Forexnews.com

2001 in Review
2001 in Review USD/JPY \| GBP/USD \| EUR/USD USD/JPY CHART 1 of 2 1. 1/03 The dollar falls to its lowest level since December 27, after the US Federal Reserve cut its fed funds rate by 50 bps to 6% and its discount rate by 25 bps in an urgent move to revive the slowing economy. The dollar loses more than a full yen reaching 113.58 as the narrowing US rate advantage weighed on the greenback. 2. 1/04 USD/JPY hits a fresh 16-month low against the dollar at 115.75 primarily due to Nikkei's failure to gain in response to yesterday's 14% rally in NASDAQ. The Nikkei fell 94 pts, disappointing market players who were expecting the Japanese stock index to show its usual reaction to the US index. 3. 1/09 USD/JPY hits fresh 16-month highs at 116.85 as the Japanese gloomy economic picture deteriorated further and on comments from Financial Minister Miyazawa that a weak yen is good for Japanese exports. 4. 1/16 The yen gains more than 200 pts against the dollar and the euro benefiting from the Japan's announced intentions to shore up the falling stock market. The Nikkei-225 Index, which has lost more than a third of its value last year, reached its lowest level since the 1998 crisis last week. The government's abrupt announcement gave a 78-pt lift to the Nikkei today, and a badly needed winning streak. 5. 2/7 USD/JPY shoots up above the 116 yen level for the first time in nearly a week after US Treasury Secretary Paul O'Neill's reiterated that he would continue the strong dollar policy of his predecessors Messrs. Robert Rubin and Lawrence Summers. 6. 2/9 The Japanese is hit across the board, after the Bank of Japan trims its discount rate to 0.35% in efforts to shore up liquidity and revive the ailing economy. The first news release was at about 1:00 AM through an announcement from Japanese TV, which caused the yen to wobble around the 116.50 level, before dropping by a full yen against the dollar on the announcement from the Bank. 7. 3/2 USD/JPY rose to a 6-week high at 118.76 yen, a level not seen since it peaked in January, due to Nikkei's 3% fall to a new 15-year low. The BoJ governor Hayami said the central bank would consider a wide range of monetary policy options, even quantitative easing which he has repeatedly rejected. 8. 3/14-16 The dollar pushes to a new 22-month high above 123 yen, capitalizing on the current confusion over Japan's currency policy and on the speculation that the Bank of Japan will return to zero interest rates next week. 9. 3/29-30 USD/JPY rises to a fresh 2-1/2 year high above 125 yen for the first time since October 1998, due to market expectations that investors will move out of the Japanese unit at the start of the new fiscal year starting in March. Also weighing on the yen were comments from Japanese Economics Minister Aso admitting that a policy of weakening the yen had been discussed with the US government before PM Mori met with Bush last week. 10. 4/19 Dollar falls to a 5-week low against the yen, in response to the unexpected 50-bp Fed rate cut (second inter-meeting cut of the year ) yesterday despite the soar in US equities. The yen has gained 2.6% against the dollar this week boosted by the comments from Japanese officials. Finance Minister Miyazawa said the G-7 leading industrial nations would not want Japan to pursue a weaker yen policy. Yesterday, Nikkei rose above the key 14,000 level for the first time January 24 after a 4.4% gain the previous day. 11. 4/23 The yen rallies by over a full yen to a session high of 121.18 against the dollar boosted by reports of an early lead by Junichiro Koizumi in the Prime Ministerial race in Japan. Markets reacted positively on the surprising news that Koizumi is the frontrunner in the PM election since he is considered the most reform-minded among the LDP candidates. 12. 4/26 The yen falls to a 1-week low and 2-week lows against the dollar and the euro respectively after newly appointed Japanese finance minister Shiokawa said he favors laissez-fair approach to the economy and thought the forex rates should be left alone. The markets also punished the yen on Shiokawa's inexperience with economy as he hinted he lacks economic expertise. 13. 5/23 The yen soars to a 10-week high vs. the dollar of 119.45 cents, propelled by the rise in yen to a 5-month high of 102.17 against the euro. Also seen boosting the yen were the minutes from the BoJ's April 13 meeting indicating that members voted against increasing outright purchases of JGBs in order to limit the rise in long-term interest rates. 14. 06/15 The yen tumbles by about 2-1/2 yen and 1-3/4 yen to 3-week lows of 123.25 against the dollar and 106.31 against the euro, respectively, pummeled by a sell-off ahead of the reweighing of the FTSE global stock market index which will cause inflows into the US and UK and outflows from Japan. Also weighing on the yen was Bank of Japan decision to keep monetary policy unchanged, with their reserve target held steady at 5 trillion yen. CHART 2 of 2 15. 7/05 USD/JPY sheds 50 pips hitting a 3-month low of 125.80, weighed by the strong US non-manufacturing NAPM and comment by Vice FinMin Kuroda that a weak yen would be tolerated as long as it reflected economic fundamentals. On Wednesday, Finance Minister Shiokawa echoed the head of the Japanese business lobby that the yen was overvalued against the euro, and that a USD/JPY rate of 110 yen was more appropriate. 16. 