“There’s a fair bit of uncertainty in the short term,” said Sean Fenton, who helps manage about $1.1 billion at Tribeca Investment Partners in Sydney. “The market has been reasonably calm, but we’re getting close to the deadline and they’re starting to worry more about the impact to U.S. growth if we don’t get a resolution soon.”
U.S. gross domestic product likely grew 1.8 percent in the second quarter, compared with 1.9 percent in the prior three months, according to the median forecast of economists surveyed by Bloomberg News. Ten-year Treasuries yields were little changed at 2.94 percent before the release of today’s report.
Dollar Loss
The dollar has dropped 0.3 percent in the past week, extending its losses in the past month to 1.5 percent, according to Bloomberg Correlation-Weighted Currency Indexes. The U.S. currency traded at 80.08 Swiss centimes from 80.12 yesterday, when it fell to a record low of 79.90.
The euro weakened to 1.14425 against the franc and sank 0.5 percent to 110.83 yen after Moody’s said funding pressures facing the Spanish government will “likely exacerbate.”
The New Zealand dollar, known as the kiwi, sank 0.6 percent to 86.59 U.S. cents. Data today showed the nation’s home- building approvals fell in June for the second time in three months. South Korea’s won weakened 0.3 percent to 1,054.08 after Statistics Korea said industrial production expanded 6.4 percent in June from a year earlier, the slowest pace in nine months.
Hong Kong’s first inflation-linked bonds jumped to HK$106.65 on their debut, having been sold at HK$100. The city’s consumer prices rose 5.6 percent from a year earlier in June, the most since July 2008, and the Hong Kong dollar’s peg to the greenback means local interest rates track those in the U.S., where the Federal Reserve has kept a near-zero policy rate since December 2008.
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