Forex Fundamentals

Yen and Dollar Fell While Sterling Excelled

2009-07-09T19:00:00.003+05:30

The Yen and the Dollar fell on Thursday, compensating some of the earlier session's gains, while sterling extended gains after the Bank of England kept its quantitative easing target unchanged.

A recovery in European stocks helped to buoy the Euro and perceived higher risk currencies, which fell sharply on Wednesday as optimism about the global economy's recovery prospects, waned and investors trimmed risk exposure.

European equities jumped by 1.1 %, breaking a five-session losing streak and pushing the yen lower after it surged broadly on Wednesday, hitting a five-month high against the USD.
Analysts noted, however, that the current moves are corrective and do not represent any fundamental shift in market sentiment.

Sterling outperformed meanwhile after the BoE left its asset buying programme at 125 billion pounds, just as most in the market had expected the central bank to expand the total by 25 billion pounds..

Sterling jumped by 1.2 % against the Dollar to $1.6255 , while the Euro lost 0.5 percent against the UK currency to 85.98 pence as the pound extended gains after the Bank of England policy decision. The news that it was not expanding quantitative easing came as the central bank left key interest rates unchanged at 0.5 percent, as widely expected.

U.S. Markets: Trading capacity fell considerably ahead of the earnings period.

2009-07-08T10:32:00.003+05:30

According to the latest forex updates, U.S. Markets are trading down by a little more than 1.5%, as investors wait for the earnings season to begin in full strangle mode.

The first major company that is due to report its earnings over the second quarter on Wednesday, and market partakers wait for the earnings result of Alcoa. TheLFB-Forex.com Trade Team said that the present earnings season is very important because it can justify or not the strong rally started in March, where the major U.S. indexes advanced as much as 40%.

More significantly, investors will focus on the banking sector earnings, to see if the “wonders” from the first quarter still have legs, and on the retail companies, to determine consumers’ activities over the previous quarter. Since consumer spending mostly drives the U.S. economy, the earnings reports are likely to have a significant influence in the financial market.

Over the last few days of trading, the market has been trading on light trading volume in the European and in the U.S. markets. Particularly, the last two days of trading in the cash market had been very light, especially in the European markets, where the U.K. FTSE moved only on half of the volume recorded over the last few weeks of trading.

The Dow Jones Index fell 144.27 points (1.73%) to 8,180.60, while the S&P 500 index declined 15.59 points (1.73%) to 883.13. Crude oil for July delivery was recently trading at $62.80 per barrel, lower by $1.20. Tuesday was the sixth repeated day in which oil fell down, time in which it lost almost 15%. Gold for July delivery was recently trading higher by $3.90 to $928.20. Gold managed to hold its value on Tuesday, even though crude oil headed lower.

Central bank of Australia sees scope to cut interest rates.

2009-06-04T11:23:00.004+05:30

On Thursday Australia's top central banker stated that he saw possibility to cut interest rates more to make sure a long-lasting economic influence and warned about declining business investment and consumer spending.

Thursday’s Government data sought to strike a chord to the investors about downside risks to the economy with exports falling 11% in April from March. Australian dollar fell down to $0.8014 from around $0.8040 beforehand.

As a result of a droop in exports, Australia suffered its first trade deficit since July last year, just a day after 1st quarter GDP showed the country moved away a recession, helped by its best trade performance in 48 years.

Reserve Bank of Australia Governor Glenn Stevens said that it is likely that activity has remained subdued in the June quarter, the quick downfall in business investment is more or less undoubtedly continuing. While consumer expenditure has held up quite well so far, it may be weaker over the next few months, as the one-off government payments pass and rising unemployment starts to weigh.

Stevens also said that the joint effect of the large fiscal and monetary incentive has played a role in mitigating Australia from the worst global downturn in decades and that monetary policy intended to cut borrowing costs and support demand but the central bank would be careful not to encourage shaky debts.

General Motors Corp. got the court approval to auction its assets.

2009-06-02T13:15:00.002+05:30

General motors Corp. filed the bankruptcy and won the court approval to auction its assets with the highest bid coming from the U.S. reserves and aimed at closing the sale in July to create a restructured Automaker.

