Forex outlook:
Speculation that the ECB will rise borrowing costs later this year boosted the allure of the single currency which approached a record high against the yen and strengthen versos the Dollar. ``The market continues to price in more rate hikes by the ECB, and that's good news for the euro,'' said Dustin Reid, a senior currency strategist at ABN Amro Bank NV in Chicago. ``But it hasn't yet priced in enough. We expect the ECB to go to 4.5 percent this year'' from 3.75 percent. ``The market wants to re- test the highs in the euro.'' The euro rose 0.3 percent to 163.03 yen at 11:55 a.m. in New York, approaching the all-time high of 163.60 set May 3. The 13- nation currency also rose 0.2 percent to $1.3544. The euro touched a record high of $1.3681 April 27.
The yen fell against the U.S. dollar, euro and currencies in New Zealand, Australia and Canada. The retail sales report from New Zealand and news last week that the Chinese government will let its banks buy shares overseas for the first time also encouraged traders to increase risks, boosting the carry trades. ``The market is getting into more riskier trades, and that's hurting the yen,'' said Alan Ruskin, head of international currency strategy at RBS Greenwich Capital Markets in Greenwich, Connecticut. ``China liberalized potential equity outflows and that helped investors regain their appetite for risk in Asian markets. Good data out of New Zealand gave the high-yielders a kick.'' Japan's currency fell 0.2 percent to 120.36 versus the U.S. dollar and dropped 0.3 percent to 100.26 per Australian dollar, near the lowest since May 1992. The yen also lost 0.7 percent against the New Zealand dollar, 0.5 percent versus the Canadian dollar and 0.4 percent against the Brazilian real.
Gold: The precious metal fell on speculation the Euro's rally against the dollar will stall, reducing the appeal of the precious metals as alternative investments. ``A lot of gold's movement for now is going to be tied to the dollar,'' said Frank Lesh, a trader at FuturePath Trading LLC in Chicago. ``The dollar is going to have to look like it's going to make a new low for gold to pull in capital.'' Gold futures for June delivery dropped $2.20, or 0.3 percent, to $670.10 an ounce on the Comex division of the New York Mercantile Exchange. The price dropped 2.5 percent last week to the lowest in a month.
Crude Oil: The black gold rose on concern that Nigerian output will reduce due to threats by The Movement for the Emancipation of the Niger Delta to attack pipelines this week in remote areas. ``Signs of the deteriorating supply situation abound,'' said John Kilduff, vice president of risk management at Man Financial Inc. in New York. ``There are new threats from Nigeria supporting oil.'' Crude oil for June delivery rose 24 cents, or 0.4 percent, to $62.61 a barrel at 11:48 a.m. on the New York Mercantile Exchange. Futures touched $63.07, the highest since May 4. Prices are 13 percent lower than a year ago.
Pool position:
