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Car production in the U.K. fell for the eighth straight month in May, though the decline was the smallest of the year, the Society of Motor Manufacturers And Traders Limited or SMMT said Friday.

Production of cars dropped 43% year-on-year to 67,754 in May after falling 55.3% in April. Production of commercial vehicles slumped 73.5% to 4,692 following 65.2% contraction in the previous month. Hence there was a fall of 47% in total vehicle production in May.

"The scrappage schemes in place across Europe are now beginning to have a positive impact, although the full benefits will take a little longer to flow down to companies at all levels in the supply chain," SMMT Chief ****utive Paul Everitt said.

Commercial vehicle production was severely affected by weak business confidence and economic uncertainty. Everitt said, "Businesses across the economy are still holding back on new expenditure and will need to see better access to finance and stronger domestic demand."


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The greenback, which slumped to multi-day lows against most majors just before the release of the US Commerce Department report on personal income, started trending higher following the report. As of now, the dollar is trading at 95.42 against the Japanese yen, 1.0847 versus the Swiss franc, 1.6491 against the pound and 1.4083 against the euro.

The report showed that personal income jumped 1.4 percent in May following an upwardly revised 0.7 percent increase in April. Economists had expected income to rise 0.3 percent compared to the 0.5 percent growth originally reported for the previous month.

Additionally, the Commerce Department also said that personal spending rose 0.3 percent in May after coming in unchanged in the previous month. The moderate increase in spending came in line with economist estimates.


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News are provided by InstaForex in partnership with RTT.

Tuesday in Asia, the U.S. dollar and the Japanese yen plummeted against their key counterparts as hopes of an economic recovery increased risk appetite to buy higher-yielding assets.

The dollar and the yen are viewed as safe-haven currencies and tend to attract buying when worries about the global economy and financial markets flare up, but can come under pressure when such concerns recede.

Asian stock markets are broadly higher today, taking their cue from gains on Wall Street with energy stocks buoyed by a continued rise in crude oil prices.

Japan's Nikkei 225 was up 1.9%, Australia's S&P/ASX 200 was 1.5% higher, Korea's Kospi Composite Index was up 0.8%, Hong Kong's Hang Seng was up 1.4%, China's Shanghai Composite was 0.1% higher and Taiwan shares were up 0.9%.

Japan's Nikkei average rose 1.9 percent today, and briefly it hit 10,000 as surging crude prices boosted trading houses such as Mitsubishi Corp., which deal in oil, amid growing optimism that economic recession may be easing.

The 225-issue Nikkei Stock Average gained 184.57 points, or 1.89 percent, from Monday to 9,968.04 in the morning session after briefly touching 10,000.30. The benchmark index last topped the 10,000 line on June 15, logging an intraday high of 10,126.55.

The broader Topix index of all First Section issues on the Tokyo Stock Exchange was up 14.32 points, or 1.56 percent, to 929.64.

Stock market gains are fueling risk appetite in the currency markets, sending the euro, aussie and kiwi higher.

Sentiment in Japan was helped by news that household spending in May rose 0.3% on year, up for the first time in 15 months, and beating expectations for a 1.5% decline.

But that was tempered by the release of the May jobless rate, which rose to 5.2%, the highest since September 2003, from 5.0% in April. Analysts had expected an increase of 5.1% for May.

The job-to-applicant ratio came in at a record low of 0.44, compared to forecasts for 0.45 after the 0.46 level in April.

But the number of employed persons rose from 63.22 million in April to 63.42 million in May. The job participation rate was 60.5 percent, up from 60.4 percent a month earlier.

The Organization for Economic Cooperation and Development last week forecast Japan's jobless rate will rise to an unprecedented 5.8 percent in 2010.

In Asian trading on Tuesday, the yen fell to a 2-week low of 159.97 against the pound. This may be compared to yesterday's close of 159.15. If the yen weakens further, it may likely target the 162.6 level.

The yen has declined 4% against the pound after it reached a 3-week high of 154.13 on June 23.

The yen tumbled to a 15-day low of 135.97 against the euro during Asian deals on Tuesday. The next downside target level for the Japanese currency is seen at 138. At yesterday's close, the euro-yen pair was quoted at 135.32.