7/30 USD/JPY pares its losses of over one-third yen, after striking a nearly 2-week high of 125.35 against the dollar. The yen was pressured in overnight trading by weak industrial production data, comments by Finance Minister Shiokawa, and the steep drop in Japanese stocks. The Nikkei plunged by 1.85% or 218 points to a new 16-year low of 11579 on market fears that Japan's banking sector stocks will be pummeled when the banks present their business plans to financial regulators this week. 17. 8/8-9 The yen rises to 2-week highs against the dollar on talks about the size of next fiscal year's budget and supplementary package that would have a goal to boost the ailing economy. The yen surges 2% against the dollar, hitting its highest level in 2 months, as yen-based players continued repatriating their holdings from dollar investments amid the continued decline in US data. 18. 8/15 USD/JPY falls to a 2-month low of 121.20 yen after the IMF warned in its annual report about bleak US economic prospects. The Fund also expressed also said the US dollar is overvalued by at least 20%, sparking fears about the state of the US economy by saying that because of receding inflation, there is more room for further rate cuts, if necessary. 19. 8/21 USD/JPY falls over half-a-yen to a new 4-session low of 119.54, followed by the Fed's decision to lower rates by a quarter percentage point to its lowest level since spring 1994, and dragged in the wake of the fall in US stocks to their lowest levels this year since April 9. 20. 8/31 USD/JPY hits a three-month low of 118.57 yen due to increasing pessimism over the US economic outlook after yesterday's sell-off on Wall Street put the Dow Jones industrial average at a 4 1/2-month low below the psychological 10,000 level. Ministry of Finance officials Kuroda and Shiokawa spoke about their readiness to intervene in forex market. 21. 9/5 The Japanese currency tumbles more than three-fourth yen to a 2-week low of 120.90 against the dollar after US Treasury Secretary O'Neill's reiterated the strong dollar policy and commented on Japan's need to take immediate action to redress its economic woes. 22. 9/11-17 BoJ intervenes in countering the dollar's earlier plunge to a seven-month low of 116.65, boosting the greenback by over one percent to a session high of 118.35. However, the greenback remains shaken by last week's devastating airline attacks on the US and the possibility of further intervention remains as option. 23. 9/20 Yen rises over 1-1/4 yen to a 7-month high of 115.83 against the dollar, bolstered by repatriation flows ahead of the accounting book closings at the end of this month and dollar weakness due to falling stocks driven by economic fears arising from last week's terrorist attacks. Later in Asian trade, the dollar spikes nearly a full yen after Japanese monetary authorities step in for the third time this week to counter further yen strength. Again, a unilateral action was taken to keep the dollar above 117.00, but the dollar's weak trend, which had kept it below key resistance around 118.25, was exacerbated by a fall to a seven-month low of 115.83 in US trade. 24. 9/26-27 Yen climbs over 30 pips its 1-week low of 118.08 as the dollar falls along with US equities, shaking off downward pressure from overnight BoJ intervention. The Central Bank, along with the European Central Bank, sold the yen in an attempt to weaken the Japanese currency. The yen drops over 50 pips to a 1-month low of 110.21 against the euro and over three-fourth yen to a 2-week low of 120.05 against the dollar as the Bank of Japan intervens yet again in the US session using the New York Fed as its agent. The morning's intervention was preceded by two interventions conducted via the ECB and by the BoJ in Tokyo and European trading. 25. 10/01-2 Yen sheds over 75 pips hitting a 3-week low of 120.42 against the dollar weighed by a disappointing September Tankan survey and by the end of the repatriation flows, which had strengthened the yen despite poor fundamentals. Tankan survey plunged for the third straight quarter to -33 in September from -16. Yen extends losses of nearly three-fourth yen to a fresh 3-week low of 121.11 against the dollar, on worries that the economy is heading towards recession after the disappointing Tankan survey. US Fed cuts rates for the ninth time this year by 50-bps, lowering the fed funds rates to its lowest rate in 39 years of 2.5%. 26. 10/11 The yen falls more than 80 pips to a 1-month low of 121.68 against the dollar following a larger-than-expected drop in US jobless claims to 468k and easing fears about the US military campaign against Afghanistan reported to be proceeding smoothly. 27. 10/22-23 Yen plunges to a 9-week low of 122.58, weighed by pessimism towards Japan's economy and as the dollar rose on optimism with the US economy. Japan's tertiary sector index fell to -0.1% in August, while the All-Industries index registered -0.2%, suggesting that GDP will be poor. Japan's trade surplus also declined 43.1% y/y to 3.305 trillion yen. USD/JPY reaches a two-month high of 123.03 but later pares its gains to 122.60 after newly reported cases of Anthrax in the US. The yen had weakened against the dollar after the government survey released overnight showed Japanese consumer confidence to have tumbled 4 points to its lowest level in three years to 36.9 in September, amid negative perceptions regarding employment and income. 28. 11/12-15 The yen eases back to the 120-yen against the dollar after rallying nearly a full yen to a 1-month high of 119.73 vs. the dollar. The yen's advance against the dollar was in reaction to this morning's news about a plane crash near JFK Airport in in New York. USD/JPY gains half a yen to a fresh 2-week high of 122.49, following the 1.5% y/y fall in Tokyo department store sales. 