Dollar, Yen, Euro, Pound - all Fluctuate

Dollar Falls Against Yen as Reports to Show Deepening Recession

By Stanley White and Ron Harui

Dec. 1 (Bloomberg) -- The dollar fell against the yen before U.S. reports this week that may show manufacturing contracted and employers cut jobs by the most since 2001 as the recession deepens.

The euro declined against the dollar and the yen as traders bet the European Central Bank will reduce borrowing costs this week in response to the recession. The Australian and New Zealand dollars weakened as economists forecast policy makers in both countries will lower interest rates this week as the economic outlook deteriorates.

“People may look more closely at the U.S. economy, so there’s some scope for dollar depreciation,” said Akio Shimizu … to read the full article please follow this link:

Online Currency | Dollars-Yen-Euros-Pounds

Courtesy: Bloomberg.com

Currency Chart

GLOBAL CURRENCY EXCHANGE NETWORK - DAILY CURRENCY NEWS

CURRENCIES	HIGH	LOW
GBP-EUR	1.1871	1.1598
GBP-USD	1.5424	1.5004
GBP-AED	5.6621	5.4922
GBP-BRL	3.4812	3.4272
GBP-EGP	8.4801	8.2256
GBP-TRY	2.4383	2.3651
EUR-USD	1.3032	1.2641
EUR - BRL	3.0086	2.9183
EUR-AED	4.7720	4.6288
USD-AED	3.6727	3.671
USD-EGP	5.5057	5.3405
AED-ZAR	2.6776	2.5972

 n.b these are just indication rates as of 8.30am on Wednesday 26th November 2008

• Sterling slipped against the dollar and yen on Wednesday, retreating from a two-week high against the U.S. currency due to falling stock markets.
  
• 
  

  One trader in London said an Asian central bank was seen buying sterling against the dollar, helping to lift the pound from its lows, shortly after China cut interest rates by 108 basis points.

  
  To keep up to date with currencies, please follow this link:

Currency News in the UK

Budget News and Currency Chart

CURRENCY TABLE

 Supplied Courtesy of Go Currency

Brown Takes U.K. ‘Back to the 70s’ With Tax, Debt Proposals
By Gonzalo Vina

Nov. 25 (Bloomberg) -- Prime Minister Gordon Brown swept aside three decades of economic orthodoxy with tax increases on the rich and plans that will double Britain’s national debt.

Brown’s proposals yesterday to mitigate fallout ... for the full story please follow this link:

Budget News November 2008

Courtesy: Bloomberg

Euro Declines Further

The euro declined against the dollar, the pound still in trouble
By aslanbash

Finance Information City
The euro fell against the dollar Friday after confirmation of the recession in the euro zone, while the pound sterling was changing to new records of weakness facing the single currency.

Towards 22H00 GMT (23H00 Paris), the euro bought 1.2591 dollars against 1.2779 the previous day.

It also address the declining yen at 122.24 yen against 124.84 the previous day.

The dollar fell face the yen to 97.06 yen against 97.67 Thursday evening.

The single currency has been weighed down by the confirmation of what economists feared the euro area went into recession for the first time since its inception in 1999, with a decline of 0.2% of its Gross Domestic Product in the third quarter the previous report.

"Preliminary data available for the fourth quarter suggest that the contraction of the economy is growing," warned economists at High Frequency Economics.

At the same time, inflation slowed to its lowest level for nine months in October, opening the door to future rate cuts in the euro area.

Zach Witton, Moody's Economy.com, the European Central Bank should cut interest rates by 0.5 percentage points to 2.75% in December.

The traders also tried to anticipate the consequences for the currency markets of the G20 summit.

"The expectation by the markets of major announcements should continue to draw the frame of the next meetings," said Daragh Maher, Calyon.

"Nothing surprising is anticipated G20," he qualified, however, and "the dollar and the yen should remain on an upward slope even if temporary setbacks can be violent due to volatililité always at work market. "

From the U.S. side, the indicators have confirmed the fuel of consumer retail sales in October were the strongest decline since the launch of this index in 1992.

The pound sterling stood at weak levels seen over the past six years against the dollar, after touching the day before at a lower dollar for 1.4557 a pound, and the highest against the euro after a more low at 1.1545 euro for a book.

The British currency rose against the euro at 85.39 pence, but fell against the dollar to dollar for 1.4733 a pound.

The Swiss currency has regained ground against the euro at 1.5081 Swiss francs to one euro but fell against the dollar to 1.1976 Swiss francs to the dollar.

The Chinese yuan closed at 6.8250 yuan to one U.S. dollar against 6.8298 yuan on Thursday.

*********************

Forex Explained... Forex Rates
By Forex Specialist

Forex is an something that has been around for many years, but still many people don't understand its power, still many people don't see the great possibilities of this market. Those who know what Forex trading actually is just love it... they lova the excitement of expecting their forex profit and the way forex rates so often change in their interest.

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Forex term comes from the word 'Foreign' and 'Exchange' and its simply participating in transactions involving currency exchange . Of course, there are some significant differences and benefits of forex trading through online brokers in comparison to a simple currency change during your vacation, but the basic principles are the same. Forex profitable opportunities are available 24 hours a day. Exchange rates are always fluctuating according to supply and demand and the economic and political influence in countries around the world.

Currency rates are forever fluctuating depending on supply and demand and economic and political influences in countries all over the world. The aim of any Forex trader is to spot which currency will next rise or fall in value against another currency.

Considering that profits can be both increases and decreases in the currency, this means that the Forex market is very attractive and potentially very lucrative for everyone who is willing to spend a little time.

As mentioned money can be made no matter whether a currency rises or falls, Forex is traded with a leverage which means if you trade with say $100 you do not get $100 of currency, you will get many times more than this perhaps as much as $40,000.dollars.

