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The Bloomberg Dollar Spot Index (BCOM) climbed for a fifth day, rising 0.4 percent by 7:01 a.m. in New York, as the euro tumbled to a 22-month low. New Zealand’s dollar led losses against the greenback after the central bank said the kiwi’s strength is unjustified, while silver slumped 1.1 percent and gold fell to an eight-month low. Copper dropped 0.5 percent and the yuan reference rate was set at a two-week low. Spain’s bonds rose with Italy’s as
the Stoxx Europe 600 Index (XU100) climbed 0.4 percent. Standard & Poor’s 500 Index (ADSMI) futures were little changed.
The U.S. reports durable-goods orders and initial jobless claims numbers today after new-home sales surged in August to the highest level in more than six years. The stronger data are leading traders to bring forward bets on higher U.S. interest rates, buoying the dollar, as monetary policy from the euro area to New Zealand weighs on other currencies. Some banks played roles in fake trade at the port of Qingdao, said Wu Ruilin, deputy head of China’s State Administration of Foreign Exchange.
“The theme during the second half of this year is dollar strength,” Yannick Naud, a money manager at Sturgeon Capital Ltd. in London, said in an interview on Bloomberg Television’s “On The Move” with Jonathan Ferro. “The economy is growing very strongly, we have a very good set of results and the central bank will probably be the first, or the second after the Bank of England, to increase interest rates.”
‘Downward Adjustment’
The Bloomberg Dollar Spot Index is heading for its biggest quarterly gain since the period ended Sept. 30, 2011, and touched the highest level since June 2010 today.The greenback strengthened against all 31 of its major peers, adding 0.2 percent to 109.25 yen. The euro slid as low as $1.2697, dropping below $1.27 for the first time since November 2012, amid bets the ECB will boost monetary stimulus. Policy makers are ready to use “additional unconventional instruments” to further address the risk of a prolonged period of low inflation, Draghi told Lithuania’s business newspaper Verslo Zinios in comments published today.
‘Gone Vertical’
The kiwi tumbled 1.5 percent to 79.58 U.S. cents, and touched 79.45 cents, the least since September last year, as Reserve Bank of New Zealand Governor Graeme Wheeler said in a statement that the currency is “susceptible to a significant downward adjustment.” The Australian dollar weakened 0.9 percent to 88.04 U.S. cents after touching 87.92 cents, the lowest since Feb. 4.The Bloomberg Commodity Index of 22 raw materials fell 0.3 percent. Gold dropped as much as 0.8 percent to $1,207.04 an ounce, the lowest since Jan. 2, and silver retreated to $17.499 an ounce.
The yield on 10-year U.S. government bonds was little changed at 2.55 percent after the U.S. notes fell yesterday for the first time in five days. The Treasury will sell $29 billion of seven-year notes today after receiving the lowest demand at a five-year auction this year at yesterday’s sale, as the prospect of higher interest rates dims demand for U.S. debt.
The odds the central bank will increase its benchmark rate by July 2015 have risen to 56 percent from 52 percent at the end of August, federal fund futures show.
‘Faked, Forged’
Copper slipped to $6,705.75 a metric ton and nickel slumped 0.7 percent to $17,273 a ton after the allegations of fake trade documents in China. The People’s Bank of China reduced its fixing by 0.06 percent to 6.1497 per dollar, the weakest since Sept. 9.Companies “faked, forged and illegally re-used” documents for exports and imports, including in Qingdao, SAFE’s Wu said. The fraudulent trades have “increased pressure from hot money inflows and provided an illegal channel for criminals to move funds,” Wu said. China is the biggest buyer of industrial metals.
“Some companies used the trade channel to bring in hot money,” said Zhou Hao, a Shanghai-based economist at Australia & New Zealand Banking Group Ltd. SAFE’s investigation “will likely further cool down hot money inflows and commodity imports could slow as banks will likely conduct more careful checks on documentation.”
The U.K. government said today it will seek to criminalize the manipulation of seven benchmarks including the WM/Reuters 4 p.m. London currency fix, the Sterling Overnight Index Average, the London Gold Fixing and the ISDAFix, as it tries to revive confidence in the integrity of London as a financial center.
Air France
The Stoxx 600 rose after posting its biggest advance in almost a week yesterday. Air France-KLM Group advanced 2.9 percent after proposing to immediately drop a low-cost subsidiary outside its French and Dutch home bases following a 10-day strike. Ryanair Holdings Plc climbed 2.1 percent after saying full-year profit will be toward the upper end of its forecast.Telecom Italia SpA gained 3.5 percent after people familiar with the matter said former Telstra Corp. Chief Executive Officer Sol Trujillo is seeking to raise as much as 7.5 billion euros to bid for a stake in the carrier.
Hennes & Mauritz AB fell 3.8 percent after reporting that September sales growth advanced at the slowest pace in a year.
Bonds Gain
Spain’s bonds rose for a third day, pushing the 10-year yield four basis points lower to 2.11 percent, while the rate on similar-maturity Italian debt dropped four basis points to 2.34 percent.Barclays Plc and Goldman Sachs Group Inc. are marketing bonds in euros, according to a person familiar with the matter, who asked not to be identified because they’re not authorized to speak about it. Credit Suisse Group AG sold 1.75 billion euros of debt yesterday.
West Texas Intermediate oil was little changed at $92.81 a barrel as Brent oil fell 0.2 percent to $96.79 a barrel. WTI has dropped 12 percent since the end of June and Brent is down 14 percent on signs of plentiful supplies even as the U.S. is bombing Syria. U.S. and Arab warplanes struck small refineries in eastern Syria controlled by Islamic State extremists, according to the Pentagon.
Oil demand is growing at its slowest since 2011, while the U.S. shale boom means production outside OPEC is rising by the most since the 1980s, the Paris-based International Energy Agency said in a monthly report Sept. 11.
Saudi Arabia’s Tadawul All Share Index ended four days of declines and Abu Dhabi’s ADX General Index added 0.3 percent. Dubai’s DFM General Index rose 0.5 percent. Marka PJSC, a retail operator that held the first initial public offering on the emirate’s main market in about five years, jumped almost 60 percent on its trading debut.
Turkey’s Borsa Istanbul 100 Index was little changed after the central bank kept its benchmark repo rate unchanged. The market in Israel is closed for a public holiday.
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