FOREX-Euro steadies vs dollar before stress test results

July 24, 2010 By Leave a Comment

TOKYO, July 23 (Reuters) – The euro steadied against the dollar on Friday, retaining gains made the previous day on strong euro zone data and U.S. corporate earnings, as investors awaited European bank stress test results due later in the day.

The euro, which jumped more than 1 percent against the greenback on Thursday, moved in a narrow range around $1.2900 EUR=, little changed from late U.S. trade on Thursday.

It has support at about $1.2720, an interim high from July 9 set during its recent rally from a four-year low, and is consolidating at $1.2720-1.3030. A break above that band could see it testing $1.3090-1.3125.

But traders said the euro was unlikely to re-test this week’s 10-week high of $1.3029 just yet nor fall sharply ahead of the stress test results, which could move other currencies as well.

Traders have been betting most of the 91 European banks being examined will pass. Analysts say if there are no ugly surprises, that will be euro supportive, although some are sceptical about the severity of the checks.

“Few are seriously worried about results of the bank stress tests now, and that is supporting the euro,” said a senior FX trader at a big Japanese bank.

“But it’s hard to see whether the euro will extend gains against the dollar after the test results as investors are well aware the root problem of the euro zone debt woes is sovereign credit trouble.”

Euro bulls bet the euro could extend its rally partly on dollar weakness due to concerns the U.S. recovery is faltering. Below-forecast economic data has fanned fears about a slowing economy, prompting investors to dump long dollar positions.

But bears bet the euro rally could lose steam, pressured by selling against currencies with higher interest rate prospects, such as the Australian EURAUD=R and Canadian dollars EURCAD=R.

Chartists say a breach of $1.2720 support could be the first warning of a deeper retracement from its 10-week high.

Euro/dollar 1-month risk reversals EUR1MRR=ICAP, a measure of currency sentiment, showed a bias for euro puts. Traders said that partly reflected speculation the euro may start falling sometime after the test results.

Data from broker ICAP EURVOL=ICAP shows euro/dollar 1-month risk reversals at 1.35/1.85 percent.

The yen was flat, recovering early losses as Japanese exporters sold the dollar, the euro and the Australian dollar, traders said.

The Japanese currency fell after data on Thursday showed surprisingly robust growth in European manufacturing and services, and after strong earnings from U.S. blue chips such as 3M (MMM.N) and Caterpillar (CAT.N) rekindled hopes for the global economy and improved investor appetite for risk.

The euro was steady at 112.08 yen EURJPY=R, having risen about 0.9 percent on Thursday.

The dollar inched down 0.1 percent to 86.91 yen JPY=, staying above a seven-month trough of 86.27 yen struck on trading platform EBS late last week. (Additional contribution by Reuters FX analyst Rick Lloyd in Singapore and Krishna Kumar in Sydney; Editing by Charlotte Cooper)

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FOREX-Yen dips, longs shed on Japan ruling party woes

July 13, 2010 By Leave a Comment

TOKYO, July 12 (Reuters) – The yen eased on Monday after election results showed political uncertainty ahead for Japan, but the move was seen likely to be short-lived with attention turning to the U.S. earnings season as a gauge of risk appetite.

Japan’s ruling coalition, led by Prime Minister Naoto Kan’s Democratic Party of Japan, lost its upper house majority in Sunday’s election, putting Kan’s policies to deal with the country’s massive debt at risk. [ID:nTOE66A02V]

Although the DPJ has a dominant grip on the more powerful lower house, the election makes policy stalemate more likely.

Market players said the outcome helped trigger yen-selling, including likely long liquidation. One trader cited dollar buying against the yen by hedge funds.

Such flows, together with Japanese importer demand for the dollar, helped push the dollar higher against the yen, market players said.

But traders said focal points in the near term were the start of the U.S. earnings season this week and the results of stress test at European banks due later in July, adding that yen-selling pressure stemming solely from the upper house election result was likely to be limited in scope and duration.

“I think we may see a move towards 90 yen to the dollar and that may be it,” said a trader for a Japanese bank, adding that long liquidation in the yen seemed to be the main reason behind the yen’s dip on Monday.

