TIPS AND FREE FOREX ANALYSIS

TORONTO -(Dow Jones)- The climb in the Swiss franc continued Friday, with the currency smashing through previous record highs to drive the euro below the psychologically significant CHF1.35 level.

The Swiss currency's long-running rally has accelerated of late after the Swiss National Bank stepped back last week from its policy of seeking to hold it down, a stance it reiterated Monday.

Broad-based euro weakness and a fresh burst of general nerves are giving fuel to the move. Late afternoon the euro was trading at CHF.3491, up from its most recent all-time low at CHF1.3456.

Until the central bank sees evidence that the strong franc is fuelling deflation by making imports cheaper--an unlikely prospect at this point--it is expected to allow the currency to keep on rising. That marks a sharp contrast to the SNB's heavy-duty program of buying euros to slow the franc's ascent in recent months.

"The combination of risk sentiment being pulled back and the euro declining is toxic for the Swiss franc," said Michael Hart, a currencies analyst at Citigroup in London.

The rapid rise in the Swiss currency is likely to test the SNB's new policy, and fresh intervention cannot be ruled out, Hart said. "Either way though, intervention would likely provide only a temporary reprieve from Swiss franc appreciation in the context of relatively healthy fundamentals," he said.

Chart-watching technical strategists at Barclays Capital suggested Wednesday that over the long term, the risk of the euro falling to parity against the Swiss franc "cannot easily be dismissed."

-By Katie Martin, Dow Jones Newswires; 44-20-7842-9346; katie.martin@dowjones.com

(Karen Johnson in Toronto contributed to this article.)

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SANTIAGO (Dow Jones)--China's decision to increase the flexibility of the exchange rate of its currency, the yuan, bodes well for Chile, especially in light of high commodity prices, said Chile's Economy Minister Juan Andres Fontaine on Tuesday.

As one of Chile's main trading partners, China's increased currency flexibility could increase the Asian giant's appetite for Chilean exports, especially copper.

Chile currently produces 30% of the world's copper, and China is one of the biggest buyers of its local copper production.

The change in currency policy ensures China's rapid economic growth, Fontaine said at CorpBanca's (BCA, CORPBANCA.SN) annual Economics Seminar.

"The gradual appreciation policy in the currency is very compatible with a sustained expansion of demand," said Fontaine.

The minister said that the true risk from China's new monetary policy would more likely be on the side of inflationary pressures rather than deflation, but emphasized that the policy is positive for Chile.

The news from China and high copper and commodity prices make a "favorable" combination for Chile, Fontaine said.

As a result of China's weekend announcement, the peso appreciated against the dollar Monday, ending at CLP530.30, compared to Friday's close of CLP534.80.

-By Erin McCarthy, Dow Jones Newswires; 56-2-715-8939; Chile@dowjones.com

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June 22, 2010 12:42 ET (16:42 GMT)

Copyright (c) 2010 Dow Jones & Company, Inc.

Latest Previous %Chg Daily Daily %Chg
Dollar Rates 2150 GMT High Low 12/31

USD/JPY Yen 91.31-34 90.35-37 +1.06 91.48 90.30 -1.91
EUR/USD Euro 1.2398-01 1.2434-37 -0.29 1.2467 1.2369 -13.40
GBP/USD Sterling 1.4859-61 1.4836-42 +0.16 1.4936 1.4809 -8.07
USD/CHF Swiss Franc 1.1087-90 1.1042-46 +0.41 1.1108 1.1010 +7.08
USD/CAD Canadian Dlr 1.0162-68 1.0179-87 -0.17 1.0213 1.0151 -3.34
AUD/USD Australian Dlr 0.8835-37 0.8803-08 +0.36 0.8859 0.8754 -1.65
NZD/USD New Zealand Dlr 0.7143-48 0.7112-20 +0.44 0.7152 0.7078 -1.56