29. 11/19 The dollar soars to 3-month highs against the yen of 123.49, boosted by optimism about a US economic rebound and enthusiasm about the military success in Afghanistan. 30. 11/23-26 A combination of thin holiday trading and weak indications from Europe and Japan propels the dollar to fresh 15-week highs against at 124.48 following additional reports that Japan will not only buy domestic bonds, but has also been asked by the US to buy foreign bonds in an effort to further weaken the yen and further expand monetary policy. Rating agency Fitch IBCA downgraded Japan's long-term local and foreign currency ratings to AA from AA+, with a negative outlook. Standard & Poor's announced it was considering downgrading Japan's AA+ sovereign debt by two notches. 31. 12/04-06 Yen drops about 30 pips near its 1-week low of 124.37 against the dollar, as Moody's announces the downgrade of Japan's credit rating to Aa3 from Aa2. This comes as no surprise given that Moody's decision is preceded by downgrades last week from both Fitch and S&P. Yen falls to a fresh 4-month low of 124.94 against the dollar after Japanese Construction Company Aoki Corp. files for protection from creditors, marking the 13th bankruptcy in this year and raising fears more insolvency will follow. 32. 12/07 USD/JPY jumps by 1 1/3rd yen breaching over the 125 level for the first time since August 1 after Japan's Q3 GDP falls 0.5% from the previous quarter's -2.9%, sending the nation into its second official recession in three years. The yen was also hurt by Finance Minister Shiokawa's remark that the BoJ could purchase foreign bonds as part of its monetary policy tools. 33. 12/10 Yen hits 8-month low at 126.38 after data show machinery orders tumbling to 14-year lows. 34. 12/14 Yen slumps 200 pts to a 3-year low of 127.95 against the dollar in Asian trading after Japanese bankruptcies rose 10% in November, and on preliminary reports that Osama bin Laden was surrounded in a Tora Bora cave. Also aiding the latest yen damage is increased sentiment that Japanese officials (including the BoJ) prefer a weaker yen, given the economy's dire straits. 35. 12/19 Yen remains mired near its multi-year lows against the dollar and euro after the Bank of Japan announced an aggressive easing in monetary by raising the current account targets at commercial banks to 10-15 trillion yen from the previous target of just over 6 trillion yen, as well as increasing its outright purchases of Japanese Government Bonds to 800 billion yen per month. 36. 12/21 Dollar rallies by over a full yen to 129.70 on strong US data and remarks by Ministry of Finance's Mizoguchi stating that the recent tumble in the yen was nothing more than a correction from its unwarranted appreciation of the past few years. Finance Minister Shiokawa concurred by saying yen weakness was "not inconvenient" because it reflected fundamentals. 37. 12/26-27 Yen breaks past the 131-level in thin post Holiday trading before slumping to fresh 38-month lows at 132 after Japanese industrial production fell 1.8% in November, worse than the consensus forecast of a 1.1% drop. Comments from Japanese officials suggest that are only concerned with the pace of the currency's decline but not with its actual value against the dollar. The yen was also hurt by a statement from MoF's former top diplomat Eisuke Sakakibara indicating it is "realistic to think the (dollar) could go to Y140 or Y150 (next) summer," given Japan's sever economic conditions. Also weighing on the yen is the seventh consecutive monthly downgrade of the Japanese economy by the Bank of Japan. _________________________________________________________________________________ GBP/USD CHART 1 of 2 1. 1/1: Opens at year-end close of 1.4914 2. 1/3: Sterling loses more than a full cent, joining the collapse of the non-dollar currencies against the greenback after the Fed's unexpected 50-bp rate cut. Although the rate cut brought down the US fed funds rate to the same level of its UK counterpart, the dollar exploded upwards following NASDAQ's 16% rally. 3. 1/11: Bank of England leaves interest rates on hold for the 11th successive month, angering business groups and trade unions who attacked the Bank's decision not to cut interest rates in the wake of the US Federal Reserve's cut last week. Cable falls to a low of 1.4467 by month's end. 4. 1/31: GBP/USD retraces losses, then surges on February 1 after the Fed cuts by another 50 bps. The large fall in US consumer confidence also weighed on USD. 5. 2/6: First signs of weakness in UK economy show up as British industry suffers. Unexpected drop in UK December industrial output put it into recessionary territory. Cable hits low of 1.4370. 6. 2/9-14: Cable rises on "sell the rumor, buy the fact" after losing 100 pips ahead of the expected BoE decision to cut rates by 25 bp to 5.75%. Subsequent strength follows on MA related activity where France Telecom uses the money from its Orange IPO to buy back 7 bln euros worth of its shares from UK's Vodafone. Added optimism comes from UK unemployment falling to 3.5%, a new 25-year low. GBP/USD hits high of 1.4605. 7. 2/16: Cable pulled down by losses in EUR/USD. The dollar rose against the European majors but fell against the yen as Greenspan's more favorable outlook on the US economy supported the greenback. Euro bulls remain frustrated by the single currency's inability to get off the ground. 8. 3/1: Cable extends gains to a one-month high of 1.4761 as it was supported by strong UK data showing Britain's manufacturing sector improving. The PMI survey on manufacturing for February was expected to drop to 51 from January's 52 due to eroding exports. However it rose to 52.1 and carried sterling higher. 