Yesterday Judge Robert Gerber in Manhattan gave the permission to borrow $15 billion of a planned $33.3 billion bankruptcy loan from U.S. Bankruptcy. According to a court filing yesterday the U.S. government will expand $50 billion in loans to the 100-year-old automaker and its strategy is to convert that into a 60 % stake in the restructured organization.

General motors Corp. the largest carmaker until its 77-year sovereignty ended last year, had beaten Chrysler LLC as the largest manufacturer to file for bankruptcy. Detroit-based GM plans to commence a new company in 60 to 90 days, equipped with vehicles from its Cadillac, Chevrolet, Buick and GMC units for the U.S. market.

The court will administer the sale or liquidation of unprofitable brands, such as Saturn and Hummer, and at least 11 unwanted factories. General motors Corp stated in its bankruptcy filings yesterday that it has more than 100,000 creditors, and they will recover some assets in the restructuring. Company operations outside the U.S. were not included in the petition.

General Motors prepares to Declare Bankruptcy Yen rose vs. Dollar

2009-06-01T12:05:00.004+05:30

According to the latest Forex updates - After the declaration of U.S. government that General Motors Corp. will file for insolvency today, the Yen climbed up for a 2nd day against the Dollar and the Euro, impelling demand for Yen as a protection from the financial crisis.

The Yen became sophisticated versus 13 of the 16 most-traded currencies after the U.S. government said GM is planning to close 11 factories, accumulating to signs the U.S. recession is far from over. The Euro fell against the Pound on alarm that European Central Bank policy makers will signal this week they plan further steps to keep down borrowing costs, wetting the request of the 16-nation currency. After a Chinese report that shows manufacturing expansion led to the increase of Taiwan Dollar the most in a month.

The Yen became stronger to 95.14 per Dollar as of 1:29 p.m. in Tokyo, from 95.34 in New York last week, when it completed a 3.5 % monthly gain. The Yen increased to 134.58 per Euro from 134.96. The Euro traded at $1.4147 from $1.4158, after gaining 7 % last month, its major forward move since December. Europe’s currency fell to 87.13 pence from 87.46 last week. Sumitomo Mitsui’s Uno said that the Dollar may weaken to as low as 94.25 Yen today.

Magna International Inc. has been chosen by Germany as the buyer for General Motors Opel.

2009-05-30T11:45:00.005+05:30

Magna International Inc. has been chosen by German Chancellor Angela Merkel’s government as the buyer for General Motors Corp.’s Opel and confirmed a financing plan aimed at helping the money-losing unit prevent insolvency.

Finance Minister Peer Steinbrueck told reporters at 2:13 a.m. in Berlin after a meeting with leaders including Merkel that the Canadian car-parts maker, Magna that’s competing with Fiat SpA in its bid for Opel, will invest in the Russelsheim, Germany-based carmaker. Germany will provide a 1.5 billion-Euro ($2.1 billion) bridge loan to keep Opel afloat. Opel will be placed under a trust later today, shielding it from a probably GM bankruptcy next week.

Peer Steinbrueck also said that they don’t take the decision lightly and the federal and state representatives are aware that there are some risks and they have a high interest in maintaining employment at all four Opel sites.

GM is selling a majority ventures in Opel, including the Vauxhall brand in the U.K., as part of a worldwide restructuring before a U.S. government-imposed June 1 deadline to restructure. Germany, which led the search for an investor, has a say because of the Detroit carmaker’s request for loan guarantees.

In front of Merkel there’s a national election on Sept. 27, and he is under pressure from lawmakers and labor unions to save the 25,000 German motors Opel jobs out of GM Europe’s 55,000 positions.

OPEC Meet to keep Oil Price Stable

2009-05-28T17:41:00.002+05:30

According to the OPEC meet on 28th May in Vienna, OPEC decided to keep production quotas unchanged in order to help the global economy. The group has completed 77 percent of its cuts, down from a revised 82 percent for March.

Oil and Natural gas are important source of energy. Due to increase in oil prices day by day had effected the badly effected Global economy. The Global economy needs its source of cheap energy in order to start growing once again, and more importantly, it needs consumers to spend their money on goods and services. OPEC's decision to stick to its targets had been widely expected.

