rise to $ 10,475 next year, the Bloomberg survey. Zinc is the best performing industrial metal, advancing as much as 21 percent to $ 2,800 a tonne from $ 2,308 in London on 24 December.

Copper futures for March delivery rose 2.25 cents, or 0.5 percent, to $ 4.3025 a pound on the Comex. Earlier, the metal rose to a record high of $ 4.3195.

The demand may also come from new products listed. ETF Securities Ltd. began offering investors PTE supported by copper, tin and nickel from this month, attracting about $ 25 million to date. JPMorgan Chase & Co., BlackRock Inc. and Credit Suisse Group AG plan similar products.

Weather markets

A stronger dollar can also be overcome by the weather on agricultural markets. Wheat as much as doubled since June and corn rose 83 percent as the worst drought in Russia in less than half a century, floods in Canada and the parched crop Kazakhstan and Europe in ruins.

While wheat is expected to increase to 17 percent, to $ 9.13 a bushel next year of $ 7.83 in Chicago on December 23 and maize by 14 percent to $ 7 a bushel to $ 6.14, the Coffee was chosen as probably the worst performer in the Bloomberg survey. Analysts see an increase of no more than 7 percent to $ 2.53 a pound from $ 2.359 a pound in New York on 23 December.

Wheat futures for March delivery rose 8.5 cents, or 1.1 percent, to $ 7.8875 a bushel today on the Chicago Board of Trade. Corn futures for March delivery rose 3.5 cents, or 0.6 percent, to $ 6.1875 a bushel, the profit straight session. The Arab-coffee futures for March delivery rose 1.05 cents, or 0.4 percent, to $ 2.385 a pound on ICE Futures U.S. in New York.

"We see no imminent threat to the commodity prices in 2011," said Evan Smith, who helps manage U.S. $ 900 000 000 Global Investors Inc. in San Antonio. "You still have the concern for monetary stability in emerging economies is not the wealth effect is driving the demand."

consumer prices in Japan fell for a month 21 in November, a sign of sustained deflation may prompt the central bank to revise their price forecasts.

Consumer prices excluding fresh food fell 0.5 percent from a year earlier, the statistics bureau said today in Tokyo.
Entrenched deflation is weighing on the economy at risk for this quarter as the effects of stimulus spending Prime Minister Naoto Kan, vanishes. Miyako Suda, a policy maker of the Bank of Japan, said earlier this month persistent price declines will continue in the year from April, a view that conflicts with bank forecasts moderate inflation in the period.

"The BOJ will probably be forced to reconsider their price forecasts," said Mari Iwashita, chief market economist at Nikko Cordial Securities in Tokyo before the report. "It is very likely that the period ending deflation will be pushed back."

The outcome of the board of the Bank of Japan in core prices in October increased by 0.1 percent next fiscal year and 0.6 percent next year.

Also reduce the possibility of an end to deflation is the base change in the price index in August, BOJ Suda said. The statistics office of a redistribution of the basket of goods used to measure the CPI every five years, as Goldman Sachs Group Inc. estimates may decrease the rate of inflation at around 0.4 percentage point. The review of the last government pushed down prices on about half a percentage point.

Cutting forecasts

"Prices continue to fall, although the rate of decline is likely to moderate," said Jun Ishii, chief fixed income strategist at Mitsubishi UFJ Morgan Stanley in Tokyo. "The BOJ will likely have to cut its forecast for consumer prices after a reset, which can intensify deflationary expectations."

The central bank in October cut its key interest rate to the range of zero percent and 0.1 percent and pledged to maintain the policy until it can predict the steady price increases, members of the Council feel about 1 percent.

falling prices tend to erode corporate profits, putting pressure on wages, weakening consumption and making debts harder to repay. Deflation has affected Japan for more than a decade.

Companies are lowering prices to consumers in the economical system to loosen their wallets.

Zensho Co., a national chain of beef bowl restaurant, this month slashed prices by 11 percent to boost sales, its third price-cutting campaign this year.

Taiwan's Central Bank said it would step up curbs on the use of foreign exchange derivatives to combat currency speculation by foreigners.

Banks in the non-deliverable holdings and options in the Taiwan dollar will be limited to 20 percent of their positions in the local currency, with immediate effect, the central bank said in an emailed statement yesterday afternoon . The ceiling was previously one third. Available below are exempt from the restrictions as they are used by local companies to protect earnings from exchange rate fluctuations, he said.

The change aims to "maintain order in the foreign exchange market to prevent speculative foreign capital to intervene in the market," said the statement.

Developing economies have intensified efforts to curb the volatility of its currency as close to zero interest rates in the U.S. and Japan to stimulate demand for emerging market bonds and higher yielding stocks. Taiwan announced on November 9, limits on foreign investment in debt, only to allow offshore funds to be up 30 percent of their portfolios invested in all types of government bonds and money market products.

"The new regulations will not impact too much on the currency," said Henry Lin, a currency trader based in Taipei in Taiwan Shin Kong Commercial Bank. "The market was already expecting the new regulations and it took quite well."

Capital controls

Island dollar has appreciated 3.3 percent against the dollar in the last month, the best performance in Asia, and today touched a 13-year high of NT $ 29,450.

The U.S. currency remains under pressure to weaken, the Economy Minister Shih Yen-Shiang, said today in Taipei. "This means continued pressure for the Taiwan dollar to rise," he said.

The island's gross domestic product will expand by more than 10 percent this year and Taiwan is facing the risk of inflation in 2011, also said Shih.

Emerging economies have been the introduction of capital control measures in recent months to cool the foreign investment and purchases of bonds the Federal Reserve more funds available for investment in higher yielding assets.

South Korea aims to apply a tax on bank lending exchange and strengthen punishment for inadequate reporting of currency transactions, according to a joint statement from the government and central bank on 19 December . A cap can also be placed in banks' holdings of foreign currency derivatives after a review in January, said Finance Minister Yim Jong Yong.

