Oil Soars on Monetary Easing Expectations!

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USD

US dollar rises against euro, yen and New Zealand dollar

On Thursday, the US dollar rose in value against the euro, and was trading at $1.2371 to the euro at 7:30 AM GMT. Against the yen, the dollar fetched 78.51 yen, with the yen falling by 0.1%. New Zealand’s dollar registered a loss versus the US dollar as well, and was trading at 81.33 US cents.

The Australian dollar, though, continued to rise against the US dollar, and was trading at $1.0590. In the past week or so, it seems that the US dollar is more reactive to global developments than before. It is not taking too many cues from domestic economic sluggishness. Overall, the dollar has declined by 1.4% in the past week.

EUR

Euro declines against US dollar, but gains versus Japanese yen

During the Asian trading session on Thursday, the euro declined against the US dollar, Norwegian krone and Swedish krona, but gained versus the Japanese yen.

The EUR/USD trading rate was 1.2371 at 7:30 AM GMT. The EUR/JPY rate was at 97.10 yen, with the yen falling by 0.1% against the euro. The GBP/EUR rate was 1.266. Even Norway’s krone rose to a near 9 year high against the euro, gaining 1.1% to trade at 7.2585. Similarly, the Swedish krona rose to a near 12 year high versus the euro, and was trading at 8.2675.

Analysts feel that the medium term outlook for the euro is a decline against its currency counterparts. This is because the European debt crisis is far from resolved.

JPY

Japanese yen weakens against major currency peers

The Japanese yen declined in value against its major currency counterparts on Thursday. This happened as Asian shares increased in value and the yield gap between US and Japanese bonds widened. The Japanese currency trades according to a risk-on mode, according to experts.

The Bank of Japan meeting results were also as expected; with no change in the asset purchase fund and lending facility. The Bank of Japan usually only intervenes when the yen is highly overvalued. Some experts, however, do feel that the Bank is engaged in indirectly weakening the yen.

At 7:08 AM Tokyo time, the EUR/JPY rate was at 97.10 yen, a fall of 0.1% for the yen. The USD/JPY rate was at 78.51 yen, with the yen down by 0.1% as well. It is worth noting that the Japanese yen has weakened by 1.8% during the past week.

Crude oil

Oil prices rise on speculation of Chinese economic revival

Oil prices rose in London and New York on Thursday. This upward trend was on speculation that China would take steps to boost its economy. Any steps taken for an economic boost in China would counter the weakening demand for oil in the US.

Crude oil for September delivery on the New York Mercantile Exchange was trading at $93.65 per barrel, up by 0.3% at 4:49 PM Sydney time. In the ICE Futures Europe Exchange in London, Brent crude oil for September 2012 settlement was trading at $112.45 per barrel, up by 31 US cents.

Experts are unsure as to whether oil prices will rise on Friday or not. It depends on the news coming in from China and the US.

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