Euro ticks higher vs dollar as Ireland hopes rise

11/19/10 15:42 EST NEW YORK -The dollar dipped against the euro Friday as officials from Ireland, the European Union and the International Monetary Fund negotiated a financial aid deal for the country.

Ireland appears likely to receive a loan to bolster its troubled banks, which would ease fears that Ireland's troubles would lead to a broader loss of confidence in European nations and raise borrowing costs for other weak economies like Portugal and Spain.

Uncertainty over whether creditors would suffer heavy losses on their Irish investments have weighed on the euro for two weeks, dragging it down from a nine-month high of $1.4281 reached on Nov. 4. The prospect of a rescue for Ireland has helped the European currency regain some ground in the past several days.

In late trading in New York, the euro edged up to $1.3672 from $1.3635.

The euro remains significantly higher than a 4-year low below $1.19 it touched in early June, when Greece's debt problems had driven down the euro. A euro110 billion rescue for Greece helped ease its short-term funding problems.

Worries about slower growth in the U.S. and the Federal Reserve's plan to support the economy through lower interest rates helped tug the euro higher throughout summer and early fall despite lingering concerns about debt in Portugal, Spain and Ireland.

Elsewhere, the dollar traded mixed. The British pound fell to $1.5973 from $1.6044, while the dollar was almost unchanged at 83.49 Japanese yen from 83.45 yen late Thursday

The U.S. currency fell to 1.0183 Canadian dollars from 1.0214 Canadian dollars, and dipped to 0.9952 Swiss francs from 0.9965 Swiss francs.

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New Zealand Dollar: Risk of Sharp Declines on Financial Market Stress

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Exploring the dollar Proof Concept, sector by sector

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Seeking Alpha var sector_slug = "etf-content"; by: Roger Nusbaum November 21, 2010  | about: AXID / AXIT / BRAF / CAT / EWS / EWT / IPK / IPN / MGYOY.PK / NKE / TWON     Email

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As a follow up to Friday's post ,deconstructing a Dollar Proof portfolio from Morningstar, I thought it might be interesting to explore the Dollar Proof concept going sector by sector, as while not every equity sector is so easy to add foreign exposure to, many are. In going sector by sector, the context is the ten big sectors that comprise the S&P 500. While there are ETFs for each sector, I think a portfolio that includes individual stocks is a better way to go.

Technology is a difficult sector for me as I believe the sector is still broken from ten years ago. There are plenty of tech stocks that have done well, but almost all of the most "important" domestic tech stocks are a long way below where they were ten years ago. I'm not thrilled with the broad foreign tech ETFs like IPK from SPDR and AXIT from iShares, each very heavy in Japan. I don't mind broad domestic exposure in this sector, but I think Taiwan would be a good place to look for dollar proofing. There is the iShares ETF EWT, the IndexIQ Taiwan Small Cap TWON-- which is not quite as heavy in tech stocks as EWT-- and there are several stocks easily traded in the US, most of which have very high yields.

I am quite comfortable with the financial sector for the simple reason that, from the top down, the sector warned very early on of trouble (its weight in the SPX and the inversion of the yield curve several years ago). It has been quite clear to me that domestic banks and European banks are best avoided for now--this might be the case for years to come. I've been equally vocal about avoiding Chinese banks as well.

We have had good luck with bank stocks from Chile, Australia and Canada. The banks from Norway, Singapore, Malaysia and Israel also seem to be on relatively firm ground in terms of how the businesses were run before the crisis, and I believe these can do well going forward. I also think there is utility in the publicly traded exchanges, including foreign ones. We also own an index provider.

Anyone interested in Singaporean banks could use iShares Singapore (EWS) as a proxy, as the fund is 50% financials, and while I am not wild about Brazilian banks, there is an ETF for that; GlobalX Brazil Financial Sector ETF (BRAF). Moreso than most (or even all) of the other sectors, I think individual stocks are the way to go for financials, as ETFs seem to have too much exposure to the "wrong" places.