Saudi Oil Minister Ali al-Naimi said. It’s the second time this year the 12-member group has met without revising that total. The Organization Of Petroleum Exporting also agreed to maintain the quota. Naimi said OPEC would hold its next ordinary meeting on September 9.

Rio Tinto Group the iron ore exporter, agreed to a 33% drop in contract prices with Japan’s Nippon Steel Corp.

2009-05-26T12:00:00.003+05:30

Rio Tinto Group, the world’s 2nd largest iron ore exporter, agreed to a 33% fall in agreement prices with Japan’s Nippon Steel Corp., the first downfall in 7 years as the worldwide recession cuts demand.

London- based Rio said today in a statement Nippon Steel, the world’s 2nd largest steelmaker, contracted to pay Rio Tinto Group 97 cents a dry metric ton unit, or about $61 a ton, for its standard product in the year started April 1. That compares with last year’s record of 144.66 cents for Rio’s Pilbara Blend fines.

Rio’s iron ore unit chief executive Sam Walsh gave a statement that- “We believe this settlement is a realistic outcome for both parties, one that reflects the global market for iron ore and the current challenging market conditions facing our customers.”

Rio share went up 1.2% to A$64.82, reversing an earlier down fall of as much as 1.7 %, at 2:07 p.m. Sydney time on the Australian stock exchange. Nippon agreed to pay 112 cents per dry metric ton unit for Rio’s premium Pilbara Lump product, 44% lower than last year’s contract price, the statement said.

Rio last year won an 80% gain in fines prices with Asian customers and a 97 %rise in lump prices. Australia’s 3rd largest iron ore exporter, Fortescue Metals Group Ltd., jumped as much as 8.3 % and Mt. Gibson Iron Ltd. as much as 9.1%.

Yen-selling worsened by position unwinding

2009-05-25T15:31:00.003+05:30

According to the latest Forex news- On Monday the Yen fell broadly after the news that North Korea carried out a nuclear test and a report that it had fired a short-range missile, with traders saying its fall was exaggerated by position unwinding.

The Yen showed slight initial response on Monday to the news that North Korea had carried out a nuclear test, but Yen-selling boosted up after South Korea's Yonhap news said North Korea had fired a short-range missile.

News about North Korea could be seen as being negative for the Yen given Japan's geographical propinquity to North Korea some market players said.

A trader for a major Japanese trading house said-"That provided the trigger, but one factor is that there had been some short-term long positions in the Yen.”

The trader also said that the Yen is being forced by the cutting of some loss-making positions. On Friday the USD rose 0.4 % to 95.11 Yen, drawing away from a 2 month low of 93.85 Yen on trading platform EBS.

A concise chief currencies pair abstract

2009-05-23T17:53:00.002+05:30

According to the latest Forex update again on Friday the Euro (EUR/USD) went up, gaining more than 100 pips and closing just below the 1.4000. Before moving back the pair busted above the 1.4000 and reached 1.4050.The pair gained more than 500 pips for the week as USD weakened across the board. Concerns about the U.S. creditworthiness add another reason for traders to move away from the greenback, moving forward the majors higher.

On Friday the Pound (GBP/USD) moved higher gaining another 85 pips and closing above the 1.5900 level. The U.K. revised GDP figures showed that the economy shrank by 1.9% as the preliminary released projected.

The Aussie (AUD/USD) gained approximately 50 pips as USD continues to take a beating. On Friday Gold prices posted a silent gain closing above $957 an ounce. The Aussie closed the week trading higher than the 0.7800 level and moving forward over all of the daily simple moving averages.

The world's biggest maker of printing presses looking for new investors.

2009-05-22T15:34:00.001+05:30

Chief Executive Bernhard Schreier told a newspaper that the world's biggest maker of printing presses, Heidelberger Druck, which got German state aid this week, is now looking for new investors, he was quoted as saying by the Frankfurter Allgemeine Zeitung that "We are not excluding any option per se -- private equity, family offices or sovereign wealth funds," Family offices are in-house investment vehicles for wealthy families.