The euro gained 1% against the yen yesterday after a report showed that the Euro-zone economic sentiment rose more than expected in June.

The economic sentiment indicator rose to 73.3 from an upwardly revised reading of 70.2 recorded in May. Meanwhile, economists had expected the index to rise to 71 from May's initially reported reading of 69.3.

Against the Swiss franc, the yen slipped to a 6-day low of 89.14 in Asian deals on Tuesday. On the downside, 89.8 is seen as the next target level for the yen. The franc-yen pair was worth 88.80 at Monday's New York session close.

After hitting a 1-month high of 86.89 against the franc on June 24, the yen has been declining and it has lost more than 2% thus far.

The dollar also weakened today on optimism the global slump is waning, reducing the currency's appeal as a refuge.

During Asian deals on Tuesday, the dollar plunged to 1.6663 against the pound. This set the lowest level for the dollar since June 03. If the dollar slides further, it may likely target a new multi-month low of 1.70. The pound-dollar pair closed yesterday's trading at 1.6567.

The pound rose as U.K. consumers became much more upbeat about the economy's prospects over the next 12 months in June, boosting the overall measure of confidence for the fourth time in five months.

Consumers seem to believe that the measures taken by the government and the Bank of England to support the economy are likely to work, and indicating that they in turn won't cut back on spending as sharply as many economists had expected.

Polling firm GfK NOP said today that the headline measure of consumer confidence rose to -25 in June from -27 in the previous month. The index was in line with economists' expectations. At the same time, the index came in better than the minus 34 registered in June last year.

The dollar plummeted to a 7-month low of 1.6666 against the pound on June 03. Although the dollar gained thereafter, it pulled back again after reaching a 12-day high of 1.5805 on June 08.

However, the pound-dollar pair largely bounced between 1.6212 and 1.6623 for the past two weeks, but the pair moved off the range today.

The dollar slumped to a 4-day low of 1.0802 against the Swiss franc and a 6-day low of 1.4133 against the euro in Asian deals on Tuesday. If the dollar drops further, it may likely target 1.065 against the franc and 1.418 against the euro. The euro-dollar pair closed trading at 1.4089 and the dollar-franc pair at 1.0823 on Monday.

Extending yesterday's 1% gain, the dollar surged up against the yen in today's early Asian deals and reached a 5-day high of 96.33 at 8:05 pm ET. But the dollar fell thereafter and the pair is currently trading at 95.69, down from yesterday's New York session close of 96.06. The near term support level for the U.S. currency is seen at 95.1.

Traders are now likely to focus on the European session, in which the Swiss May UBS consumption indicator, French May PPI, German June unemployment rate, Euro-zone M3 money supply for May and CPI for June, Italian CPI for June and PPI for May, U.K. final first quarter GDP estimate and current account reports are expected.

From the U.S., the S&PCase-Shiller home price index for April and the consumer confidence report for June are due in the North American session.

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The US dollar that edged slightly higher against its major rivals immediately after the ADP employment report lost ground shortly. As of 8:30 am ET, the greenback drifted lower to 96.67 against the Japanese yen, 1.0795 against the Swiss franc, 1.6494 against the pound and 1.4123 against the euro.

The ADP report showed that non-farm private employment fell by 473,000 jobs in June following a revised decrease of 485,000 jobs in May. Economists had expected a decrease of 394,000 jobs compared to the loss of 532,000 jobs originally reported for the previous month.

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The dollar pulled back versus the euro and sterling but managed to stabilize against the resurgent yen Thursday morning in New York, as traders looked ahead to weekly jobless claims figures.

Yesterday, The Group of Eight largest industrialized nations meeting in L'Aquila released a statement recognizing serious downside risks to the global economy.

Still, stock futures on Wall Street crept ahead Thursday morning on Wall Street, fueling renewed risk appetite. Alcoa kicked off earnings season with a better than expected result.

The dollar gave back some of its recent gains versus the euro and sterling. Versus the euro, the dollar dropped to 1.3980, falling more than a penny from its 3-week high of 1.3832.

The dollar plunged versus the sterling, dropping to 1.6260 from a monthly high of 1.5982.