The dollar rose 0.3 percent against the yen to 88.90 yen JPY=, pulling away from a seven-month low of 86.96 yen hit on trading platform EBS in early July.

On daily Ichimoku charts, the dollar faces resistance near 89.55 yen, roughly where the kijun sen now lies.

Overall, the Tokyo market reaction to the election was subdued, with the benchmark Nikkei average .N225 little changed on the day and 10-year Japanese government bond futures eking out a small gain 2JGBv1.

The latest U.S. Commodity Futures Trading Commission (CFTC) data showed that currency speculators increased their long positions in the yen to 37,926 contracts in the week that ended July 6, up from 27,427 contracts in the previous period. [IMM/FX]

The euro was almost flat against the yen at 112.00 yen, having failed to maintain small gains made earlier in the day. EURJPY=R.

Against the dollar, the euro fell 0.3 percent to $1.2598 EUR=. Resistance is seen near $1.2715/20, the trendline from the December high.

The euro touched a two-month high of $1.2723 on Friday, supported by strong German data, some clarity on European bank stress tests and a turnaround in appetite towards riskier assets.

The latest CFTC data showed speculators had decreased bets against the euro to 38,909 contracts, from 73,670 contracts.

Traders said they will watch how a Greek debt auction goes this week for more direction on the euro. The debt-laden country plans to auction six-month treasury bills on July 13.

The dollar index .DXY rose 0.3 percent to 84.225, pulling away from a two-month low of 83.622 hit on Friday. The greenback has been under pressure since early last week, hurt by growing worries about a slowdown in the United States and easing concerns about the euro zone.

“From their June 8 peak, dollar net longs have tumbled by 80 percent,” wrote David Watt, a senior currency strategist at RBC Capital.

“Along the way, the dollar index has dropped from over 88 to below 85. Much of the most recent drop seems due to a successful Spanish bond auction, though yield spreads are working against the dollar and are an underlying factor at play too.”

The U.S. earnings season begins with Alcoa Inc (AA.N) after the closing bell on Monday. Analysts are expecting overall second-quarter earnings to grow by 27 percent, according to Thomson Reuters data. That is up from the 22.4 percent that analysts were anticipating at the beginning of the year.

But given worries about a U.S. slowdown, markets will be looking at companies’ guidance on the coming quarter too, said Katsunori Kitakura, chief dealer at Chuo Mitsui Trust and Co.

“We haven’t had pre-announcement earning revisions, which is a good sign. But depending on the outlook on the third quarter, market sentiment could deteriorate again, which would hurt the dollar,” Kitakura said. [ID:nN08195712]. (Additional reporting by Anirban Nag in Sydney; Charlotte Cooper in Tokyo; Editing by Michael Watson)

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UPDATE 2-KBC sells Asian derivatives unit for $1 bln

July 6, 2010 By Leave a Comment

BRUSSELS/TOKYO, July 5 (Reuters) – Belgian banking and insurance group KBC (KBC.BR) sold its Asian derivatives unit for around $1 billion, as part of the restructuring it promised in return for state aid during the financial crisis.

KBC also said on Monday it sold a Brussels-based reinsurance unit for 267 million euros ($358.2 million).

The Belgian group sold its Global Convertible Bond and Asian Equity Derivatives businesses to Daiwa Capital Markets, the investment banking unit of Daiwa Securities Group (8601.T)

The deal will release approximately $200 million in capital, resulting in an increase in its tier-1 ratio of 10 basis points, KBC said.

KBC, which received 7 billion euros ($9.39 billion) of state support during the crisis, has agreed with the European Commission to reduce its risk-weighted assets by 39 billion euros between 2008 and 2013, mainly through reducing its capital market activities and international corporate lending.

Daiwa’s purchase of some of KBC’s operations comes as the Japanese brokerage is trying to expand its Asian operations. After it cut its investment banking alliance with Japanese bank Sumitomo Mitsui Financial Group (8316.T), Daiwa has shifted its focus on Asia to tap growth in the region.

The company recently said it would double its research business for Asian stocks in the next two years and will keep hiring bankers from rivals.

REINSURANCE SALE

KBC also said on Monday that it has sold its Brussels-based reinsurance company Secura NV to Australia’s top insurer by premium income, QBE Insurance Group (QBE.AX), for 267 million euros plus gains to be realised on the investment portfolio and earnings for the year 2010 until completion.

