FOREX-Euro, growth currencies firm on stimulus hopes - Reuters
* Rising talk of more stimulus from Fed helps risk
* Euro bears cut positions as peripheral yields ease
* Spanish bond auction, Bernanke's testimony in focus
* Aussie jumps after unexpected gains in payrolls
By Anirban Nag
LONDON, June 7 (Reuters) - The euro hovered near one-week highs on Thursday and growth-linked currencies were supported by expectations that global policymakers will act soon to support a flagging economic recovery.
That drove investors to unwind bets on safe-haven currencies like the dollar and the Japanese yen. Both may stay under pressure ahead of Federal Reserve chairman Ben Bernanke's testimony later in the day, traders said.
Hopes for more stimulus from the Fed received a boost after Janet Yellen, the Fed's vice chair, laid out the case for more easing to bolster a fragile economy as financial turmoil in Europe mounts.
The global economy has floundered in recent weeks and risks to growth have risen given chances of a Greece exit from the euro zone and expectations that Spain will have to seek an international bailout to help its banking sector.
This has put pressure on euro zone politicians and global central banks to come up with a credible policy response to support growth. Also boosting risk sentiment in general, data showed Australian employment surged in May despite forecast of a fall, pushing the Aussie dollar to its highest in three weeks.
The single currency last stood at $1.2565, having briefly risen to $1.25859, its highest level since late May and about 2.3 percent above a two-year low of $1.2288 hit last week. Traders cited resistance at around $1.2625, the January low which was also last week's high.
"The euro can bounce up to $1.2630 but then it will be a sell on rallies as Europe's problems are ...considerable," said Stuart Frost, head of Absolute Returns and Currency at fund manager RWC Partners.
"There is also profit taking in long dollar positions. We expect Bernanke to strike a dovish tone and that will keep alive expectations of more quantitative easing."
More easing by the Fed would likely weigh on the dollar while giving a fillip to growth-linked currencies like the Australian and New Zealand dollars and to some extent the euro and the pound.
The dollar index was down 0.1 percent at 82.253.
While Yellen is known to be a dove and her comments late on Wednesday did not surprise markets, other officials, such as Atlanta Fed President Dennis Lockhart, also talked about possible need for action, saying his level of concern had risen since the Fed's April meeting.
"Since (last week's) weak U.S. job data, there's been rising speculation of more stimulus from the Fed. That is making dollar long positions uncomfortable," said Katsunori Kitakura, associate general manager of market-making unit at Sumitomo Mitsui Trust Bank.
SPANISH AUCTION
In Europe, traders said further gains in the euro will depend on the market's response to a Spanish bond auction.
The sale of up to 2 billion euros of bonds is seen as a crucial test of Madrid's ability to continue to refinance its debt. Spanish and Italian government bond yields slipped ahead of the sale.
Spain has been on investors' radar in the past two weeks, relegating worries about a Greek euro exit. While there has been no concrete progress on steps to support Spain, European sources said Germany and European Union officials are urgently exploring ways to support Spain's stricken banks.
Spain has not yet requested outside assistance and is resisting being placed under international supervision, but signs of sense of crisis hounding policymakers - such as a Group of Seven conference call on Tuesday - were making traders uneasy about holding large bearish positions against the euro.
The Australian dollar rose to three-week high of $0.9969 on upbeat jobs data, which came a day after strong growth numbers. It last stood at $0.9955, up 0.4 percent on the day.
The U.S. dollar managed to outperform the yen, which was hit broadly as risk appetite improved. The yen was also dampened by recent threats from Japanese authorities to curb its strength.
The dollar was 0.1 percent higher at 79.30 yen, off a 3-1/2 month trough around 77.65 set on June 1.
FOREX-Dollar rallies on Bernanke, euro surrenders gains - Reuters India
* Bernanke comments do not suggest more stimulus imminent
* Surprise China rate cut boosts some riskier currencies
NEW YORK, June 7 (Reuters) - The dollar rose against the euro on Thursday after Federal Reserve Chairman Ben Bernanke said the U.S. central bank was ready to shield the economy, but offered few hints that further monetary stimulus was imminent.
The euro earlier had hit its highest level since May after China's central bank cut benchmark interest rates to support growth in the world's second-largest economy.
