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Dollar Falls Second Day Versus Yen on Fed Bets
WASHINGTON – The dollar fell for a second day versus the yen on speculation Federal Reserve speakers including Chairman Ben S. Bernanke will reiterate economic growth isn’t yet sufficient to trim stimulus.
The Bloomberg U.S. Dollar Index touched the lowest level in almost two weeks and Australia’s currency rallied as a report showed China plans to reduce its intervention in the foreign-exchange market. Norway’s currency jumped after third-quarter gross domestic product increased more than analysts forecast.
“The U.S. dollar has been under pressure right across the board,” said Emma Lawson, a Sydney-based senior currency strategist at National Australia Bank Ltd. “Certainly, the doves are taking the fore at the moment. Most investors have moved away from any expectation of tapering in December.”
The dollar fell 0.2 percent to 99.82 yen at 10:27 a.m. London time, extending yesterday’s 0.2 percent decline. It was little changed at $1.3498 per euro after touching $1.3543, the weakest level since Nov. 6. Japan’s currency gained 0.2 percent to 134.73 per euro.
The Bloomberg U.S. Dollar Index, which monitors the greenback against 10 major counterparts, was little changed at 1,015.31 after touching 1,013.11, the lowest since Nov. 6.
Dudley’s Outlook
New York Fed President William C. Dudley said yesterday he’s more hopeful about the economy, though he indicating no change in the central bank’s bond-buying program.
“While growth in 2013 has been disappointing, I believe a good case can be made that the pace of growth will pick up some in 2014 and then somewhat more in 2015,” Dudley said yesterday. “As growth picks up, I expect to see more substantial improvement in labor market conditions.”
At a Nov. 14 congressional hearing on her nomination to run the Fed, Vice Chairman Janet Yellen indicated she’ll press on with the central bank’s monetary stimulus until she sees a robust recovery, downplaying risks the policy is inflating asset bubbles. Bernanke will speak at the National Economists Club in Washington later today.
The Commerce Department will say tomorrow that retail sales in the world’s biggest economy increased 0.1 percent in October after a 0.1 percent decline the previous month, according to the median estimate of economists surveyed by Bloomberg News. A separate report the same day is projected to show consumer prices stagnated in October from the previous month, after rising 0.2 percent in September.
China Intervention
Australia’s currency rose for a third day after reports that Governor Zhou Xiaochuan said the People’s Bank of China will “basically” exit from normal intervention in the foreign-exchange market, without giving a timeframe.
China will widen the yuan’s trading band in an “orderly” way as it seeks to enhance the currency’s two-way flexibility, Zhou wrote in a book explaining reforms outlined last week following a meeting of Communist Party leaders.
The central bank currently sets a daily reference rate for the yuan, with the spot rate allowed to trade up to 1 percent on either side. The maximum allowed divergence was doubled in April 2012, having been increased from 0.3 percent in May 2007.
“The implication is that there would be less dollar buying and less dollar-reserve accumulation from the PBOC down the road,” said Valentin Marinov, head of European Group-of-10 currency strategy at Citigroup Inc. in London. “That is being seen as dollar negative. The Aussie could do well as well if the PBOC actions are seen as consistent with growing confidence in the Chinese economy.”
RBA Minutes
Reserve Bank of Australia policy makers said it was “prudent” to keep the cash rate steady while gauging the impact of previous easing, according to minutes of the central bank’s Nov. 5 meeting released today.
The Aussie added 0.4 percent to 94.15 U.S. cents after advancing to 94.47, the strongest level since Nov. 8.
The ZEW Center for European Economic Research said its index of German investor and analyst expectations, which aims to predict economic developments six months in advance, rose to 54.6 in November, from 52.8 the previous month. That’s the highest since October 2009 and above the 54.0 median estimate of economists in a Bloomberg News survey.
Norway’s krone appreciated 0.5 percent to 8.2337 per euro after reaching 8.2070, the strongest level since Nov. 11. It gained 0.4 percent to 6.1012 per dollar.
The euro has strengthened 0.4 percent in the past month, according to Bloomberg Correlation-Weighted Indexes that track 10 developed-nation currencies. The dollar has climbed 1.9 percent and the yen is down 0.5 percent. The krone slumped 1.7 percent.
– BLOOMBERG
There are allegations that secret drilling of crude oil has begun in some Ogoni communities, even as talks between the Federal Government and representatives of the people on the planned resumption of oil exploration in the area remain inconclusive.
Though the Movement for the Survival of the Ogoni People (MOSOP), in a statement released in Port Harcourt on Sunday by the Secretary-General of MOSOP, Stephen Nmane, insist that the citizens have embraced the idea of oil resumption because of the integrity of its leaders involved in the talks.
According to MOSOP reports of alleged compromise and alleged corruption are worrisome.
Also, MOSOP said it wanted the names of 40 Ogoni youths employed by the Nigerian National Petroleum Company Limited (NNPC Ltd) published for the sake of transparency, alleging that names of foreigners were smuggled onto the list.
Nmane specifically said oil drilling had been noticed in Ogoni communities in Tai and Eleme local government areas without the knowledge of the people, saying MOSOP condemned any forced re-entry into Ogoni, describing it as a betrayal of the spirit of the dialogue process.
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The statement was titled ‘Alarming Compromise of The Ogoni Oil Production Resumption Process: The Reported Massive Corruption of Leaders of The ODC’.
“It is appalling as it is disappointing that while dialogue between Abuja and Ogoni is ongoing, preliminary oil production is operationalised in parts of Ogoni by the Federal Government without the consent and social licence of the Ogoni community.
“In Ban-Ogoi and Alesa-Eleme areas, oil drilling with its attendant health and environmental toxicity is ongoing.
“To us, this is in bad faith as it betrayed the godly spirit of the dialogue.
“Therefore, we cannot but condemn this forced re-entry through the back door. Thus, we demand immediate halt of the operations and the needful done,” the statement read.
It added, “The Movement for the Survival of the Ogoni People, MOSOP, is alarmed at a damning report circulating in Ogoni and across social media platforms, alleging massive economic corruption of some key leaders of the Ogoni oil resumption dialogue process.
“This is most concerning as it is at the expense of our people. Since the allegations impugn the credibility and trustworthiness of these facilitators, the Ogoni Dialogue Committee (ODC) and its leadership, MOSOP would urge the body to publicly clear its name of the weighty allegations.
“It equally warned of dire consequences as Ogoni will not sit idly by while accrued benefits to the community are illicitly cornered by a greedy, heartless few pretending to work for our common good.
“Notwithstanding acknowledged doubtful integrity of some of these leaders, our people had embraced the process in the hope that envisaged opportunities offered would create enduring succour.
“The feeling that the hope would not materialise owing to corruption, occasioning anger and tension, is understandable. Hence, we call on the people to remain calm and law-abiding while efforts are made to address the issues.
“Saddeningly, information available to MOSOP indicates that some bigwigs of the Ogoni Dialogue Committee had been compromised to facilitate the re-entry. In fact, Ogoni youths who had protested at the operational bases reported that engineers at these sites told them to approach an ODC chieftain instead.
“Furthermore, the report also implicated the ODC facilitators in other shoddy deals. It revealed their involvement in another multi-million-dollar oil pipeline contract to be executed across Ogoni oil fields preparatory to oil resumption proper.”
It warned the Federal Government and investors interested in investing in Ogoni to be wary of predators.
“We would further counsel against hasty agreement with anyone or group without appropriate due diligence, as such will not be binding on us.
“We wish to make it categorically clear that all entered agreements on behalf of Ogoni are shoddy, unacceptable, and null and void,” the statement added.
