Yen Heads for Biggest Quarterly Loss in Years

The Japanese yen declined today against the other major currencies as the stock markets corrected after the yesterday’s fall and the yen became too overbought.
The traders also expect a worst in 30 years business confidence index to be reported by the Bank of Japan tomorrow. The yen is currently losing largely against the euro as the market participant believe that the European Central Bank will state that it will stop reducing rates after the next cut, which expected to be announced this week (April 2).
Some analysts go as far as saying that the lower business confidence index that will be reported tomorrow will push the yen out of the list of «safe haven» currencies and, lacking the higher interest rate, it will be the major Forex outsider in the near future. Of course, if the confidence index is reported at a reasonably better value, the yen may go up significantly.
USD/JPY rose from 97.43 to 98.32 as of 9:07 GMT today. EUR/JPY advanced from 128.63 to 130.64 today, while GBP/JPY went up from 138.97 to 140.38

Pound Gains as House Prices Rise

The British pound rose today against the other major currencies as the house prices demonstrated growth for the first time since October 2007 in United Kingdom this March.
The market participants expected that the March report on the nationwide house prices in Great Britain will show a continued decline on the recessing economy. They were wrong as the report showed 0.9 percent month-to-month growth (and still 15.7 percent year-to-year decline) after the February’s 1.9 percent slump. It added some positive to otherwise rather pessimistic pound’s trend.
Although there can be seen other factors in the current pound’s growth — like the decline in risk-aversion, the analysts point at the housing release as the primary reason. The pound is extremely dependent on the domestic real estate sector.

Euro Declines on Unemployment Report

The single European currency declined today to the levels close to its 2-week low before and after the report on Eurozone February unemployment negatively surprised the traders.
The Japanese yen, the U.S. dollar and the British pound all gained against the euro as the investors expected that the jobless rate will grow in the Eurozone at faster pace than the analysts have predicted earlier. After the report was released the euro rolled back up somewhat but is still remaining in negative zone. The report showed that the unemployment rate rose from 8.3 percent (revised up from 8.2 percent) to 8.5 percent, while analysts predicted a rate of 8.3 percent.
The released fundamental data signal a deepening of the recession with the positive impulse for the «safe haven» currencies (that may soon become not very safe). Now some analysts point at the fundamental weakness of the euro compared to the dollar as the main trend-setter for Forex market.
EUR/USD fell from 1.3242 to 1.3220 as of 10:18 GMT, touching the daily low at 1.3165 earlier. EUR/JPY fell from 130.95 to 130.60, while EUR/GBP declined from 0.9245 to 0.9181 today.

Euro Gains Stall by 61.8% Fib; Dollar/Yen Fresh 09 Highs

Euro rallies stall out by 61.8% fib retracement. Dollar/Yen to fresh 2009 highs; stalls ahead of 100.00. Cable poised for close well above 100-Day SMA; exposes 1.4990. Dollar/Swiss well propped on dips in the low 1.1300”s as expected. Dollar/Cad profits booked as trailing stop hit; bullish outlook unchanged. Australian Dollar considers major double bottom prospects. New Zealand Dollar dashes hopes for hourly h&s top; stalls by 78.6% fib.

Wall Street gains on financials and techs rebound, JPY falls.

Fxstreet.com (Barcelona) - After falling yesterday, Wall Street is rising as banks and techs shares are rebounding. US Stocks are extending the biggest monthly rally for global equities since 2003. Yen is falling across the board.S&P 500 is rising 1.87%, Nasdaq gains 2.47% and Dow Jones is posting 1.82% increases, around 137 points to 7.522.09.USD/JPY is rising 1.85% from the 97.42 opening price and it has reached the 99.40 level, currently the pair is trading above 99.00.GBP/JPY has risen 2.30% from 138.89 opening price to 141.98. The pair has reached 142.26 and currently is trading above the 142.00 level.EUR/JPY has gained 2.30% from 128.48, opening price, to the currently 131.40. The pair has reached 131.71 as highest.

Forex: USD/JPY rises 1.60% to break above 99.00

FXstreet.com (Barcelona) - USD/JPY has risen around 90 pips after the US opening bell, from 98.24 to 99.15, and it is reaching a fresh three weeks after breaks the 99.00 level. Along today's session, the pair has risen around 1.60% from the 97.42 opening price.