Brazil Tax

Brazil tripled a tax on local purchases of fixed assets by foreign investors in October, while the Thai government took a 15 percent exemption of income tax for foreigners from local bonds.

Taiwan's Central Bank has intervened in the currency market almost every day for eight months to see recognition that can hurt exports, according to currency traders who declined to be identified because of the sensitivity of the matter.

"I do not think the new rules that actually affect the Taiwan dollar," said Tan Pin Ru, a strategist at Royal Bank of Scotland Group in Singapore. "Investors can still make NDF operations at sea without restrictions. The fact that the central bank decided to do this instead of stopping in the domestic market shows that the authority does not dare to go so hard."

Swiss central banker Philipp Hildebrand, who completed 15 months of intervention in currency markets this year, may be unable to stop the free registration to extend a rally that he called a "burden."

Options traders are more optimistic about the franc for the next three months all the money in large, except the yen. Bank of Tokyo-Mitsubishi UFJ Ltd. says it can be appreciated by 8.3 per cent to 1.17 per euro in six months after rising more than any other important point since the intervention ended in June. Standard Bank Plc advance estimates of 1.20.

Currency traders say Hildebrand probably not going to renew efforts to stop the profits after the previous sales failed to stem the appreciation which made exports more expensive and saddled the Swiss National Bank with $ 22 billion of losses on exchange currency in the first nine months of 2010. While political leaders said June 21 that the intervention was no longer necessary because the risk of deflation has decreased, the price increases have since declined.

"The negotiating committee can not do much, they are just observers," said Beat Siegenthaler, senior currency strategist at Zurich-based UBS AG, ranked by Euromoney Institutional Investor PLC as the world's second largest currency trader. "Of course we are very concerned. Your options are limited."

The franc advanced 1.2 percent last week to 1.2627 per euro, rising to a record $ 1.2439 on 22 December. It gained 0.7 percent against the dollar to 96.23 cents, extending its origin to 2010 by 7.6 percent. The Swiss currency weakened 0.3 percent against the euro and was little changed against the dollar as of 11:05 am in London today.

Monetary Union

the currency of Switzerland, a refuge in times of economic crisis, has strengthened 17 percent against the euro this year amid concerns about the fiscal crisis involving Greece, Ireland, Portugal and Spain will drag down growth in the region of 16 countries and may force some countries of the monetary union.

The gain of the franc against the euro is an additional "burden" on Swiss exports, which account for about 50 percent of gross domestic product, Hildebrand, 47, told reporters in Zurich on 16 December. The growth of 492 billion U.S. dollars in Swiss economy is likely to be "significantly lower in coming quarters," partly because of the strength of the currency, he said.

The Swiss National Bank said it had started selling the March 12, 2009, his first solo foreign exchange intervention since 1992. The policy, designed to prevent deflation, to protect exports and revive growth, caused the biggest daily fall since 1999 to start the euro. The franc fell 3.4 percent to 1.5299 per euro. In late June 2010, had been strengthened by 16 percent to 1.3184.

SNB losses

The central bank said Nov. 12 that there was a nine-month loss of 8.46 billion francs (8.8 billion U.S. dollars) after depreciation of the euro and the dollar caused its assets to decline in the value of a 21 2 million francs. A year earlier, the bank's 103 years old, reported a profit of 6.89 billion francs.

"The SNB tried to intervene, and that clearly did not work, so they turned away," said Richard Benson, an executive director at London-based Millennium Asset Management, which oversees $ 14 billion of currency funds. The French "continue to strengthen at the same time the stresses and strains in the euro zone will no longer be resolved," he said.

derivative operators are paying a premium of 2.56 percentage points for stock options three months, giving the right to buy the franc against the euro in relation to places that allow sales. That compares with an average premium of about 1 percentage point over the past two years.

Ratings Downgrades

The franc could strengthen to 1.10 per euro next year as the debt crisis in Europe deepens, Lee Hardman, a London-based strategist at Bank of Tokyo-Mitsubishi, wrote in a note to clients on 22 December.

Fitch Ratings downgraded the debt of Portugal with a level of A + on December 23, citing concern for the environment "financing" for the government. Moody's Investors Service said on December 15 can be reduced Aa1 credit rating of Spain and a day after Greece's Ba1 rating placed on review for possible downgrade. Ireland fell five levels by Moody's on 17 December. Switzerland top AAA rating from all three companies.

Analysts forecasts are pessimistic about earnings for the franc. As recently as 30 November was for free until the end of 2010 of 1.33 euro. The currency of trade to 1.30 in late March, an independent study of 34 strategists showed.

Some investors say that the franc is too strong, to the point of reference interest rate 0.75 nationwide below 1, the European Central Bank percent. The two-year notes yielded 48 basis points less than German securities of similar maturity on 23 December, compared with 39 basis points in late September.

Relative Value

The currency is overvalued by 34 percent against the euro, based on the relative costs of tradable goods and services measured by the Organization for Economic Cooperation and Development in Paris.

"The market is getting a little carried away by his concern for European sovereign debt risks," said Jurgen Buscher, Zurich-based head of JB Private Asset Management and former director of foreign exchange at Deutsche Bank Private Wealth Management. The franc may weaken to 1.30 per euro to 1.40 over the next year, he said.

Swiss trade surplus, freeing the country from dependence on foreign capital and may boost purchases in times of crisis, fell to 1.93 billion francs last month from 2.05 billion francs in October, the Federal Office Customs said on 21 December.

While the strong franc helped fuel a 3.4 percent drop in exports last month, the Swiss economy benefits from its proximity to Germany, according to Steven Barrow, chief currency strategist Group 10, Standard Bank in London.

