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The dollar weakened on speculation President Barack Obama's re-election victory will boost chances the U.S. will continue monetary stimulus policies that tend to weaken the currency. The dollar reversed earlier gains versus the euro after Obama defeated Republican challenger Mitt Romney, according to television network projections that show the incumbent winning the electoral votes needed for re-election. The Australian dollar rose for a third day as Asian stocks advanced. Demand for the euro was limited as Greece headed for a vote on austerity measures needed to keep its bailout on track. Monetary policy will remain loose under Obama so the dollar will be sold, said Michiyoshi Kato, senior vice president of foreign-currency sales in Tokyo at Mizuho Corporate Bank Ltd., a unit of Japan's third-largest bank by market value.Dollar selling may not last that long as the U.S. faces the fiscal cliff,he said, referring to more than $600 billion in tax increases and spending cuts that will be implemented in 2013 unless Congress acts. The dollar fell 0.4 percent to $1.2861 per euro as of 2:48 p.m. in Tokyo, after earlier gaining as much as 0.2 percent. It declined 0.4 percent to 80.07 yen. The euro was little changed at 102.99 yen, after touching 102.18 yesterday, matching the lowest since Oct. 16. The so-called Aussie advanced 0.2 percent to $1.0454. The MSCI Asia Pacific Index (MXAP) of shares climbed 0.6 percent. Obama was projected the winner in the battleground states of Ohio, Iowa, New Hampshire, Wisconsin, Colorado and Virginia. He also won Pennsylvania, where Romney made a last-minute bid for support to try to derail the president's path to re- election.
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The Canadian dollar strengthened against the majority of its 16 most-traded counterparts as rising U.S. stocks and raw materials boosted appetites for higher-risk assets. Canada's dollar gained along with the currencies of fellow commodity exporters as the Standard & Poor's GSCI Index (SPX) of 24 raw materials rose 2.3 percent after the Reserve Bank of Australia kept interest rates unchanged, signaling the global economy is stabilizing. The Canadian dollar, nicknamed the loonie for the image of the aquatic bird on the C$1 coin, may strengthen to a more than two-week high if it breaches the key resistance level of 99 cents per U.S. dollar, as markets await the results of the U.S. presidential election. No matter who wins tonight, moving in to the next year, the U.S. is going to be outpacing our counterparts, and that's going to boost the Canadian and Mexican economies -- the tide raising all boats,said John Doyle, director of markets in Washington at currency-trading firm Tempus Consulting Inc.The RBA not cutting rates was the biggest headline today and so you saw a boost in commodities. The Canadian dollar appreciated 0.4 percent to 99.21 cents per U.S. dollar at 5:05 p.m. in Toronto. It gained last week from the weakest level in almost three months, C$1.0019. One Canadian dollar buys $1.0080. The S&P 500 Index added 0.8 percent. Futures of crude oil, the nation's largest export, rose as much as 4.2 percent to $89.22, the highest level in two weeks.
 GOLD Gold and silver climbed for a third day on expectations the U.S. will keep stimulus measures to boost the economy after President Barack Obama won re-election for a second term. Silver, platinum and palladium advanced. Spot gold gained as much as 0.6 percent to $1,726.57 an ounce, the highest level since Nov. 1, and was at $1,724.30 at 1 p.m. in Singapore, reversing a 0.6 percent drop. The metal climbed 1.8 percent yesterday, the most since Sept. 13. Silver for immediate delivery jumped as much as 1.3 percent. Bullion advanced 10 percent this year and is set for a 12th annual gain after central banks took steps to stimulate economies hurt by Europe's debt crisis. The Fed said Oct. 24 it will maintain $40 billion in monthly purchases of mortgage debt and probably hold interest rates near zero until mid-2015. U.S. television networks showed the president winning the electoral votes needed for victory over Republican challenger Mitt Romney. Investors are probably convinced that an extension of a Democrat in the White House would ensure a continuation of the Fed's easy monetary policy, Barnabas Gan, an economist at Oversea-Chinese Banking Corp., said from Singapore. The incoming president will need to address a so-called fiscal cliff of more than $600 billion in tax increases and spending cuts that take effect in January unless Congress can reach a budget compromise. Gold for December delivery rose as much as 0.7 percent to $1,726.50 an ounce on the Comex in New York, before trading at $1,724, erasing a 0.6 percent decline. The contract climbed 1.9 percent yesterday, also the most since Sept. 13.
 SILVER Spot silver added 1 percent to $32.30 an ounce after a 2.6 percent jump yesterday. Spot platinum increased 0.6 percent to $1,563 an ounce and palladium advanced 0.5 percent to $621.75 an ounce.
 +CLZ12 Crude rose the most in a month on forecasts that U.S. gasoline supplies dropped after Hurricane Sandy forced the shutdown of East Coast refineries and as Americans went to the polls to pick a president. Futures climbed to a two-week high after a Bloomberg survey showed supplies of the motor fuel probably decreased 1.5 million barrels last week. Hess Corp. (HES) and Phillips (PSX)'s New Jersey refineries remained shut after Sandy. U.S. voters decide today whether to return Barack Obama, a Democrat, as president or elect his challenger, Mitt Romney, a Republican. Clearly there is a short-term shortage of gasoline on the East Coast because of the closure of refineries, terminals and pipelines, said Julius Walker, global energy markets strategist at UBS Securities LLC in New York. These problems should be short-lived. In the oil market, you also have some sentiment about the election affecting trading. Crude oil for December delivery advanced $3.06, or 3.6 percent, to $88.71 a barrel on the New York Mercantile Exchange, the biggest gain since Oct. 4 and the highest settlement since Oct. 22. Prices are down 10 percent this year. Prices were little changed after the American Petroleum Institute reported U.S. oil inventories slid 27,000 barrels to 371.7 million last week. Gasoline stockpiles gained 1.38 million to 201 million barrels. December oil advanced $2.75, or 3.2 percent, to $88.40 a barrel at 4:44 p.m. in electronic trading.
 @ESZ12 U.S. stock futures fell, following a two-day advance for the Standard & Poor's 500 Index, as President Barack Obama won re-election. S&P 500 futures expiring in December dropped 0.5 percent to 1,418 at 2:21 p.m. Tokyo time after declining as much as 1 percent. The benchmark index rallied 1 percent over the previous two sessions. Dow Jones Industrial Average futures lost 52 points, or 0.4 percent, to 13,149. Television projections showed Obama winning more than the 270 electoral votes needed to secure a second term in the White House. Arguably investors did not factor the risk of an Obama victory sufficiently, as his re-election has raised the probability that sequestration will go into effect, Andrew Swan, head of Asian fundamental equities at BlackRock Inc., said in a note. Sequestration refers to automatic spending cuts that will go into effect if U.S. lawmakers can't agree budget reductions.Given the political deadlock in Washington DC, with a Democratic president and Senate and a Republican Congress, a compromise on these spending cuts may be difficult to negotiate. U.S. voters had to decide between giving President Obama another four years or replacing him with Republican challenger Mitt Romney. President Obama needs to address a so-called fiscal cliff of more than $600 billion in tax increases and spending cuts that take effect in 2013 unless Congress can reach a budget compromise.
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Wednesday, November 7, 2012
Today Analysis 07-11-2012
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