Currently, the pair is trading around 98.90/99.10 band.According to Valeria Bednarik, USD/JPY continues moving upwards: "USD/JPY continues pushing higher and giving signals for further gains in 4 hours charts. The pair has an important congestion zone around 98.70/85, formed both by maximums and a descendant trend line, yet indicators point for further upside continuation, with momentum and CCI cutting their medium lines and still strong. A confirmation above the mentioned level, could send the pair to test this year high at 99.67, followed by 100.00 key level, and above 100.60, stronger resistance that should contain the pair in the first attempt. Failure to break above mentioned 98.70/85 zone, could send the pair back to the downside, although losses should be limited. Supports lie at 98.10, 97.70 zone and 97.38."

Forex: USD/CHF rise above 1.1400 after rebounding from 1.1357

FXstreet.com (Barcelona) - After falling from 1.1500 to find support at 1.1357, the USD/CHF has began to rise to reach levels above the 1.1400. Currently, the pair is trading around 1.1430.Along today's session, USD/CHF is losing 0.65% from the 1.1207 opening price. According to Valeria Bednarik, FXstreet.com collaborator, USD/CHF is in a correction movement: "The pair continues the bearish correction after failure to break the strong congestion zone between 1.1520/40 zone. Bearish trend seems a bit exhausted in the hourly despite 20 SMA remains clearly pointing to the downside along with momentum. Watch for a movement above 1.1410 to confirm upside bias. Under today’s low, around 1.1355, the pair could continue falling to next support levels."

USD Recoups Amid Sharp Stock Advance

The greenback has recovered from some of its earlier sharp losses against the euro, which slumped past the 1.28-level to 1.2822. The primary driver in the foreign exchange market on the Tuesday session was the strong rally in US equity bourses, with the Dow Jones surging by over 4.5%, the Nasdaq advancing by over 6.0% and the S&P 500 gaining by over 5%.

US equities regained their footing after heavy selling in recent sessions on the heels of an internal memo from Citigroup CEO Pandit, describing the current quarter as its best since 2007. Pandit said he was encouraged by the strength of Citigroup’s business in the current year and was profitable for the first two months of the year, adding it was the “best quarter-to-date performance since the third quarter of 2007”.

There was little economic data from the US, seeing only the release of January wholesale inventories and wholesale sales. The January inventories figure declined by 0.7% while the sales number fell by 2.9%. Scheduled for release on Wednesday will be the February Federal Budget, expected to show a deficit of $200 billion, up from $175.56 billion in the previous month.

Fed Move Slams USD

The dollar collapsed following the FOMC monetary policy decision in the Wednesday afternoon session. Although the Fed left its benchmark interest rate unchanged at 0%-0.25%, it announced additional measures to prop up the economy and loosen credit to the markets. The statement announced, “To provide greater support to mortgage lending and housing markets, the Committee decided to increase the size of the Fed’s Balance sheet further by purchasing up to an additional $750 billion of agency MBS, totaling $1.25 trillion this year, and to increase its purchases of agency debt this year by up to $100 billion to a total of up to $200 billion”. The Fed also announced the purchase of up to $300 billion of longer-term Treasuries in the next six months.

The surprise move by the Fed was lauded by the US equity markets, sending the Dow Jones higher by over 1.5% and the S&P 500 sharply up by over 2.4%. However, the greenback sold off heavily – tumbling to a fresh two-month low against the euro at 1.3436

USD Mixed Ahead of Central Bank Decisions

The dollar was mixed in the Tuesday session, losing ground against the euro and the Loonie despite better than expected US economic reports. The February housing starts figure unexpectedly jumped to 583k units, up by 22.2% from a month earlier at 466k units. Building permits also beat consensus estimates, improving to 547k units defying calls for a decline to 500k units from 531k units in the previous month. Producer prices for February were mixed with the headline prices at 0.1%, down from the previous month at 0.8% while declining by 1.3% on an annualized basis versus a 1.0% drop previously.
The key highlight for Wednesday will be the FOMC monetary policy decision, due out around 2:15 pm. While the Fed’s room for maneuver is limited at this point, the accompanying policy statement will likely reiterate the FOMC’s support for providing the necessary means to prop up the economy. Additional reports due out tomorrow include February CPI and the current account balance

