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FOREX-Euro rises for third day but gains could fade - Reuters
Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests.
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Forex: EUR/USD bullish above 1.26 – V.Bednarik - FXStreet.com
Forex focus: European unity may lie ahead – but for how many? - Daily Telegraph
As HiFX’s Chris Towner says: “Germany is being forced into a corner where it is they who will need to start to give up if they would like Europe to become more unified. The Spanish finance minister is right to say that the battle for the euro will be waged in Spain, but it will be decided in Germany.”
Eurosceptics suspect Germany will use the crisis to usher in a United States of Europe.
“Is there a hidden German agenda? Probably not,” answers Charles Purdy of Smart Currency Exchange. “They have always thought and made clear that greater fiscal unity is a must for the euro – ensuring that each country adopts their fiscal discipline. Up to now the political will has been lacking but if the euro is to survive and the 'weaker’ countries are to benefit from Germany’s strong credit rating then fiscal union will be what Germany expects.”
World First’s chief economist Jeremy Cook believes greater unification will take decades, saying: “Fiscal union is the endgame for the eurozone – a United States of Europe that has centralised fiscal and monetary policy and leadership based from one location. This will take years to set up and will only follow a huge upheaval of the European political landscape.”
However, while the consensus view is that the eurozone will bind closer together, this doesn’t mean that all 17 members will remain in the club.
“It is becoming increasingly clear that some nations can’t remain in the eurozone,” says Richard Driver of Caxton FX. “A stronger eurozone with a fiscal union is the only way the eurozone can survive but this won’t come soon enough for Greece.”
Stephen Hughes of Currencies.co.uk is sceptical, saying, “As a growing number of voices call for greater fiscal union across the eurozone, it’s still by no means a given that this is an achievable path – don’t forget that even the German people have yet to ratify the fiscal compact.
“But, given the depth of the current euro crisis, we are likely to see a more accommodating stance from policymakers in the coming months. What is clear is that any move to greater unity will take time to implement, something Greece certainly doesn’t have. As for Spain, Portugal and Ireland, the jury’s out for them...”
FOREX-Rising Spanish and Italian yields pulls euro lower - Reuters India
* Euro cuts gains as Spanish borrowing costs rise
* Italy sells three-year debt at 6-mth high of 5.3 pct
* Investors wary ahead of Greek election on Sunday
By Anirban Nag
LONDON, June 14 (Reuters) - The euro pared gains against the dollar on Thursday as Spanish and Italian bond yields surged, highlighting the risk of euro zone contagion ahead of Sunday's elections in Greece that could lead to the country being pushed out of the common currency.
The euro's outlook may stay bearish after benchmark 10-year Spanish government bond yields hitting 7 percent on Thursday - a level where fellow euro zone members such as Greece and Ireland had to seek international bailouts as it is seen as too expensive in the long term.
The aid deal put together for Spanish banks at the weekend has signally failed to calm the markets, with Italian three-year borrowing costs spiking to 5.30 percent at an auction on Thursday.
The common currency fell to a session low $1.2542 on trading platform EBS, turning lower on the day and off the day's high of $1.25894. It was last trading at $1.2565 with large option expiries cited at $1.2500 which could curtail losses for the time being.
"Spanish yields are creeping up, which clearly indicates that the bank bailout deal will not change anything and they are dragging Italian yields higher," said Stuart Frost, head of Absolute Returns and Currency at fund manager RWC Partners.
"For the euro/dollar, all this means it is on a slippery slope down."
Earlier, the common currency took Moody's downgrade of Spanish government debt to one notch above junk status in its stride.
Many analysts said the euro was likely to trade between $1.24 and $1.27 ahead of Sunday's Greek vote, with investors either reluctant to initiate fresh bearish bets or squaring positions given uncertainty over the election outcome.
Speculators have added to very large bearish bets against the euro in the past few weeks, leaving scope to the euro to stage a short-covering rally if parties supporting austerity and reforms in Greece win at the weekend.
Right now, it is too close to call and a victory for the far-left SYRIZA, which opposes the austerity measures on which Greece's bailout deals are based, would intensify fears of a potential euro zone break-up, and likely push the currency towards recent two-year lows around $1.2280.
A sharp rise in yields on German Bunds, viewed as the euro zone's safest asset, has also raised concerns that the cost of the debt crisis is growing for Germany, the bloc's paymaster. A further rise in German yields would weigh further on the euro, traders said.