9. 3/9-19: Cable falls from 1.4747 to 1.4210 in 10 days. Growing fears that the UK and Eurozone will succumb to the US economic slowdown weighs on European majors. BoE officials state that the US slowdown could be sharper than expected, which implies that the impact on the UK economy would also be more notable. Therefore, there is increasing speculation of further rate cuts by the BoE in the near future. 10. 4/2-9: Sterling draws support from recent robust data and signs that the BoE may cut rates again next week. Market shifts focus from interest rate differentials to growth differentials. Analysts expect both the BoE and ECB to respond to slower growth by lowering rates like the US, Japan and Switzerland have done. Cable rises from April 2 low of 1.4140 to April 9 high of 1.4499. 11. 4/19: Fed's concern for US economy sends USD reeling across the board. Cable moves from low of 1.4255 to high of 1.444. 12. 4/20-5/11: Cable retraces prior move as FX markets punish euro. Despite the willingness of the BoE, the Fed and other major central banks to cut interest rates this year, the ECB made it clear that it wishes to remain independent in its fight against inflation despite increasing evidence of an economic slowdown on the Eurozone's front. Markets then punished the euro for the ECB's about-face in cutting rates to 4.5% given their relentless rhetoric about a steady hand monetary policy in light of inflationary evidence. Cable weighed by weakness in EUR/USD. 13. 5/21-24: Cable falls 170 pips on May 21 in the wake of EUR/USD losses on the back of the 9th decline over the past 10 months in the German Ifo Business Sentiment Index. Sterling deepens declines to 6-month lows at 1.4074. 14. 5/31-6/12: Cable falls to year's low of 1.3680 in the wake of EMU mania and EUR/USD weakness. UK elections bring to light the fact that sterling strength is an obstacle to the UK joining the euro in the short term. Labor party wins but Treasury Chief Gordon Brown reiterates that the EMU decision will be based on the key 5 economic tests. Nevertheless, the markets remain confident that the Labor party's victory brings the country closer to Europe than ever, and the euro, which is falling across the board. Cable hits a year's low of 1.3680 on June 12. 15. 6/14: The greenback falls across the board today after the head of the US National Association of Manufacturers declares that the US dollar is overvalued by 25-30%. Cable rebounds to a high of 1.4105 by June 15. CHART 2 of 2 16. 6/21: Pound soars by a full cent to hit a 2-and-a-half week high of 1.4182 against the dollar and by two-third pence to a 2-week high of 60.20 pence against the euro. The currency is supported by remarks from UK Finance Minister Gordon Brown who described the government's approach to the EMU issue as "considered and cautious", because joining the euro "in the wrong way or on the wrong basis" was not in the UK's economic interest. That quelled speculation about early euro membership, which had driven GBP to recent 15-year lows against the dollar. 17. 7/5: GBP falls 3 consecutive days to a 2-week low of 1.3987. Besides tracking the euro's fall, sterling was pressured today by the Bank of England's MPC expected decision to hold rates steady at 5.25% for the second month. UK interest rates are still the highest among the Group of Seven leading industrialized nations at 5.25%. 18. 7/17-20: Cable rises from low of 1.3931 to high of 1.4350 as USD takes a beating due to emerging market fears in Argentina, negative corporate earnings surprises, and Fed Chairman Greenspan's downbeat assessment of the U.S. economy on July 17. 19. 8/2-8: BoE's MPC surprises markets with a 25-bp cut in interest rates to 5.0%. GBP/USD begins a 5-day 200-pip fall to a low of 1.4127 on August 8 as markets interpret the move as the UK economy beginning to show the same signs of economic malaise as the US. MPC minutes later reveal that members noted their concerns to over-stimulating domestic demand, but were more worried that a delay in policy response risked deepening the downturn. 20. 8/14-16: Doubts over US economy grow stronger in the market. USD index begins another steep downturn from 116 to 113 in one week. Cable rises from 1.4167 to 1.4513 in 3 days. 21. 9/4: USD surges 1/2 cents against GBP on a surprise jump in US NAPM to 47.9 in August from the previous 43.6, indicating a possible bottom. 22. 9/11: Terrorist attacks on US send USD falling across the board, financial markets close early. GBP/USD soars to a 9-month high of 1.4772 in thin trading with US markets closed on September 12. 23. 9/17-21: US markets reopen and the Fed and ECB cut rates by 50 bp. The BOE eased monetary policy the next day in its first inter-meeting cut since 1997 by 25-bps to bring the UK's rates down to 4.75%. However, markets were not impressed by the unaggressive stance by BoE. Cable falls to a low of 1.4513 24. 9/22-10/8: Cable maintains uptrend support and continues its bull run from June 12 low of 1.3680. Cable rises to a high of 1.4829 as foreign funds flow out of US stocks and bonds at an alarming rate due to doubt over US as a safe haven. 25. 10/8: Joint US/UK air strikes in Afghanistan send USD higher as fears subside, but GBP lower as sterling is seen as not a safe haven currency, but as a target of potential terrorists for their role in fighting terrorism. GBP/USD begins 4 days of consecutive losses from today's 10-month high of 1.4829 to 1.44. This more than wipes out September 11 gains. 26. 