USD Slumps as Stocks Surge

The greenback and yen traded lower across the board at the start of the week on the heels of a sharp surge in the US equity bourses. The catalyst for the steep gains was the Treasury’s plan to purchase nearly $1 trillion in bad assets from banks – with private investors expected to provide the predominant source of the purchases and thereby avoiding nationalization. The S&P 500 surged by over 7%, while the Dow Jones and Nasdaq were both up approximately 6.8% on the Monday session.
Economic reports released from the US revealed an unexpected jump in existing home sales for February, up by 5.1% to 4.72 mln units from 4.49 mln units a month earlier – defying calls for a decline of 5.3%. In the session ahead, the calendar consists of the January Richmond Fed survey and home prices.
The foreign exchange market will continue to take its cues from the equity markets with a shift to riskier assets remaining detrimental for the dollar and the yen. We expect the euro to further extend gains over the coming sessions against the greenback with our initial target around the 1.39-region.

USD Eases on Geithner

The greenback relinquished some of its previous session’s gains versus the majors, with Treasury Secretary Geithner jawboning the dollar lower. Geithner responded for calls from China for a global currency but suggesting he was open to the idea. With the G-20 meeting in the UK next week, government officials’ verbal intervention will be closely scrutinized as a driver for the currency market.

Economic data released earlier revealed better than expected US reports, including February durable goods orders and new home sales. The core durable goods orders improved by 3.5% in February, beating calls for a decline of 1.5% and reversing the 3.0% decline in January. The headline figure advanced by 3.4%, a steep improvement from January, which posted a decline of 4.5%. Meanwhile, February new home sales increased by 4.7% to 337k units and beating expectations for a decline to 300k units from 309k units a month earlier.

The calendar for Thursday will see weekly jobless claims, Q4 GDP and Q4 PCE. Weekly jobless claims are expected to continue to edge higher, climbing to 650k from 646k a week earlier. Growth in the fourth quarter is forecasted to deteriorate further, contracting by 6.5% and worst than the 6.2% decline previously. Lastly, both core PCE and PCE are seen unchanged from the previous reading, holding steady at 0.8% and -5.0%, respectively.

JPY Slumps

The greenback was little changed in the Thursday session, edging slightly higher against the euro toward the 1.35-level while advancing versus the sterling. The yen was the loser on the session amid sharp gains in the US equity bourses, losing ground across the board. The Dow Jones added onto recent sessions’ gains, up 2.25% while the Nasdaq surged by 3.8%.

The US economy contracted by less than expected in Q4, albeit worse than the initial reading. The report revealed Q4 GDP contracted by 6.3%, slightly better than consensus estimates for a 6.5% decline versus the previous estimate of a 6.2% decline. The core PCE in Q4 was slightly higher at 0.9% compared with 0.8% previously, while headline PCE posted a 4.9% decline versus a 5.0% decline in the initial estimate. Meanwhile, the outlook for the US jobs market remains bleak with weekly jobless claims creeping up further to 652k from 646k a week earlier.

Reports slated for release in the Friday session include February consumption, personal income, PCE and the University of Michigan. Markets expect February consumption to decline to 0.2% from 0.6% in January while personal income is seen declining by 0.1% compared with an increase of 0.4% previously. The University of Michigan consumer sentiment survey final reading is expected to improve to 56.8 in February, up from 56.3 while the current survey is seen declining to 64.1 from 65.5 in January

3 banks fail - 20 so far this year

The FDIC estimates that the cost of the three failures will run in excess of $200 million. One bank was not able to find a buyer, two others were



FDIC estimates that the combined cost of the bank failures to its deposit insurance fund will be approximately $207 million.



The announcements mark the ninth week in the past ten that bank failures have been reported.
FirstCity Bank, based in Stockbridge, Ga., with $297 million of assets and $278 million of deposits as of March 18, was closed by state regulators, according to the Federal Deposit Insurance Corp., which was named the receiver.



The FDIC, unable to find a bank to take the assets of FirstCity, said on Monday it will mail the bank's former customers checks to cover insured funds.



A message on First City's Web site said that "an assuming bank could not be located."