'Saving Grace'

German gross domestic product will grow 3.6 percent this year, more than double the 1.7 percent for the euro region. Switzerland's GDP will rise 2.7 percent, the projections show.

The gain of the coin "is obviously harmful in terms of trade is concerned," said Barrow. "Salvation has been the closest of neighbors trading Switzerland, Northern Europe and Germany in particular have been really strong."

German benchmark DAX stock has risen 18 percent this year, while the Swiss market index has changed little since the end of 2009.

Switzerland's economic growth probably will slow down one percentage point next year to 1.7 percent. That compares with 1.45 percent for the euro area and 2.5 percent in Germany, polls show. Greece and Portugal contract with Spain's GDP increased by 0.6 percent.

Inflation Forecast

Hildebrand's central bank cut the inflation forecast for 2012 of 1 percent on 16 December from 1.2 percent, almost six months after the SNB Vice President Thomas Jordan said the intervention was not necessary because the threat of deflation had largely disappeared. Consumer prices rose 0.2 percent in November from the previous year, compared to a gain of 1.1 percent in May.

Policy makers said in its quarterly report on 24 December that "if a risk of deflation rises, the bargaining committee to take the necessary measures to ensure price stability," repeating a statement from their meeting one week before .

They may have to live with a stronger currency as long as the euro zone remains in crisis, according to Collin Crownover, director of currency management at State Street Global Advisors Inc. in Boston, which manages assets of $ 1,900,000,000,000.

"The problems in the periphery of the euro area will not be resolved, which will continue into next year," said Crownover. "I look back negotiating again. Of course there is always a set of circumstances in which they feel they have to. But in the absence of strong appreciation, most likely going to be on the sidelines. They have very little to intervene .

Canadian dollar made gains against its two weekly U.S.

Canadian dollar made gains against its two weekly U.S. and the euro as crude oil to a stock price in two years and increased demand pushed higher-yielding assets.

Canadian currency, nicknamed the loonie, is a 2 percent this month and 0.8 percent in the last five days against the dollar, recovering from two consecutive weekly losses, on speculation that the Bank of Canada will resume its cycle of interest rate hikes in 2011. The Canadian dollar has gained more than 12 percent this year versus the Danish krone, the most among the 16 most-traded counterparts.

"The Canadian data was not strong enough to change the perception that the Bank of Canada will begin to walk in the second quarter," wrote David Watt, senior currency strategist at RBC Royal Bank of Canada Capital Markets unit, a e-mail. "There is little reason for the rally in the U.S. dollar against the Canadian dollar to be sustained and good argument for that fade."

The Canadian currency climbed to C $ 1.0062 per U.S. dollar at 11:47 am in Toronto, compared with C $ 1.0140 on 17 December. Appreciated by 1.3 percent to C $ 1.3198 against the euro, after five straight gains through today.

"The U.S. growth outlook still looks pretty good," said Watt. "The feeling of risk remains alone. The actions follow the rotation of the profits and now oil prices are starting to gain momentum. A test of parity is likely to be aligned with a test of $ 100 per barrel oil. "

Bank of Canada

Brent crude rose to 49 cents to $ 94.74 a barrel on London's ICE Futures exchange in Europe, the highest since October 2008. Prices have gained 2.3 percent this week, and 20 percent this year.

500 of Standard & Poor's gained 1 percent this week. U.S. markets are closed today.

The Bank of Canada, which meets next on Jan. 18, left its benchmark interest rate by 1 percent on 07 December for the second time directly to measure the global economic recovery after three successive increments.

Economists predict that the central bank will raise the target rate overnight to 1.25 percent in late June.

Canadian government bonds were mixed. The yield on the benchmark 10-year note fell 2 basis points to 3.17 percent from 3.19 percent on 17 December. A basis point is 0.01 percentage point. The yield touched 3.37 percent on Dec. 14, the highest since June 21. The price of the 3.5 percent security due in June 2020 rose 11 cents to C $ 102.55.

Bond yields

two-year yield rose six basis points to 1.70 percent. five-year yields rose five basis points to 2.44 percent.

Government bonds have lost 0.4 percent this month, comparing this year's gain to 5.8 percent, according to a Merrill Lynch Bank of America Index.

Canadian gross domestic product grew 0.2 percent to a seasonally adjusted annual rate of C $ 1,240,000,000,000 (1.22 trillion U.S. dollars) in October after contracting 0.1 percent in September, the national statistics agency said yesterday in Ottawa. Economists expected a 0.3 percent increase, based on the median of 21 forecasts.

Reports earlier this week showed that wholesale prices unexpectedly stagnated, inflation slowed, while retail sales rose more than economists had forecast.

The franc weakened against the euro and the dollar for a second day

The franc weakened against the euro and the dollar for a second day, as the Swiss National Bank said it is ready to "take steps" to combat deflation, fueling speculation that he may intervene.

The yen fell against most major pairs as Reuters reported that Japan said it is likely to increase their reserves to intervene in the currency market. The dollar was on the verge of a weekly loss against 12 of its 16 most-traded counterparts as positive U.S. data spurred economic investment in riskier assets. Reports next week may show confidence among U.S. consumers including improved housing remains weak.

"It does not take much to get the market to move at Christmas or New Year and, in view of the euro-Swiss acceleration to the minimum of a couple of days, does not take much for a little investment, "said Jeremy Stretch, executive director of foreign exchange strategy at the Canadian Imperial Bank of Commerce in London.

"The SNB could have learned the lesson of how painful and expensive unilateral intervention," said the stretch. "It might want to rush back into the same type of risk at the moment."

The franc has depreciated 0.4 percent against the euro at 1.2619 from 14:12 in London, and weakened to 96.22 cents per dollar from 95.87 yesterday.