Thursday, the Bank of England retained its key interest rate and decided to continue with its asset purchase scheme totaling GBP 125 billion by utilizing central bank reserves.

At the end of the two-day rate setting meeting, the Monetary Policy Committee decided to hold the Bank Rate at 0.5% as expected. The rate now stands at the lowest since the central bank was established in 1694.

The dollar steadied versus the yen,, holding near 93 after plummeting to a 5-month low of 91.79.

Despite nagging rumors that G8 leaders would discuss an alternative to the dollar as the world's de facto reserve currency, there was no mention of a new international currency in the statement released following the first day of meetings in Italy.

A Labor Department report on the number of first time claimants for unemployment benefits is likely to be in the radar, given the linkage jobs and wage growth has got with consumer spending. Economists expect the report to reveal a decline in claims in the recent reporting week. Additionally, the results of the Treasury auction of $11 billion worth of 30-year bonds may also be closely watched.

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Friday morning in Asia, the U.S. dollar advanced against the currencies of Europe, U.K. and Switzerland. On the other hand, the dollar pared its recent gains against the Japanese yen.

Leaders of the world's biggest developed and emerging nations avoided a debate over the dollar's role in the global economy as they agreed not to devalue their currencies to promote their exports.

With officials from Brazil, India, China and Russia pushing consideration of alternative reserve currencies, their joint statement's language on foreign exchange echoed an agreement at an April summit of the Group of 20.

The leaders agreed to "refrain from competitive devaluations of our currencies," according to the statement released after their meeting yesterday at the G-8 summit in L'Aquila, Italy. They also agreed to "promote a stable and well-functioning international monetary system."

The global financial crisis and the surge in U.S. borrowing have prompted Russian President Dmitry Medvedev to advocate diversification away from the dollar. Russia and its counterparts have yet to come up with a viable alternative.

The dollar that closed yesterday's trading at 1.4025 against the euro rose to 1.3969 during early Asian deals on Friday. The near term resistance level for the U.S. currency is seen at 1.389.

A report from the U.S. Labor Department showed yesterday that first-time claims for unemployment benefits decreased substantially in the week ended July 4th.

The report showed that jobless claims fell to 565,000 from the previous week's revised figure of 617,000. Economists had been expecting a more modest decrease to 603,000 from the 614,000 originally reported for the previous week.

In early Asian trading on Friday, the dollar climbed to 1.6273 against the pound. This may be compared to yesterday's close of 1.6339. On the upside, 1.61 is seen as the next target level for the dollar.

Against the Swiss franc, the dollar gained in early Asian deals on Friday. At 10:45 pm ET, the dollar-franc pair reached 1.0830, up from yesterday's 1.0783. If the pair advances further, it may likely target the 1.092 level.

The dollar strengthened to 93.20 against the yen at 7:50 pm ET Thursday. Thereafter, the dollar-yen pair slipped and it is presently trading near yesterday's close of 92.99. The next downside target level for the pair is seen at 91.8.

An index measuring the prices of domestic corporate goods fell 6.6 percent on year in June, the Bank of Japan said today, marking the fastest pace of decline on record.

Analysts had been expecting a fall of 6.4 percent on year following the revised 5.5 percent decline in May. On a monthly basis, the prices for corporate goods eased 0.3 percent versus expectations for a 0.1 percent decline. The May reading was revised from -0.4 percent to -0.5 percent.

The industrial production reports from France and Italy as well as the French current account-all for the month of May are scheduled for release in the European session today.

From the U.S., the trade balance for May, import and export price indexes for June and the Reuters/University of Michigan's preliminary consumer confidence report for July are expected in the New York session.

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Thursday, in its July issue of the Asia Economic Monitor, the Asia Development Bank noted that the East Asian Economies had already entered the transistion from recession to recovery, although the economic growth was continuing to slow this year.

"Emerging East Asia could see a V-shaped recovery, with growth dipping sharply in 2009 before regaining last year's pace in 2010," Jong-Wha Lee, ADB Chief Economist and Head of the Office of Regional Economic Integration said.