According to an FDIC representative, the assets of the failed bank in Georgia were not attractive to buyers. "There was no franchise value," wrote David Barr, spokesperson for the FDIC, in an email. "More than half the deposits were out of area and the assets were highly concentrated in development loans. We had interest until they saw the deposit and asset makeup."

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Stocks: Crossroads ahead

NEW YORK (CNNMoney.com) -- The next week -- the last full week in the quarter -- promises to be a critical one for investors looking for reasons to either resurrect the stalled rally or retreat even further.

"As we approach the end of the quarter the big question is if we can push the S&P 500 above the 800 level," said Michael Sheldon, chief market strategist at RDM Financial Group

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He said that if the market can make that move, it would add weight to bets that the much longed for bear market bottom was put in place earlier in March. Twice late last week, the S&P 500 topped the 800 level, only to turn tail and run.

"We need another leg up on decent [trading] volume before more buyers will come in off the sidelines," Sheldon said. "Unless something changes, you have to consider the current advance a rally in the bear market, but you never know."

Key economic reports are due this week on home sales and income and spending, while in Washington, Congress talks AIG and regulatory reform. But more notable will be if Wall Street is able to recharge the advance after it lost steam at the end of last week.

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Bank losses revised up to $32B

WASHINGTON (Reuters) -- The U.S. bank industry posted a net loss of $32.1 billion in the fourth quarter of 2008, according to revised statistics released by the Federal Deposit Insurance Corp. Friday.

The FDIC had previously reported that the industry had posted a net loss of $26.2 billion - its first quarterly loss since 1990 - but significant amendments showing substantially higher charges for goodwill impairment prompted the agency to update the figures.

The decline in total equity capital was revised to $10.1 billion from a previously reported figure of $3.7 billion. The additional goodwill write-downs had no effect on the industry's regulatory capital, because goodwill is not included in regulatory capital.

The FDIC did not provide the names of the institutions which accounted for the largest losses.

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Emergency biz loans: What qualifies

NEW YORK (CNNMoney.com) -- The Small Business Administration is still drawing up guidelines for its forthcoming emergency loans program, a stopgap measure intended to shore up small businesses struggling to keep up with payments on existing debt. But the agency this week confirmed an unexpected twist: Businesses with current loans backed by the SBA won't be able to use the new loans to cover payments on their existing SBA debt.

The upcoming program, tentatively dubbed the "America's Recovery Capital" (ARC) loan program, is a measure mandated by last month's stimulus bill. The bill requires the SBA to create a new "business stabilization" program to back loans of up to $35,000 to small businesses "experiencing immediate financial hardship." The loans are intended to be used to make interest and principal payments on a "qualifying small business loan" for up to six months.

In several announcements this week, SBA officials said that SBA-backed loans made before the stimulus bill's passage on Feb. 17 won't be eligible for ARC loan relief. The reason: The American Recovery and Reinvestment Act, the stimulus bill, forbids it. A provision Congress wrote into the bill explicitly prevents the new stabilization loans from being used to pay down SBA-backed loans made before the bill's enactment.

A staffer with the House Small Business Committee said that restriction was mandated by the Congressional Budget Office to comply with pay-as-you-go prohibitions against increasing the federal deficit through new direct-spending measures.

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California unemployment jumps to 10.5%

SAN FRANCISCO (Reuters) -- California's unemployment rate increased to 10.5% in February from 10.1% in January as the most populous state's economy worsened, official data showed Friday.

California's February jobless rate far exceeded both the state's 6.2% rate a year earlier and the national unemployment average for February of 8.1%, according to the report by the state's Employment Development Department.

California lost 116,000 non-farm payroll jobs in February from January and 605,900 non-farm jobs from a year earlier, marking a 4% decrease in nonfarm payrolls, the report said.

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Profits up at luxury group Hermes

French luxury goods firm Hermes has said profits rose in 2008, shrugging off concerns about the impact of the global economic downturn.

Shares gained 3.1% in Paris as its profit of 290m euros ($395m; £273m) was higher than analysts had forecast and the company increased its dividend.

Hermes generated revenues of 1.76bn euros last year, up 8.6% from 2007.

It said sales so far in 2009 were "slightly" higher thanks to the stronger dollar and yen.