10/19: Cable begins another leg down as GBP/USD follows losses in EUR/USD to a 5-week low of 89.67. The key German Ifo survey sank to an 8-year low of 85.0 in September as confidence in the Eurozone was pummeled as a result of the September 11 terrorist attacks that likely led to increased unemployment and further economic deterioration. 27. 10/23: Anthrax scares in US put USD back in doubt. GBP begins sharp recovery against USD from 1.4210 to a high of 1.4680 by Nov 1. 28. 11/8: Both the BoE and the ECB joined their US counterpart by cutting their short- term interest rates by 50 bps to 4.0% and 3.25% respectively, in surprisingly aggressive moves to assist the Fed in stimulating the ailing global economy. The result is a steep sell off in GBP and EUR against USD. Cable hits a low of 1.4062 on November 23. 29. 11/26-12/17: Rally from $1.4062 to $1.46. Traders return from Thanksgiving holiday and sell the dollar. USD undergoes a two-week correction after the US Conference Board's consumer sentiment survey unexpectedly tumbled for the fifth straight month to a new 7-year low of 82.2 in November, as it was mired by pessimism sparked by rising unemployment and layoffs. This sparked renewed fears in US recovery theories. Meanwhile, GBP/USD gets a boost from gains in GBP/JPY to a 2-year high of 183.13 on December 13. Pound is also boosted in early European trading by the latest survey showing that only 16% of UK citizens supported the pound's being replaced by the euro. 11/30 - Dollar tumbles across-the-board after US GDP gets revise down to 1.1% from the previous estimate of 0.4%. The greenback was subsequently pressured lower in the US session after the Chicago Purchasing Managers' survey slid to 41.1 from the previous 46.2. 12/04 - The pound fell half-a-cent to a session low of 1.4205 against the dollar, pressured by market expectation that the Bank of England will hold interest rates steady at a 40-year low of 4.0% when the monetary policy committee meets tomorrow. 12/05 - US NAPM non-manufacturing rose more-than-expected to 51.3 in November from its 4-year low of 40.6. GBP/USD falls one cent to a low of 1.4140. 12/06 - More negative data weighs on USD. This time the dollar's fall was provoked by the steep downward revision in US Q3 Non-farm productivity to 1.5% from the previous estimate of 2.7%, and lower than the previous quarter's 2.1%. This also marks the start of a rally in GBP/JPY from 175 to December 26, 2001 high of 191, putting it up 9% in 3 weeks. The yen begins steady fall as the plight of Japan's economy continues to worsen and Japanese officials start calling for more unorthodox easing measures to weaken the yen. 12/13 - GBP/USD falls to profit taking but finds support at the 1.44 level. However, sterling rallies by 4.5 yen pulling cable higher with it. The prevailing sentiment in currency markets is that Japan would prefer a weaker yen, given the dire straits of the nation's economy. This viewpoint was based on speculation that the Ministry of Finance would utilize any means to weaken the yen without resorting to intervention. 30. 12/21: Cable undergoes a sharp 2-cent correction as to a low of 1.4344. The dollar regains appeal after the third consecutive rise in the University of Michigan Consumer Sentiment survey to 88.8 in the final December reading from the preliminary 85.8. The US Index of Leading Economic Indicators also shot up above expectations to 0.5% in November from the previous 0.3%, advancing on improvements in stocks, jobless claims and interest rate spreads. This marked the second straight month of rises in the index, and suggests a greater likelihood that the economy is turning around. Meanwhile, EUR/GBP comes under pressure following remarks from BoE Chief Governor George that the same monetary policy was not in the best interests of each nation, which analysts interpreted as casting doubt over the UK's joining the EMU. 31. 12/26-27: EUR/GBP falls to a 6-month low of 60.56 while GBP/JPY soars to a new 2-1/2 year high of 191.08. Sterling leveraged its gains against the euro and yen to rise to a day's high of 1.4537. __________________________________________________________________________________ EUR/USD CHART 1 of 2 1. 1/03 EUR/USD plunges 3 cents from a 6-month high after the Fed delivers a surprise 50-bp cut in its fed funds rate to 6% in an urgent move to revive the slowing economy. The dollar shot up across the board as NASDAQ closed up 362 points or 16%. 2. 1/04 EUR/USD retraced 90% of the 300-point slide of the prior day hitting 95.19 cents, as traders ventured into the currency to find value following yesterday's slide. Also helping the euro was a record high number in French Consumer Confidence Index. 3. 1/24 EUR/USD drops 1.9% to 4-week low amid reduced pessimism with US economy following the Fed's clear resolve to shore up the ailing US economy. This contrasted with ECB's constant worrying with inflation after Bank chief Duisenberg echoed yesterday's comments from Bundesbank Chief Welteke saying that controlling inflation was the bank's top priority and that it was in no hurry to follow the rate cut by the Fed. 4. 1/30-2/01 1/30. Euro gains over a cent as US consumer confidence tumbles to a 5-year low, falling for 4th consecutive month. 1/31. EUR/USD rises 1% to 1-week high at 93.76 after Fed's scheduled 50-bp rate cut failed to impress US assets. Dollar was already depressed by US Q4 GDP release, which grew 1.4% posting its smallest rise since 1995. Euro extends gains to fresh one-week high at 94.45 cents on a renewed drop in January manufacturing NAPM from the US also helped the single currency make its way above the 20-day moving average of 93.80 cents. 