The U.S. dollar had been hindered by expectations that the Federal Reserve would take further steps to ease monetary policy, but those expectations were countered by Bernanke's almost sanguine tone, which indicated the Fed was far from crisis mode..
"I don't think he is definitely saying that QE3 is on the way," said Fabian Eliasson, vice president of currency sales at Mizuho Corporate Bank in New York. "He's saying what he has said before, reassuring people that they will act if things deteriorate further. In other words, they are there if needed, but they don't feel they are needed yet."
The euro was last at $1.2557, down 0.1 percent from the prior close.
"Despite economic difficulties in Europe, the demand for U.S. exports has held up well," Bernanke told Congress.
Earlier the euro climbed as high as $1.2625, using Reuters data, its highest level since May 23. Traders had earlier cited resistance around $1.2625.
Against the yen, the euro also hit its highest level since May 23, at 100.61 yen, before paring gains to trade at 99.94 yen, up 0.4 percent.
Before Bernanke began his testimony to Congress, trading had been influenced by China's twin surprises on interest rates, cutting borrowing costs to combat faltering growth while giving banks additional flexibility to set deposit rates. [ID:nL3E8H76KL}.
"Rate cuts in China serve to reduce China's exposure to global weakness," said Douglas Borthwick, managing director of Faros Trading in Stamford, Connecticut. "Rate cuts in combination with a stimulus program - still to be announced, should shelter Asia somewhat from global weakness and should help keep a bid to Asian growth and currencies."
Decent demand at a Spanish bond auction and expectations that European policymakers may take further steps to support the global economy also led to demand for perceived riskier currencies such as the Australian dollar, which rose to a three-week high.
The global economy has floundered in recent weeks. Risks to growth have mounted on concerns about a possible Greek exit from the euro zone and the fragility of the Spanish banking system, putting pressure on euro zone politicians and global central banks to come up with a credible policy response.
Speculation that Spain could become the fourth euro zone country to need an international bailout prompted investors to sell the euro heavily last week, although European sources have said Germany and European Union officials are urgently exploring ways to support Spain's country's stricken banks.
Many market players were already expecting euro gains to be limited. A Reuters poll suggested the euro was unlikely to recoup recent steep losses against the dollar in the next 12 months.
"The euro can bounce up to $1.2630, but then it will be a sell on rallies as Europe's problems are ... considerable," said Stuart Frost, head of Absolute Returns and Currency at fund manager RWC Partners in London.
The dollar managed to outperform the yen, which was hit broadly as risk appetite improved. Demand for the yen was also dampened by recent threats from Japanese authorities to curb its strength.
The dollar was 0.5 percent higher at 79.56 yen after posting a session peak of 79.78, also the highest since May 23 using Reuters data, and well off a 3-1/2-month trough set last Friday.
The dollar was also bolstered against the yen by a report showing the number of Americans lining up for new jobless benefits fell last week for the first time since April, a reminder that the wounded labor market is slowly healing.
"The number was very close to expectations," said Vassili Serebriakov, senior currency strategist at Wells Fargo in New York. "We've had a deterioration in the last few months, and now it looks like claims are plateauing."
Money market fund assets fall to $2.564 trillion - Yahoo Finance
NEW YORK (AP) -- Total U.S. money market mutual fund assets fell by $8.04 billion to $2.564 trillion for the week that ended Wednesday, the Investment Company Institute said Thursday.
Assets of the nation's retail money market mutual funds rose by $2.88 billion to $890.35 billion, the Washington-based mutual fund trade group said. Assets of taxable money market funds in the retail category grew by $1.6 billion to $703.59 billion. Tax-exempt retail fund assets rose by $1.28 billion to $186.77 billion.
Meanwhile, assets of institutional money market funds fell $10.92 billion to $1.674 trillion. Among institutional funds, taxable money market fund assets fell $10.97 billion to $1.588 trillion; assets of tax-exempt funds rose $50 million to $86.41 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 fell to 0.32 percent from 0.33 percent. It fell to 0.51 percent from 0.52 percent on two-and-a-half-year CDs. It was flat at 1.12 percent on five-year CDs.