This does not mean you physically have $40,000 for a $100 deposit but rather that you can earn a percentage of that $40,000 if the currency fluctuates in your preferred direction.

Forex trading is trading with foreign currencies and benefit from currency fluctuations. It is surprisingly easy to learn Forex trading and start making profits, however, before rushing to invest money you must ensure that you fully understand the market.

Courtesy: Online Currency Broker | forex-rates.info

A Pfennig for Your Thoughts 11/17/2008

Courtesy:
EverBank World Markets
A Pfennig For Your Thoughts
Monday, November 17, 2008

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......................................................

In This Issue..

* G20 largely a non-event...
* Pound moves up...
* Brazil falls on sell off of emerging markets...
* Japan enters recession...

And Now... Today's Pfennig!

Nothing comes out of the G20 meeting...

Good day...and welcome back to another work week. I driving into work this morning and started thinking about the growing number of people who no longer have jobs to report to. And the problems are no longer just concentrated on the manufacturing sector. I was shocked at the long list of retail stores which are planning to shut down after the holiday season. The situation in the US economy continues to deteriorate, and unfortunately things are going to get much worse here in the US before they turn around. On that cheery note, I'll get started.

Leaders from around the world gathered in an attempt to solve the crisis facing the global economy. This meeting was being billed as "Bretton-Woods II" and the markets were counting on some action. But the meeting was largely a non-event, as leaders did little more than point fingers and try to pass the blame for the financial crisis. President George W. Bush and his counterparts from the Group of 20 blamed the looming global recession on imprudent investors who sought higher yields without an adequate appreciation of the risks. They also mentioned the regulators who failed to address the dangers building in the market were at fault, but no mention at all of the Wall Street banks and investment houses who concocted complicated investment vehicles, bought them a AAA rating, and sold them to unsuspecting investors. Granted, these investors who purchased them without proper due diligence are partially to blame, but some fingers should also be pointing in Wall Street's direction.

But pointing fingers won't solve our problems, so what did the G-20 come up with to rescue the markets? Nothing more than a statement calling for higher capital standards and stronger risk management at banks, hedge funds, and credit rating firms. I agree that more regulation is needed, but the markets were looking for a coordinated response to the current crisis, and this announcement will undoubtedly disappoint them.

I received a phone call from a Reuter's reporter on Friday asking my thoughts on the probably outcome of the G20 meeting. I told her I had little expectations for any market moving announcements, and that the most likely result would be the agreement to have another meeting later next year. That is exactly what occurred, with the leaders scheduling another meeting for the first quarter of 2009.

The dollar fell vs. most of the major currencies, as with the British Pound turning in the best performance, increasing 1.28% vs. the US$. Chuck had a reader send him a very important newsflash from the Telegraph UK paper. The Financial Services Authority (FSA) has completed a liquidity/stability stress test on the capital ratios of UK building societies and found that they're much more stable than the Banks. This undoubtedly helped the pound rally, but this move up could prove short lived, as the underlying fundamentals for the pound are weak, and getting weaker.

The Brazilian Real was the biggest loser vs. the US$ over the weekend, as weak economic data caused investors to move out of the emerging markets. I continue to believe that the commodity based currencies hold some of the best values in today's markets. The stimulus package announced by China, along with government infrastructure which will likely be announced here in the US, should increase demand on raw materials. More and more governments will try to 'spend their way' out of the global slowdown, investing into big infrastructure construction projects. These projects should bring commodity prices back up, which would be supportive of the Brazilian real and the Australian dollar two of the major exporters of raw materials.

Today we will get the Empire Manufacturing data, which will likely show more rot on the vine for manufacturing in the NY area. The number is expected to show a record drop for November. We will also see the Industrial Production and Capacity Utilization numbers for October. The Industrial Production number is actually expected to show a slight pick up after falling almost 3% in September.

The rest of the week will bring even more data on the US economy, with PPI and TIC flows scheduled for tomorrow; CPI, US Housing starts, and the minutes of FOMC's October meeting on Wednesday. And to finish the week, the jobs numbers will be printed on Thursday along with the Leading Indicators. None of this data should be dollar positive, as the fundamentals of the US economy continue to deteriorate. But as readers know, bad economic numbers have had a dollar positive effect, as investors flock to the 'safe haven' of US treasuries. So the dollar could actually see more strength as the bad numbers roll in.

This is what happened with the Japanese Yen over the weekend, as Japan announced GDP fell .4% during the third quarter. Japan's economy, the world's second largest, entered its fires recession since 2001 last quarter and the government economists say conditions may get even worse. The bad news was met with currency investors buying the Japanese yen. Yes, investors moved back into yen as they reversed carry trades, selling high yielding currencies to pay down loans in Japan. So poor economic data in the US and Japan are driving investors back into these currencies.

Crazy days!

Currencies today 11/17/08: A$ .6485, kiwi .5564, C$ .8119, euro 1.2646, sterling 1.4922, Swiss .8352, ISK (No Quote), rand 10.13, krone 6.9728, SEK 7.923, forint 212.13, zloty 2.9817, koruna 20.07, yen 96.51, baht 34.99, sing 1.5231, HKD 7.7501, INR 49.3375, China 6.8270, pesos 13.062, BRL 2.305, dollar index 86.97, Oil $55.54, Silver $9.50, and Gold... $742.84

That's it for today... The weather here in St. Louis has been about as volatile as the currency markets. We had the first snowfall of the season on Saturday, followed by a beautiful fall day yesterday with temps heading into the 60's. Back to winter today and tomorrow with temps down into the 30's. And then back to mid 60's on Wednesday; you got to love the St. Louis weather! Tough weekend for St. Louis sports, as the Rams got embarrassed in San Francisco, and the Blues lost in overtime last night to the Montreal Canadians. Chuck should be back in the saddle tomorrow, but is scheduled to head back out on the road at the end of the week. Hope everyone has a Marvelous Monday!!
Chris Gaffney, CFA
Vice President
EverBank World Markets
1-800-926-4922
1-314-647-3837

