Thailand’s SET May Rise 4.5% Next Week, Bualuang Says (Update2)

Thailand’s SET Index may rise 4.5 percent next week, extending its biggest gain in six years, as individual investors buy more mutual funds to meet a year-end tax deadline, Morgan Stanley’s Thai partner said.

The measure may rise to as high as 760 by the end of the year from yesterday’s close of 727.21, according to Bualuang Securities Pcl, which has a tie up with Morgan Stanley for Thai research. That would be the highest level since July 2008.

“There should be more money inflow into the equity market next week as it’s the last chance for local individuals to buy mutual funds for tax savings,” Pongrat Ratanatavanananda, an investment strategist at Bualuang, said by phone from Bangkok.

The SET has gained 62 percent this year on expectations the economic recovery will boost earnings. Southeast Asia’s second- largest economy shrank 2.8 percent last quarter, the smallest contraction in a year, as it pulls out of the global slump.

Local individuals are expected to invest at least 5 billion baht ($151 million) in mutual funds that provide tax breaks, Tisco Securities Co., Deutsche Bank AG’s partner in Thailand, said in a report on Dec. 22. The gauge today rose 0.4 percent to 730.41, the highest close since Oct. 19.

Thai individuals may invest more in the so-called long-term equity fund and the retirement fund as the government offers tax breaks for as much as 1 million baht on these investments.

More Local Buying

Local institutions, which include mutual fund and insurance companies, bought 484 million baht of domestic stocks more than they sold yesterday, an 14th straight day of net buying, according to the exchange’s data. Overseas investors sold a net 64 million baht of the stocks, the first net selling in three days.

A court decision to lift a suspension on construction for some projects in the Map Ta Phut industrial complex has also “dramatically” boosted investor sentiment, Pongrat said today.

On Dec. 22, Prime Minister Abhisit Vejjajiva said 19 projects of the stalled 65 may be allowed to proceed. The Administrative Court said on Dec. 23 a project of Siam Yamato Steel, an affiliate of Siam Cement Pcl, can proceed because it obtained an environmental impact assessment certificate before the 2007 constitution was promulgated.

Pongrat recommended shares of PTT Pcl and Siam Cement, whose projects have been suspended by the court, on expectations that the court may allow construction of their plants to proceed soon.

China’s Stocks Drop for First Time in Three Days; Zijin Falls

China’s stocks dropped for the first time in three days, paring a weekly gain, on concern new share sales will divert money from existing equities.

Zijin Mining Group Co. and China Shenhua Energy Co., the nation’s largest producers of gold and coal, lost at least 1.3 percent as eight companies debuted in Shenzhen’s ChiNext market for start-up companies today. Pharmaceutical companies Joincare Pharmaceutical Group Industry Co. advanced as investors sought so-called safe havens that aren’t easily affected by the economic swings.

The Shanghai Composite Index fell 12.06, or 0.4 percent, to 3,141.35 at the close. It added 0.9 percent in the past five days, its first weekly gain in three weeks. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, declined 0.4 percent to 3,424.78.

“The market will be in a fluctuating pattern until the end of the year,” said Wu Kan, a Shanghai-based fund manager at Dazhong Insurance Co., which manages about $285 million. “The market won’t have a strong performance, unless the government slows down new share sales.”

The Shanghai gauge has rallied 73 percent this year as government spending and a credit boom helped the nation’s economy recover from its steepest slump in more than a decade. The index has dropped 1.7 percent this month as a flood of share sales diverted funds from existing equities and the government raised down payments on land purchases.

Zijin, Jiangxi Copper

Zijin Mining lost 1.9 percent to 9.47 yuan after rising 4.7 percent yesterday. Shenhua fell 1.3 percent to 32.79 yuan. The stock gained 4.8 percent yesterday.