Energy might be the easiest sector to add foreign exposure because just about every country has a big oil company. Even Hungary has its Exxon with MOL Magyar Olaj (MGYOY.PK). To be clear, I don't have any interest in the name, but it is accessible for anyone who is interested. In addition to plenty of individual stocks from all sorts of countries, there are plenty of ETFs that are broad within the sector and also very specialized--we recently added a coal industry ETF. Work still needs to be done to properly research names and segments within the sector, but finding choices is very easy.

Healthcare seems like an easy one for dollar proofing but I might give it a Lee Corso "not so fast, my friend." I think it is easy, but getting there requires a willingness to go beyond the big pharma stocks. If you agree with that statement then it rules out the broad sector ETFs, or more correctly, means not relying solely on them. Above a certain account size we use a domestic big pharma, a Swiss big pharma, a Danish specialty company and a foreign generic company.

One theme that I think could be added at some point is medical tourism, which would be foreign exposure, but I would need direct access as the pinksheet volume in these names is too thin. I personally would stay away from Chinese pharma, as it seems like the odds for something going wrong are quite high. Also, many of them are reverse mergers, which raises other problems.

For anyone not interested in going really narrow with the healthcare sector, I don't think the domestic ETFs are a bad hold. I think there is also longer term opportunity in this space-- with medical devices, which is mostly domestic-- but there are a few foreign stocks here as well. One thing to consider in this space is that many of the individual stocks have very good dividends, which might be difficult to capture in a broad ETF.

I'll address staples and discretionary together because some of the funds lump them together. For staples we have food, tobacco and alcohol for their very high dividends-- which again, may not be captured in an ETF. For discretionary we use one ETF and Nike (NKE), which aside from what I think is a great product line also captures foreign aspirational volume -- note this makes Nike a beneficiary of, not a proxy for. I can see increasing the foreign exposure here via an ETF. There is one from EG Shares and two from GlobalX. I'm not sure what I would add in or when, but there is long term value in capturing the consumer in countries where a middle class is ascending.

Industrials are also an easy sector to add foreign exposure, but I would avoid broad funds like SPDR International Industrials (IPN) or iShares International Industrial (AXID), because they are heavy in Japan and Europe. There are plenty of themes in this sector-- like water and infrastructure-- which lend themselves to foreign, and defense, for which I would go domestic-- and there are ETFs for these. There are other themes like solar and wind. Each of these has their share of headwinds these days, but the funds exist. I think a mix of ETFs and stocks is best here; we have Caterpillar (CAT) and a Swedish company, and for people willing to use individual stocks, there are names to choose from many countries.

Obviously, the materials sector has plenty of individual stocks and thematic ETFs; miners of various metals and resources, chemical companies and food related. Stocks or ETFs, I think either can work and the access is very easy. This sector should be no problem for someone who cares about dollar proofing, given the abundant choice.

Utilities are another easy one, especially for anyone willing to use individual stocks and do some research. There are many ADRs from all sorts of countries to choose from and some ETFs. The funds are not terribly precise but decent yield can be had from the funds, which doesn't happen often.

If energy is not the easiest sector to add foreign exposure then telecom is. Just about every country has a big phone company--even Morocco is accessible through this sector. We use one foreign stock with a very high yield and a domestic ETF with a decent yield. Obviously, this sector is a great source of yield for a portfolio.

In general, the narrower you are willing to go, the easier it will be to avoid some lousy markets and groups of stocks. With several sectors I believe using individual stocks will make for a better risk adjusted result, however-- there will be a lot more work involved. I would not rely exclusively on any type of product, be it ETFs or illiquid pink sheet stocks, but those two along with NYSE or regular Nasdaq ADRs should get the job done. Another reason to consider individual names is that some segments are not covered by ETFs with some examples being toll roads, fisheries and cement companies, although looking under the hood of ETFs at some of the smaller holdings can be a good starting point for research of any segment or sector.

