Dollar falls at least 15 years

The dollar fell Tuesday to a new 15-year low against the yen after Japanese Prime Minister Naoto Kan won an election within the ruling party, generating speculation that Tokyo did not take immediate action to stop the advance of its currency .Naoto Kan will maintain his position as prime minister after winning the party internal Ichiro Ozawa, who had been most strident in calling limit the yen's rise.
At 1120 GMT, the dollar fell 0.6 percent to 83.18 yen, after losing up to 83.07 yen on trading platform EBS.
"The market had positioned for a victory Kan, the scope for considerable appreciation of the yen may be limited," said Derek Halpenny, European head of currency research at Bank of Tokyo-Mitsubishi UFJ and the dollar fell .

Dollar Falls

"The downside for Kan (...) is reached only 50.7 percent of the votes of party members. This does not give a sufficiently strong mandate to lead the country and we suspect that once markets focused on this aspect, the yen could weaken a bit, "he said.Still, operators say that a rise in the dollar may be short-lived, with a ceiling of 84.43 yen intraday on Monday considered the first point of resistance, due to the expectation that Japanese exporters sold more dollars before balance sheet for fiscal first half on 30 September an the dollar fell .
"The threat of intervention will be around the market, but will there be international cooperation? Probably not. Then the market will continue to test the determination of Khan," said Simon Derrick, manager of currency research at Bank of New York Mellon.
Analysts said if the dollar falls below 83 yen and touched the 82 units, the risks of intervention would increase dramatically.

Dollar falls at least 15 years

The euro was around session lows against the dollar at $ 1.2830 after the rate of German ZEW economic sentiment fell more than expected in September.
The euro reversed some of its gains on Monday, resulting in positive economic data from China and the relief of the markets following the agreement of the new banking regulations of Basel III.
The market believes that the currency will have a point of resistance at 1.2920 to 30 dollars, a level that has slowed the rise of the currency several times since August.The dollar fell below parity level against the Swiss franc to a nine-month low of 0.9996 francs on electronic trading platform EBS, and played a one-month low against a basket of currencies. and the dollar falls. The dollar index climbed 81.98, rebounding from its 200 day moving average of 81.761.
Market participants expect the publication of data on U.S. retail sales, expected to show an increase of 0.3 percent in August from last month.
A less-than-expected reading could trigger further gains in the yen against the dollar fell .

Yen and dollar fall, euro rises on worries about Greece

The yen and the dollar fell on Monday against the euro and high yielding currencies, as a jobs data better than expected U.S. on Friday and an easing in concerns drove the Greek debt investor demand for the risk.

The euro gained after encouraging remarks from key monetary authorities on the problems of debt in the euro zone. French President Nicolas Sarkozy vowed on Sunday that euro zone countries would help to Greece if they worsen their financial problems.

However, Managing Director International Monetary Fund, Dominique Strauss-Kahn, told Reuters it was unlikely that Greece's financial problems will spread to other euro area countries with high levels of debt.

Trust is kept up after a data on Friday showed job losses were less than expected, raising the view that the U.S. may be about creating jobs and affecting considered a refuge currency like the dollar and the yen.

"Greece is taking a breather from a market perspective, while the appetite for risk is driving the market. This gave the euro a bit of renewed support," said Niels From, analyst at Nordea in Copenhagen.
At 1049 GMT the euro was up 0.2 percent at $ 1.3642. Traders said that the level of short-term resistance was close to 1.3712, its highest March 4.

The dollar index was down 0.1 percent at 80.355.
Against the yen, the euro gained 0.2 percent to 123.25 yen, after hitting a two-month 123.80 yen on electronic trading platform EBS earlier.

The falling dollar, inflation factor for the Gulf oil monarchies

The falling dollar will fuel inflation in the oil rich Persian Gulf monarchies, though not forcibly take you to separate your currency greenback, analysts said.
With the continuing decline of the dollar, which is close to 1.50 per euro from a few days ago, exports from Europe and Asia to the six countries of the Gulf Cooperation Council (GCC) will become more expensive.
"The most direct consequence of the weak dollar will be a higher bill for imported products," said Paul Gamble, head of research Jadwa Saudi Investment Bank. "This will not be immediately through increased inflation because the ties between local and global economies are flexible enough to allow keeping a lid on consumer price index," said Gamble told AFP.
"However, a persistent fall in the dollar may eventually lead to more inflation, a phenomenon that is exacerbated by rising raw materials that serve as shelter value to a weakening dollar," he added.

Since March, the dollar lost 18% of its value against the euro, and analysts expect a move towards lower long term. In parallel, a barrel of oil rose 75% from its fall to $ 34 in early 2009.
Kuwait is the only GCC country which indexes your currency on the basis of a basket of currencies dominated by the dollar, which explains a setback not as strong of its currency, the dinar.
In contrast, Saudi Arabia, Bahrain, UAE, Qatar and Oman have their currencies fully indexed to the dollar, which the devaluation is even greater.
The most visible impact of the dollar's decline is the rising prices of foodstuffs in the Gulf, said the analyst Amrith Mukkamala, the Kuwait Financial Center.
"A weak dollar will increase import prices, such as food products," said Mukkamala told AFP.
"Inflation is already rising in the GCC and the trend will be accentuated in December," said Mukammal, estimating that anyway will not be as strong as in 2008, when he reached double-digits in five of the six countries of Persian Gulf, with Bahrain as the only exception.

The average inflation in the GCC is set at 2.9% at end-2009, against 10.8% in 2008, but should climb strongly in 2010, supported by rising oil prices and the return of economic growth.

The high inflation of the last two years he returned to bring to the fore the debate about the indexing of local currency on the dollar. Until now, the GCC countries ruled out the system and four of them are preparing to launch a single currency will also be indexed from the dollar.