Australia’s QBE, which made over 75 acquisitions in the last 10 years to spread to 47 countries, has said growth in its existing businesses in the developed world would be low but was in talks for takeovers in Europe, the U.S., Latin America and Australia.

In May KBC raised 1.35 billion euros in what was its biggest divestment to date under the restructuring plan by selling its private banking arm KBL European Private Bankers to Indian family-owned investment firm Hinduja Group. [ID:nLDE64K05X]

KBC closed down its Japanese operations in March and BNP Paribas (BNPP.PA) hired equity analysts, traders and sales people from KBC’s Tokyo office.

By 0824 GMT KBC shares were down 1 percent compared with a 0.3 percent drop in the STOXX Europe 600 banking index .SX7P ($1=.7453 euro) (By Ben Deighton in Brussels, Junko Fujita in Tokyo and Narayanan Somasundara in Sydney; Editing by Erica Billingham)

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TREASURIES-Sept futures hit 14-month high as shares slide

July 2, 2010 By Leave a Comment

July 1 (Reuters) – U.S. Treasury futures hit their highest in more than a year and the benchmark note yield eased further below 3 percent on Thursday as investors nervous about the economic outlook sought shelter from falling equity markets.

The yield on the two-year note US2YT=RR held close to a record low of 0.59 percent as Japan’s benchmark share average fell 2 percent .N225 and the MSCI index of Asian shares excluding Japan .MIAPJ0000PUS fell 1.2 percent.

The yield curve has flattened in the past quarter and the spread between the 10-year US10YT=RR and two-year note yields was at 231 basis points on Thursday, the narrowest since October, after buying of longer-dated debt by pension funds and other money managers on Wednesday, the last day of the quarter.

A report in the previous session showing that private U.S. employers added fewer jobs than expected in June also supported Treasuries ahead of weekly jobs data, pending home sales and a manufacturing survey on Thursday, and monthly jobs data on Friday.

“Fears of a double-dip recession are persisting, forcing investors to buy Treasuries,” said a senior bond trader at a big Japanese bank.

“Investors are wondering if they should really keep buying Treasuries given a huge pile of U.S. government debt in their portfolios. But the sad truth is that they cannot find any alternatives at the moment.”

The September 10-year Treasury future TYv1 rose as far as 122-28.5/32, its highest since April 2009, as Asian shares slid.

The benchmark 10-year note rose 4/32 in price to yield 2.920 percent, down 1.5 basis points from late trade on Wednesday, after dipping to 2.906 percent earlier in the Asian session, its lowest since April last year.

The yield fell below 3.0 percent for the first time in 14 months on Tuesday. Akihiro Nishida, a senior fixed-income strategist at Mitsubishi UFJ Morgan Stanley Securities, said the previous period below 3 percent was in the aftermath of the financial crisis, which meant economies around the world were still in very bad shape and anxiety about the global banking system was much higher.

“Compared to that period the current situation is much better but markets are expecting a double-dip recession and a much longer period of extremely low interest rates in the U.S,” he said.

Markets might have to revise that view as data came through, although in the near term indicators were likely to show the economic recovery had moderated, he said.

“Markets are now too extreme in their pessimism,” he said.

The yield spread between 10-year Treasuries and 10-year Japanese government bonds has also narrowed to 185 basis points, its tightest since May 2009.

The 30-year Treasury bond US30YT=RR rose 5/32 in price to yield 3.886 percent, down nearly 1 basis point on the day. (Reporting by Charlotte Cooper and Rika Otsuka; Editing by Michael Watson)

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FOREX-Euro, yen crosses lifted by round of short covering

June 9, 2010 By Leave a Comment

TOKYO, June 8 (Reuters) – The euro edged up but was still near four-year lows against the dollar on Tuesday as a short squeeze showed signs of waning and funds were expected to resume selling on persistent worries about Europe’s financial system.

Higher-yielders such as the Australian and New Zealand dollars bounced 1 percent up against the yen as investors covered some of their extreme short positions after Asian stock markets .MIAPJ0000PUS gained, despite Wall Street’s tumble on Monday.