"Concerns about stability in the euro area have led to renewed financial market tensions," pushing up the franc, the central bank based in Zurich, said in its quarterly report published on its website today day. "If these tensions were exacerbated and put a strain on economic developments in the euro area, that too would have a detrimental effect on the Swiss economy. If there is a risk of deflation, the Swiss National Bank will take the necessary measures to ensure price stability. "

Six Days of Records

The Swiss currency strengthened to a record $ 1.2439 against the euro on December 22 after touching new highs for six consecutive days. Has appreciated 15 percent against the euro and 7.1 percent against the dollar this year, as investors sought refuge from the debt crisis of the region's troubled currency.

The yen weakened against 13 of his 16 fellow seniors. Japan is likely to increase their reserves to one side to intervene in the foreign exchange market by 5 trillion yen (60 billion) in the next fiscal year, Reuters reported, citing unidentified sources. The pool is 145000000000000 yen, the report said.

Treasury Bonds Drop

The yen gained 12.1 percent this year, according to indexes of correlation-weighted currencies, which track a basket of 10 currencies of the developed countries.

The euro gained for a second day against the dollar. S & P said yesterday that France deserves a rating of AAA sovereign credit because of the "richness and depth" of its economy and the view that the government of President Nicolas Sarkozy will consolidate its budget deficit.

credit rating of France was vulnerable to a rescheduling because its budget deficit and because its banks are the largest holders of debt issued by so-called peripheral countries, analysts said before yesterday's announcement.

The common currency traded little changed at $ 1.3118 after strengthening 0.3 percent to $ 1.3149.

The vote of confidence in France came hours after Fitch Ratings cited concern for the environment "financing" for the government of Portugal and banks, as well as the economic outlook as a court of the nation's long-term foreign issuer in local currency default rating to A +, the fifth-highest level of AA-. The outlook is negative.

China voices support

The euro will end 2011 about $ 1.50 European accelerates growth led by Germany, Stacey Gavin, interest rate strategist at Barclays Capital in Sydney, said in an interview.

"If the euro is down to around $ 1.25 level, then that's a good time to load up on the history of European growth because Germany is growing rapidly," he said.

The demand of the common currency was also boosted by Chinese officials this week expressed support for the European Union. The strengthening of the state of the euro will help "promote the construction of a diversified global monetary system," said China's ambassador to the EU Song Zhe yesterday in a statement on the website of the Ministry of Foreign Affairs.

His comments follow those of Chinese Vice Premier Wang Qishan said on 21 December that his country had taken "concrete steps" to help the EU meet its debt crisis.

The confidence index for the Conference Board's U.S. consumer rose to 56.3, according to the median estimate in a survey before the report of the group from New York, expiring December 28.

S & P / Case-Shiller index of home values in 20 U.S. cities fell 0.2 percent in October from the same month of 2009, the first decline year by year, since January, a report is expected to show December 28. The gauge probably fell 0.7 percent from the previous month after adjustment for seasonal variations.

"Recovery of the whole world seems to be recovering," said Tsutomu Soma, a provider of bond and currency of Okasan Securities Co. in Tokyo. "It seems that there are risks in the sense that probably negative for the yen and the dollar."

The euro may fall to a minimum of four months against the yen

The euro may fall to a minimum of four months against the yen should fall below key support levels established in the last month, said Tsutomu Soma, a provider of bond and currency of Okasan Securities Co.

Support at 108.35 yen weakest marks the euro on Nov. 30, and the level of 108.49 yen represents a trend line connecting the lows of August 24, 1908 September and 23 December. Daily momentum indicators such as Moving Average Convergence Divergence, or MACD, also show that the euro is likely to weaken against the yen, Soma said.

"The euro is very bad against the yen in the lists, " said Tokyo-based Soma in an interview. "The trend is downward, with a clear break below 108.35 yen target the August low 105.44 yen."

The European currency rose to 109.04 yen at 9:53 am in Tokyo from 108.74 yen in New York yesterday, when it fell to 108.46 yen, at least from 1 December. The level of 105.44 yen reached on 24 August was the weakest since July 2001. The euro has fallen 18 percent against the Japanese currency this year, set for biggest loss since 2008.

MACD of the euro against the yen today was less than 0.7102, below the signal line of less than 0.5405. The MACD is calculated by subtracting the 26-day exponential moving average of the mean of 12 days. The signal line is a nine-day exponential moving average of the MACD, and provides signals for buying and selling of some analysts.

In technical analysis, investors and analysts charts on trading patterns and prices to forecast changes in the security, commodity, currency or index. Support is on purchase orders can be grouped while resistance refers to a level where sell orders may be.

Canadian dollar dropped after showing the nation's economic growth forecasts lost

Canadian dollar dropped compared with commodity-linked counterparts after a report showed the nation's economic growth forecasts lost, adding to evidence of recovery can be prolonged.

The Canadian currency, known as the Canadian dollar strengthened against the dollar as crude oil climbed to the highest level in over two years. The Canadian dollar led to a gain of 0.5 percent in the week, after falling the previous two. It has risen 4.3 percent this year against the U.S. dollar, the ninth best performance among its 16 major counterparts.

The U.S. dollar pair Canadian dollar currency "has been less attuned to the risk of finding the feelings," said Brian Kim, currency strategist at UBS in Stamford, Connecticut, via email. "It's probably the choppiness in the Canadian and U.S. data that batting around the couple."

Canadian dollar fell 0.5 percent to 75.42 Canadian cents per dollar of New Zealand at 5 pm in Toronto from 75.01 cents yesterday, and declined 0.2 percent to C $ 1.0138 per Australian dollar, from $ 1.0122. Australia and New Zealand, like Canada, are based on raw materials for export earnings.

The Canadian dollar gained 0.4 percent to C $ 1.0095 per U.S. dollar, from $ 1.0132 yesterday, after depreciation of up to 0.3 percent. It touched C $ 1.0209 per dollar on 20 December, the lowest since Dec. 1.

