Archive For "July, 2010"

A modicum of confidence returned to markets in July, as U.S. and European stocks erased losses inked in the frenzy of prior months and investors took heart that slow growth is better than none at all, dumping gold and the U.S. dollar in light of this more sanguine view.

A graphic look at the factors behind the euro’s three-month slide and rebound.

The U.S. dollar gave up some of its earlier gains against the euro Friday.

NEW YORK (MarketWatch) — Barclays Capital raised its forecast for the euro versus the dollar Friday and now expects the shared currency to fall less over the next few months as previously predicted. The euro will decline to $1.27 in the next month, compared to a previous forecast for it to fall to $1.20 from $1.3065 currently. In three months, the euro will decline to $1.25, strategists at Barclays wrote in a research note Friday. The euro has recovered from a four-year low in recent weeks as data in the euro-zone has been surprisingly strong, while U.S. economic reports have missed, they said. “The most likely course in the short run is that data will be the most important factor in relatively thin summer markets,” analysts including Paul Robinson wrote. “This is likely to support the U.S. dollar, both because we think that prospects for the U.S. economy are somewhat better than has currently been factored in and because the rally of the euro is going to have something of a dampening impact on the euro area.” A stronger euro reduces the competitiveness of exports, which are a big component of the European economy.

The U.S. dollar gave up some of its earlier gains against the euro Friday.

The U.S. economy lost momentum in the second quarter, according to figures released Friday, which may raise concerns of an extended soft patch if not an outright contraction.

The U.S. dollar held onto gains as investors wariness of riskier assets fuels demand for the relative safety of the U.S. dollar.

NEW YORK (MarketWatch) — Treasury prices and the dollar stayed higher on Friday after the Reuters/University of Michigan index of consumer sentiment was revised to 67.8 in July. A separate report showed manufacturing activity in the Chicago region came in better than expected in July. Yields on 10-year notes , which move inversely to prices, fell 7 basis points to 2.93%. The dollar index , which tracks the U.S. unit against a basket of major currencies, traded at 81.781, compared to 81.790 before the data but still up from 81.559 in North American trade late Thursday. The euro fell to $1.3024, down from $1.3094 late Thursday.

NEW YORK (MarketWatch) — Companies are expected to continue bringing massive amounts of bonds next month to satiate investor demand and satisfy funding needs at very low rates, according to a Informa Global Markets survey. “On average, people participating in our poll are expecting $65.2 billion to be raised in August,” Informa’s Ken Jaques said Friday. That is the highest average estimate since May, which came in well below expectations. The average amount sold in August is $45 billion, according to Informa. “While we see the capital-raising environment as ideal, we tend to agree with ‘vacation’ scenario” and expect a more average month, Jaques said. So far in July, companies have sold $86.09 billion, up from $59.73 billion in July 2009, attributed to extremely low yield levels for companies. Still, total sales for the year have fallen almost 34% to $556.3 billion. Earlier it the week, debt was sold by AT&T Inc. , McDonald’s Corp. s: [mcd], Kimberly-Clark Corp. , Alcoa Inc. , Union Pacific Corp. and Safeway Inc. . International issuers selling U.S. debt included UBS AG , CIBC and Westpac Banking Corp. [wbk] as well as the countries of Turkey, Brazil, Barbados and Chile, Informa said.

The unemployment rate across the 16-nation euro zone holds steady at 10% in June, where it’s stood since March.