The euro also rose against the yen after hitting its lowest in more than 8 years at 108.06 yen EURJPY=R on Monday, and one trader said it had technical scope to rebound towards 111 yen.

But the market remains bearish on the euro generally, with Monday’s four-year low of $1.1876 EUR= still a downside target, followed by expected options triggers around $1.1850.

U.S. Federal Reserve Chairman Ben Bernanke said European leaders were committed to ensuring the survival of the euro and had enough money to meet obligations of heavily indebted member countries. [ID:nWEN5603]

But traders remained sceptical.

“The market is seriously concerned about the possibility of the euro disappearing as a currency system,” said an options trader for a Japanese bank

“The euro’s fall has become a big trend that will continue for a long time. What we’re seeing today with the euro is only a temporary pause in that trend after sharp downward moves since late last week.”

The euro EUR= rose 0.3 percent to $1.1960, with support expected at Monday’s $1.1876 low.

Portfolio managers like pension funds and sovereign accounts have been purchasing euro put options constantly over the past one to two months to hedge against a fall in the euro.

The euro’s break below key chart support at $1.20 on Friday suggests this hedging will continue, the options trader said, although there has been no scramble to hedge in the past few days. Euro puts for three to six months are in regular demand and three-month euro puts with strikes at $1.15 or $1.12 are popular, he said.

Typically, managers use those options to hedge against the euro’s fall while they dump euro assets, and then get rid of those hedges as soon as they’re done with the sale, he said.

Traders say the next option trigger for the euro comes at $1.1850, with another likely target at about $1.1825, its March 2006 low. Below that, traders saw little support until its November 2005 low around $1.1640, although its 1999 launch level of $1.1747 was also a potential key marker.

It rose 0.6 percent to 109.55 yen EURJPY=R after falling 0.9 percent on Monday. Immediate support is seen at about 107.95 yen, the 76.4 percent retracement of its move up from a low in October 2000 to a high of 170 yen in July 2008.

Finance ministers from the debt-stricken euro zone agreed to set up a safety net arrangement on Monday. [ID:nLDE65612T]

Germany’s government agreed a package of austerity measures and Hungary promised cuts to meet budget targets, but financial markets continued to fret over the region’s banking systems.

“The near-term market driver should be developments in European peripherals with particular focus on Hungary,” JP Morgan said in a morning note.

“As there are many auctions in the euro area countries this week, results from these auctions would affect government bond yield spreads between European peripherals and Germany and their impact on risk assets and forex.”

Euro zone governments will issue about 27.5 billion euros worth of new bonds this week, with Spain, Portugal and Italy all due to hold auctions. [GVD/EUR] Spain faces redemptions and coupon payments worth more than 20 billion euros in July, raising worries it may face a difficult month of refunding.

Meanwhile, the dollar index .DXY slipped 0.1 percent to 88.276 after hitting a 15-month high of 88.708 on Monday. The focus is on 89.624, the high hit in early March 2009 when the global financial crisis was still playing out.

The dollar climbed 0.2 percent to 91.61 yen JPY=, having lost some ground on Monday as yen gains against riskier currencies weighed on the pair.

Japan’s new leader Naoto Kan appointed his cabinet on Tuesday, and deputy finance minister, Yoshihiko Noda, was named finance minister, in line with expectations. There was little impact on the yen, with market players awaiting more information on the government’s policies. [ID:nTOE65702H]

The Australian dollar AUD=D4 jumped more than 1 percent to $0.8204, with talk of hedge fund buying. Against the yen, it rose 1.2 percent to 74.86 yen AUDJPY=R.

But the outlook for the Aussie remains difficult. Aussie one-month 25 delta risk reversals AUD1MRR=ICAP — seen by many as a barometer for short term fear — were once again showing an extreme bias for puts, sitting at 4.4/5.4 percent, up from around 3.50 percent on June 3.

The New Zealand dollar climbed 0.7 percent to $0.6628 NZD=D4, having slid more than 1.7 percent on Monday. It rose 0.8 percent to 60.70 yen NZDJPY=R. (Additional reporting by Anirban Nag in Sydney, Satomi Noguchi in Tokyo and Reuters FX analyst Krishna Kumar; Editing by Edwina Gibbs)

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Euro holds steady above lows after Spain downgrade

May 31, 2010 By Leave a Comment

(Reuters) – The euro stabilized against the dollar on Monday but remained under downward pressure after Fitch Ratings downgraded Spain’s credit rating, refueling concern about Europe’s debt woes hurting the global economy.