Smart Daily Currency Note - 17th November 2008

Smart Currency Exchange - Daily Currency Rates for Business Users

Free Daily Inter Bank Currency Exchange Rates 17th November 2008

Currency Rate EURO 1.178 US$ 1.494 CHF 1.780 CAN$ 1.834 AUS$ 2.289 JPY 144.43 HKD 11.569 Comments: Sterling is in the pits. The constant stream of increasingly negative data over the last year as well as the gloomy outlooks on the year ahead have left a sad picture of the UK economy. The recent flurry of well publicised job cuts and the ever growing sense of an impending recession (that may or may not have 'technically' started already) has new, unwanted benchmarks being set by sterling daily. The hope that monetary policy will be of any help against the current woes in the short term and this within a financial system already proven to be flawed is perhaps over optimistic. So don't expect any upside for sterling in the short term. Further downside seems more likely. The €'s price against sterling, currently 1.178/£1, is flattered by the total decimation of the pound. Against the US$ however, the euro has itself lost an awful lot of ground in the past six months. The fact that last week Germany officially fell into recession was countered by news that the French economy has bucked the current trend and actually grown fractionally in the last quarter has kept the single currency treading water. Interest rates in the eurozone may well be lowered over the coming months but the sharing of the burden amongst the Europeans has arguably helped some individual nations from the perils now affecting the UK economy. The US$, currently at 1.494/£1, and its movement against sterling over the past months has been relentless. The wave of optimism brought about from the promise of President Elect Obama leading the nation away from the current crisis and an end or at least a relenting of worldwide unpopularity has filtered quickly through to the markets. The continuation of risk averse investors returning to the US$ as a safe-haven asset and the notion that the US may be 'over the worst' of the credit crisis has certainly helped. How accurate this notion is however will be tested over the next few months. The commodity backed and high yielding currencies continue to loss credibility as commodity prices fall and yields are cut but the problem is that sterling has lost even greater credibility. Note: All rates are mid market inter bank and indicative at the point of publication.

Smart Currency Exchange | 1 Hammersmith Grove | Hammersmith | London | W6 0NB | UK © 2005-2008 Copyright Smart Currency Exchange Ltd

Pound Falls

Sterling continues to decline against the dollar and other major currencies
Saturday 15th November 2008

As sterling continues to fall in the foreign exchange markets there is real concern with the rate against the dollar down to $1.4715 and down to 84.7p against the Euro. There is real fear that sterling could yet fall further with interest rates likely to decline in the short term (Gordon Brown recently asked for a substantial cut) and the economy set to move into recession over the next few months.

The problem which the currency presents the government is the fact that imports, especially against the dollar, are very very expensive when you consider the rate has fallen back from over two dollars to the pound. This is the issue which many economists believe will force the UK into something of a major recession and possible depression with deflation coming to the head of the table. This would be a worse case scenario and literally see the UK economy collapse in a cloud of doom and gloom.

We recently saw major UK retailer Next Group announce that clothing was likely to rise in cost in the short term because of the currency exchange rate and the increased cost of goods from American. This has the potential to cause major upset with the UK economy although the government is in no situation to increase interest rates to protect the exchange rate which offers something of a quandary.

Courtesy: Punds - Euros - Dollars | financialadvice.co.uk

A Pfennig for Your Thoughts 11/14/2008

Courtesy: EverBank World Markets

A Pfennig For Your Thoughts
Friday, November 14, 2008

.........But First, A Word From Our Sponsor..........
Gold and silver prices are down.

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......................................................

In This Issue..

* Data shows just how bad things are...
* Trade deficits narrow...
* EU confirms they are in a recession...
* RBA intervening again...

And Now... Today's Pfennig!

Data shows just how bad things are...

Good day... Chuck asked me to go ahead and write the Pfennig this morning, but I got a late start, so this one will be short. We finally had some data releases here in the US which look to steer the markets, so I'll just get right to it.

The dollar continued to strengthen yesterday after another round of bad weekly employment figures. Initial jobless claims increased to 516k during the first week of November, and last weeks numbers were revised up to 484k. The employment picture continues to darken here in the US, and it doesn't look like it will improve any time soon. This is just what the US consumers don't need right now. Not only are most consumers living paycheck to paycheck, but now many of those paychecks are being ripped out of their hands.

Personal bankruptcies are heading into record territory, and job losses will only make this worse. While the total size of the consumer credit market is dwarfed by the size of the mortgage market, with home loans there is an underlying asset providing some base from which banks can work. Credit card debt is different, the banks and investors who hold this debt have no underlying assets to fall back on. This fact has not been missed by the current administration, and Treasury Secretary Paulson is now looking to spend some of the bailout package to try and help out the consumer lenders. Unfortunately it looks like we will be taking another step into the deep dark area Chuck has continually talked about.

This morning we got the retail sales numbers here in the US which showed a further deterioration. Retail sales less autos were down 2.2% in October, almost double economist's expectations. This fall is the largest monthly drop ever, and is just one more sign the US economy is heading for a doozy of a recession!

We did get some good news yesterday morning as the trade deficit narrowed somewhat, a result of a stronger dollar and lower oil prices. But even after the narrowing, we are still running a deficit adding to our need to attract foreign investments. Chuck let me have a sneak preview of December's Review and Focus the other day before he sent it to the printer. In the latest issue, he talks about our need to finance the twin deficits which the US continues to amass. This financing need is one of the factors convinces me the US dollar will have to get weaker. The current dollar strength will not last, and once the 'flight to quality' buying of US Treasuries subsides, we will see the US currency return to its long term decline.