Canadian gross domestic product grew 0.2 percent to a seasonally adjusted annual rate of C $ 1,240,000,000,000 (1.22 trillion U.S. dollars) in October after contracting 0.1 percent in September, the national statistics agency said today in Ottawa.

Bond Reduction

Crude oil for February delivery rose to 1.3 percent, to $ 91.63 a barrel in New York, the highest since October 2008. The oil is the largest Canadian export. 500 of Standard & Poor's fell 0.2 percent.

Government bonds fell, bringing the yield on the two years for up to five basis points, or 0.05 percentage point to 1.72 percent, the highest level in a week. It touched 1.76 percent on Dec. 13, the highest since Nov. 25. The price of the guarantee of 1.5 percent due December 2012 fell 6 cents to C $ 99.64.

Canadian dollar, known as the Canadian dollar for the image of waterfowl in the C $ 1 coin, will strengthen the dollar peg at the end of March, and trade there for most of 2011.

New Zealand Dollar

New Zealand's currency was the best performer among the major partners of the dollar. The U.S. dollar fell against most of its peers after reports showed U.S. economic recovery is gaining momentum, creating demand for higher yielding assets. The data showed that household spending and capital goods orders rose in November and initial claims for unemployment insurance benefits fell last week.

Canadian Finance Minister Jim Flaherty said the budget next year will include measures to help boost economic growth without losing sight of the long-term goal of a balanced budget.

Expansion of training programs and "significant" infrastructure spending will be part of Canada's 2011 budget, Flaherty said in a Dec. 21 interview. However, the country's finances back in balance "anchor" of the fiscal plan, he said.

Orders for capital equipment in the U.S. recovered in November

Orders for capital equipment in the U.S. recovered in November, indicating a slowdown in business investment may be less pronounced than some economists projected.

Bookings for goods like computers and communications equipment rose 2.6 percent after declining 3.6 percent in October, which was lower than estimated, the Commerce Department figures showed today in Washington. Total orders fell 1.3 percent, pressured by the ongoing demand for airplanes, and reserves excluding transportation equipment rose more than expected.

Capital spending has been a source of strength for the world's largest economy, while household purchases are starting to accelerate. Manufacturing industry helped pull the U.S. the worst recession since the 1930's, has remained strong throughout the recovery, driven in part by foreign demand for American-made goods.

"There are still some teams spending going on," said Brian Bethune, chief U.S. financial economist IHS Global Insight in Lexington, Massachusetts. "It will be a positive factor for growth."

Another Commerce Department report today showed consumer spending rose in November as incomes rose. Household purchases by 0.4 percent after rising 0.7 percent in October, which was higher than previously estimated. Revenue rose 0.3 percent and the preferred price measure of the Federal Reserve showed that inflation remained below the comfort zone of policy makers.

Jobless Claims

Initial claims for unemployment fell in 3000 to 420,000 in the week ended Dec. 18, the Labor Department figures showed today in Washington. And collecting those benefits fell last week to 4.06 million.

The index futures fluctuated after the reports. The contract on the Standard & Poor's 500 Index expiring in March fell 0.2 percent to 1252.50 at 8:57 in New York. Treasury securities were lower, pushing the yield on the benchmark 10-year to 3.36 percent from 3.35 percent late yesterday.

The median forecast calling for a decline in total orders for durable goods reflects 74 projections in a survey. Estimates ranged from a decline of 3.6 percent to an increase of 3 percent.

Reservations for commercial aircraft fell 53 percent last month after a 7.1 percent decline in October.

Excluding transportation, bookings rose 2.4 percent, the biggest increase since March. They were forecast to rise 1.8 percent.

Business Investment

The capital goods orders excluding aircraft non-defense is considered an indicator of business investment in the future. The revised fall in October compared with a 4.5 percent decline previously estimated. In the last three months, stocks rose at an annual rate of 7.1 percent, down from an increase of 11 percent in October.

The demand for computers and electronics rose 5.8 percent last month, the biggest increase since February 2009.

Shipments of capital goods excluding aircraft non-defense, which is used in the calculation of GDP, increased 1 percent after falling 1.2 percent in October.

The U.S. economy grew at a rate of 2.6 percent between July and September, the Commerce Department said yesterday. Corporate profits rose 1.6 percent during the third quarter and increased 26 percent from the same three months last year.

Industrial Production

Today's report supports others suggesting factories are contributing to growth in the fourth quarter. Last week the Fed said U.S. industrial production increased in November by the most in four months.

Some manufacturers are projecting higher earnings as orders increase. Joy Global Inc., the manufacturer of P & H Joy Mining equipment, last week announced an earnings forecast for fiscal 2011 that exceeded analysts' estimates in a survey.

"The rate of stock enhancement supports our view that mining customers continue to increase their capital spending plans," said Mike Sutherlin, CEO of Milwaukee-based company said in a statement on 15 December. "We continue to increase our production to meet forecasted demand growth."

Foreign sales are a plus for factories and exports in October rose to its highest level in more than two years, according to Commerce Department data released on 10 December. Some companies are responding to increased U.S. demand and abroad by replacing obsolete equipment and the expansion of its plants on line.

The pound sterling depreciated against the dollar for the second straight week

The pound sterling depreciated against the dollar for the second straight week as economic data stoked concern the recovery may be slower.

The pound headed for weekly decline against 16 of its most actively traded counterparts. The pound hit a three-month low against U.S. currency December 22 as the Office for National Statistics said gross domestic product grew by 0.7 percent in the three months to September, below the initial estimate of 0.8 percent announced in October. Second quarter growth was revised downward to 1.1 percent from 1.2 percent. The budget deficit rose to a record of approvals and home loans fell to the lowest since March 2009.