Euro Rates

EUR/JPY Yen 113.22-26 112.35-39 +0.77 113.41 112.11 -15.04
EUR/GBP Sterling 0.8343-47 0.8379-82 -0.43 0.8379 0.8329 -5.81
EUR/CHF Swiss Franc 1.3743-48 1.3733-37 +0.07 1.3771 1.3699 -7.29
EUR/CAD Canadian Dlr 1.2600-09 1.2659-66 -0.47 1.2680 1.2583 -16.28
EUR/AUD Australian Dlr 1.4031-38 1.4117-28 -0.61 1.4158 1.4015 -11.95
EUR/DKK Danish Krone 7.4398-03 7.4394-95 +0.01 7.4410 7.4396 -0.01
EUR/NOK Norwegian Krone 7.8591-72 7.8574-31 +0.02 7.8715 7.8328 -5.30
EUR/SEK Swedish Krona 9.5025-65 9.5350-65 -0.34 9.5563 9.4808 -7.27
EUR/CZK Czech Koruna 25.7020-20 25.6310-10 +0.28 25.7400 25.6310 -2.60
EUR/HUF Hungary Forint 277.85-10 278.00-30 -0.05 278.70 275.83 +2.69
EUR/PLN Polish Zloty 4.0360-00 4.0241-00 +0.30 4.0512 4.0135 -1.69

Yen Rates

AUD/JPY Australian Dlr 80.68-72 78.85-93 +2.32 80.85 79.35 -3.51
GBP/JPY Sterling 135.68-73 134.09-11 +1.19 136.01 133.98 -9.82
CAD/JPY Canadian Dlr 89.80-86 88.740-90 +1.19 89.98 88.53 +1.42
NZD/JPY New Zealand Dlr 65.24-27 64.19-42 +1.64 65.30 64.21 -3.41

Other Dollar Rates

USD/CZK Czech Koruna 20.739-69 20.659-89 +0.39 20.792 20.580 +12.51
USD/HUF Hungary Forint 224.11-27 223.05-13 +0.48 225.12 221.95 +18.58
USD/DKK Danish Krone 5.9985-25 5.9800-06 +0.31 6.0149 5.9679 +15.41
USD/NOK Norwegian Krone 6.3374-95 6.3190-30 +0.29 6.3518 6.2896 +9.32
USD/PLZ Polish Zloty 3.2560-79 3.2348-18 +0.66 3.2745 3.2228 +13.54
USD/RUB Russian Ruble 30.742-48 30.980-85 -0.77 30.969 30.675 +1.42
USD/SEK Swedish Krona 7.6700-20 7.6720-50 -0.03 7.7028 7.6145 +7.15
USD/EEK Estonia Kroon 12.6137-37 12.6259-57 -0.10 12.6381 12.5516 +15.40

USD/HKD Hong Kong Dlr 7.7722-32 7.7739-47 -0.02 7.7768 7.7682 +0.24
USD/MYR Malaysian Ringt 3.1845-85 3.2515-55 -2.06 3.2450 3.1810 -6.98
USD/INR Indian Rupee 45.7500-00 46.0100-00 -0.57 45.9400 45.5400 -1.41
USD/IDR Indones Rupiah 9010-020 9087-095 -0.85 9075 9005 -4.40
USD/PHP Philippine Peso 45.760-40 45.760-40 0.00 45.950 45.460 -1.57
USD/SGD Singapore Dlr 1.3752-58 1.3731-34 +0.15 1.3812 1.3697 -2.14
USD/KRW S. Korean Won 1173.9-6.2 1202.5-0.7 -2.38 1185.9 1169.6 +0.68
USD/TWD Taiwan Dlr 31.755-70 32.125-25 -1.15 32.090 31.720 -0.73
USD/THB Thai Baht 32.27-30 32.33-39 -0.19 32.41 32.18 -3.25
USD/VND Vietnamese Dong 18950-90 18900-00 +0.26 +2.58
USD/ZAR S. African Rand 7.4638-98 7.4750-80 -0.15 7.5175 7.4145 +0.76

USD/BRR Brazilian Real 1.770-70 1.770-71 0.00 1.772 1.770 +1.54
USD/MXN Mexican Peso 12.455-67 12.500-05 -0.36 12.485 12.421 -4.77
USD/ARS Argentine Peso 3.9250-00 3.9250-00 0.00 Untraded today +3.27

Source: Thomson Reuters


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June 21, 2010 07:50 ET (11:50 GMT)

Copyright (c) 2010 Dow Jones & Company, Inc.

DOW JONES NEWSWIRES

Robert Doll, Blackrock Inc.'s (BLK) vice chairman and chief equities strategist, said Monday he was a "cautious optimist" about the global economic recovery and that he didn't see us heading toward a "double-dip" recession. In a CNBC interview, Doll said he doesn't expect an "ebullient recovery" but that he expected GDP growth this year to be positive, in the upper part of the 2%-3% range, with continued earnings growth. Doll said the Chinese currency move at the weekend was another sign we won't have a "double-dip" as the Chinese "wouldn't have moved forward if they were lacking confidence in the global economic recovery." He termed double-dips as extremely rare, with few historical precedents.