Disclosure: No positions

Roger Nusbaum is an Arizona-based financial advisor who builds and manages client portfolios using a mix of individual stocks and ETFs. Roger writes a popular blog, which focuses on 'top down' asset allocation. We think Roger is particularly insightful on exchange-traded funds, risk management... More
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Dollar steady, climbing Asia stocks after fed

Hong Kong - Japanese shares gained 2 percent on Thursday after the Federal Republic of Reserve?s new bond purchase was close enough, expectations investors sell to keep yen and the search for higher yielding values. After fall overnight $ stabilized, with dealers hesitant to add significant bets against the currency to the euro is a 10-month high, touched but dealer hinaufgeschiebt copper and oil prices anyway. Asian stocks edge up to a two-year high in the wake of fed decision mainly due to the purchase in 'resources the section, although overall response was dampened. Also there was a variety of events, links of this week, the volatility of the capital markets, including policy meeting of the Bank of England, Bank of Japan and the European Central Bank and the October U.S. wage and could inject payrolls report. For Asia, after the Fed pledged, usually mid-maturity Government bonds raised to buy $ 600 billion be capital flows in the region a strengthening of economic activity likely to speed up but also increase the risk of more stringent capital controls. "Companies more Treasury bond purchases, the hope is the risk appetite to spend the catalyst for the people, will offer companies in particular," Sean Darby, Asia strategist with Nomura in Hong Kong, said in a statement. "We expect that Asian shares well stay offer, but the additional QE raises the spectre of capital controls in ASEAN and parts of Northern Asia." ·         Japan's Nikkei stock average was 1.9 percent, with shares of large exporters, the largest ski lifts to the index after the yen night sold. ·         The MSCI index of Asia Pacific stocks outside Japan edges by 0.4 per cent to the highest since June 2008. Commodity stocks were early winners in Asia after the Fed decision. ·         The euro was basically flat on the day after hitting $1.4175 Wednesday at $1.4110. ·         The dollar was 81.14 yen on pace for a fourth day of profits up slightly compared to the yen. ·         Traders were quick to other topics for trade find fed. The dollar was up 0.4 percent against the Canadian dollar at C$ 1.0092, after the Canadian government markets with a decision to block BHP Billiton's 39 billion dollar bid for Potash Corp. · U.S. Treasury of futures surprised 10 year one-month high increased to 0.5 percent a while slipped 3 basis points to 1.08 percent in the spot market, 5-year Treasury bond yields, with 43 per cent of the Fed new plans for bond purchase fall terms between 4 and 7 years. * Three month copper on the London Metal Exchange traded one reached by 1 per cent to $8,399.75 per tonne, creeping back towards the two-year high last week Tuesday.

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Euro to keep profits against dollar probably busy week

The euro will be expected to be stable next week to go for three straight days against the dollar as worry about debt strapped Ireland have relaxed, although the risk of infection to other economies in the euro area of next profits could dampen provide continued.

The euro will be expected to be stable next week to go for three straight days against the dollar as worry about debt strapped Ireland have relaxed, although the risk of infection to other economies in the euro area of next profits could dampen provide continued.

The euro on Friday rose across the Board. In the late afternoon trading was the euro by 0.3% to $1.3684 on the trading platform EBS as high as $1.3733 get up.

Sliding doors on a seven week low of $1.3446 early in the week, the euro ended the week little against the dollar changed. The month was the euro by 2%.

Hopes Ireland close was a thing for tens of billions of euros of its European partners and the IMF received helped push euro about $1.37 overnight.

The resistance to $1.3750 however advised dynamic ground to a halt.Traders said this level is probably keep to get more details on the Irish rescue plan until markets.

In the Forex market stabilised mood for jetzt.Die euro one-month euro/dollar risk reversal, a barometer of mood, started currency options, crawl investors starting short-term to receive less euro bearish, higher, suggesting.

