(Bloomberg) — The euro rose against the dollar for the first time in three days as the Ifo business confidence index unexpectedly approached a record level, triggering speculation about continued interest rate hikes by the European Central Bank. “Ifo gave the euro some momentum,” said Joe Manimbo, a market analyst at Travelex Global Business Payments in Washington. “There is a small profit-taking on the dollar rally, which helped stocks, commodities, and high-yield currencies find a base.”
| EUR/USD Pivot point 1.4079 |
R1 / 1.4146 | R2 / 1.4199 | R3 / 1.4266 |
| S1 / 1.4026 | S2 / 1.3959 | S3 / 1.3906 |
(Bloomberg) — The UK recorded its largest budget deficit in April since 1993 as tax revenues fell and spending increased, putting pressure on Chancellor George Osborne to stick to his deficit reduction plan. The Office for National Statistics in London stated that government net borrowing reached 10 billion pounds ($16 billion) compared to 7.2 billion pounds a year earlier. The average of 12 forecasts in a Bloomberg News poll showed a deficit of 6.5 billion pounds. It may be difficult for Chancellor George Osborne to meet his deficit target as the economy tries to gain momentum, according to opposition Labour Party representatives and some economists. Growth slowed for six months through March, and Bank of England Governor Mervyn King stated this month that activity remains weak. “Economic growth has not picked up at the expected pace, leading to concerns about exceeding the deficit target,” said Ross Walker, chief economist at Royal Bank of Scotland Group Plc in London. “Risks are tilted toward higher borrowing, although dramatic exceedance appears unlikely.”
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| GBP/USD Pivot point 1.6151 |
R1 / 1.6234 | R2 / 1.6291 | R3 / 1.6374 |
| S1 / 1.6094 | S2 / 1.6011 | S3 / 1.5954 |
(Bloomberg) — Japan’s net foreign investment dropped for the first time in two years in 2010 as the yen’s rise reduced the value of these assets. The value of net assets decreased by 5.5% to 251.5 trillion yen ($3.1 trillion) at the end of last year, reported the Ministry of Finance in Tokyo. Japan will remain the world’s largest holder of foreign assets for the 20th consecutive year, while China is expected to increase its assets by more than 50% from 167.7 trillion yen, according to the ministry’s statement. Japan’s total foreign assets became the second-highest record, highlighting the country’s strong credit position abroad, although the debt burden is the highest among industrialized nations. A sharp rise in the yen prompted the Ministry of Finance to intervene in the foreign exchange market twice since September. “Japan’s net assets have reduced investor anxiety about the country’s financial condition,” said Takeshi Minami, chief economist at the Norinchukin Research Institute in Tokyo. “Mainly this is a legacy of the past. The growth rate of assets may slow due to a shrinking population and a stagnant economy.”
| USD/JPY Pivot point 81.95 |
R1 / 82.29 | R2 / 82.55 | R3 / 82.89 |
| S1 / 81.69 | S2 / 81.35 | S3 / 81.09 |