Investors may avoid building positions up as the United States and the UK are on holiday on Monday, though some month-end flows may be seen in the market, traders said.

The European single currency is on track for a hefty 7.7 percent decline against the dollar in May, in what would be its sixth straight monthly fall and the biggest percentage drop since January 2009.

“The market is susceptible to negative news and small rallies in the euro on short-covering don’t last for long,” said a trader at a Japanese bank.

“This jitteriness in the market is likely to continue for a while, and it is difficult to see a recovery in market sentiment as there are worries that further bad news about southern European countries may come out,” he said.

Fitch cut Spain’s credit rating by one notch to AA-plus on Friday, saying the country’s economic recovery will be “more muted” than the government forecast due to its austerity measures. The outlook on the new rating is stable.

The euro was steady at $1.2282, staying above a four-year low of $1.2143 hit this month.

“The next 24-hours might put the recent euro low in play at $1.2143,” said a trader at a major Canadian bank.

A key support is seen around $1.2135, a 50 percent retracement of the 2000-08 advance.

Charts indicate a monthly close below $1.2135 would favor additional weakness with the next downside support seen near $1.1640 — a trough hit in November 2005.

The euro was little changed at 111.88 yen, having fallen 0.7 percent on Friday.

The dollar was steady at 91.05 yen. Japanese exporters are expected to sell the greenback when it nears 91.50 yen, traders said.

Month-end flows may have some impact on dollar/yen toward the Tokyo fixing time (10 p.m. EDT) but the currency pair is basically seen staying around 91 yen, they said.

Market players are keeping an eye on Japan’s political turmoil after Japan’s tiny Social Democratic Party on Sunday left the ruling coalition ahead of an election, although its impact on the currency market so far is seen as limited.

Sterling stood at $1.4464 after a British treasury minister resigned on Saturday after revelations about his expenses, dealing a blow to the new coalition government.

(Additional reporting by Anirban Nag in Sydney, Reuters FX analyst Krishna Kumar)

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FOREX-Yen retreats after rise on yuan talk; euro struggles

April 10, 2010 By Leave a Comment

* Yen slips as short-term players trim positions

* Meeting between Japan PM, BOJ governor weighs on yen

* Euro initially climbs as stops above $1.3375 triggered

* But euro struggles as Greek worries fester

By Satomi Noguchi

TOKYO, April 9 (Reuters) – The yen retreated on Friday on selling by short-term players on the view that the currency’s rise the previous day on talk of a near-term yuan revaluation was overdone.

The euro rose earlier as investors trimmed record-high short positions, but the single currency struggled to keep those gains as worries about debt-laden Greece simmered in the background.

The yen was also under pressure as Japanese Prime Minister Yukio Hatoyama and Bank of Japan Governor Masaaki Shirakawa held a meeting on Friday, the first of regular talks between the government and the central bank.

The outcome of the meeting offered no new trading incentives but reminded the market that the BOJ will likely continue facing government pressure to take further action to fight deflation. [ID:nTKX006741] [nTKZ006422]

“What matters for the market is how this meeting will likely impact BOJ policy meetings in the coming months, including the next one at the end of the month,” said a trader for a big Japanese bank.

The meeting came just two days after the central bank decided to hold off on new policy initiatives and gave a slightly more positive view than before on the economy.

The dollar rose 0.2 percent from late New York trade to 93.54 yen JPY=, recovering from Thursday’s low of 92.83 yen on trading platform EBS. It was helped by demand from Japanese companies and gains in other currencies versus the yen, traders said.

The greenback had pulled back from a seven-month high of 94.78 yen hit on Monday as traders sped up their yen-buying amid speculation that a revaluation of the Chinese yuan could come before China’s president visits Washington early next week.