Of the euro risk reversal still showed a "put" bias, but it gestiegen.Am is Friday, puts traded from extremely low levels higher – middle of 1,175 volumes, with bids on 1.55 Vols.Am Thursday went bids to puts to 1.60 euros from 2.025 early this week, an approximately 2-1/2-month deep.

"Overall the crisis in Ireland, probably come to an end, for now...""(which) means dollar against the euro can alleviate a bit their short positions, consolidate as investors", said Marc Chandler, global head of currency strategy at Brown Brothers Harriman in New York.

In the United States investors on a range of data downloads including revised figures on gross domestic product for the third quarter, durable goods orders and personal income konzentrieren.Alle to an economy should show holiday shortened in one, which is again gradually on the right track said analysts.

The minutes of the last fed are meeting for release next week, but are probably too much buzz given the scale, the markets in quantitative easing, before the Fed policy on November 3 announced prices had to generate.

The minutes can give up some hints what it would take to see a third round of the QE.

Outside of the data in the United States celebrates the Thanksgiving holiday next Thursday, the markets on developments in Ireland will remain focused.

A lot to help Ireland, dealing with his ailing banks be revealed next week, EU sources said the details of a tax four year plan, to save € 15 billion at the same time published at the Freitag.Irland.

Avery Shenfeld, said senior economist at CIBC World markets in Toronto, Ireland is a "look what economically lies before us for greater Spain, that the next target for bond market vigilantes could be together with Portugal."

Shenfeld said Spanish debt pose a much larger cloud over other banks in Europe risks and Spain might need a much larger safety net loan if it fails to meet its deficit targets.

"All good reasons why, at least until the dust settles to worth milling positions in the euro", said Shenfeld.

James Dailey, chief investment officer and senior portfolio manager with TEAM asset strategy Fund, a fund based in Harrisburg, Pennsylvania, ECHO's Shenfeld view.

"I think the euro situation is a lot of highs and deep haben.Und finally next year, it's going to significantly weaker, especially against commodity currencies, move" Dailey said who manages assets of 45 million $.

"He believes the euro is likely in the early stages of a long-term downward trend."Generally speaking, we are probably in the range of $1.10 and $1.40 Handel.Es is a wide range, but the dollar and the euro will probably alternating bouncing to how each country or region through rescue operations.

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Than euro mixed dollar recovers

The US dollar trade traded mixed against major currencies in the late New York on Friday as the euro restored by confidence that Ireland's debt problems could be solved.

Euro fluctuated between 1,365 and 1,370 against the dollar in the most Friday's trading session.

Ireland could received financial support from the euro zone partners but remained unclear for now how much credit required to resolve debt problems.

Federal Reserve Chairman Ben Bernanke, back to critics of the Fed latest bond purchase programme in a Conference at the European Central Bank in Frankfurt taken.His speech helped narrow the U.S. Treasury yields, leading to a decline in the dollar against the yen.

In the late Friday, the increased trade, bought 83.49 yen, compared with 83.45 late Thursday, dollar and euro on 1.3672 1.3627 dollars.

The British pound fell from 1.6004 on 1.5973 US Dollar.Der dollar fell from 0.9965 adjusted 0.9952 against the Franks and fell to $1.0214 1.0183.

Source: Xinhua

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As dollar weakens further, NZD/USD continue to achieve higher highs

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S&P 500, Treasuries, Gold, & Dollar are At Key Price Levels

Thursday was another example of Mr. Market playing games with traders and investors as equities and precious metals took part in a strong rally. Some market prognosticators noted short-term oversold conditions across the board while others discussed the potential for a strong reversal that could potentially take out recent highs. In addition to the regular banter, to the average retail investor the market sure looks rigged when the government decides to sell a large stake in a massive IPO offering and a shaky tape suddenly becomes stronger than garlic.