5. 2/15 Euro slumps nearly 2% to 11-week low at 90.27 cents on ECB decision not to cut rates, which was expected by FX markets, but not necessarily accepted. 3% rise in NASDAQ also helped the dollar. 6. 2/27-3/02 Euro gains more than 3% in 4 sessions as US consumer confidence figures showing fresh evidence of a deteriorating picture in the US. Further contraction in US NAPM to the low 40s contrasting with the Eurozone's PMI figure, which remained above the 50-level suggesting it is still in expansion territory. 7. 3/12-3/15 EUR/USD weakens to 2-week lows breaching below 92 cents on a host of events: (i) German think tank downgraded its growth projections to 2.1% from 2.5%. (ii) European bourses' inability to rally following a brief rebound in Wall Street, raising questions over Europe's perceived inability to withstand the US slowdown. (iii) US dollar waves its safe haven banner across the board, rallying to fresh 20-month highs against the yen and to 2-week highs against the major European currencies, as credit agency Fitch places 19 Japanese banks under negative review. 8. 3/21-22 EUR/USD drops 3% in 2 days to hit a 14-week low at 88.30 cents. Germany's Ifo business survey fell to 96.6 in February reaching worst level in 20 months. Dollar maintains safe-haven status as stock markets tumbled world-wide. 9. 3/28-30 3/29. Euro hits fresh 15-week lows against the dollar following ECB decision not to cut interest rates. 3/30. EUR/USD drops a full cent towards the 87.50-cent support after the ECB issues an unusually timed statement calling for the confirmation of a wait-and-see stance in its monetary policy stance. The statement fuelled fresh concerns with the Bank's credibility as it contained two elements of inconsistency: (i) content contradicting prior week's articulations on price measures being lagging, and (ii) unusual timing of the announcement, given there was no rate change, nor press conference scheduled. 10. 4/3-4 4/3. Euro posts its highest intraday rise against the dollar up 2% to 89.78 cents amid intensified selling in US stocks and profit-taking in the US dollar. A flurry of profit warnings coupled with the threat of escalating tensions between the US and China over the grounded US spy plane sent the NASDAQ down 6.2% to 1,672, its lowest level in 2 years. 4/4. Euro posts its third consecutive daily gain hitting a two-week high of 90.50 cents amid resurfacing expectations of an ECB cut next week. Bundesbank President Welteke said today that the euro was clearly undervalued and that price pressures in the Eurozone were lessening. 11. 4/19-20 In response to the Fed's intermeeting rate cut rate on 4/18, EUR/USD rose over 150 pts to 89.62 cents due to widening interest rate differential favoring the Eurozone, and mounting speculation of an ECB rate cut. For the first time in over 6-1/2 years, US interest rates of 4.5% fall below those of the Eurozone at 4.75%. 4/19. EUR/USD climbs near a 2-week high of 90.45 cents, lifted by the Fed's unexpected rate cut and by Merrill Lynch's announcement increasing its exposure to European debt to 41% from 40%, and decreasing its US bond allocation to 32% from 37%. 12. 4/27 Euro falls by more than 150 pips sliding to a 1-week low of 88.87 cents in reaction to a broad dollar rally sparked by better than expected 2% Q1 Real GDP. The improved GDP this quarter resulted from a rise in consumer spending of 3.1%, which accounts for 2/3 of GDP, attributed to an 11.9% increase in durable goods purchases. 13. 5/7-14 5/8. Euro hits 2-1/2 week lows against the dollar and yen, losing a full cent to breach below 88.50 cents support, following today's reported 6,000 increase in German April unemployment to 3.8 million-- the fourth consecutive monthly. 5/10. Euro plunges about 1-1/2 cents to a 3-week low of 87.82, pummeled by markets' disenchantment to the ECB's about-face in cutting rates to 4.5% given their relentless rhetoric about a steady hand monetary policy in light of inflationary evidence. Markets viewed the rate cut of 25-bps as too little and too late to be effective in preventing Eurozone growth slowdown, and punished the single currency for what they additionally perceived as the ECB's loss of credibility. 5/11. Euro falls by over 3/4 cent to a new 3-week low against the dollar and yen, better than expected US consumer outlook and US retail sales, having already been weighed by residual skepticism over yesterday's ECB bombshell rate cut. EUR/USD eased after diving today to 3-week low of 87.35 14. 5/18-23 5/18. Euro retreats as traders prepared for Saturday's revision in the Morgan Stanley Capital International (MSCI) indices, which will likely hurt the euro and yen because of cross-shareholdings, but benefit the pound and dollar. The MSCI indices, tracked by $3.5 trillion funds, will be changed to weigh stocks by the quantity of shares available to investors, rather than by the total number of issued shares. Also, rumors of an impending $40 billion merger between France's Alcatel and Lucent Technologies of the US, which would necessitate selling euros for dollars. 5/22. EUR/USD plunges by 1-1/2 cents to a 6-month low of 86.27, extending its losses triggered primarily by the 9th decline over the past 10 months in the German Ifo Business Sentiment Index, as well as by preliminary CPI reports from Germany and Italy showing inflation levels higher than the ECB's 2% cap. 5/23. Euro hits 6-mnth low tumbling by almost a full after German data showed fresh evidence of rising inflation (CPI +3.0% first time since 2.94) and slowing growth (Q1 GDP +2.0% lowest since Q3 99). Germany's finance ministry blamed the weak GDP on the impact of high oil prices, but expects Q2 and Q3 GDP to reflect the positive impact of the tax cuts. 15. 