Euro Strengthens Versus Major Peers as Emerging Currencies Drop

The euro rose against the dollar for the first time in three days amid speculation last week’s drop to the lowest level in almost two months was excessive.

Emerging-market currencies fell after a typhoon swept across the Philippines and as traders weigh the likelihood of reduced Federal Reserve stimulus. The 17-nation shared currency pared a decline from last week, when a report showed the U.S. economy added more jobs in October than analysts forecast and the European Central Bank unexpectedly trimmed its key interest rate. Brazil’s real declined to a two-month low on concern the nation’s budget deficit will lead to a credit-rating downgrade.

The euro climbed 0.3 percent to $1.3407 at 5 p.m. New York time after dropping to $1.3296 on Nov. 7, the lowest level since Sept. 16. The 17-nation currency added 0.4 percent to 132.94 yen. The dollar gained 0.1 percent to 99.16 yen.

The Bloomberg U.S. Dollar Index (PCOMP), which tracks the greenback against 10 major currencies, was little changed at 1,020.88 after rising to 1,024.31 on Nov. 8, the highest since Sept. 13.

(Source: Bloomberg)

China’s Stock-Index Futures Drop After Inflation, Economic Data

China’s stock-index futures fell after economic reports over the weekend including inflation.

Futures on the CSI 300 Index  expiring in November lost 0.2 percent to 2,310 as of 9:22 a.m. local time. China Vanke Co. and Poly Real Estate Group Co. may decline among developers on concern the government is strengthening measures to rein in the property market. Suning Commerce Group Co., an online retailer, may advance as consumers look to the Internet for bargains on Singles’ Day, one of China’s biggest shopping days of the year.

The Shanghai Composite Index  dropped 1.1 percent to 2,106.13 on Nov. 8, capping a 2 percent decline last week. Industrial output rose 10.3 percent from a year earlier in October, according to data released Nov. 9 by the National Bureau of Statistics. Inflation was 3.2 percent last month, producer prices fell 1.5 percent from a year earlier and retail sales rose 13.3 percent.

The CSI 300 Index declined 1.4 percent to 2,308 on Nov. 8. The Hang Seng China Enterprises Index  retreated 0.8 percent. The Bloomberg China-US Equity Index added 1.1 percent in New York.

The Shanghai index has dropped 13 percent from this year’s high set on Feb. 6 on concern economic growth will slow in the fourth quarter. The measure trades at 8.4 times projected profit for the next 12 months, compared with the seven-year average of 15.3, according to data compiled by Bloomberg. The

China’s economy entered the final quarter of 2013 with an acceleration in manufacturing and exports, momentum that offered confidence to Communist leaders gathering to determine policy shifts for the coming decade.

(Source: Bloomberg)

Euro Bulls Crack as Odds of Return to 2013 Lows Jump: Currencies

The surprise decision by the European Central Bank to cut interest rates means there’s now about an even chance that the euro, this year’s best performing major currency, erases all of its gains in a matter of months.

There is an almost 50 percent probability the euro, which has risen more than 5 percent against the greenback since reaching a 2013 low in April, will give back its increase by mid-2014, according to data compiled by Bloomberg. The odds are the highest in seven weeks and up from 37 percent prior to the ECB lowering its key rate yesterday to a record.

While the euro area economy is seen shrinking 0.3 percent in 2013 based on a survey of more than 50 analysts by Bloomberg, the currency has still managed to appreciate on speculation ECB President Mario Draghi would refrain from further stimulus. That changed yesterday, catching traders who had pushed bullish bets to almost record highs off guard.

(Source: Bloomberg)