Asian boost

Hermes, famous for its handbags and silk ties, proposed a dividend of 1.03 euros, up from 1 euro the previous year.

It said all regions had registered growth except for Japan, which is traditionally one of the largest markets for luxury goods. Same-store sales in Japan fell 3% last year.

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Iceland interest rates cut to 17%

The central bank of crisis-hit Iceland has cut its interest rate to 17%.

The rate cut is the first since Iceland agreed a $10bn financial aid package with the International Monetary Fund.

The Sedlabanki cut rates by one percentage point from 18%, where they had remained since October on the recommendation of the IMF.

Iceland's financial system collapsed in October under the weight of debt, leading to a currency crisis, rising unemployment and public protests.

Iceland's economy is forecast to shrink by almost 10% this year.

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World Bank lowers China forecast

The World Bank has cut its prediction for China's economic growth in 2009 from 7.5% to 6.5%, saying it could not "escape the impact of global weakness".

Falling demand for Chinese goods abroad is seen as the main reason for the cut.
But the bank added that China's economy was still holding up well compared to other countries, and remained a bright spot amid all the financial gloom.

Analysts are particularly worried about a slowdown in China, due to the threat of social unrest if the economy stalls.

Exports exposure

China is heavily dependent on the global economy that buys its imports. But as recession grips the US and Europe - which are among its largest customers - demand has fallen, resulting in factories closing and millions of people losing their jobs.

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Economic woes hit Dubai ratings

Standard & Poor's has cut the credit ratings of six Dubai government-backed entities and a leading property firm.

It comes weeks after Dubai's finance ministry sold $10bn (£6.9bn) in bonds to the United Arab Emirates (UAE), to ease the emirate's liquidity problems.


Dubai is one of seven members of the UAE federation.
S&P said that the worsening world economy could hit sectors vital to the Dubai economy such as trade, tourism and commerce.


S&P analyst Farouk Soussa said the downgrades followed a cut to the in-house sovereign rating S&P has for Dubai, a rating which remains confidential.

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First black FTSE 100 boss at Pru

Tidjane Thiam will become chief executive of Prudential in October, becoming the first black head of a FTSE 100 company.

Mr Thiam joined Prudential from Aviva in 2007 and is now finance director at the firm. He will replace Mark Tucker.

Originally from the Ivory Coast, Mr Thiam had previously been the country's Minister of Planning and Development.

Mr Thiam will be one of a limited number of ethnic minorities who are represented in the UK's boardrooms.

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Crude oil prices back above $50

Crude oil's price has risen back above $50 a barrel for the first time in ten weeks, pushed higher by a weaker dollar and hopes of an economic upturn.

US light crude gained rose to $52.25 before closing at $51.61 a barrel in New York trading.
Oil has gained more than 15% since the start of the year.

Oil gained after the US Federal Reserve announced a plan to buy $1.2tn (£843bn) of debt to boost its economy, which in turn may stoke oil demand.

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World economy 'to shrink in 2009'

The world economy is set to shrink by between 0.5% and 1.0% in 2009, the first global contraction in 60 years.

In its gloomiest forecast yet, the International Monetary Fund (IMF) says that developed countries will suffer a "deep recession".

The global economic body says "the prolonged financial crisis has battered global economic activity beyond what was previously anticipated".

Just two months ago, the IMF predicted world output would increase by 0.5%

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What is Stock Exchange?

Marketplace where brokers and dealers meet to buy and sell stocks of publicly traded companies on behalf of investors.

A market in which securities are bought and sold. Its basic function is to enable public companies, governments and local authorities to raise capital by selling securities to investors.

An organized marketplace where members gather to trade securities. Members may act either as agents for customers, or as principals for their own accounts.

What is Finance?

The field of finance refers to the concepts of time, money and risk and how they are interrelated. Banks are the main facilitators of funding through the provision of credit, although private equity, mutual funds, hedge funds, and other organizations have become important.

1. The commercial activity of providing funds and capital
2. Obtain or provide money for; "Can we finance the addition to our home?"
3. Sell or provide on credit

What is Forex Exchange?

The foreign exchange market, where brokerage firms and banks are connected over an electronic network that allows them to convert the currencies

What is Forex?

The simultaneous buying of one currency and selling of another