As I said earlier, the dollar continued to strengthen yesterday morning as the stock market fell. But both reversed course early in the afternoon after Paulson started talking. The Treasury Secretary said the big 3 auto makers should receive some government help, but he isn't willing to take any of the funds already approved by congress to help them. Instead, he urged congress to come up with additional funds to help the car makers. He also said he would look to try and spend some of the already approved rescue package on 'non-traditional' lenders who give loans directly to consumers. Looks like Paulson is finally realizing what we have been saying for a while now, that the next big crisis is the consumer credit crunch.

Anyway, just after the news came across the wire about Paulson's remarks, the stock market jumped 400 points and the euro bounced up over two cents in the matter of a few short minutes. The dollar has really become a contra indicator for the risk appetite in the market. The dollar index and the stock market have moved in opposite directions 88 percent of the time since the beginning of September. As investors feel more comfortable with risk, they sell the short term dollar holdings and invest them into other markets. The Europeans have started to take the dollar back up this morning, but it remains lower than at this time yesterday.

The Europeans are taking the euro down after it was confirmed that the European economy fell into its first recession in 15 years during the third quarter. Germany had already reported a third month of negative growth, and the European Union confirmed the GDP shrank .2% in the 15 euro nations during the third quarter. France, Europe's second largest economy, unexpectedly grew in the third quarter as consumer spending gained and exports rebounded. I am still convinced that while things are bad across the pond, Europe's economies are still in better shape than the US economy. And while some here in the US have given the ECB trouble about not lowering interest rates as quickly as the US; I believe they have done a better job navigating the current crisis, and Europe will be able to recover more quickly than the US.

And finally, the RBA was in the markets protecting the Australian dollar again. Lately, the RBA is intervening to hold the AUD$ up while there are rumors the Bank of Japan may start intervening to stop the appreciation of the yen. Officials at the Swiss National Bank have also been complaining about the rise of the Swiss franc. Both the Japanese yen and Swiss franc continue to strengthen as investors reverse carry trade positions. So we have a couple central banks intervening to hold their currencies down, and others who are intervening to try and keep theirs from falling further. Crazy Times!!

Currencies today 11/14/08: A$ .6585, kiwi .5595, C$ .8188, euro 1.2671, sterling 1.4738, Swiss .8409, ISK (No Quote), rand 10.152, krone 6.890, SEK 7.894, forint 213.42, zloty 2.9408, koruna 20.015, yen 96.39, baht 34.97, sing 1.5184, HKD 7.7501, INR 49.01, China 6.8250, pesos 12.97, BRL 2.30, dollar index 86.89, Oil $58.25, Silver $9.65, and Gold... $747.24

That's it for today... Rainy day here in St. Louis, tonight it is supposed to get a bit colder so this rain will likely turn into our first dusting of snow. My wife, Tina, took off to Colorado with her girlfriends last night, so I will spend the weekend playing chauffeur for our two kids. I hope all of you have a Fantastic Friday and a Wonderful Weekend!!
Chris Gaffney, CFA
Vice President
EverBank World Markets
1-800-926-4922
1-314-647-3837

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Smart Daily Currency Note - 14th November 2008

Smart Currency Exchange - Daily Currency Rates for Business Users

Free Daily Inter Bank Currency Exchange Rates 14th November 2008

Currency Rate EURO 1.169 US$ 1.483 CHF 1.767 CAN$ 1.805 AUS$ 2.270 JPY 143.96 HKD 11.493 Comments: Sterling is in the pits. The constant stream of increasingly negative data over the last year as well as the gloomy outlooks on the year ahead have left a sad picture of the UK economy. The recent flurry of well publicised job cuts and the ever growing sense of an impending recession (that may or may not have 'technically' started already) has new, unwanted benchmarks being set by sterling daily. The hope that monetary policy will be of any help against the current woes in the short term and this within a financial system already proven to be flawed is perhaps over optimistic. So don't any upside for sterling in the short term. Further downside seems more likely. Note: All rates are mid market inter bank and indicative at the point of publication. To get live pricing contact Ben@SmartCurrencyBusiness.com

A Pfennig for Your Thoughts 11/13/2008

In This Issue..

* Paulson throws the markets a curve...
* Goldman says to buy the yen...
* RBA intervenes to protect the AUD$...
* China provides support to commodities...

And Now... Today's Pfennig!

Paulson throws the markets a curve...

Good day... Chuck is out today, so I get the opportunity to share some of my thoughts on the markets. As many of you know, I spent most of last week in Washington DC giving presentations at the Money Show. On the way to the hotel, the cab driver who had noticed my EverBank luggage tag asked if I was a banker. He said he had seen a lot of us lately. I guess I was one of the few bankers flying into Washington DC who wasn't heading over to the Treasury Dept. to get some of the cheap money they are passing out. I had a great trip to Washington and really enjoyed the opportunity to spread the word about EverBank and the protection that portfolio diversification provides.

I don't think Treasury Secretary Paulson is having as good a time as I did in the nation's capital. When he came down from NY a couple years ago to take over the Treasury, he was Wall Street's best paid CEO and looked to cap his career with a high-profile sojourn in public service. But his credibility has really taken a hit over the past year, and his update before congress yesterday didn't quite go as everyone expected. Chuck left me the following to share with readers this morning:

"Yesterday I told you that Treasury Sec. Paulson was going to give an update on the bailout package... And instead of an update, he threw the markets a great big 12-6 curveball! Treasury Sec. Paulson laid out his plans for the next stage of the financial market rescue package, announcing he has shelved a plan to buy troubled mortgage assets and is moving his attention to non-banks and consumer finance.

And... in a striking admission, Paulson said that buying mortgage assets "is not the most effective way" to use government funding. Geez Louise! I could have saved him, Congress, and the whole country a lot of time and stress on this if he would have just listened to me at the time! I said when it was first announced that the Gov't had no business buying up these troubled assets, and getting involved in what used to be known as "free markets"! He's changing horses in the middle of the stream! What gives? And... All this unknown stuff now, put the Trading Theme in overdrive, buying dollars in the deep, dark days of the U.S. economy!