6/12-14 6/12. Euro hits a session high of 85.31 cents rallying nearly 2/3 cent from its 6-1/2 month nadir against the dollar on BoE Governor George's remarks about the pound being too strong relative to the euro, sending EUR/GBP to a session, and consequently boosting EUR/USD near the close of US trading. The single currency was also supported by markets' wariness of possible ECB intervention following earlier comments by BoF Governor Trichet and Bundesbank President Welteke that a strong euro is in Europe's interest. 6/14. A broad fall in the dollar sends the euro spiking up half a cent to 3-week highs of 86.34 cents after the head of the US National Association of Manufacturers said the US dollar was overvalued by 25-30%. Also fuelling the euro rally was Bundesbank President Welteke who echoed his colleagues' opinion that the ECB has "utmost interest in strong currency". 16. 6/27-28 6/28. Euro sheds nearly a full cent to a 2-week low of 84.34 against the dollar as traders reacted to yesterday's 25-bp Fed rate cut with jubilation, as well as to new signs of deteriorating conditions in Europe and Japan. The dollar was also lifted by an article in the Wall Street Journal indicating that the Bush administration wanted both Europe and Japan to ease monetary policy more aggressively, due to desperation to see stronger economic growth abroad. The Journal also noted that lower interest rates overseas would likely make U.S. investments relatively more attractive, thereby increasing demand for dollars. Also, according to a German newspaper, the IMF revised its German 2001 growth forecast to 1.3% from 1.9%. 17. 7/5-7/10 7/5. The euro loses a full cent to hit 8-month lows of 83.57 cents following a better-than-expected US non-manufacturing NAPM in June showing a rise above the 50-mark for the first time in 3 months, extending its losses after the ECB's decision to hold rates steady at 4.5%. 7/6. The euro soars by nearly a full cent against the dollar, bouncing off its 8-and-a-half month low of 83.49 cents on short-covering ahead of the G7 finance ministers meeting in the weekend, and also on the weaker-than-expected US labor market report. US June payrolls fell 114k in June from the previous revised +8k, and unemployment rate rose to 4.5% vs. the previous 4.4%. ECB Vice President Noyer even described the euro's exchange rate as "ridiculous", adding that Europe was too competitive for the US to compete in steel, automotives and in planes as a result of the weak currency. 7/9. Euro gaines following remarks by Bank of England Governor Edward George at the G10 meeting that the strong dollar is hurting the US economy, as well as fueling Eurozone inflation that hurts consumer confidence. CHART 2 of 2 18. 7/17-7/18 7/17. The dollar tumbles against the majors today to a 1-week low against the euro and a nearly 2-month low against the franc, following weaker-than-expected industrial production posting a decline for the 9th consecutive month. US June Capacity Utilization plunges to its lowest level in nearly 18 years of 77.0% in June vs. the previous revised 77.6%. 7/18. Anti-strong dollar complaints reverberates throughout the market as a coalition of the AFL-CIO union, US manufacturers, and farmers stated dollar overvaluation as the most pressing concern of US economic problems since it risks setting the stage for a global recession. A statement by President Bush indicating negative effects of a strong dollar on US exports sent the euro jumping by a full cent to a 2-month high of 87.37 cents. A Congressional testimony by Fed Chairman Greenspan expecting further US economic deterioration also helped weigh on the currency. 19. 8/9-8/16 8/9. EUR/USD shoots up through its 200-day moving average, gaining nearly a cent and a half to a 3-month high of 89.41cents powered by the gloom of the Fed's Beige Book combined with rising possibilities of an ECB rate cut late this month. 8/14. Euro soars to fresh new 3-1/2 month highs vs the dollar at 90.36 cents after the IMF warned in its annual report of bleak US economic prospects and an unsustainable trade deficit as well as expressing its belief that the US dollar is overvalued by at least 20%. Continued optimism for an ECB rate cut at the end of the month due to recent benign inflation data also benefited the euro. 8/15. EUR/USD hits 5-month high at 91.43 cents as US industrial production falls for 10th consecutive month, further weighing on the already beleaguered dollar, despite the White House's reiteration of its strong dollar policy. 20. 8/31-9/04 8/31. Euro falls by nearly a full cent after the rise in Chicago PMI exceeded expectations in August, showing some signs of reviving from its worst month of growth since the 1990-1991 recession. 9/04 Euro plunged by about 2.5% against the dollar hitting a new 3-1/2 week low of 88.43 cents following the release of a stronger-than-expected rise in August NAPM. The report fuelled optimism that US manufacturing had seen the worst. 21. 9/11-9/18 9/11-14. Dollar gets hit across the board and euro rallies from a low of 89.54 to 91 cents following the terrorist attacks on the World Trade Center and the Pentagon. US stock markets shut trading into the rest of the week, but currency markets remain open, punishing the dollar further. The euro also strengthened on dismal data reported on US industrial production and consumer sentiment. 