There is a lot going on in the news as of late, and the expiration of the Bush tax cuts looms large on the minds of many, particularly small business owners. So the real question becomes, what should traders be watching or paying attention to before the light volume Thanksgiving week? The answer is simple, watch the tape! The market will provide plenty of clues and it will eventually tip its hand, experienced traders will wait for this process to unfold.

At this point in time, it is a bit early to begin making predictions as to which direction the equities market will go. What we do know is that the market was oversold in the short-term, so this could be a pause before prices turn lower. In contrast, this could be the beginning of another bullish move breaking recent highs on its way to a \"Santa Claus\" rally. My stance is neutral at this point in time; S&P 1200 should offer significant overhead resistance while S&P 1170 / 50 period moving average is near term support. The chart listed below illustrates these key levels:

S&P 500

If price were to break out above S&P 1200 on strong volume, it is likely that we will see a retest of the recent highs around the 1220 area. Consequently, if price tests the S&P 1170 area and fails price will likely be magnetized to the 1140-1150 area. We will have our answers in due time, but until a definite direction is known, patience is warranted.

Treasuries

As discussed in my previous article, the ProShares Ultra Short 20+ year treasury ETF ( TBT ) bounced off of the 36 level and put on a short lived rally only to settle toward the bottom 1/3 of its recent price range. After the recent breakout, it would be constructive to see TBT consolidate before confirming a direction. The chart below shows the key levels on TBT:

U.S. Dollar

Instead of illustrating a gold chart, let us focus our attention on the U.S. Dollar Index. The chart below shows the dollar has pulled back and is now testing the 50 period moving average. I am anticipating a retest of the recent breakout over double tops and this key level is illustrated below. If support holds firm, higher prices for the U.S. Dollar in the near term will be likely.

The Contrarian Trade

Thursday's price action in the S&P 500 offers a great example of the power of options, which are traditionally overlooked by most equity traders or investors. While I did not personally enter this trade, I did enter a short position with tight stops around the S&P 1197 level using futures contracts for a short term trade. I was looking for a short term decline which we subsequently received in the aftermarket and my limit orders were triggered.

The option trade that I discussed with one of my trading buddies and mentor, involved getting short Apple ( AAPL ) when its price was around $309.50/share. While I did not place this trade as I felt I had plenty of short side exposure via my e-mini futures position, the trade would have worked quite well. So the trade listed below is not a recommendation, but an illustration of how options can be a contrarian traders' best friend.

AAPL has been trading in the $300 - $320 per share range for several weeks having broken out above $320 only to be smacked down into the range. During the recent selloff, AAPL crossed down through the $300 level only to encounter strong buying that pushed it above the key $300 area by the close of trade that day. Thursday's rally had AAPL trading above $309.50/share and the 20 period moving average was right around the 310 level as can be seen from the chart below.

The 20 period moving average provides an adept option trader with a key level which he/she can define the risk of a short position using options. Through the utilization of a contingent stop based on AAPL's stock price, a trader using this setup could place a stop around the $311.25 area to define their ultimate risk. As of Thursday, the AAPL weekly options that expire November 26 began trading.

The trade listed below is a put debit spread:

Buy 1 AAPL Nov. 26 310 Weekly Put - $5.00 / contract based on Thursday's close
Sell 1 AAPL Nov. 26 300 Weekly Put - $1.47 / contract based on Thursday's close

AAPL stock closed around $308.43 / Share

The profitability chart reflecting this trade is below:

The maximum risk this trade has per leg was around $350, however through the use of the contingent stop around $311.25, the risk per leg is around $150. The maximum gain would be $650 per leg if at expiration in one week AAPL was trading below $300/share. In the first hour of trading, AAPL sold off below $306 per share. If an option trader had more than one contract on, he/she could take partial profits and place a stop at the entry price insuring a winning trade and allowing room for the trade to run.