Money skills programme to help Neet young people goes national - Children & Young People Now
A financial education programme for young people not in employment, education or training (Neet) is expanding following successful pilot projects.
Many young people do not have a household budget, so Barclays Money Skills aims to give them the skills to manage their finances. Image: Barclays
Barclays is linking up with a consortium of youth and information charities – the National Youth Agency, Citizens Advice, Rathbone UK, UK Youth, YouthNet, and Youth Access – to roll out the Money Skills champions programme.
The project aims to recruit young people who are classed as Neet, giving them skills and “money know-how” training to then go on to share the knowledge with their peer group.
Eventually it is hoped that 5,000 young people will be trained as “champions”, who can then go on to share financial capability skills with up to 100,000 other young people.
Fiona Blacke, NYA chief executive, said: “Young people are facing significant challenges and want to reach out to people they trust for help and advice.
“It is essential that the information they receive is accurate, to ensure they are appropriately equipped to negotiate financial problems and money management issues.
“The programme will prepare young people who need it most with skills and knowledge to support themselves and their friends."
Pilot projects for the programme have been completed in eight areas across England.
More than 100 of the 450 adult support workers that the project needs to roll out nationwide have so far been recruited.
Michelle Smith, head of community affairs in the UK for Barclays, said: “It is vital that young people are given the best start in life.
“Having good money management skills, particularly when faced with a constrained budget and trying to be financially independent for the first time, is vital to enhancing their life opportunities and preparing them for a secure future.”
Forex: AUD/USD firm above 0.9900 - NASDAQ
FXstreet.com (Barcelona) - Fourth consecutive daily advance for the AUD so far, bolstered by increasing risk appetite in the global markets.
After a dreadful May, the Aussie dollar is finding some relief at the beginning of June: the RBA cut the overnight rate 'only' 25 bps on Tuesday, against a widely expected 50 bps; GDP figures for the first quarter have surprised growing 4.3% YoY and the unemployment rate has come in at 5.1% early in the Asian session, in line with expectations.
J.Kruger, Technical Strategist at DailyFX, affirms that the bearish outlook on the cross remains unchanged, although he assesses the likeliness of a rebound due to technical studies showing 'oversold' conditions, "…and we see shorter-term risks for more of a bounce towards 1.0000-1.0200 area where the next major lower top is sought out ahead of underlying bear trend resumption…".
AUD/USD is now advancing 0.32% at 0.9946, with the next hurdle at 1.0016 (high May 15) ahead of 1.0028 (50% of 1.0475-0.9581) and 1.0070 (high May 14).
On the flip side, a violation of 0.9875 (hourly sup Jun.6) would bring 0.9767 (MA10d) and 0.9738 (hourly low Jun.6).
Calls to stop British aid money pouring into Argentina: Country owes UK taxpayers £225MILLION - Daily Mail
By Gerri Peev
|
Argentina owes British taxpayers 225 million, it emerged, as the government faced calls to halt any further support to the aggressor country.
Ministers have been urged to oppose any further World Bank loans to Argentina, after an escalation of tension over the Falkland Islands and a threatened boycott of British goods.
The World Bank - which Britain is a major shareholder of - has shelled out 10.4 billion in loans to Argentina. The UK’s share of this is over 225 million, according to parliamentary answers given to Tory MP Priti Patel.
Both Foreign Office Minister Jeremy Browne and Barack Obama have spoken out against the World Bank loan to Argentina which currently stand at 10.4 billion
The TaxPayers’ Alliance yesterday launched an online petition called StopFundingArgentina.org.
It urged British ministers to use their votes to oppose further loans of the World Bank to Argentina.
A spokesman for the Taxpayers’ Alliance said: ‘Britain can and should act to stop further World Bank loans to Argentina. This is a key opportunity to show that our aid policy reflects rather than ignores Britain’s broader national interests.
The Argentinian government has launched recent attacks on British interests by advocating a boycott of British goods. It has also tried to claim sovereignty over the Falkland Islands.
Britain’s response has been muted so far.
In contrast, President Obama has already ensured that America will oppose any new loans to Argentina because the country had failed to respect its obligations to earlier lenders.