SNB REITERATES FRANC CAP
The Swiss franc rose against the euro after the SNB said it was prepared to buy unlimited amounts to defend the 1.20 level. The euro fell to 1.2008 francs on trading platform EBS, from around 1.20196 before the announcement.
Traders said the SNB has been buying lots of euros in recent weeks, stepping up its defence of the cap ahead of the Greek election, which could fuel demand for the safe-haven franc. SNB President Thomas Jordan hinted that capital controls could be introduced if the situation in the euro zone deteriorates and puts more upward pressure on the franc.
"Clearly the SNB is trying to downplay the franc's attractiveness and buy more time. We expect further pressure on the euro/Swiss franc 'floor' in the coming days, especially considering the Greek elections," said Peter Rosenstreich, chief FX analyst at Swissquote Bank, in a note.
Against the yen, the euro eased 0.1 percent to 99.60 , off a session high of 100 yen, with Japanese exporters' bids lined up above that level. The dollar fetched 79.26 yen, off Monday's high of 79.92 yen with expectations of more easing by the Federal Reserve weighing on the greenback.
The New Zealand dollar was up 0.5 percent on the day at US$0.7778, paring gains from Wednesday, when it hit a one-month high of $0.7808.
The kiwi eased after the Reserve Bank of New Zealand said a weak economy and an uncertain global outlook meant rates need to stay at record lows. As expected, the RBNZ kept rates unchanged at 2.5 percent for a 10th straight meeting.
Money market fund assets fall to $2.554 trillion - Yahoo Finance
NEW YORK (AP) -- Total U.S. money market mutual fund assets fell by $10.68 billion to $2.554 trillion for the week that ended Wednesday, the Investment Company Institute said Thursday.
Assets of the nation's retail money market mutual funds fell by $550 million to $890.20 billion, the Washington-based mutual fund trade group said. Assets of taxable money market funds in the retail category fell by $50 million to $703.57 billion. Tax-exempt retail fund assets fell by $500 million to $186.63 billion.
Meanwhile, assets of institutional money market funds fell $10.13 billion to $1.664 trillion. Among institutional funds, taxable money market fund assets fell $8.47 billion to $1.579 trillion; assets of tax-exempt funds fell $1.66 billion to $84.77 billion.
The seven-day average yield on money market mutual funds was 0.03 percent in the week that ended Tuesday, unchanged from the previous week, said Money Fund Report, a service of iMoneyNet Inc. in Westborough, Mass.
The 30-day average yield was also unchanged from last week at 0.03 percent. The seven-day compounded yield was flat at 0.03 percent. The 30-day compounded yield was unchanged at 0.03 percent, Money Fund Report said.
The average maturity of portfolios held by money market mutual funds was the same as the previous week at 45 days.
The online service Bankrate.com said its survey of 100 leading commercial banks, savings and loan associations and savings banks in the nation's 10 largest markets showed the annual percentage yield available on money market accounts was unchanged from last week at 0.13 percent.
The North Palm Beach, Fla.-based unit of Bankrate Inc. said the annual percentage yield available on interest-bearing checking accounts was unchanged from the week before at 0.06 percent.
Bankrate.com said the annual percentage yield on six-month certificates of deposit was also unchanged from the previous week at 0.21 percent. The yield on one-year CDs was unchanged at 0.32 percent and flat at 0.51 percent on two-and-a-half-year CDs. It fell to 1.11 percent from 1.12 percent on five-year CDs.
Can You Make Money by Buying From Facebook's IPO? - huffingtonpost.co.uk
The answer is simple. Only if they can turn their organically grown database into a revenue stream channel the $100 billion valuation makes sense and one can make money out of it. If you think this is a good answer, think again?
This answer fails to understand the influential power social connections can have long-term. By thinking you can't make money since users aren't clicking on ads you are missing the whole point. In the online world we are all used to measuring everything from click through rates to sales in real time, however with social sites like Facebook one must have a holistic approach in order to reap the benefits which lie underneath the surface. It's a bit like saying we shouldn't invest in customer service because it doesn't produce returns; while you may not be able to track the return on investment on your customer service initiatives like you can with your marketing campaigns, that's not to say that investing in customer service won't yield positive returns.