Jiangxi Copper Co., China’s biggest producer of the metal, lost 1.7 percent to 37.93 yuan. Zhongjin Gold Corp., the country’s second-largest bullion producer by market value, slid 2.6 percent to 56.21 yuan.

Eight companies including Jiangsu Huasheng Tianlong Photoelectric Co. and Guangzhou Improve Medical Instrument Co. jumped on the first day of trading in the ChiNext market for technology-heavy start-ups.

They are the second batch of companies that have been listed on the market, adding to the first 28 companies that went public at the end of October. ChiNext has less stringent rules for listing compared with the nation’s two main exchanges.

Mainland companies have raised 194 billion yuan ($28 billion) from initial public offerings this year, 87 percent more than the whole of 2008, according to data compiled by Bloomberg, as an improving economy lures investors.

New Listings

Anhui Xinhua Media Co., the biggest publishing house in the province, said it plans to raise 712 million yuan in an initial public offering in Shanghai to fund its expansion.

Joincare Pharmaceutical advanced 6.3 percent to 12.17 yuan, rising for a fifth day. Zhangzhou Pientzehuang Pharmaceutical Co., a manufacturer of Chinese traditional medicine, gained 3.1 percent to 39.08 yuan. A measure tracking health-care stocks gained 1.5 percent today, the second biggest among the CSI 300’s 10 industry groups.

The following companies were among the most active in China’s markets. Stock symbols are in brackets after companies’ names.

China CAMC Engineering Co. (002051 CH) rose 3.4 percent to 25.70 yuan after the company said 2009 net income may rise 30 percent to 50 percent.

Guangdong Mingzhu Group Co. (600382 CH) rose by the 10 percent daily limit to 8.55 yuan after saying it received a 78.8 million yuan dividend payment from Guangdong Dading Mining Co.

Shenzhen Gas Corp. (601139 CH), a supplier of bottled gas, more than doubled to 15.17 yuan in its Shanghai trading debut after raising 903.5 million yuan in its initial public offering.

U.K. Stocks Gain; FTSE 100 Reaches Highest Since September 2008

Dec. 24 (Bloomberg) -- The U.K.’s FTSE 100 Index rose to the highest level since September 2008, with the benchmark gauge extending its biggest annual rally since 1997, as shares of mining companies advanced.

Fresnillo Plc, Rio Tinto Group and BHP Billiton Ltd. gained at least 1.3 percent as metals prices climbed on the London Metal Exchange. RSA Insurance Group Plc, the U.K.’s biggest non-life insurer, led declining shares.

The FTSE 100 gained 30.03, or 0.6 percent, to 5,402.41, bringing this year’s rally to 22 percent. That’s the highest closing level since Sept. 12 last year, the final trading session before Lehman Brothers Holdings Inc. filed for the world’s biggest bankruptcy.

The measure has rebounded 53 percent since March 9 as central banks cut interest rates to record lows and governments worldwide committed about $12 trillion to revive the economy. The FTSE All-Share Index rose 0.4 percent today and Ireland’s ISEQ Index slipped 1.1 percent.

“It’s been a good few weeks” for equities, said Manoj Ladwa, a markets strategist at ETX Capital in London. “Whether momentum can be maintained in 2010 is a tougher question.”

Fresnillo, the world’s largest primary silver producer, surged 6.1 percent to 793.5 pence. BHP Billiton, the world’s biggest mining company, advanced 1.3 percent to 1,970 pence. Rio Tinto, the third largest, gained 2.3 percent to 3,370 pence. Copper, lead, nickel and tin prices climbed in London.

RSA Insurance slipped 1.5 percent to 119.1 pence, leading declining shares on the FTSE 100.

Trading on the London Stock Exchange closed at 12:30 p.m. for the Christmas holiday. All markets in Europe are closed tomorrow and the U.K. market will also be shut on Dec. 28.

European Stocks Advance for Second Week on Economic Recovery

European stocks rose for a second week, with the benchmark Dow Jones Stoxx 600 Index heading for its largest annual increase in a decade, amid signs the global economy is recovering.