However, the report cautioned saying that given the tentative nature of the expected recovery, it was critical for authorities to continue to follow measures which would support domestic demand and growth. "Monetary and fiscal policies in the region need to remain accommodative until the recovery gains substantial traction", the ADB said.

"Emerging East Asia should reinforce cooperation in enhancing financial stability by accelerating regional initiatives, and actively participate in designing the new global financial architecture", it added.

Moreover, the ADB pointed out that deep recessions in the U.S,Europe and Japan would continue to hurt emerging Easing Asian economies, particularly the smaller one that were highly reliant on exports. However, larger economies like China, that had implemented major fiscal packages were begining to see some results from the stimulus packages.

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The dollar came under further pressure versus the euro and continued its trek toward parity against the surging loonie Monday morning in New York.

Rising global stocks and speculation that the economy is on the mend have fueled increased appetite for riskier higher yielding currencies.

Traders were looking ahead to a fairly busy week on the economic front, kicked off by the Commerce Department's new home sales report for June.

The consensus estimate for the report coming at 10 AM ET this morning calls for an increase in new homes sales to 352,000.

New home sales declined 0.6% in May from the previous month to a seasonally adjusted annual rate of 342,000.

The dollar remained on the defensive versus the euro, dropping to an 8-week low of 1.4296, just shy of its lows from last December. A move to 1.4340 would take the dollar to its lowest level since the last week of 2008.

There was no relief for the dollar versus the scorching-hot loonie. Amid growing evidence that the Canadian economy is in much better shape than its neighbor to the south, the dollar dropped to C$1.0780, its lowest level since September 2008.

The dollar extended its run of choppy trading versus the sterling, easing to 1.6500 after seeing some modest strength late last week.

Versus the yen, the dollar firmed up slightly to 95.20, staying near a monthly high of 95.28.

In economic news from around the globe, German consumer confidence for August improved strongly, suggesting a recovery in the economy that is hit hard by recession.

According to the latest consumer climate survey from the market research firm GfK, the forward-looking consumer sentiment index rose to 3.5 points for August.

Monday, the quarterly report from the Bank of England said the continued asset purchases in the second quarter were accompanied by signs of improvement in the corporate credit markets.

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The International Monetary Fund welcomed Indonesia's fiscal stimulus plan for 2009, underscoring timely and efficient implementation of the spending program. The Washington-based agency urged Indonesia to maintain some of the stimulus measures next year.

The IMF Board of Directors noted that private consumption supported by the fiscal stimulus package helped to maintain positive economic growth. However, another round of global risk aversion could adversely affect nation's external liquidity, demand and growth prospects. To withstand these risks, the authorities should strive to achieve the appropriate policy mix and promptly adjust it as needed to preserve macroeconomic and financial stability.

The board assessed that the current level of the real effective exchange rate is broadly in line with fundamentals and that reserves are at a comfortable level. Some others believed that the current level of reserves and the various contingency arrangements should provide an adequate cushion.

Regarding inflation, the fund said, "Strong commitment to the medium-term inflation targets, as well as publication of inflation forecasts, would help guide inflation expectations and enhance policy credibility."

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The public's trust in business has stabilized and is recovering significantly in some of the world's largest markets, results of a survey conducted by Edelman, a leading independent public relations firm, showed Thursday.

Edelman's previous survey, conducted in January, showed a devastating loss in trust in the private sector.

The mid-year survey was conducted among 1,675 informed public in six countries - the U.S., the U.K., France, Germany, India, and China.

The survey found that India and China are the most positive about business. At 75%, India recorded the highest level of trust in business of any of the six countries surveyed. China followed with 60% saying they trust business to do what is right.

"The private sector is perceived as enabling an economic growth that has led to healthier living standards. The survey numbers reflect a high degree of national pride in the accomplishments of business," said Alan VanderMolen, president, Asia Pacific, Edelman.

In the U.S., 48% of informed public trust business to do what is right, up from a low of 36% in January. The figure for France rose to 41% from 30%.

"Trust in business is on the way back, but we're still in the middle of the game," said Richard Edelman, president and CEO, Edelman.

The public's trust in government rose the most in India, an increase of 13 points to 55% followed by the U.S., where the trust barometer rose 12 points to 42%.

News are provided by InstaForex.