9/17-18. Euro joins the European currencies and the yen in giving the dollar a harsh drubbing (EUR/USD gained 2.5% to a 6-month high at 92.33 cents) after US stocks reopened following the September 11 attacks. The Dow plunged by 684 points or 7%, its worst decline on record, while NASDAQ tumbled by 6.8% or 115 points to 1579 as markets sold off in reaction to the prior weeks' terrorist attacks. Concerted interest rate cuts by the Fed, ECB and BoE had no noticeable impact on US equities or the currency. 22. 9/20-21 The single currency loses a cent and a half after Germany's August Ifo survey hits a 5-year low of 89.5 from the previous 89.8. 23. 10/9-11 10/9. Euro sheds nearly 80 pips, closing just above its 3-session low of 91.27 cents, partly due to expectations that the European Central Bank will hold rates steady at 3.75% on Thursday based on recent comments from ECB officials. The dollar also had some support by a US Dept of Defense briefing outlining the effectiveness of the third round of military airstrikes 10/11. Euro loses over a full cent breaching the 90-cent level amid markets' disappointment with today's ECB decision to keep rates unchanged at 3.75%. A larger than expected drop in US jobless claims and easing fears about the US military campaign in Afghanistan also managed to maintain the dollar's domination throughout the session. 24. 10/19-22 10/19. The euro falls to a fresh 5-week low of 89.67 cents after Germany's Ifo survey sinks to an 8-year low of 85.0 in September. Euro is also pressured by ECB officials' comments hinting at no rate cut the following week, thus fuelling markets' concerns of eroding growth in the Eurozone. 10/22. Euro loses more than a cent to hit a 6-week low at 88.95 cents after a number of German institutes slash their forecasts for German growth in 2001 and 2002, articulating the possibility that the Eurozone's largest economy may be in a recession. Finance Minister Eichel also made his own downward adjustment of for German growth. 25. 11/02-08 Euro loses footing atop the 90-cent perch as ECB's Trichet hints against an ECB rate cut this week, further highlighting the Bank's relative inaction in the midst of the aggressive easing of the Fed. A higher-than-expected increase in US Q3 productivity by 2.7%, helped give the dollar composure. 11/08. ECB's unexpected 50-bp cut fails to prop the euro as both the Fed (Nov 6th) and the BoE (earlier in the day) went for the aggressive easing option, thus neutralizing the impact of the growth decision by the ECB. EUR/USD posted its 5th consecutive daily drop hitting a 2-week low at 89.06 cents. 26. 11/13 EUR/USD hits a 3-month low of 88.06 cents on reports that US-backed Afghan Northern Alliance advanced to capture the Afghan capital of Kabul; reports that relations between terrorist group Al-Quaeda network and the Taliban were deteriorating which consequently triggered gains of over 2% in US stock indices. Another downgrade in estimates for German economic growth by the nations' top economic think- tanks also weighed on the euro. 27. 11/26-30 EUR/USD gains over 2.4% in the last week of November amid mostly negative events in the US. The fifth consecutive monthly decline in Consumer Confidence to a new 7-year low in November (Nov 27), a gloomy assessment on the US economy by the Fed's Beige Book (Nov 28) and downward revision in US Q3 GDP to 1.1% from 0.4%, all conspired in triggering a wide retreat in US stocks which eventually weighed on the dollar. 28. 12/03-05 Euro starts its 3-day fall on stronger than expected NAPM manufacturing figures in the US, and gloomy remarks by the head of Germany's most respected economic think tanks-Ifo--indicating that Germany is in its worst recession since 1981. EUR/USD widens losses to 1-week low at 88.45 cents after the US non-manufacturing NAPM survey rises above the key 50-mark to 51.3 in November from the previous 4-year low of 40.6, exceeding economists' forecasts for a slight improvement to 43. The survey clearly suggests that the US services sector, which makes up over 65% of the economy, has reached bottom. 29. 12/12-14 Euro rallies nearly a full cent to a 4-week high, boosted by EUR/JPY's leap to a fresh 8-month high of 113.57 and by ECB's comments that the single currency is undervalued and will improve over time. 12/13. Euro falls almost three-fourth of a cent amid profit-taking in EUR/JPY, and due to remarks from ECB chief Duisenberg alluding that interest rates will remain unchanged for some time. 12/14. EUR/USD soars 130 pips to 6-week highs at 90.54 cents on further advances in the EUR/JPY rate, which hit a 2-year high of 115.49.The movements in the cross-pair effectively overshadowed any impact on the euro from negative industrial production data in France and Italy. 30. 12/21-24 EUR/USD slides by a cent a half after the University of Michigan Consumer Sentiment survey posts its third straight monthly rise, with the final December figure hitting 88.8 from a preliminary figure of 85.8. The Survey's Expectations Index also helped dollar assets, as it soared to 82.3 from 76.6, suggesting that consumers' optimism will give the economy the necessary boost. On the day before Christmas, the euro sheds another cent to 87.50 due to a combination of positive US data in the prior week (rising consumer sentiment and falling jobless claims) and thin holiday trading exaggerating currency moves. 31. 12/27-31 12/27. Euro lifted up by half a cent to 88.70 cents following a modest rise in French business confidence to 90 in December from 89.5. The single currency added to its gains on the eve of the introduction of notes & coins, hitting a fresh 2-year high against the yen at 117.24, helping EUR/USD breach through the 200-day moving average of 88.70 cents to 89.18.