There's a silver lining here folks... And I believe that Sec. Paulson is seeing the seized up credit markets unlock. This development might just be nascent, but he believes it's there. And when this problem with the credit markets eases, a return to the fundamentals could very well be in store. In fact, I would bet a dollar to a Krispy Kreme, those fundamentals are going to come home to roost once this credit market problem is in our rear view mirror.

Now, back to the bailout package... Now, the Treasury Sec. wants to put the government's money toward unlocking student loans, credit card receivables, and auto loans... Some are calling this move a U-Turn, but in essence it isn't... Before the Gov't was going to buy toxic bonds made up of residential home loans... Now, they will be buying bonds made up of consumer loans, which in my opinion may end up more toxic than the first choice, given the fact that we're in a recession and the recession will work out to be one that is protracted.

While these things "might" get the credit markets unlocked, they might miss the mark too, and until we get these credit markets unlocked, the markets focus will remain on the crisis and not return to focusing on the awful fundamentals in the U.S. economy. These awful fundamentals need to rise to the top again for risk takers to come back, and until the risk takers come back, currencies and commodities like euros and Gold, will continue to be put into a corner by the dollar.

We get a new Treasury Sec. in January when the new administration takes over... The new Treasury Sec. will have their hands full for sure!

On the side... OK.... Yesterday morning... I looked up to the TV and saw that knucklehead Jim Cramer on the Today Show... I swear.. He said this to Meredith... "I have been honest on this show, Meredith, and I "try" to be honest on my show"... He Tries to be honest? OMG!"

I agree with Chuck, whoever decides to take over as the new Treasury Secretary will certainly have their work cut out for them. I've heard they may bring back Volker to take over for Paulson. That would be an interesting choice, as he has 'been there, done that' crushing inflation during the 1980's. But his high interest rate policies which he pushed caused the US to dip into a deep recession, and he also played an important role in bringing the US off the gold standard back in the early 70's. Even if he doesn't take the Treasury position, Volcker is one of Obama's advisors, and will certainly have some influence on the new administration's monetary policies.

Paulson's curve ball put the markets in a sell mode, with investors moving back into the relative safety of US treasuries and money markets. The dollar strengthened after his bombshell, but started to fall again in Asian trading. The Japanese yen which has been one of the most volatile currencies, rose to a two week high against the euro after Paulson's curve caused cuts in purchases of higher-yielding assets. But the yen reversed some of yesterday's sharp gains overnight as currency traders worried about BOJ intervention. These concerns were heightened by comments from Japanese Finance Minister Nakagawa who warned that Japan would protect the yen against sharp volatility.

Despite the prospect of intervention, the yen remains a buy according to a report by Goldman Sachs group. Goldman believes the yen will strengthen 6 percent against the US dollar due to a continued unwinding of the carry trade. The dollar will weaken to 90 yen in three months, before gaining to 100 yen six months from now, Goldman said. "Deleveraging and funding constraints have likely created a new source of foreign-exchange demand and supply," the Goldman analyst wrote. "We expect deleveraging patterns to continue into year-end, driving the dollar and yen stronger and putting pressure on higher-yielding currencies." As readers know, Chuck has been talking about this carry trade reversal for some time, and we agree that this reversal will likely last through the end of the year and into the 1st or 2nd quarter of 2009. Look for further dollar strength during this time period, but watch out below once the dollar reverses course.

The reversal of the carry trades has led to a fall in the value of the Australian dollar, a move which accelerated yesterday. The currency drop became too much to bear for the Reserve Bank of Australia who intervened in the markets to protect the AUD$. An RBA spokesman confirmed the central bank bought its own currency, putting a floor under the currency after it dropped over 2 cents yesterday morning. This intervention is a good sign that the RBA is now concerned with the value of the Aussie dollar and won't let it slip too much further than the current levels. With the RBA's support, and the possibility of a bottoming of commodity prices, these could be excellent levels to buy into the Australian dollar.

The German economy, Europe's largest, contracted more than economists expected in the third quarter, pushing the nation into the worst recession in at least 12 years. German GDP dropped a seasonally adjusted .5% from the second quarter, when it fell .4%. The economy is officially in a recession, as it has now contracted over two consecutive quarters. Traders increased bets that the ECB will reduce interest rates. The euro had been sold off before the announcement, hitting a low of 1.2389 vs. the US$, but then rallied back above $1.25 in early US trading.

This week has been a pretty slow data week here in the US, but today we have two important releases. The US trade deficit probably narrowed in September as retreating oil prices reduced the value of imports. The sharp increase in the value of the US$ over the past 6 months has also helped reduce our trade deficits. But I don't think the commodity price slump will last, and also believe the US$ will turn back around sometime next year. So this narrowing of the trade deficit won't last. We will also get the weekly jobs report today, which will likely show another big bounce in first time filings for unemployment. The labor market in the US is bad and getting worse, and I would be surprised to see a number below 500k for the weekly initial jobless claims. This is one of the factors which caused the Treasury Secretary to reverse course on the bank bailout, as he now moves his focus to the growing consumer credit crisis.

We talked about China's big stimulus package earlier this week, and the impact it will have on China's US$ reserves. But the stimulus package will have another impact on the markets. Most of the $586 billion stimulus will be focused on infrastructure building projects. These projects will mean China will continue to import large amounts of copper, iron ore, cement, and other building materials. They will also continue to demand a greater supply of oil and feul. This new demand will help offset some of the drop in commodity demand from the slowing western economies. Commodity prices have fallen dramatically as traders priced in the global slowdown. But China's economy is still the fastest growing among the world's 20 largest, with a growth rate close to 8 percent, and this latest stimulus announcement should cause a bounce back in the prices of these commodities. The countries supplying China with raw materials should also benefit, including the currencies of Brazil, Australia, and Canada, all of which have been beaten down lately.