Obviously the trader may want to adjust his/her stop based on market conditions, but this is simply an example of what can be accomplished with options. Once the trader understands how to determine the risk that an option trade assumes, he/she can build trade constructions to fit nearly any trading style or strategy. For a contrarian trader, options offer an unbelievable opportunity to mitigate risk and maximize profits. Learning how to trade options does take time and effort, but the potential returns options offer when they are used appropriately are unparalleled.

If you would like to receive my Free Options Strategy Guide & Trade Ideas join this free newsletter: http://www.OptionsTradingSignals.com

J.W. Jones

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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Dollar is essential

The dollar broke out over the intermediate term downtrend line on 11/16 and is now consolidating the gains since the low point on 11/4. The impulsive move since 11/4 the previous exceeded swing high, and in combination with the trendline breakout, litt ...

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Australia - The dollar and beef exports

  THE Australian dollar's historic eclipse of the US greenback this week has highlighted the dramatic changes being seen in the international grinding meat trade this year caused by currency movements. The Australian dollar continued its upwards spiral, hitting US100.2c during trading on Tuesday.Driven squarely by currency, Australia's manufacturing beef shipments to the US for the month of October totalled just 8951 tonnes. That's the lowest figure for any month since January 1996, and a 45pc slide on the same month last year, as exporters seek customers in other parts of the world less exposed to currency changes.Russia, on the other hand, has seen a dramatic five-fold increase in Australian grinding beef imports over the same 12-month cycle.So significant is the currency impact that some analysts are suggesting that after 40 years dominating Australia's grinding meat price trends, the US may no longer provide the price-setting role for Aust-ralian 90CL manufacturing product.Instead those price signals may now be set by a basket of "second-tier" markets, including Russia, Indonesia and others.Recent reports out of the US illustrate just how profound the currency impact has been.US Cattle Buyers Weekly publisher, Steve Kay, reports a record-wide price premium has emerged for imported lean (90CL) beef over US domestic 90CL beef, causing headaches for importers and some US end-users.While total beef imports to the US for the year to date are down only 5pc on the same period last year, imports from Australia (predominantly frozen 90CL) are down 27pc, and from New Zealand, down 6pc.So far this year, Australia has filled only 40pc of its tariff-free US quota of 379,0000t, sliding to second place behind Canada as the largest outside supplier to the US...

Source: farmonline.com.au

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Euro ticks higher vs dollar

AP

The dollar dipped against the euro on Friday as officials from Ireland, the European Union and the International Monetary Fund negotiated a financial aid deal for the country.

Ireland appears likely to receive a loan to bolster its troubled banks, which would ease fears that Ireland's troubles would lead to a broader loss of confidence in European nations and raise borrowing costs for other weak economies like Portugal and Spain.

Uncertainty over whether creditors would suffer heavy losses on their Irish investments have weighed on the euro for two weeks, dragging it down from a nine-month high of $1.4281 reached on November 4. The prospect of a rescue for Ireland has helped the European currency regain some ground in the past several days.

Advertisement: Story continues below

In late trading in New York, the euro edged up to $1.3672 from $1.3635.

The euro remains significantly higher than a four-year low below $1.19 it touched in early June, when Greece's debt problems had driven down the euro. A 110 billion dollar rescue for Greece helped ease its short-term funding problems.

Worries about slower growth in the US and the Federal Reserve's plan to support the economy through lower interest rates helped tug the euro higher throughout summer and early autumn despite lingering concerns about debt in Portugal, Spain and Ireland.

Elsewhere, the dollar traded mixed. The British pound fell to $1.5973 from $1.6044, while the dollar was almost unchanged at 83.49 Japanese yen from 83.45 yen late Thursday.

The US currency fell to 1.0183 Canadian dollars from 1.0214 Canadian dollars, and dipped to 0.9952 Swiss francs from 0.9965 Swiss francs.

Gold for current delivery closed at $1,352.20 per troy ounce on Friday on the New York Mercantile Exchange, down from $1,352.90 late on Thursday.

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