Royal Dutch Shell Plc and Total SA led gains among oil producers as crude advanced after stockpiles of the commodity fell more than expected. Allied Irish Banks Plc rallied after saying it is looking at ways to raise capital next year. The Stoxx 600 gained 2.3 percent this past week to 251.9, extending its 27 percent rally this year. Most equity markets across Europe were closed yesterday and all are closed today for Christmas vacation.

A 59 percent surge on the regional benchmark gauge from March has been spurred by record-low interest rates in the U.S. and Europe and by governments worldwide that have committed about $12 trillion to revive credit markets and stimulate economic growth. Sales of existing homes in the U.S. topped forecasts Dec. 22, the latest sign the world’s largest economy is emerging from recession.

“Markets still look to be reasonably good value and we expect profits are going to grow pretty quickly next year,” said Kevin Gardiner, the London-based head of investment strategy at Barclays Wealth, in a Bloomberg Television interview.

Earnings for companies in the Stoxx 600 are expected to climb 29 percent next year, according to data compiled by Bloomberg. That compares with a forecast for a 7.4 percent increase in 2009 profits.

Earnings Growth

European equity strategists said earnings growth can push stocks 11 percent higher in 2010 following this year’s rally, according to a Dec. 22 survey. Goldman Sachs Group Inc. and Bank of America Corp., which underestimated the strength of this year’s gains, predict shares in the region may climb more than 20 percent over the next 12 months. Morgan Stanley is the only brokerage among 16 surveyed by Bloomberg to estimate a retreat by year-end, saying the withdrawal of government stimulus will weigh on equities.

Lower than normal trading volumes this week may continue next week, according to market analyst Cameron Peacock at IG Markets in Melbourne. All western European equity markets will be closed Jan. 1 for a holiday and the U.K. market is closed Dec. 28.

The U.K.’s FTSE 100 climbed 4 percent this week, while France’s CAC 40 rose 3.1 percent. Germany’s DAX gained 2.2 percent as Infineon Technologies AG surged on a revised sales estimate.

Shell

Shell, Europe’s largest oil producer, gained 6.7 percent and Total, the third-biggest, added 5.8 percent. Crude oil climbed as a government report showed a larger-than-expected decline in U.S. stockpiles and amid the latest signs the economy is recovering from its recession. Oil and gas companies rose more than any of the other 19 industry groups on the Stoxx 600.

Sales of existing U.S. homes rose more than forecast in November, to the highest level in more than two years, a National Association of Realtors report showed Dec. 22.

Allied Irish Banks surged 15 percent and Bank of Ireland soared 19 percent, the two biggest movers on the Stoxx 600 this week. Allied Irish shareholders approved its participation in a so-called bad bank that will buy loans from lenders at an average 30 percent discount, reflecting a fall in land values over the past two years. The bank said it may need to rely on the government after it transfers loans to the bad bank. The government already has a 25 percent stake in each of the two largest Irish banks.

Infineon, Debenhams

Infineon Technologies climbed 5.9 percent after Europe’s second-largest chipmaker said revenue will grow by a better- than-expected “high single digit” in the quarter ending Dec. 31 on improved sales in the automotive and industrial units.

Debenhams lost 1.5 percent, paring its rally this year to 234 percent. UBS AG added the U.K.’s second-largest department-store chain to its “least preferred” list of stocks. UBS said “we see a higher risk to Christmas sales performance given the strong showing last year, a mild autumn and the recent cold snap which we think may have affected footfall,” according to a report sent to clients.

U.S. Stocks Rise, S&P 500 Reaches 15-Month High on Commodities

U.S. stocks rose, pushing the Standard & Poor’s 500 Index to a 15-month high, as higher commodity prices boosted metal producers and reports showed the economy is improving.

