Dollar Soars High, Yen Falls With News Of Laden’s Death

By Author: russelmori
Total Articles: 25
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At Gerard Associates Ltd we continue our daily look at factors affecting markets and currencies allowing some insight into conditions affecting exchange rates.
Cash and income timing from a UK Pension or QROPS (Qualifying Recognised Overseas Pension Scheme) should be considered to maximise the Pension, QROPS and investment income taken.
Investment market volatility and currency exchange remains a challenge. The global economics are volatile and unprecedented in history. Currency exchange continues to concern expats with UK Pensions, QROPS and now QNUPS (Qualifying non UK Pension schemes).

Currency markets saw a rebound in the Dollar after the US President announced that Osama
bin Laden was killed by US military in Pakistan. The Yen fell against most currencies on this
news snapping gains against major currencies with the Dollar being the strongest among all.

Asian markets gained, Treasury markets moved upwards, Gold, Silver declined and Crude oil
fell from the 31-month highs. The threat of terrorism is seen as subsiding after bin Laden’s
death in the markets which is giving ...
... rise to risk-appetite, selling of the Yen and more people
buying the US Dollar.

Asian markets such as the Nikkei rose 1.57%, Topix rose 1.61% while Hang Seng declined
0.36% on data that Chinese manufacturing declined last month indicating that growth may
moderate after the government raised interest rates and Chinese markets remained closed
due to a holiday. US stock futures jumped as S&P 500 Futures rose 0.5% indicating that
markets may open higher when the US starts trading.

EUR/USD approached a 16-month high trading to highs of 1.4864 on speculation that the ECB
will increase rates this week to counter rising inflation, boosting EU region, GBP/USD traded
to lows of 1.6644 on the Dollar strength as UK markets remained closed yesterday even as
UK home prices stopped falling last month for the first time in 10 months as demand for
homes picked up. AUD/USD crossed 1.10 for the first time to highs of 1.1011, NZD/USD moved
to 0.8109 but later declined after the US military operation news, Gold climbed to record
$1576.95 earlier this morning but later declined to lows of $1540 on profit booking, Silver
dropped to lows of $42.21 as the CME increased margin requirements by 13% leading to the
biggest intraday drop since October 2008 and the Oil dropped from 31-month highs of
$114.14 to $112.14 levels.

EU and Germany release manufacturing data, Swiss retail sales, US ISM Manufacturing and
speeches by ECB’s Constancio, Draghi, Trichet and Wellink and Bank of England’s King and Enria to
testify form part of today’s economic calendar. Markets would be dominated by the news of
bin Laden’s killing while focus remains on US NFP Data to be released on Friday and
Thursday’s ECB rate decision.

IN THE UK
• Friday sees sterling hit new highs against US dollar of 1.6721.
• UK Bank holiday on Monday means UK data thin on the ground and any movements in GBP are based on trading.
• This morning the pound falls as PMI Manufacturing posts a disappointing 54.6, well below estimates of 57.5 and the pound dips below €1.12 and $1.65

ELSEWHERE
• Friday sees the US dollar under pressure again as Fed confirm they won’t be tightening policy.
• Yesterday, US dollar rises as news emerges yesterday that Osama bin Laden has been killed by US military.
• The rise is short lived as ISM manufacturing figures show a fall, providing evidence manufacturing is under pressure in the US.
• The euro continues to climb hitting a high of $1.4864 against the US dollar on speculation the ECB will raise rates again on Thursday.
• Most participants believe the ECB won’t increase rates until July, but Thursday’s post decision conference might suggest a June rise.
• RBA surprise some by leaving Australian interest rates on hold at 4.5% despite rising inflation pressures.

DATA TO LOOK OUT FOR
• Markets will be understandably following news on bin Laden’s and any reprisals.
• This morning Eurozone Producer Price Index expected to remain at 6.6%
• ECB interest rate decision on Thursday, will the ECB continue to put rates up again this month?
• Friday main release is Non Farm Payrolls in the US

Gerard Associates Ltd advises expats and people considering living abroad on the technical and currencyoptions available for Pensions, QROPS, QNUPS and investments in a clear format allowing all customers to make an informed choice. Our service encompasses Pension including QROPS and QNUPS and investments in a clear format allowing all customers to make an informed choice.
This with the reassurance and security of UK FSA authorised and regulated advice - essential for your security.

Russel Mori writes for Gerard Associates LTD, for more information on
QROPS, QROPS Pensions, QROPS List, QROPS Providers, QROPS Guernsey info available online.