Dollar May Rise to 120.90 Yen on a Break of 119.49 on Fibonacci, MUFG Says

(Bloomberg) -- The dollar may rise to 120.90 yen
should it pass 119.49 yen in coming weeks, Masashi Hashimoto, a
currency analyst at Bank of Tokyo-Mitsubishi UFJ Ltd., said.

Traders may accelerate buying of the U.S. currency as it
rises above so-called resistance at 119.49, which represents the
previous high set on July 31, near the conversion line on the
so-called ichimoku chart, Hashimoto said. The next resistance at
120.90 is a 50 percent reversal of the dollar's climb to a high
of 124.13 reached on June 22 from a low of 117.60 on Aug. 1,
based on the Fibonacci series of numbers.


Read more at Bloomberg Currencies News

Gold steadies above 2-week low, remains defensive

(Reuters) - Traders said weaker share prices had forced investors to lighten positions in risky assets, including commodities, until the situation in stock markets stabilized.




"The weakness in global stock markets on concerns of a credit crunch continues and this is probably a negative factor for gold," Dresdner Kleinwort said in a research note.


Read more at Reuters.com Hot Stocks News

Australia Dollar Holds Near 18-Year High on August Interest-Rate Rise Bets

(Bloomberg) -- The Australian dollar traded close
to an 18-year high on bets the central bank will raise the
interest rate next month, making the country's bond yields more
attractive for overseas investors.

The local dollar has gained against all 16 most-active
currencies this month as the odds of the Reserve Bank of
Australia raising rates a quarter-point on Aug. 8 climbed to 79
percent from 5 percent at the end of June, according to a Credit
Suisse Group index based on the exchange of interest-rate swaps.
Traders added to bets after a report yesterday showed inflation
was faster than expected in the second quarter.


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NEXT UP-Bond traders primed for mortgage theme from Bernanke

(Reuters) - Traders will listen for any suggestions from lawmakers
indicating they envision new waves of legislation to regulate
the credit industry, which many blame for loose practices that
led to the meltdown of the subprime mortgage sector.




Regulators, including the Federal Reserve Board, announced
on Tuesday their latest effort to come to grips with subprime
in a plan to conduct joint consumer-protection reviews of
non-depository sub-prime mortgage lenders. See
[ID:nN17237094].


Read more at Reuters.com Bonds News

Dollar Rises to 4 1/2-Year High Versus Yen Before U.S. Economic Report

(Bloomberg) -- The dollar rose to the highest in 4
1/2 years against the yen on expectations a U.S. report today
will show faster inflation and as the extra yield investors earn
on Treasuries over Japanese debt widened.

The dollar has risen 3.3 percent against the yen this year
as traders reduced bets on lower U.S. interest rates, causing the
10-year yield spread with Japan to widen almost a quarter point.
Traders also expect the Bank of Japan to keep its key borrowing
cost at the lowest among major economies tomorrow.


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European Government Bonds Extend Slide; 10-Year Yields at 4 1/2 Year High

(Bloomberg) -- European bonds slid, pushing 10-year
yields to the highest in more than 4 1/2 years, on speculation
central banks around the world will raise interest rates more
than anticipated to check quickening global growth and inflation.

Bunds fell with debt markets in the U.S. and Asia, sending
10-year benchmark yields, which reflect investors' perception of
future inflation, to the highest since October 2002. Traders
added to wagers on how far the European Central Bank will lift
its key rate this year after New Zealand and South Africa lifted
borrowing costs yesterday, triggering a global debt sell-off.


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Dollar steadies after slip, yen stays weak

(Reuters) - The dollar slipped on Monday after investors booked profits. It was unable to maintain a four-month high against the yen and a two-month peak versus the euro hit late last week after strong U.S. jobs data made it less likely the Federal Reserve will cut rates this year.




Traders said the dollar would continue to suffer against the euro given that euro rates are seen rising this week, but the yen would keep sliding as market participants shun it due to Japan's paltry 0.5 percent yield.


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Australian Dollar May Fall on Narrowing Yield Premium With U.S. Treasuries

(Bloomberg) -- The Australian dollar may fall as the
yield advantage of the nation's bonds over Treasuries narrows,
suggesting traders are reducing bets the interest rate spread with
the U.S. will widen.

The currency has declined 1.5 percent over the past two weeks
as the yield spread between Australian and U.S. two-year bonds
shrunk to 1.37 percentage points from 1.49 percentage points.
Traders have cut bets Australia's 1 percentage point rate
advantage over the U.S. will widen on weaker local wages data and
stronger U.S. economic figures.


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Traders Pay Premium to Export Electrcitity to France From U.K. This Summer

(Bloomberg) -- Traders taking part in auctions of
capacity on a power cable linking the U.K. and French grids paid a
premium to be able to export power to France in the three months
starting in July, after prices in continental Europe rose.

RTE France, the electricity transmission-network unit of
Electricite de France SA, and its British equivalent National Grid
Plc, today sold 150 megawatts of capacity for exports to France
from the U.K. at 4.57 euros ($6.15) a megawatt hour. The 150
megawatts of import capacity to the U.K. sold at 1.51 euros a
megawatt hour, National Grid said in an e-mailed statement.


Read more at Bloomberg Energy News