Alcoa Inc. and U.S. Steel Corp. helped lead a measure of raw-material producers in the S&P 500 up 4.2 percent, the biggest gain in six weeks. American International Group Inc. added 6.9 percent, the most since September, after people familiar with the matter said the insurer halted an initial public offering of its Chartis property-casualty unit.

The S&P 500 rallied 2.2 percent to 1,126.48 this week, surpassing 1,120.84 to recover half its loss from the 17-month bear market that ended in March. The Dow Jones Industrial Average advanced 1.9 percent to 10,520.10. U.S. exchanges closed three hours early yesterday and are shut today Christmas. Trading at the New York Stock Exchange yesterday was the slowest since Dec. 24, 1998, with 319.3 million shares changing hands.

“I’m optimistic on the market, at least for the first half of the year,” said Ethan Anderson, who helps oversee $900 million as a senior money manager for Rehmann in Grand Rapids, Michigan. “Investors and the stock market are making up.”

The S&P 500 has risen five straight days, the longest winning streak in almost two months, after sales of existing homes topped forecasts and consumer spending rose. It has added 67 percent since March after governments around the world enacted stimulus measures and the U.S. lent, spent or guaranteed more than $11 trillion to end the recession. The S&P 500 is up 25 percent this year, the largest annual gain since 2003.

Economic Barometer

The Treasury yield curve, a barometer of the health of the U.S. economy, widened to a record this week as investors bet an accelerating recovery will fuel inflation and hurt demand for unprecedented sales of government debt. The difference between 2- and 10-year Treasury note yields increased to 285 basis points on Dec. 22.

Alcoa soared 12 percent to $16.34 for the biggest gain in the Dow average. Morgan Stanley lifted the largest U.S. aluminum producer to “overweight” on speculation metal prices will keep rallying. U.S. Steel increased 16 percent to $56.86. Copper and oil prices climbed, helping send the Reuters/Jefferies CRB Index of 19 raw materials up 1.7 percent.

“There’s still a lot of buying power out there,” said Peter Sorrentino, who helps manage $13.8 billion at Huntington Asset Management in Cincinnati. “It’s a market that’s transitioning from being liquidity-driven to being earnings- driven, and the big search now is for who has got that earnings power.”

No IPO

AIG gained 6.9 percent to $30.12. The company stopped preparations for an IPO of Chartis after Robert Benmosche, who started as AIG’s chief executive officer in August, told employees that he considers the business a core holding, according to two people who declined to be identified because an announcement hasn’t been made.

Economic growth in the U.S. is accelerating even more than previously anticipated as business investment picks up and stockpiles fall at a slower pace, according to economists at Morgan Stanley in New York. The economy is poised to grow at a 5.1 percent annual rate from October through December, according to a revised forecast by Morgan Stanley following the Commerce Department’s report on durable goods yesterday. The new estimate is a percentage point higher than their earlier projection.

Excluding demand for transportation equipment, which is often volatile, bookings for long-lasting goods climbed a greater-than-forecast 2 percent in November, figures from the showed yesterday. Initial jobless claims also fell by 28,000 to 452,000 in the week ended Dec. 19, the fewest since September 2008, according to the Labor Department.

Cintas Corp. tumbled 11 percent to $26.37 for the biggest decline in the S&P 500. The largest U.S. supplier of uniforms reported quarterly earnings that missed the average analyst estimate by 8.7 percent.

Electronics for Imaging, Sunrise, Qualcomm: U.S. Equity Preview

Shares of the following companies may have unusual moves in U.S. trading. Stock symbols are in parentheses.

Electronics for Imaging Inc. (EFII US): The digital- printing company said its tender offer was oversubscribed and that it had accepted orders to buy about 5.5 million shares at $12.75 a share.

Qualcomm Inc. (QCOM US): The world’s biggest maker of chips for mobile phones said that Len Lauer, chief operating officer, has resigned and accepted a role as chief executive officer at another company.