Asian currencies are seen likely to gain from any move by China to revalue its currency and the yen is perceived as a major proxy for those regional units. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Insider on yuan revaluation: link.reuters.com/xut96j ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

The euro briefly extended its recovery from Thursday’s low of $1.3282 after European Central Bank chief Jean-Claude Trichet assured markets that a Greece default is unlikely, prompting some sovereign names to pick up the battered euro in the New York session.

But the euro quickly erased its gains and fell 0.1 percent to $1.3346 EUR= as sentiment towards the single currency remains weak.

Against the yen, the euro EURJPY=R stood at 124.88 yen, up 0.1 percent on the day and above the previous day’s low of 123.43 yen, but struggled to keep gains above 125 yen.

“Greece remains a focus in FX markets,” JP Morgan said in a report. “The next test is Greece’s launch of its next bond issue. So far, no date has been given, but they will require 10 billion euros to meet May refunding.”

The dollar index .DXY =USD was steady at 81.543.

Speculation about a firmer Chinese yuan has reached fever pitch since The New York Times said China was close to announcing a shift in policy involving a “small but immediate” yuan revaluation. (Additional reporting by Anirban Nag in Sydney; Editing by Chris Gallagher)

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FOREX-Yen hits 1-mth high vs euro as risk appetite ebbs

April 24, 2009 By Leave a Comment

Yen hits 1-mth high vs euro, but later gives up gains

* Bank of America’s bad loans jump, underscores banks’ woes

* Euro mired near one-month low vs dollar, focus on ECB

By Masayuki Kitano

TOKYO, April 21 (Reuters) – The yen briefly hit a one-month high against the euro on Tuesday as renewed concerns about the U.S. banking sector tempered risk appetite and triggered buybacks of the Japanese currency.

The yen initially added to the gains it made on Monday when U.S. equities slid after Bank of America (BAC.N) reported a jump in non-performing assets, underscoring the banking sector’s troubles. [ID:nN20380236]

In addition, the yen drew support after breaching key chart levels in the past few sessions against currencies such as the euro and the Australian dollar, market players said.

“Equities are weak and market players who had bought higher-yielding currencies against the yen earlier amid signs of optimism are dumping their positions,” said a trader for a major Japanese bank.

There have been signs of improving investor risk appetite in recent weeks, as could be seen in the Australian dollar’s rally to six-month highs against the yen and the dollar last week.

The euro fell to 126.10 yen on trading platform EBS, its lowest since mid-March. But it later rebounded to 126.95 yen, up 0.3 percent from late U.S. trading on Monday. The euro rose 0.1 percent against the dollar to $1.2930, but was not far from a one-month low of $1.2888 hit on EBS on Monday.

The euro has been under pressure in the past few sessions, hurt by uncertainty over what policy steps the European Central Bank may adopt next month.

ECB President Jean-Claude Trichet signalled on Sunday during a trip to Tokyo that the bank’s next move could likely be an interest rate cut of 25 basis points.

But Trichet kept mum on details of plans for unconventional policy responses that are due to be unveiled at the ECB’s policy meeting on May 7.

The Australian dollar rose 0.3 percent to $0.7009, regaining a bit of the ground it lost the previous day, when it fell more than 3 percent.

The Australian dollar also edged up 0.6 percent against the yen to 68.79 yen, after sliding more than 4 percent on Monday.

The Australian dollar hit six-month highs of 73.49 yen and $0.7328 last week, supported by growing views that the worst of the global economy’s woes may be over. (Additional reporting by Satomi Noguchi; Editing by Hugh Lawson)

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FOREX-Euro hits 1-month low vs dollar on ECB uncertainty

April 20, 2009 By Leave a Comment

ECB President Trichet signals small rate cut

* Trichet gives no details of unconventional steps

* Yen gains broadly as share prices fall

* Aussie retreats from a 6-mth peak vs euro

By Satomi Noguchi

TOKYO, April 20 (Reuters) – The euro hit a one-month low against the dollar and a three-week trough versus the yen on Monday due to uncertainty over policy steps the European Central Bank may take.

The Australian dollar earlier climbed to its highest in more than six months against the euro but then retreated sharply after Asian shares fell, prompting investors to reduce risky bets including the Aussie, also pushing the yen broadly higher.