Finally, Chuck let me know some great news for our St. Louis readers: There's going to be a screening of Addison Wiggin's movie, I.O.U.S.A. here in town... The screening will be Nov. 18 at the Missouri History Museum, part of the Community Cinema Series, co-sponsored by KETC and the History Museum. "I.O.U.S.A." will be shown at 7, followed by a panel discussion.

Currencies today 11/13/08: A$ .6389, kiwi .5557, C$ .8113, euro 1.2535, sterling 1.4838, Swiss .8404, ISK (No Quote), rand 10.3166, krone 7.096, SEK 8.0703, forint 215.51, zloty 2.9765, koruna 20.095, yen 96.03, baht 34.99, sing 1.5119, HKD 7.7501, INR 49.2925, China 6.8298, pesos 12.97, BRL 2.305, dollar index 87.43, Oil $56.81, Silver $9.41, and Gold... $717.66

That's it for today... Got to go now so I can call into the quarterly EverBank officer's meeting. It really is great working for EverBank, we continue to do very well and maintain our health in a very difficult banking environment. We just announced record growth in deposits and earnings here at EverBank. It truly is a great day at EverBank!! Hope everyone has a Tub-thumpin Thursday!!
Chris Gaffney, CFA
Vice President
EverBank World Markets
1-800-926-4922
1-314-647-3837

Smart Daily Currency Note - 13th November 2008

Smart Currency Exchange - Daily Currency Rates for Business Users

Free Daily Inter Bank Currency Exchange Rates 13th November 2008

Currency Rate EURO 1.195 US$ 1.493 CHF 1.779 CAN$ 1.842 AUS$ 2.329 JPY 143.61 HKD 11.580 Comments:  Sterling fell for the third consecutive day to record-low prices against the euro. Losing ground to almost all major currencies sterling also hit its lowest price against the US$ for 6 years. The increasingly 'dovish' stance demonstrated by the Bank of England in their quarterly inflation report, out yesterday, solidified the belief that interest rates could come down by another whole percent by the end of the year. This news came only an hour or so after jobless figures in the UK were shown to be at their highest level of increase since 1992. However, German GDP data already released early this morning has shown contraction within the German economy meaning that the nation has officially entered recession. This and similar news over the coming year may well be sterling's best hope for any significant improvement. Note:  All rates are mid market inter bank and indicative at the point of publication.  To get live pricing contact Ben@SmartCurrencyBusiness.com

email: Ben@SmartCurrencyBusiness.com phone: 0845 638 0571 web: http://www.SmartCurrencyBusiness.com

Smart Currency Exchange | 1 Hammersmith Grove | Hammersmith | London | W6 0NB | UK © 2005-2008 Copyright  Smart Currency Exchange Ltd THIS PUBLICATION DOES NOT CONSTITUTE ADVICE WITHIN THE TERMS OF THE FINANCIAL SERVICES ACT (OR ANY SUBSEQUENT REVISIONS, ADDITIONS, OR AMENDMENTS). Disclaimer Exchange rates can move very quickly. The above rates are valid at a moment in time. Suggestions should not be taken as advice or fact. The market does what it wants to do.  We have no crystal ball and as ever we recommend that if an exchange rate works for your budget then don't try and wait for an even better exchange rate, as Murphy's Law says the rate will go against you and cause you maximum pain!

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Euro dips below $1.25

11/11/08

FRANKFURT, Germany (AP) — The euro drifted below $1.25 on Wednesday, dragged down by worldwide economic gloom and falling equity markets, before staging a slight recovery.

The 15-nation currency dropped to $1.2481, a level last seen in October 2006, before recovering to $1.2578 in European morning trading. That compared with its level of $1.2531 in New York late Tuesday.

The British pound slipped to $1.5392 from $1.5401, while the dollar edged up to 97.80 Japanese yen from 97.68 yen.

"Falling equity markets and global economic gloom mean traders are continuing to favor the greenback as a currency of choice," said analyst James Hughes of CMC Markets in London.

He said the pound could face pressure from economic reports due later Wednesday: the Bank of England's quarterly inflation report and new unemployment figures. Both could have a bearing on the bank's interest rate course.

"Clearly, monetary policy remains in focus so anything that points toward yet more cuts at the start of next month will have the potential to heap yet more pressure on the pound" and send it lower, he said.

Last week the Bank of England lowered its interest rate to 3 percent, a 50-year low. The European Central Bank cut its rate to 3.25 percent.

Lower interest rates can help prompt economic activity, but also typically drive investors away from a currency as they seek higher returns elsewhere.

Courtesy: pounds-euros-dollars | associatedpress | guardianuk

A Pfennig for Your Thoughts 11/12/2008

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A Pfennig For Your Thoughts
Wednesday, November 12, 2008

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In This Issue..

* The dollar rallies big time!
* A dollar conspiracy?
* Bailing out the automakers?
* Weathering the storm in N.Z.?

And Now... Today's Pfennig!

The Junk Yard Dog Bites!

Good day... And a Wonderful Wednesday to you! Well, the Junk Yard Dog got a hold of the euro yesterday, and even though the U.S. Banks, thus the majority of currency desks, were observing Veteran's Day, the move down in currencies VS the dollar, led by the euro, was drastic!

The Junk Yard Dog I'm talking about is Jean-Claude Juncker, chairman of the Euro group... I stopped the euro in its tracks from its nascent rise in the past month, by saying the "euro's recent rise was undesirable"... He also deep sixed the euro, and thus all the currencies save yen, by saying he "didn't see any reason there couldn't be more rate cuts by the ECB"... (the ECB is of course the European Central Bank) Well... These two comments tore through any gains the currencies had mounted VS the dollar in recent weeks, like a Junk Yard Dog tears though some raw meat! It was a knife to the euro's heart...