Sunrise Senior Living Inc. (SRZ US): The manager of retirement communities said its Sunrise Connecticut Avenue Assisted Living unit amended its credit line, making a $5 million payment on the principal of $29.5 million of outstanding borrowings and suspending or amending some covenants.

Dollar to Gain on Fed, European Ratings Concern, Thin Says

Dec. 24 (Bloomberg) -- The dollar will recover against its major counterparts as the Federal Reserve prepares to raise interest rates and European nations face credit-rating reductions, according to Brown Brothers Harriman & Co.

Standard & Poor’s cut Greece’s rating on Dec. 16 to BBB+, three steps above high-risk, high-yield status, and said the ranking may drop further. Concern about a default among the 16 sovereign nations making up the euro area helped push the common currency down from its highest this year against the greenback.

“Portugal, Italy, Greece and Spain are really coming under stress,” Win Thin, a senior currency strategist in New York at Brown Brothers, said in a Bloomberg Radio interview. “It’s one thing we think will weigh on the euro over the medium term.”

The dollar has rallied 5.4 percent since trading at $1.5144 per euro on Nov. 25, the fastest 21-day appreciation since January. The U.S. currency gained against the yen and 12 other of its 16 most actively traded counterparts since then as traders added to bets the Fed will raise rates next year.

“The dollar can turn around versus the majors and pick up some lost ground,” Thin said. “Once the Fed starts hiking, the yen resumes its role as the major carry trade currency.”

In the carry trade, investors borrow in one currency to invest at higher yields in another. The trade earns a profit based on the difference between the two rates and may lose money should the funding currency strengthen.

Fed funds futures on the Chicago Board of Trade indicate a 91 percent chance the U.S. central bank raises rates by November, up from 84 percent a month ago.

Central Banks Avoiding Dollar to Kill 2010 Rally, Barclays Says

U.S. dollar’s gains may end in the middle of 2010 as central banks shy away from adding greenbacks to their reserves and the Federal Reserve raises rates at a slower pace than investors expect, Barclays Plc said.

Long-term demand for dollars is set to weaken after the currency’s share of global reserves added in the third quarter slid to less than 30 percent, a decline “unprecedented in a period of U.S. dollar weakness,” Barclays said in a note to clients. The dollar stemmed 11 months of declines versus the 16 most-traded currencies in December, gaining against all but two, after investors increased bets the Fed will remove monetary stimulus next year as the economy recovers.

“We see the dollar strengthening in the first six to nine months of 2010 when the focus is on liquidity withdrawal and tightening of rates,” said Steven Englander, chief U.S. currency strategist at Barclays in New York, in a telephone interview. “Once the market gets past this initial fear of tightening, the reality will be that the Fed isn’t going to be tightening very fast and we’ll see dollar selling again.”

The Dollar Index -- which measures the currency against the euro, yen, pound, Canadian dollar, Swiss franc and Swedish krona -- has dropped 4.2 percent this year. It has climbed 4.1 percent in December and traded at 77.928 as of 9:28 a.m. in Tokyo. The U.S. dollar has registered its biggest declines against the Brazilian real, Australian dollar and South African rand dropping by more than 25 percent this year against each.

Global Reserves

Global reserves probably gained by about $180 billion in the third quarter with U.S. dollar-denominated reserves accounting for about $50 billion or less than 30 percent, Barclays estimated, using data from the International Monetary Fund and U.S. official reports.

The bank adjusted for changes in the value of currencies over that period to capture “actual buying and selling, rather than passive gains and losses” Englander wrote in the note.

The dollar declined against all but the yen among the 16 most-active currencies this year. That prompted China and Russia, holders of the world’s biggest and third-biggest currency reserves, to express concern about their U.S.- denominated investments.

“Emerging market central banks are selling their local currencies and buying U.S. dollars to prevent appreciation of their currencies,” Englander said. “They’re avoiding having a bigger concentration of U.S. dollars in their portfolio by turning around and selling dollars against the euro and other currencies.”