Full story at www.cnbc.com

-Dow Jones Newswires; 212-416-2900

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June 21, 2010 07:49 ET (11:49 GMT)

By Don Curren
Of DOW JONES NEWSWIRES


TORONTO (Dow Jones)--The durability of the euro's rebound from its recent four-year low is the key issue confronting currencies in the trading sessions ahead.

The euro has made a substantial recovery since bottoming out at $1.1876 on June 7, a roughly 16.5% drop since the beginning of the year. But the currency--now down about 13.6% so far in 2010--remains fragile, and is vulnerable to pressure from a number of sources, including new developments in the euro zone's sovereign-debt crisis.

Its rebound has been driven by some good news from the euro zone, including a successful Spanish bond auction and plans by the European Union to publish bank stress tests. The euro's recovery is attributable in large measure to investors booking profits on earlier negative bets against the common currency, so the recovery remains tenuous.

If the news in Europe continues to be positive, the euro could extend its two-week rebound in the short term, even though its longer-term outlook remains questionable.

Late Friday, the euro was at $1.2361, down from $1.2388. The dollar was at Y90.73, down from Y91.00, while the euro was at Y112.15, down from Y112.72. The U.K. pound was at $1.4801, down from $1.4820. The dollar was at CHF1.1097, down from CHF1.1119.

The ICE Dollar Index, which tracks the dollar against a trade-weighted basket of currencies, was at 85.705, up from 85.657.

Analysts see the euro trading in a range between $1.2200 and $1.2500 next week, with the potential for its recent correction to extend to $1.2700 in the weeks ahead.

"The recent euro rally is a corrective phase in a bear market and not a change in trend, but the upward momentum is strong and the $1.25 mark may be tested soon," said currency strategists at Brown Brothers Harriman in New York.

Since the common currency's rebound is partially a product of market players covering negative bets, it might not portend a sustained improvement, analysts say.

"Ultimately, when the market is this short a particular currency and a pullback happens, it results in some price volatility. It doesn't necessarily reverse the longer-term trend," said Jack Spitz, managing director for foreign exchange, financial markets and derivatives at National Bank Financial in Toronto.

The euro could slip into a pattern of sideways trading against the dollar after its recent volatility, said Shaun Osborne, chief currency strategist at TD Securities in Toronto.

The euro continues to trade heavily against other major currencies, notably the Swiss franc, and that could be an indication of a coming retreat against the greenback, he said.

The euro dropped to a record low of CHF1.3718 against the Swiss franc on Friday.

While the euro looks vulnerable, the yen appears likely to continue on its recent strengthening track. Analysts see the dollar moving between roughly Y90.00 and Y92.50, with a tendency to edge lower in that range.

"I think the yen may strengthen a little bit, although it will be in reaction to a more risk-averse environment, not for any fundamental reasons," Osborne said. "The yen is the mystery wrapped inside of the enigma, I think," he said.

The yen's strength this week in a generally risk-positive environment is somewhat puzzling, said National Bank's Spitz. "It's being seen in many respects as somewhat of a range trade," he said.

A move below Y90 by the dollar would likely invite "jawboning" by Japanese authorities in an effort to quell the yen's strength, Spitz said.

A handful of key events loom over currency markets next week.

One is the U.S. Federal Reserve's two-day open market committee meeting.

No one is expecting the U.S. central bank to raise interest rates, but investors will be scrutinizing its policy statement closely for any clues about future direction.

"At this stage, a significant change to its statement seems unlikely, with low rates for an 'extended period' retained," said currency analysts at ING in London.

"However, the chance of noteworthy alterations cannot be completely ruled out and this may prevent the [dollar] from softening as much as it might otherwise in the lead-up," they added.

Other notable events include the meetings of leaders from the Group of Eight major economies in Huntsville, Ontario, and the Group of 20 advanced and emerging economies in Toronto.

The G-20 event, which takes place next weekend, will be watched closely for any signals on currency policy.

Analysts say China's fixed-exchange-rate regime could be up for discussion during the G-20 meeting, although Chinese officials have said the meeting shouldn't be a forum for discussing the currency.

-By Don Curren, Dow Jones Newswires; 416-306-2020; don.curren@dowjones.com

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June 21, 2010 07:37 ET (11:37 GMT)

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