And so it was to be, a massive dollar rally, on Veteran's Day. And it didn't get any better in the overnight markets, as Japan, and then early European trading has taken the dollar even higher and the euro drops to the 1.25 handle... A handle it thought it had left in the rear view mirror back in October... Boy! If comments from a guy that's not even the President of a Central Bank in the Eurozone, can deep six the euro like that, you have to sit back and wonder what's going on... Was it simply a case of watching the euro rally in recent weeks, and even get within spittin' distance of 1.31 last week, and needed to stem the rise? Well, if that's the case, the plan worked! And like Col. John "Hannibal" Smith used to say... "I love it when a plan comes together!"

And it just so happens that Bank of England (BOE) head Gov. Mervyn King added to the currencies' worries by announcing that the BOE policy makers are "prepared to cut interest rates again to prevent a recession pushing inflation below its target." All this on a day when most U.S. currency desks were absent... Hmmm... Sure seems to me as though this was a "planned" jawbone intervention to support the dollar...

So... Like I said above, the currencies, save yen, got whacked yesterday... But not Japanese yen! When things get really dark in the U.S. and with all the investment choices except U.S. Treasuries getting sold, that's when the dollar and Japanese yen shine... Which to me is still a strange phenomenon, that the dollar can be strong VS almost every currency on the face of the earth, but losing ground to yen. You would think that the other currencies would get some love just based on the dollar / yen cross!

Recall, I've explained the currency pairs and crosses before, and how one major pair's (like dollar / yen) usually carries over to the other currencies... But since the dollar and yen were the two major currencies used to fund the Carry Trade, they are getting bought at the same time, causing all kinds of ripples in the currency karma...

Looks like the good folks over at Bank of America, have been reading their Pfennigs each and every day! I say that because, there is a report out this morning that Bank of America (BOA) issued a report that; "U.S. dollar gains are increasingly at risk toward year-end as declining credit market rates switch investors' focus to the slowing economy."

WOW! If that's not just rewording what I've been saying in the Pfennig almost daily for a couple of months now, then I'm a monkey's uncle! The go on to say that, "A weak economy and declining stock prices are not a solid foundation for any currency over time. Persistent strength in the dollar is more related to the unwinding of long positions in the euro and pound and not a sign of optimism about U.S. economic prospects."

It's nice to see someone other than me, keeping my eye on the ball here... OK, I know all too well that it's not just me, but it sounds good, eh?

Well.. There's another "bailout" plan, although the media now calls them "rescue plans", being talked about... This one is for the automakers... The Speaker of the House wants the bailout package NOW! Unfortunately, for her, and the automakers, it doesn't look like a bailout package will be passed with this "lame duck" Congress... The "new guys" don't come into office until January 6th. Maybe, just maybe, this thought that every freaking business that runs into trouble because they didn't run their business correctly, and therefore "deserves" a bailout from the Government, which will mean in the end, taxpayers, will go away... I doubt it... But there's always a chance, somebody, someone, somewhere, at sometime, comes up with a hoola-hoop, and we don't have to go down this bailout road any more!

Hey! What ever happened to U.S. Treasury Sec. Paulson's "bazooka" that he threatened to aim at the U.S. credit crisis back in July? A quick check of the financial scorecard since then, shows that stocks are circling the bowl, the Fed has had to step in to conduct commercial paper operations, U.S. Consumer Confidence is at 1982 low levels, and loans are still difficult to get on the books... I'd say his bazooka was much like the bubble gum I used to chew as a kid, with the Bazooka Joe comic inside the wrapper... Sweet and satisfying at first, but soon petered out and the taste was gone, soon to be disposed of properly!

Speaking of Treasury Sec. Paulson, or King Henry, as I so named him during his ascent to the top of decision making with regard to the financial crisis, will be speaking today! King Henry will be giving an update on the Bailout packages... Should be interesting...

Our friends down under in New Zealand think they are far removed from the financial mess going on in the U.S. and Europe... But then, the European thought they were far removed from it too before the walls began crumbling down on top of them with bad debt! But, in New Zealand's case, I think they are on top of it... Mainly because the strong Central Bank... The Reserve Bank of New Zealand, (RBNZ) is big on fiscal discipline, and stated in their quarterly Financial Stability Review, that... "we are far from seeing the final impact of the financial and economic disruption. However, Kiwi banks and the Australian parents of the majors, are well positioned to withstand the economic downturn."

It would a HUGE feather in the RBNZ's cap, and further the kiwi's cap should the financial meltdown pass them by without causing major problems... The Kiwis get a glimpse at the state of their economy tonight when Sept Retail sales are printed.

Well... The euro is creeping back up as I get ready to head to the Big Finish this morning...

You know... On Monday I talked about the Chinese announcement to provide $586 Billion worth of renminbi liquidity to their economy, and how that had gotten the currencies around the world excited... And yesterday I talked about how that excitement dissipated... But there's one more thing to discuss here... And that's the fact that if the Chinese are going to focusing on keeping their economy going and their billions of citizens happy, they won't be focusing on buying U.S. Treasuries... And the funding problem that still exists, even though its not the markets' focus right now, will get even trickier for the U.S. and the U.S. dollar...

And... One more thing before I head to the Big Finish... Oil has fallen below $60 for the first time since March 2007! WOW!