Canadian Dollars

Canada’s Finance Minister Jim Flaherty said this week that China, may be poised to buy Canadian dollars as it seeks to shield its $2.3 trillion worth of reserves against the U.S. dollar’s decline. Russia’s central bank said last month it will add Canadian dollars to its reserves and may include more currencies to reduce its dependence on the U.S. dollar.

Declines in the greenback mostly stalled this month as traders bet on a 48 percent chance that Fed Chairman Ben S. Bernanke will increase the target rate for overnight lending between banks by June. Policy makers will end most emergency lending programs and debt purchases by March because of “improvements in the functioning of financial markets” and stabilizing labor markets, the Federal Open Market Committee said on Dec. 16.

Unemployment, Retail

Reports this month showed the U.S.’s jobless rate unexpectedly fell, retail sales beat forecasts and purchases of existing homes rose to the highest level in almost three years in November. Benchmark rates are as low as zero percent in the U.S. compared with 8.75 percent in Brazil and 3.75 percent in Australia. They are 0.1 percent in Japan and 1 percent in the Euro region.

Barclays forecasts that the Federal Reserve will begin raising rates at the end of the third quarter of next year, while the European Central Bank’s tightening cycle will begin at the start of 2011. The Fed’s target rate will reach 2 percent by the end of 2011, Englander said.

Barclays on Dec. 10 forecast the euro will fall to $1.40 in six months before rallying to $1.45 by the end of 2010. The euro traded at $1.4333 today.

Dollar Set for Weekly Drop on Speculation Fed Will Keep Easing

The dollar was poised to end three consecutive weeks of gains against the euro on speculation the Federal Reserve will maintain stimulus measures to secure the U.S. economy’s recovery.

The greenback traded near the lowest level in one week against the 16-nation euro before reports forecast to show a slide in U.S. business activity and a rebound in initial jobless claims. The yen was set to break a two-week advance against the euro after a government report showed Japan’s consumer prices slid in November, backing expectations the Bank of Japan will keep interest rates near zero.

“Speculation about an early exit from credit easing in the U.S. may weaken if incoming data confirm a patchy recovery,” said Keiji Matsumoto, a strategist in Tokyo at Nikko Cordial Securities Inc. “It looks to be premature to conclude that the dollar carry-trade will come to a full end.”

The dollar was at $1.4390 per euro at 4:33 p.m. in Tokyo from $1.4338 a week ago and $1.4380 yesterday in New York. It appreciated to $1.4218 on Dec. 22, the strongest level since Sept. 4, and fell back to $1.4418 yesterday, the lowest since Dec. 17. The dollar lost 0.4 percent this week following a 1.9 percent advance in the previous week. The dollar traded at 91.45 yen from 91.54 yesterday. It rose 1.1 percent this week. The euro was at 131.65 yen from 131.63 in New York. It gained 1.5 percent this week following a 0.4 percent decline.

Many global markets, including those in the U.S., Singapore and Australia, are closed today for Christmas.

Jobless Claims

The Institute for Supply Management-Chicago Inc. will report on Dec. 30 its barometer of U.S. business activity fell to 55.1 in December from 56.1 the previous month, according to a Bloomberg News survey. Readings above 50 signal expansion.

The number of Americans filing claims for unemployment benefits in the week ending 27 probably rose to 460,000 after dropping to 452,000 in the previous week, the lowest level since September 2008, according to a separate survey ahead of the release of the data on Dec. 31.

Fed Bank of St. Louis President James Bullard said he sees interest rates remaining near zero in 2010 as the central bank tries to keep the recovery on track, the Wall Street Journal reported this week.

Clear Picture

“Unless we see a more clear picture about the withdrawal of dollars by the Fed, there is a good chance of investors tapping excess dollars again and resuming investments on higher-yielding currencies,” said Yuichiro Harada, senior vice president of the foreign-exchange division at Mizuho Corporate Bank Ltd., a unit of Japan’s second-largest lender.