"It was not the best race of the data in the course of the last session and the pound is looking a little softer," said Jeremy Stretch, executive director of foreign exchange strategy at the Canadian Imperial Bank of Commerce London. "The GDP data was a bit disappointing, and does not provide a lot of positivity to be the end of the year."

The pound was little changed at $ 1.5440 as of 12:40 pm in London. That is a decline of 0.7 percent from $ 1.5533 on 17 December. It reached $ 1.5356 on 22 December, its lowest level since 14 September. The UK currency was at 85.05 pence per euro from 84.91 pence a week ago.

Published data showed 21 December, the deficit of the United Kingdom in November rose to a record budget. Net public debt rose to 22.8 million pounds, up from 16.7 million pounds a year earlier, said the ONS. The growing gap highlights the challenge facing the prime minister, David Cameron and his government is prepared to implement deeper cuts in spending since World War II.

Home Loans

A report by the British Bankers Association showed on December 23 UK banks granted 29,991 mortgages in November, compared with 30,689 the previous month. That was the lowest number of mortgage approvals since March 2009 when the economy was in the depths of the recession, according to the data.

"The housing market is showing signs of recovery in the short term fiscal consolidation likely to weigh," said CIBC stretch.

The pound has lost 1.1 percent in the last week, which track a basket of 10 currencies of the developed countries.

Since late 2009, the British currency has lost 6.4 percent, compared with a decline of 10.5 percent for the euro and a loss of 1.4 percent for the dollar.

The UK currency dropped their declines as Bank of England markets director Paul Fisher said in an interview on 23 December that interest rates may rise to a "standard position" of about 5 percent.

"It's not impossible"

"I do not think a change of 25 or even 50 basis points, will cause a recession," Fisher told the Daily Telegraph. "But we have to do is turn on the way people think that's where the rates that may come back."

The central bank official also said it is "impossible" the economy may contract for a quarter.

Minutes of the meeting of the Bank of England in December on 22 December showed that policymakers remained divided in its decision to keep the benchmark interest rate at a record low of 0.5 percent and the asset purchase program without changes in 200 million pounds.

Member of the Monetary Policy Committee Adam Posen, who has asked the bank to increase the stimulus, said last week policy makers should not "overreact" to inflation. His colleague Andrew Sentance voted to increase rates since June.

The 10-year gilt yield gained two basis points to 3.51 percent from 3.56 percent on 17 December. This is his first weekly loss in four. The yield on two-year note increased one basis point in the week to 1.21 percent.

Gilts have returned 6.7 percent this year, according to indexes compiled by the European Federation of Financial Analysts Societies . Treasuries gained 5.4 percent and Germany's debt reference values of the euro zone, returned 6.1 percent, rates of EFFAS show.

Gold rose for the first time in three days in London

Gold rose for the first time in three days in London as concern about the debt crisis in Europe led investors to protect their wealth.

Portugal Fitch Ratings downgraded by one level yesterday and said the economy faces a "deterioration" of Outlook as the government struggles to contain the euro zone's fourth largest budget deficit. Gold rose to a record $ 1431.25 an ounce on 07 December amid growing concern about the fiscal health of countries like Ireland, Spain and Greece.

"Gold prices have risen largely on the sovereign risk in Europe," said Chris Kwon, Co. operates Seoul-based KTB Securities "ingots may soon break the $ 1,400 mark again."

Gold for immediate delivery rose $ 4.83, or 0.3 percent, to $ 1,384.93 an ounce at 12:45 pm in London. Gold futures for February delivery closed at $ 1,380.50 in the Comex in New York yesterday. Trade is closed today.

Bullion rose to $ 1,380.50 an ounce in the morning "fix" in London, used by some mining companies to sell production, from $ 1,373.50 in the afternoon yesterday fixing. Spot prices by 26 percent this year, heading for a 10th consecutive year, the longest streak in at least nine decades.

The euro rose against the dollar after Standard & Poor's said on Tuesday that France deserves a rating of AAA sovereign credit because of the "richness and depth" of its economy and the view that the government of President Nicolas Sarkozy will consolidate its budget deficit.

gold assets in exchange-traded products fell 3.12 metric tons to 2,101.3 tons yesterday. Holdings reached a record 2,114.6 tons on 20 December.

Silver for immediate delivery in London was little changed at $ 29.2725 an ounce. Palladium rose 1.6 percent to $ 764.25 an ounce. Platinum was 0.4 percent, to $ 1,726.25 an ounce.

The premium of yuan to buy outside of China disappeared

The premium of yuan to buy outside of China disappeared as Hong Kong's central bank established a fund to guarantee the supply of currency cross-border trade settlements.

Yuan traded in Hong Kong to 6.6510 per dollar as of 12:10 pm local time, a discount rate of 6.6333 in Shanghai. offshore trading began in July and the Hong Kong rate has averaged 0.8 percent stronger than on the mainland. Hong Kong banks will be allowed to exploit the 20 billion yuan ($ 3 billion) of funds from the bank next month the city of yuan of compensation runs out of funds created pursuant to a quarterly fee.

The Hong Kong Monetary Authority made available 10 million yuan in October with a swap agreement with China's central bank after a quota of 8000 million yuan was insufficient. Chinese Premier Wen Jiabao, is allowing the currency to be more readily available outside the borders of China to reduce reliance on U.S. dollars in trade and finance.

"They're hurtling toward this point," said Gavin Parry, chief executive of Hong Kong Parry International Trading Ltd. "They are really in Hong Kong as the clearing and settlement center for storage and offshore transactions" in yuan, he said.

Hong Kong aspires to grow as havens for trade in yuan and HKMA Chief Executive Norman Chan said yesterday deposits amounted to 280 billion yuan by the end of November, up from 220 million yuan the previous month. The city received 130 million yuan in net trade payments of China in the first 11 months, told reporters in Hong Kong.