A new report by internet marketing research company Comscore suggests that social media marketing can show a positive return on investment by directly influencing sales, but it has to be measured in a different way to conventional online marketing since it's not ads that are driving sales, building brands and creating customer loyalty. It's the very act of being social and engaging with your customers. That means understanding the link between Facebook's various ad units with what Comscore calls free earned media, which is essentially the posts and other actions by brand and consumers on the social network.
The Comscore report cited examples of how advertising on Facebook could be traced to sales increases. For example, by tracking consumers who were Starbucks fans on Facebook against a control group of shoppers who weren't exposed to those messages, Comscore found that over a four-week period, 2.12% of the brand's fans and their friends made a purchase at the coffee shop. That's 0.58 percentage points higher than the 1.54% for the control group. That suggests that fans and their friends made 37.7% more purchases than those not exposed to the brand's earned media.
So all in all, can we buy Facebook shares at the current price and still make money. While the answer seems positive, you may want to wait as the current scepticism around Facebook's potential to deliver a return on investment may result in share prices dropping short-term, only to start seeing an upward movement medium to long term but we will most probably have to wait several years to witness this change. I guess the question is, if social media advertising is still in its infancy, where is the social media stock market? You can't expect for investors to understand now what most marketers still don't.
Social media will create a revolution in how we behave ourselves and eventually will start the next bull market, but not for at least three to five years. Social media gives the ability for everybody to be in instant communication with everyone else, and that's very powerful. We must not forget that Facebook is the pioneer of the social media generation, and remains as the most powerful social media network in the planet.
Follow Vashi Dominguez on Twitter: www.twitter.com/VashiDominguez
FOREX-Euro holds firm on hopes of central bank action, soft US data - Reuters UK
* Cenbanks' liquidity pledge triggers short-covering
* Soft US data keeps hopes of Fed easing alive
* Euro looking better on charts, rises above Ichimoku kijun line
* Dlr/yen falls after BOJ stands pat
TOKYO, June 15 (Reuters) - The euro held firm against the U.S. dollar on Friday, reflecting hopes of central bank action to counter potential fallout from Sunday's crucial election in Greece, and after disappointing U.S. economic data.
G20 officials told Reuters that central banks from major economies stand ready to take steps to stabilize financial markets by providing liquidity and preventing a credit squeeze if the Greek election result roils markets.
New claims for U.S. state jobless benefits rose for the fifth time in six weeks and consumer prices fell in May, opening the door wider for the U.S. Federal Reserve to further ease monetary policy.
These factors prompted unwinding of market players' massively short positions on the euro, though worries about Spain's troubles in financing its debt remained in place.
The euro traded at $1.2628, maintaining Thursday's 0.6 percent gains and edging near a high of $1.2672 hit right at the beginning of the week in a knee-jerk reaction to the announcement of a plan to support Spanish banks.
While the outcome of the Greek election on Sunday is seen as holding the key in the near-term, the euro's technical outlook is improving, analysts said.
On daily Ichimoku charts the euro rose above major resistance from the kijun line, which stands at $1.2623 on Friday, for the first time since it began declining in May.(The kijun line is the mid-point between the highest high and lowest low of a particular instrument.)
"I'm a bit impressed by the euro's charts today. We may be approaching the time when we have to judge whether the euro's recovery from its bottom on June 1 may become more solid," said Teppei Ino, currency analyst at the Bank of Tokyo-Mitsubishi UFJ.
Analysts at RBC Capital Markets said in report that a close above resistance around $1.2625, its January low, is needed to sustain the euro's corrective rebound.
NO EXIT AFTER ALL?
Traders agree that the euro has scope for further gains if Greece's pro-bailout parties manage to win a majority in Sunday's election.
But as speculators' net short positioning in the euro hit a record high last week, some analysts say even if the leftist coalition, which opposes the bailout, wins, the euro could be resilient.
"The initial reaction would be negative (for the euro.) But what's likely to happen after that is a new government will keep its commitment to the euro and start negotiating with creditors," said Junya Tanase, chief currency strategist at JPMorgan Chase.
"In that case, those euro short positions that have been stemming from fear of Greece's exit will have to be wound back," he added.
Euro zone officials said that the euro zone might consider giving a new government in Athens some leeway on how it reaches their austerity target.