The dollar pared weekly losses on speculation Treasuries will draw buying interest from global money managers.

The difference in yields between 2- and 10-year Treasuries reached a record 2.88 percentage points on Dec. 22 and was at 2.84 percentage points yesterday.

“Investors can generate stable returns just by re- investing funds raised in the U.S. back into Treasuries, and thereby avoiding the risks of currency fluctuations,” said Akio Yoshino, chief economist in Tokyo at Societe Generale Asset Management (Japan) Co., a unit of France’s third- largest bank. “The dollar will benefit from this change of investment strategy.”

The spread between 10-year Treasury yields and the same maturity Japanese government bonds reached 2.53 percentage points yesterday, the widest gap since December 2007.

November Deflation

The yen was headed for a 5.2 percent drop against the dollar this month, the biggest since February. The Japanese government said today consumer prices, excluding fresh food, fell 1.7 percent in November from a year earlier, matching the median forecast in a Bloomberg survey.

Bank of Japan Governor Masaaki Shirakawa said in an interview with TV Tokyo this month that the central bank will “persistently” keep interest rates at “virtually zero” to fight deflation.

No Fast Exit

“The BOJ can’t possibly seek an exit from stimulus anytime before other central banks do so,” said Masahiro Ito, senior manager of foreign-exchange sales and marketing at Central Tanshi FX Co., a unit of Japan’s largest money broker. “This will keep a lid on the yen.”

The Japanese currency traded as weak as 91.87 yen on Dec. 22 and 23, the lowest level since Oct. 27.

Losses in the yen were tempered on speculation Japanese exporters were taking advantage of this month’s decline to bring home foreign earnings.

“Exporters seem to be buying the yen in a last-minute attempt before the new year,” said Kazutoshi Yasuda, general manager of the markets department in Tokyo at FX Prime Corp., a foreign-exchange unit of Japanese trading house Itochu Corp.

Large Japanese manufacturers expect the yen to average 91.16 per dollar in the six months to March 2010, according to the Bank of Japan’s quarterly Tankan survey.

Dollar Rebounds on Jobless Claims

After having its winning streak halted yesterday and earlier today on a negative housing report and as the Fed insisted that economic stimulus will be maintained, the dollar rebounded slightly as an employment report brought optimism back to the currency’s outlook.

The U.S. dollar started today’s session losing specially versus the euro after touching the lowest level in December, and also dropped versus the pound and the Canadian dollar as stocks surged globally, but as a jobless claims reports indicated a lower level of new applications for the past week, the dollar pared some of its losses and is currently trading near the highest levels for this month versus the yen and the pound, as retail sales also increased in the U.S., bringing optimism towards the economic recovery in North America for the next year.

Even if the Federal Reserve frustrated traders avoiding to comment interest rate hikes for anytime soon, the economic recovery in the U.S. and pessimism in other economic regions is still allowing the greenback to maintain the levels it reached this month, and may extend its gains for early 2010.

EUR/USD traded at 1.4363 as of 15:56 GMT as of 16:01 GMT from as high as 1.4415 before the unemployment report was published. GBP/USD followed the same trend, trading at 1.5926 after touching 1.6020.

South African Rand Advances on Demand for Metals

The South African rand touched a one-week high versus the U.S. dollar today as demand for several commodities produced in the country emerged, providing support for the African nation’s currency to advance despite negative speculations.

Despite analysts overview for the rand, suggesting it may decline as interest rates are likely to be raised in U.S. in 2010, the rand rose today to a one-week high versus the greenback as demand for metallic commodities as the gold and the platinum rose globally, consequently bringing capital to the African nation.

USD/ZAR traded at 7.5915 as of 17:48 GMT after trading as high as 7.6150 yesterday.