Forex - Sterling Skyrockets Versus Dollar, Yen As Global Stocks Bounce Back [GBP/USD]

10/23/2007 11:06:25 AM The sterling was broadly stronger against other major currencies Tuesday morning, racing higher versus the dollar to all but erase its losses from Monday's session.

The pound accelerated to the upside versus the dollar Tuesday morning, coming almost all the way back from Monday's dramatic plunge. With confidence restored in global equities markets, traders raced back into riskier higher yielding currencies.

The sterling rose to 2.05 versus its American counterpart by mid-morning Tuesday, a major improvement from Monday's low of 2.0257. A move above the 2.055 mark would bring the sterling to its highest point since late July.

The pound hit a 10-day best versus the euro in early dealing Tuesday, but pared its gains to trade at .6956 by mid-morning. The sterling failed to sustain its early advance to .6946, with traders weighing a slew of economic data from the Euro zone.

Euro zone industrial new orders growth fell to its lowest level since December 2006, official data showed Tuesday. The Eurostat said that industrial new order annual growth stood at 5.1% in August, smaller than the revised 12% rise in July. The number for July was revised up from 10.9% initially estimated. The number came in weaker than the expected annual growth of 6%.

French consumer spending growth accelerated in September from the prior year, official data showed Tuesday. The spending growth also topped expectations in September.

The sterling continued to move away from Monday morning's monthly low versus the yen, improving to 235.40 after pausing near 233 overnight.

Japan's September domestic shipments of consumer electronics products climbed 8 percent on year to 253.6 billion yen, according to data released Tuesday by the Electronics and Information Technology Industries Association.

The U.K.'s balance of firms reporting growth in total orders stood at 9% during three months to October 10, the latest quarterly Industrial Trends survey result of the Confederation of British Industry, or CBI, showed Tuesday. The report said that the balance improved from plus 7% recorded in July, however a slight slowdown was expected over the coming three months.


Forex - CIBC Comments Retailing Plus For August GDP, But Wholesaling And Manufacturing Are Negatives []

10/23/2007 10:30:19 AM Avery Shenfeld from CIBC World Markets commented on Monday that while retailing will be a big plus for August GDP, wholesaling and manufacturing are two major negatives.

The economist stated that the recent numbers put the month on track for a modest 0.2% real GDP advance, and has Q3 real GDP aiming close to, if perhaps a shade under, his 2.4% projection.

The Bank of Canada likely wants to see a few quarters a bit slower than that pace to unwind inflationary pressures, Shenfeld commented.

Shenfeld also noted that the C$ gained a bit on the news, having rallied strongly overnight on a weaker US dollar backdrop. The results, he remarked, were consistent with his view that the Bank of Canada, seeing a healthy domestic economy, isn't going to be matching Fed rate cuts any time soon.


Forex - Euro Gains On Dollar And Yen Amid Renewed Risk Appetite [EUR/USD]

10/23/2007 9:50:29 AM The euro continued to pare Monday's sharp losses against the dollar and yen Tuesday morning in New York, with traders moving into higher yielding currencies after global equities markets roared back to life overnight.

In economic news, French consumer spending growth accelerated in September from the prior year, official data showed Tuesday. The spending growth also topped expectations in September.

The euro gained against the dollar Tuesday morning, paring a good portion of its dramatic losses from Monday's early retreat. The euro snapped back Monday afternoon following a plunge from record high levels and has followed through on its rebound, hitting 1.4254 just before the opening bell on Wall Street.

The euro plummeted to 1.4125 from an all-time high of 1.4346 on Monday. However, with positive earnings news providing a catalyst for gains in global equities markets, appetite for riskier higher yielding currencies has picked up, sending the euro higher.

The euro raced higher against the yen Tuesday morning, extending its gains from the previous evening. The euro fell sharply over the course of the last week, but hit bottom Monday morning when it made a turnaround from a 5-week low. As of 10 am ET Tuesday, the euro fetched 163.80, having moved well off Monday morning's low of 160.46.

The euro was slightly weaker in choppy trading versus sterling Tuesday morning in New York. The euro dropped to a nearly a 2-week low of .6946 in early dealing, but pared most of losses to fetch .6962 by mid-morning.