31.10.2008 12:14

FOREX. Thursday summary [M]

The dollar gained versus the euro, erasing earlier losses, on speculation foreign investors in U.S. stocks bought the dollar at the end of the month to keep their currency hedge ratios constant, said Shaun Osborne, chief currency strategist at TD Securities Inc. in Toronto.
``Foreign investors buying U.S. equities sell the dollar as a hedge,'' said Osborne. ``Because the value of the stocks has declined so much, they have to buy back the dollar to maintain their hedge ratios.''Gross domestic product shrank 0.3 percent in the third quarter, its biggest decline since the 2001 recession, the Commerce Department reported today in Washington. The median forecast of economists was for a 0.5 percent drop.
The yen fell against the dollar as global interest-rate cuts sparked gains in stocks, boosting demand for higher-yielding assets funded by loans in Japan.
Japan's currency also weakened on speculation the Bank of Japan will reduce borrowing costs tomorrow.

EUR/USD having shown high on $1,3290, pair on results of session down in area $1,2850.

GBP/USD positions of pound in relation to dollar for yesterday's session practically have not changed. Having opened the tenders in the field of $1,6390, the pair has finished session on a mark $1,6359.

USD/JPY the pair bargained within the limits of Y97,20-Y99,00. The rate has finished the tenders of Thursday in the field of the top border of a range.

At 1000 GMT E15 Harmonized CPI (October) and Unemployment (September)is due.
US data starts at 1230GMT with the third-quarter 2008 Employment Cost Index, personal income, expenditures and PCE core price index for September. Personal income is expected to rise only 0.1% in September, as payrolls fell 159,000, hourly earnings rose only 0.2% and the average workweek was cut 0.1 to 33.6 hours. PCE is expected to fall 0.2% in September, as retail motor vehicle sales fell 3.8% and non-auto retail sales fell 0.6% on widespread declines. The core PCE price index is forecast to rise 0.1%.The ECI is expected to rise 0.7% in the third quarter, same as the previous two quarters.
At 1345 GMT the Chicago PMI is due, which is expected to fall to a reading of 48.0 in October from 56.7 in September . At 1400GMT, the Reuters/University of Michigan Consumer Sentiment Index is expected to be unrevised at 57.5 in late-October.