Currencies today 11/12/08: A$ .6610, kiwi .5755, C$ .8260, euro 1.2590, sterling 1.5285, Swiss .8450, ISK 182, rand 10.45, krone 6.9830, SEK 8.0150, forint 215.50, zloty 2.9920, koruna 20.21, yen 97.30, baht 34.98, sing 1.5050, HKD 7.75, INR 49.25, China 6.8298, pesos 13.06, BRL 2.2665, dollar index 86.93, Oil $58.40, Silver $9.70, and Gold... $732.42

That's it for today... Mervyn King also said... "we are living in unprecedented times" Oh, thanks! Like we didn't already know that! It was a great day yesterday for catching up on email, etc. I also got a huge chunk of our monthly newsletter to clients, The Review & Focus, finished too... Hey! Chris has the conn on the Pfennig tomorrow, I will not be in the office. Don't know what the baseball writers were smoking, but they named Tim Lintecum as the National League Cy Young winner... Ahem... Brandon Webb won 22 games last year, Ahem... My darling daughter Dawn, phoned last night to tell me that my precious granddaughter, Delaney Grace, heard the song "Amy" on the radio and began to dance around and jabbering like she was singing... Dawn knows that I used to play that song on my guitar and sing it when friends would make me... I told Dawn, that Delaney Grace has good taste in music, she's like Me! HA! OK, enough... I hope your Wednesday is Wonderful!

Chuck Butler
President
EverBank World Markets
1-800-926-4922
1-314-647-3837

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Smart Daily Currency Note - 12th November 2008

Smart Currency Exchange - Daily Currency Rates for Business Users

Free Daily Inter Bank Currency Exchange Rates 12th November 2008

Currency Rate EURO 1.218 US$ 1.526 CHF 1.811 CAN$ 1.852 AUS$ 2.322 JPY 148.68 HKD 11.845 Comments:  In spite figures which showed the deficit in UK trade was not as bad as expected in the month of September sterling closed lower against the US$ and only fractionally higher against the euro. The recent trend against the US$ is raising speculation that prices could well move lower than the US$1.50/£1 by the end of the year which is almost 30% down from only one year ago. There will be significant releases regarding the health of the UK economy later today, most notably unemployment data as well as the Bank of England's quarterly inflation report. Note:  All rates are mid market inter bank and indicative at the point of publication.  To get live pricing contact Ben@SmartCurrencyBusiness.com

email: Ben@SmartCurrencyBusiness.com phone: 0845 638 0571 web: http://www.SmartCurrencyBusiness.com

Smart Currency Exchange | 1 Hammersmith Grove | Hammersmith | London | W6 0NB | UK © 2005-2008 Copyright  Smart Currency Exchange Ltd THIS PUBLICATION DOES NOT CONSTITUTE ADVICE WITHIN THE TERMS OF THE FINANCIAL SERVICES ACT (OR ANY SUBSEQUENT REVISIONS, ADDITIONS, OR AMENDMENTS). Disclaimer Exchange rates can move very quickly. The above rates are valid at a moment in time. Suggestions should not be taken as advice or fact. The market does what it wants to do.  We have no crystal ball and as ever we recommend that if an exchange rate works for your budget then don't try and wait for an even better exchange rate, as Murphy's Law says the rate will go against you and cause you maximum pain!

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Dollar Versus the Euro

Dollar little changed versus euro after China plan
Reuters, Monday November 10 2008
By Vivianne Rodrigues

NEW YORK, Nov 10 (Reuters) - The U.S. dollar was little changed against the euro on Monday after falling earlier in the session as news of a large economic stimulus package from China made some traders more willing to take on risk.

Courtesy: sneijers.net

Initial optimism quickly faded, however, as U.S. stocks surrendered early gains on concerns that China's plan may not be enough to help avert a global recession, helping the safe-haven yen regain some strength versus the greenback.
China launched an economic stimulus package on Sunday worth nearly $600 billion in what could mark the start of a round of big spending or interest rate cuts to stave off a recession in many countries.
"The initial reaction to the announcement … to read the full story, please follow this link:

Courtesy: UK Currency | Reuters

World Finance

Emerging economies want new role

The G20 says there must be a global solution to current problems

World finance chiefs are looking to increase the role of emerging nations, as part of reforms to tackle the current crisis.

Finance ministers and central bank presidents from the world's 20 major economies have been meeting at a G20 summit in Sao Paulo in Brazil.

World Bank President Robert Zoellick said countries see the need for better coordination towards economic issues.

"All of us know it's a meeting at a time of historic challenge," he said.

"The food and fuel crises of the recent years have now been supplemented by the blow of a financial crisis. Virtually no country has escaped... all countries are moving into a danger zone."

'Developing country voices'

Emerging nations want to see the G20 grouping - which includes the G7 and the BRIC countries (Brazil, Russia, India, China) plus others - enhanced and also elevated to a heads-of-state and heads-of-government level, above the present finance ministerial status.

In October Mr Zoellick said the G20 system was "too unwieldy". In Brazil, he has now said that a new grouping of nations must emerge.

"We need to modernise the multilateral system to bring in the important developing country voices such as Brazil... I think over the next two years we are going to see some real changes to the global system," he said.

Brazil and other emerging-market nations do not feel that under the current set-up they have sufficient representation within bodies like the IMF and the World Bank.

France is suggesting bringing emerging economies on board as members of the G8 club of industrialized nations.

'Real change'

Brazil's President Luiz Inacio Lula da Silva said there was acceptance the G7 group of elite nations was no longer capable of working alone.

"It is time for a pact between governments to build a new financial architecture for the world," he said.

"This is a global crisis and it demands global solutions."

He said nations must "avoid temptations to take unilateral measures," and stressed that "new universal mechanisms are needed" that have to be worked out in concert.

"The crisis gives an opportunity for real changes," he said, adding: "We cannot, we must not and don't have the right to fail."

On Friday the Bric nations had called for reform of institutions like the IMF to give more influence to developing economies.

China and the Gulf states have trillions of dollars in reserves that could help the IMF help smaller countries withstand the present turmoil.

Courtesy: Currency UK | BBC News