Currency Swap

The amount available in the yuan clearing bank will be subject to quarterly review, Chan said, predicting that 4 million yuan will be sufficient for the first quarter of 2011. The yuan fund, created through a currency swap agreement with the People's Bank of China will be "more than sufficient" to meet the growing demand for the currency, he said.

The HKMA, together with the city banks, will be the promotion of yuan business in Hong Kong offshore next year in countries that have "rapid increase in trade and investment flows to the continent," said Chan.

BOC Hong Kong is currently Hong Kong (Holdings) Ltd. as a clearing bank for RMB. There are risks in having a single bank for the release of yuan, the official Xinhua news agency reported on 10 December, citing Peter Wong, executive director of the Asia-Pacific of HSBC Holdings Plc.

the city's richest man, Li Ka-shing, plans for what may be the first initial share sale of yuan next year, in their search for more than 10 billion yuan (1.5 billion dollars ) for a real estate investment trust backed by the Beijing Oriental Plaza development, a person briefed on the matter, he said.

Naoto Kan plans to limit new bond sales of 44.3 trillion yen in 2011

Japanese Prime Minister Naoto Kan plans to limit new bond sales of 44.3 trillion yen ($ 534,000,000,000) in 2011 to finance a record budget in an attempt to stimulate demand and boost business growth.

The country's budget will amount to 92.4 billion yen in the year from April 1, according to a proposal approved today by the Council of Ministers in Tokyo. Kan is committed to maintaining the bond sales unchanged for three years to curb the industrialized world's largest debt burden.

Kan budget juggling the need to stimulate demand in an economy battered by the yen up to a deflation in 15 years, and reduce the burden of debt twice the size of gross domestic product. The increase in sales tax to improve Japan's finances might not be feasible because it runs the risk of a further decline in his popularity, Nikko Cordial Securities Inc., said.

"Given the political situation will be difficult for Khan to discuss a tax increase sales," said Hidenori Suezawa, chief strategist at Nikko Cordial Securities in Tokyo. "There is no doubt that the government will have a harder time compiling the budget for next year as social security costs swell and run out" of the sources of income.

Japan's economy will shrink this quarter, due to the stimulus of government spending expire and reinforced the strength of the yen threatens export profits. The government said this week that he expected growth to slow to 1.5 percent next fiscal year of 3.1 percent.

The job cuts

JVC Kenwood Holdings Inc., a Japanese manufacturer of audio equipment, video cameras and televisions, said it plans to eliminate 500 jobs at its unit Victor Japan due to the appreciation of the yen and competition from Asia have reduced income.

The yield on the benchmark 10-year note rose to 1.16 percent at 6:56 pm in Tokyo. The yen was trading at 82.90 as of 18:57 has fallen 2.9 percent against the dollar to a 15-year high of 80.22 reached on November 1.

The government also said today it plans to add ¥ 5000000000000 145000000000000 yen reservations aside pool of currency intervention, after Japan sold yen for the first time in six years on 15 September.

Japan's primary deficit was reduced to 22,700,000,000,000 yen from 23.7 trillion yen, the Finance Ministry said, equivalent to about 4.7 percent of GDP. Khan wants to publish a primary balance, which can be achieved when revenues match expenditures, excluding bond sales and interest payments for the year 2020.

The decline in income

The government hopes that new bond issues over the tax revenue of 41 billion yen for a second consecutive year. Japan tax revenues have declined more than a third after peaking in 1990 ¥ 60,100,000,000,000.

Sales of all bonds and obligations including to refinance maturing debt will take place next year ¥ 144900000000000 144300000000000 yen, according to the proposal. Nikko Suezawa said the amount of bond sales were within expectations and have a limited market impact.

Kan submit the draft budget to Parliament, where it is almost certain to be approved by the ruling party controls the more powerful lower house.

Lack of Leadership

Prime Minister 7000000000000 yen tapping unused accounts and reserves to pay for the plan, including money from an account in foreign currency reserves and accumulated funds from a company affiliated with the government railway. Finance Minister Yoshihiko Noda said the government needs to find a sustainable source of funds.

"This outstanding debt and low tax revenues, obviously, suggest the need to increase taxes, including sales tax," said Yoshiki Shinke, economist at Dai-Ichi Life Research Institute in Tokyo. "The real obstacle is the lack of political leadership."

The ruling Democratic Party of Japan lost ground in the midterm elections in July after Kan proposes increasing the nation's 5 percent sales tax to restore the finances. Kan Cabinet's approval ratings fell to 21 percent, the lowest since he took office in June, the Asahi newspaper reported on 13 December.

To meet budget guidelines Kan, DPJ abandoned its promise to double the child care leaflets to households, which limits the increase to families with children under three years old.

'Troubling' initiatives

Yoshimasa Hayashi, a legislator from the opposition Liberal Democratic Party, said Khan plans expenses are increasing the risk of a bond market crash and his cabinet should implement more aggressive measures to restore fiscal health of the nation. "There are many worrying spending initiatives" in the proposed budget, said in an interview Dec. 20 in Tokyo.

bond yields in Japan are the lowest in the world. About 95 percent of holders of domestic investors. A total of ¥ 908800000000000 Japanese government bonds are outstanding, making the country the largest global debt market.

Japan is one of the four economies, together with Greece, Italy and Portugal, to the enhanced risk of needing a drastic reduction of the budget to avoid uncontrollable debt, according to an IMF report in September.

aging of the nation is also putting pressure on their chests. social security costs, which have risen more than 60 percent since 2000, representing 53 percent of next year's general expenses. Families receiving welfare payments rose to a record $ 1.4 billion in September as the data were compiled in 1951, according to the Ministry of Social Welfare.