ECB President Jean-Claude Trichet signalled on Sunday during a trip to Tokyo that the bank’s likely next move could be an interest rate cut of 25 basis points.[ID:nT138276]

But Trichet kept mum on details of plans for unconventional policy responses that are due to be unveiled at the ECB’s next policy meeting on May 7.

Trichet also dismissed any suggestion that ECB policy makers were divided over how far it should go and said he did not think zero interest rates would be appropriate for the ECB. [ID:nSP404768]

Market players are keen to see whether the ECB will follow the Federal Reserve, the Bank of England and the Bank of Japan in making asset purchases to contain the financial crisis.

“The euro looks set to fall further, following the same path as the dollar, sterling and the yen did when they faced month-long selling after their central banks adopted unconventional measures,” said Kengo Suzuki, a currency strategist at Shinko Securities.

The euro fell as low as $1.2967 on trading platform EBS, its lowest since March 17, before recovering to $1.2994, down 0.4 percent on the day.

“The euro is facing selling pressure because the market feels from Trichet’s recent comments that he probably wants to lower the euro,” said a manager of forex trading group at a large Japanese bank.

Trichet said on Friday that saying the euro was weak did not reflect the current situation. The euro was trading around $1.31 at the time of his remarks. The ECB chief also said he appreciated U.S. comments that a strong dollar was in U.S. interests. [ID:nTKF104338]

The euro erased earlier gains against the yen and fell to a three-week low of 128.14 yen on EBS. It then traded at 128.47 yen, down 0.6 percent.

The dollar also shed earlier gains and was down 0.3 percent at 98.85 yen .

The Australian dollar earlier climbed to its highest since early October against the euro, as firmer U.S. stock markets and signs of a pickup reflected in economic data late last week supported demand for riskier assets.

But investors later quickly reduced bets on the Aussie as regional stock markets fell, with the Nikkei average .N225 losing 1 percent partly on caution ahead of more U.S. company reports this week including Bank of America BAC on Monday.

The euro fell as low as A$1.7993 before rebounding sharply to A$1.8121, up 0.6 percent on the day as traders covered euro-short positions.

Traders said expectations that Asian and Oceanian countries will recover faster than European countries due to resilience in the Chinese economy could continue lending strength to the Aussie against the euro in the long run. (Editing by Michael Watson)

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Estate agent Foxtons in debt-for-equity talks -paper

April 14, 2009 By Leave a Comment

LONDON, April 12 (Reuters) – Heavily indebted UK real estate agent Foxtons is in talks with banks over a deal that would see the lenders write off some of its debt in return for a stake in the company, according to a Sunday newspaper report.

The Observer said that the banks have agreed in principle with Foxtons’ private equity owner BC Partners to write off between 60 million and 90 million pounds.

BC Partners bought Foxtons for about 390 million pounds ($574.4 million) in May 2007, shortly before the UK housing market slumped. The deal was backed by 260 million pounds of debt supplied by Japanese bank Mizuho (8411.T) and Bank of America (BAC.N). BC Partners was not immediately available for comment on Sunday.

BC Partners managing partner Andrew Newington told Reuters last month that while Foxtons had breached covenants of its bank debt, it was still trading profitably. [ID:nLO504488]

UK house prices have fallen by more than 20 percent since their peak in 2007 and although recent data has shown a let-up in the pace of decline, analysts expect prices to continue falling this year. [ID:nL3614376] ($1=.6789 pounds) (Reporting by Victoria Bryan; editing by Mike Nesbit)

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World’s biggest banks to meet in London: report

March 8, 2009 By Leave a Comment

TOKYO (AFP) – Chief executives of leading banks from Japan, Europe and the United States will meet in London to discuss regulation of the financial sector, according to a report.

The British government will host the talks on March 24, ahead of an April summit of Group of 20 leaders, the Nikkei economic daily said, without naming sources.

Invitations have been sent to the chiefs of leading institutions including US-based JPMorgan Chase and Co. and British bank HSBC, it said.

From Japan, Mitsubishi UFJ Financial Group president Nobuo Kuroyanagi will attend the meeting, it said.

No confirmation of the report was available from the Japanese bank on Saturday.

Leaders of the Group of 20 developed and developing nations are to get together in London on April 2.

Supervision of financial institutions is expected to be high on the agenda.

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