Against the yen, the euro stood at 100.27 yen, staying above the 100 yen mark, above which Japanese exporters offers are lined up.
The euro's latest rebound from its two-year low of $1.2280 on June 1 started after disappointing U.S. payroll data rekindled speculation of another stimulus from the U.S. Federal Reserve.
Although Chairman Ben Bernanke dropped no hint of an immediate action when he spoke last week, hopes for more policy steps were heightened after the UK government and the Bank of England unveiled a 100 billion pound ($155 billion) funding scheme for banks to boost credit on Thursday.
Thus the dollar parked near its lowest level in three weeks against a basket of currencies, with the dollar index standing at 81.81. A fall below 81.785 will take it to the lowest level in more than three weeks.
Against the yen, the dollar fell 0.4 percent to one-week low of 78.97 yen after the Bank of Japan announced no policy change, though that is in line with market expectations.
Commodity-linked currencies also held firm on hopes of more policy support for the global economy, with the Australian dollar staying near a one-month high of $1.0034 hit on Thursday. It last stood at $1.0020. (Additional reporting by Antoni Slodkowski Editing by Ramya Venugopal)
Printing money: How to create a currency - BBC News
European officials may not like it, but the prospect of Greece leaving the euro is a serious possibility.
The picture will become clearer after a Greek election on 17 June.
If the winners are hostile to the austerity measures demanded by the European Union and IMF, then Greece might have to look for a new currency.
It would not be a simple case of resurrecting Greece's old currency the drachma.
Changing currency is a complicated process that would take at least six months and probably much longer.
So the new Greek government might want to call Warren Coats.
Over the last 20 years at the International Monetary Fund, he has advised numerous countries on how to create currencies.
His clients have included nations that emerged from the Soviet Union including Kyrgyzstan and Kazakhstan.
Mr Coats has also helped Iraq and Afghanistan and, most recently, Southern Sudan to launch new money.
He says there are three phases to the process.
Currency design and production
"Deciding what and who appears on a nation's currency might sound trivial, but it is highly political," said Mr Coats.
Bosnia-Hercegovina is a good example of how difficult the situation can be.
In the late 1990s after a bloody war for independence the nation had to form a new currency.
But the three groups that make up the population, Bosniaks, Croats and Serbs could not agree on who to put on the notes - even when the choice was limited to literary and artistic figures.
"Usually two would agree one would disagree," said Mr Coats.
"This went on for many months. And in the end there was never an agreement," he said.
The head of the central bank, Peter Nicholl, who was a New Zealander appointed by the IMF, decided what went on the currency.
In Greece's case, the situation is much less fraught. It can draw on the images and figureheads used on its previous currency the drachma.
It may though have to decide on how many denominations of note there will be and what they will be worth.
There is useful rule of thumb to help with that.
Experts say the largest coin should be worth around 2% of the average day's wage and the smallest note should be worth 5% of the average day's wage.
Once those details are sorted out the notes will have to be printed, which is usually done by a specialist printing firm.
It is estimated that for a country the size of Greece that would cost $50-$60m.
There are not many firms that can handle a contract of that size and if they are busy then Greece might have to wait for its new currency.
Analysts say there is no chance of a new currency before the end of this year.
"If this was a serious consideration for 2012 the presses would have to be running already. And there are no credible rumours that that is happening," said Paul Jones an analyst at Panmure Capital.
Preparing rules for exchange
Getting the new currency printed is just the start of the process.
Greek officials would then have to work out how to get that new currency into the system.
The problem for Greece is that the population is unlikely to want to exchange their euros for the new currency.
Rules may have to be put in place to prevent large amounts of euros leaving the country.
There would have to be an information campaign to make sure the population understood how the process would work.
The question of timing also has to be addressed at this stage, ideally banks and other businesses would need enough time to adapt their systems.
The notes would have to be distributed to banks and a launch date set.
Legal issues
Notes and coins are just pieces of paper and bits of metal until they have the status of legal tender.
That requires laws which define and control the use of a currency.
When swapping a currency these have to be adapted and laws will have to be approved in Parliament.
Business will have to look closely at the new legislation to see if contracts priced in the old currency are still valid or need renegotiation.
So should Greece embark on such a lengthy and expensive process?
Mr Coats has this final thought: "The majority of Greeks want to keep the euro because they don't trust their government and central bank to do better with a new currency of their own than they did with the old one."
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