There is good news

The Japanese government has said it plans to reduce corporate taxes by 5 percentage points next year to stimulate investment and employment without obtaining funds to cover about 1.5 trillion yen of losses of income. That may be a sign that Japan is losing its commitment to reduce its debt, "said Azusa Kato, economist at BNP Paribas in Tokyo.

debt rating of Portugal was demoted one level by Fitch Ratings

debt rating of Portugal was demoted one level by Fitch Ratings, which said the economy faces a "deteriorating" prospects as the government struggles to contain the euro zone's fourth largest budget deficit.

The long-term issuer foreign and local currency default rating was reduced to A +, the fifth highest level, from AA-, Fitch said in a statement. The outlook is negative. March 24, Fitch cut the rating by one step to AA-. The company said in a separate report, the risk of the European Union will have to rescue other euro member states after rescue of Ireland and Greece.

"The downgrade reflects a further slow reduction in the current account deficit and financing environment much more difficult for the Portuguese government and the banks prior to joining Fitch rating and negative outlook assigned on March 24, 2010, and as impaired short-term economic prospects, "the rating company said.

The Portuguese government plans to cut salaries of state workers and raise taxes to convince investors that it can reduce the budget gap, after the Greek debt crisis led to an increase in borrowing costs for high-income countries deficit. Ireland became the second euro country to find the rescue and the first to request assistance from the European Financial Stability Fund last month.

Yield spread

The difference in performance between 10-year bonds Portuguese and German bonds, a benchmark in Europe, the euro hit a record was 483 basis points on November 11. The spread was 364 basis points yesterday.

The rating downgrade by Fitch announced it is "difficult to understand" at the present time in 2011 in Portugal, the budget has been approved and its banking system is "solid and strong," said the Finance Ministry yesterday in a comment sent by e-mail.

"The white structural budgetary adjustment in 2011 - equivalent to almost four per cent of GDP - will be difficult, especially if, as Fitch expects the economy goes into recession next year," said the rating company's statement yesterday.

The government is taking the necessary measures so that they do not have to ask for help, Finance Minister Fernando Teixeira dos Santos said on 15 December. Portugal faces no bond repayments until April and has completed sales this year of the debt. Borrowing costs increased by Dec. 15 sale of 500 million euros (655 million U.S. dollars) of bonds in three months.

Finance market

"The government has shown it can maintain access to market financing, albeit at a high cost during the crisis," Fitch said. "The current ratings are based on the Portuguese government to maintain market access and not assume that it is external financial support under a program of the EU and the IMF."

Moody's Investors Service said on December 21 Portugal bond rating may be downgraded one or two levels on the basis of that budget cuts will worsen the country "weak" economic growth. Moody's downgraded the credit rating two steps to A1 Portugal on 13 July.

Standard & Poor's said Nov. 30 it may lower the country's rating, after being cut to A-from A + in April. S & P yesterday affirmed the AAA rating in France.

Credit rating companies also review other countries. Moody's said Dec. 15 it may cut the rating Aa1 from Spain and on 16 December said that Greece placed bonds Ba1 ratings on review for possible downgrade. Ireland's credit rating was reduced five levels by Moody's on 17 December.

'Systemic' Crisis

Fitch said in a separate report yesterday that the crisis is "systemic" and is concerned about the viability of the single currency as a whole.

"While the economic fundamentals of the euro area credit are stronger than current levels of risk assessment indicates, Fitch believes that the crisis is systemic to the extent that it reflects concerns about the viability of the euro, as well as country-specific vulnerabilities, "the ratings company said in London.

Portugal has exports, such as paper and wood products to support economic growth, as spending cuts. The budget envisages a GDP growth of 0.2 percent in 2011, slower than previously estimated 1.3 percent this year. Portugal's economic growth has averaged less than 1 percent annually over the past decade, one of the weakest growth rates in Europe.

"The evidence that the economy was on a path of sustainable recovery, supported by adherence to the government's objectives of fiscal consolidation could lead to a revision in the rating outlook to stable," Fitch said yesterday.

Portugal 2011 budget includes the largest cuts in spending over three decades. In September, the government said it would cut the wage bill by 5 percent for public sector workers earning more than 1,500 euros a month, hiring freeze and increase value added tax by 2 percentage points to 23 percent to help to reduce the government deficit amounted to 9.3 percent of gross domestic product in 2009.

The country recorded the largest deficit of the 16-nation euro zone last year after Ireland, Greece and Spain. It aims to reduce its budget deficit to 7.3 percent of GDP this year, 4.6 percent in 2011, and reach the EU limit of 3 percent in 2012.

Business

Welcome to our website

Wednesday, December 29, 2010

Chinese executives are reducing support for a stronger yuan

Brazil raised its tariffs on toy imports from China

Plosser and Fisher may dissent from Fed Chairman Ben S. Bernanke’s plan to purchase $600 billion in Treasuries

Tuesday, December 28, 2010

The dollar weakened against their counterparts from Australia

Bernanke may be about to get help in an attempt to boost the economy

Confidence among U.S. consumers unexpectedly fell in December

investors remain bullish on commodities that beat stocks and bonds for a second year

consumer prices in Japan fell for a month 21 in November

Taiwan's Central Bank said it will rein in limits on the use of exchange-rate derivatives

Swiss central banker Swiss may be unable to stop the free registration to extend a rally

Friday, December 24, 2010

Canadian dollar made gains against its two weekly U.S.

The franc weakened against the euro and the dollar for a second day

The euro may fall to a minimum of four months against the yen

Canadian dollar dropped after showing the nation's economic growth forecasts lost

Orders for capital equipment in the U.S. recovered in November

The pound sterling depreciated against the dollar for the second straight week

Gold rose for the first time in three days in London

The premium of yuan to buy outside of China disappeared

Naoto Kan plans to limit new bond sales of 44.3 trillion yen in 2011

debt rating of Portugal was demoted one level by Fitch Ratings

Welcome

Blog Archive

Pages

Categories

About Me

visitors