Argentine President Cristina Fernandez de Kirchner
Meanwhile the Foreign Office yesterday accused Argentina of ‘domineering’ behaviour ahead of an official visit to mark the 30th anniversary of the liberation of the Falklands.
Foreign Office Minister Jeremy Browne said he was disappointed at the Argentinian government’s aggressive stance.
Buenos Aires is launching criminal proceedings against British oil firms operating off the Falkland’s coastline.
Mr Browne said Argentina seemed determined to destroy the islands’ economic livelihood.
Ahead of his visit to the remote isles, Mr Browne said: ‘Sometimes there is a narrative from Argentina - and the decolonisation committee is prompted by that narrative - that here is Britain, this big, global power, and poor Argentina, that is going to the decolonisation committee at the UN to try and have their voice heard, well that is the Argentinean narrative.
‘Let me put forward what I think is a much more accurate, contemporary narrative, which is that there is a G20 country, at the top table of world affairs, one would imagine keen to be responsible on the world stage, with a population of about 40 million people, seeking to put an economic blockade in place which will, in tangible terms the ambition of that is, to impoverish an isolated community with about 3,000 people.’
He added: ‘Which party in this arrangement are behaving in a domineering way and who are the vulnerable population who are having to make their way in the world despite a much more powerful country going out of their way to make that harder for them? I think that it’s pretty clear cut.’
Diplomatic sources have warned that the UK is facing a ‘difficult few months’ with Argentina during this anniversary year.
June 14 marks exactly 30 years since the liberation of the Falkland Islands.
The British Government is not organising its own official commemorations this year because it is Whitehall policy to use public money only for 25th, 50th, 60th and 100th anniversaries.
But Mr Browne will travel to the Island to attend the annual Liberation Day service on June 14.
A spokesman for the Department of International Development said: ‘No British taxpayers’ money is spent on World Bank loans to Argentina. The Secretary of State will consider Britain’s position on any future World Bank loans when the time comes.’
However, Britain’s share of Argentina’s outstanding loans is over 225 million, based on the UK’s shareholding of the two World Bank institutions who lend to the country.
Money looming even larger over Nov. election - CBS News
(CBS News) WASHINGTON -- President Obama is halfway through a two-day fundraising swing through California.
His trip underlines the importance of money in the 2012 campaign.
It's also being criticized by Republicans who say the president is spending too much time with celebrity Democrats.
The money-raising trip took him to San Francisco and Los Angeles, two towns where he hasn't been a stranger in recent weeks and months, spending plenty of time with the wealthy and famous in the entertainment and tech communities.
But his campaign tweeted Thursday that 98 percent of its donations in May were less than $250.
Either way, it's all about the money.
Mr. Obama got a warm welcome from campaign donors in the Los Angeles gay community Wednesday night, a group he considers crucial to his re-election prospects.
"I could not be prouder of the work we've done on behalf of the LGBT community," Mr. Obama said.
During his speech, he ticked off accomplishments under his watch, such as ending the war in Iraq.
But he also warned the audience about what's ahead during the campaign, and why their donations matter, saying, "You're going to see hundreds of millions of dollars in negative ads, because the other side's not offering anything new."
To build a war chest that would enable him to counter those ads and run his campaign, Mr. Obama is spending two days on the West Coast to raise an expected $5 million.
He will have done 153 fundraisers since formally declaring his candidacy for re-election a little over a year ago - nearly double the number President Bush had done at the same point in 2004.
With the majority of outside super PAC dollars going to Republicans, raising money will be crucially important for Democrats in this election cycle.
In the Wisconsin recall election, unions spearheaded the effort to unseat Gov. Scott Walker after he successfully limited their power. But the union effort to get out the vote was overcome by the GOP advantage in money and TV advertising. Walker raised $30 million. His challenger, Milwaukee Mayor Tom Barrett, raised only $4 million.
Rep. Steve Israel, D-N.Y., chair of the Democrats' campaign committee, warned that the Wisconsin results should be "a wake-up call" that the party needs money for TV ads to compete with the super PACs.
A California political power broker once put it this way: "Money is the mothers' milk of politics."
Four years ago, candidate Obama outspent his Republican opponent, Sen. John McCain by more than two-to-one - $730 million to $333 million.
To see Bill Plante's report, click on the video in the player above.
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