Austria’s Largest Cooperative Bank on Watchlist
Austrian banking woes have further pressured the euro in currency markets. Austria nationalized Hypo Alpe-Adria Bank International AG and the Austrian press reported that the Austrian central bank and its financial market regulator have put Oesterreichische Volksbanken have put the country’s largest cooperative bank on a watchlist. A spokesman for the bank said it was not at risk of nationalization and that the press reports were inaccurate. Recently the US dollar has risen on positive US jobs and economic data. Camilla Sutton of the Bank of Nova Scotia stated, “What we are seeing recently is the improvement in some important U.S. data and rising sovereign risk in the euro zone. Both provide a bid tone to the U.S. dollar.”
Dollar Gains on Industrial Production Data
The dollar gained 1% on the euro trading at $1.4513. The dollar gained 1.6% on the yen and traded at 89.95. The yen fell 0.4% against the euro to and fell 0.5% against the pound to 89.41 U.K. pence. US industrial production increased 0.8% in November but a report from New York showed decreased industrial production during the same period showing the US economy is still struggling. Sebastien Galy of BNP Paribas SA said, “The data was positive for the dollar. It’s much safer to be short the yen, not the dollar.”
Greek Fiscal Problems Add to Euro’s Woes
Risk sentiment rose after Abu Dhabi announces a $10 billion dollar bailout for Dubai erasing previous debt concerns. Greek fiscal problems continue adding to Austria’s banking woes and sparking concerns about Euro Zone recovery. Investors are watching the ongoing Federal Reserve meeting for signs that the Fed may withdraw its stimulus programs earlier than expected. The Fed’s low rates have pressured the greenback throughout 2009 and although the dollar is now higher against most major currencies the DXY is %% lower this year. Since the release of the last US non farm payrolls report investors have been speculating that the Fed may raise rates sooner than expected.
