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January 5, 2014

Global News January 6, 2014

Posted by: ffs @ 23:16 GMT Category: Daily Forex,Forex Market News

⇒ U.S. stocks ended a choppy trading session mostly lower on Friday after Federal Reserve Chairman Ben Bernanke defended the extraordinary measures undertaken by the central bank to boost the economic recovery. The SandP 500 slipped less than a point to end at 1,831.37, leaving it down 0.5% for the week. The Dow Jones Industrial Average closed up 28.64 points, or 0.2%, at 16,469.99, but finished the week marginally lower. The tech-heavy NASDAQ Composite shed 11.16 points, or 0.3%, to 4,131.91 on Friday and lost 0.6% for the week. Volumes on Wall Street were thin, with many traders still on vacation – Source: Marketwatch

⇒ U.S. economic growth will accelerate this year even as the pace of expansion remains sub-par almost five years after the end of the recession, according to academic economists and former policy makers. “2014 is going to be a better year,” Martin Feldstein, a professor at Harvard University and chairman of the Council of Economic Advisers under President Ronald Reagan, said in Philadelphia. “There is no reason for pessimism about our near future if we adopt appropriate policies.” – Source: Bloomberg

⇒ The Federal Reserve will begin winding down, or tapering, its $85 billion-a-month money-printing program this month, and emerging markets are seeing foreign investment pull back as a result. Last year, around $30 billion fled emerging equity and bond funds tracked by EPFR Global, provisional data shows. The Fed’s $3.7 trillion expansion of its balance sheet was a mixed blessing for developing countries. Economic growth was pumped up by record-low borrowing costs and hundreds of billions of dollars in stock and bond market investments – Source: Reuters

⇒ Federal Reserve Chairman Ben Bernanke gave a full-throated defense Friday in front of the economics profession to his nearly eight-year tenure running the central bank, arguing without near-zero interest rates, new communication methods and unconventional bond purchases the economy may have stagnated or even fallen back into recession. Interest rates have been near zero levels since the end of 2008, and the Fed’s balance sheet has swelled to over $4 trillion during Bernanke’s tenure – Source: Marketwatch

⇒ The euro fell the most against the dollar in two months amid speculation its six-month rally was due for a pause even as data signaled improvements in the European economy. The euro dropped 1.2 percent to $1.3589 this week in New York after reaching $1.3893 on Dec. 27, the strongest level since October 2011. The common currency declined against all but three among major currencies this week even as euro-area factory output in expanded for a sixth month. The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major peers, rose 0.3 percent to 1,026.23, the third-straight weekly rally – Source: Bloomberg

⇒ The pound advanced for a third week against the euro as expansion in the property market boosted optimism the U.K’s economic recovery is strengthening. Sterling reached a one-month high against the 18-nation currency as data showed U.K. house prices rose in December and mortgage approvals in November reached the highest level in almost six years. The U.K. currency fell for the first time in three weeks versus the dollar, after touching the highest level since August 2011, as reports showed construction cooled and a gauge of manufacturing unexpectedly declined last month. Ten-year government bonds rose for the first time in three weeks. The pound strengthened 0.6 percent this week to 82.86 pence per euro at 4:59 p.m. London time yesterday. It reached 82.71 pence a day earlier, the strongest level since Dec. 3. Sterling declined 0.4 percent to $1.6422 after reaching $1.6603 on Jan. 2 – Source: Bloomberg

⇒ The yen and Australian dollar, the two worst-performing major currencies last year, posted the first weekly increases in more than two months on speculation their recent declines were too rapid. The yen was little changed at 104.86 per dollar at 5 p.m. New York time, and gained 0.3 percent this week, the most since the period ended Oct. 25. It slid to 105.44 yesterday, the weakest since October 2008. Japan’s currency gained 0.6 percent to 142.48 per euro. The euro fell 0.6 percent to $1.3589, having fallen 1.2 percent this week. Australia’s dollar climbed 0.4 percent to 89.45 U.S. cents after adding as much as 1.1 percent, the biggest advance since Oct. 1. It jumped 0.9 percent this week, its first five-day gain since the period ended Oct. 18 – Source: Bloomberg

⇒ A measure of future U.S. economic growth rose last week to its strongest since April 2010, while the annualized growth rate stayed steady, a research group said on Friday. The Economic Cycle Research Institute, a New York-based independent forecasting group, said its Weekly Leading Index increased to 132.9 in the week ended December 27 from 131.9 the previous week. The index’s annualized growth rate was 1.8 percent, the same as a week earlier. The previous week’s figure was originally reported at 1.9 percent – Source: Reuters

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