He also said that the main thing was finding investors who had a long-term commitment and would not try to make a profit on the investment in the next year or two. Schreier refused to comment on the topic of state aid his company had won.

It was looking for 400 million Euros ($551.4 million) in debt guarantees and a loan of around 300 million Euros media reports have said. Its shares climbed 0.3 % to 6.13 Euros by 0823 GMT, covering a 1% gain by the German mid-cap index.

Sell and buy signals

2009-05-21T18:05:00.003+05:30

Any winning veteran trader will say that a trade does not begin and end with a buying or selling activity. For each trade a trader makes, there is always a trade managing procedure occupied, he or she has to make a group of decisions before entering in to a trade. The way you manage and time those decisions is what will conclude the success of your trade.

A Forex trader who has made correct decisions during the courses of trade might be in profit, decisions like scaling in and/or out, using or not using trailing stop losses and setting or not setting profit objective before entering into a trade.
Yes, there are chances when better results are achieved by a worst trader.

There are numerous things to take into consideration if you like to be a successful trader, you better educate and train yourself for Forex vicinity. Learn how to expand improved trading tactics and investigation techniques, and then learn how to implement what you have built-up to the process of a making a trade-from the original inclination to enter or stay out of a trade to the control of your thought processes and sentiments in managing that trade.

Forex Indicator-Trends

2009-05-20T15:49:00.001+05:30

In Forex a trend means the movement of prices. Mounting peaks and troughs represent an uptrend; declining peaks and troughs represent a downtrend that determines the steepness of the current trend. The breaking of a trend line generally is a sign of a trend reversal. Horizontal peaks and troughs differentiate a trading range.

When you use the Forex indicator trend, you will find it very simple and easy to work, made up of three trigger lines which tell you when to buy and when to sell. It alarms you the beginning of a trend, and will indicate when the trend is ending.

It has proved to be extremely correct, particularly when linked to the best time frame, currency and time of day. Although it is accurate for just concerning any of these three variables, for most advantageous effectiveness it is best to follow the instructions of the trend provider closely. We can’t say that every trade is a winner, but traditionally losses have been much lesser than triumph. Past results are not routinely the signals of future results.

What is MACD?

2009-05-16T17:29:00.000+05:30

MACD or the Moving Average Convergence Divergence is the indicator which let you know whether the currency price is in a high or a low trend. MACD Oscillator has two lines which are the MACD line and the signal line. The MACD line points out the difference between two Exponential Moving Averages (EMA) whereas the Signal line is an EMA of the MACD line itself. With the intention of displaying the buy or sell alarm, the Signal line is marked at the top of the MACD. Generally, a 26 days and 12 days EMA are used for the MACD indicator if based on the closing date, whereas a 9 day EMA will be used, for the Signal line.

There are two ways which are usually employed to understand the MACD. The first one is crossovers - if the MACD falls lower than the Signal line, it is an indication of upcoming low trend and recommends that may be it is a good time to place a short position trade. And if the MACD go beyond the signal line, it gives you an idea about an indication of upcoming up trend and recommends that may be it is a good time to place a long position trade.

The other way is divergence - if the currency price reverses from the MACD, it shows that the trend is going to end. If there is a negative divergence it means that the currency price produces a new high which is higher than the previous high, but the MACD failed to get to the new high, then you should be cautious that the current up ward trend in prices movement may go to the reverse direction. For positive divergence, it happens if the currency price beat a new low which is lower than the previous low, and the MACD failed to get to the new low, you should be cautious that the current currency price downfall will get over and up ward trend will occur once more.

Currency Pair Overview

2009-05-15T16:20:00.001+05:30

Latest Forex updates say that on Thursday, the Euro (EUR/USD) was not able to build up a clear way throughout the overnight session, although the pair had a 90-pip range. In the second part of the European session, the Pound (GBP/USD) saw very little movement when the pair’s volume improved considerably.

The only pairs that did not trade side-ways during the overnight session on Thursday was the Aussie (AUD/USD), showing a 70-pip drop.

The Cad (USD/CAD) did business in a 60-pip range throughout the Thursday trading hours, but ultimately broke the range’s support level during the late U.S. session. The Swissy (USD/CHF) dealt similar with the Euro in the earlier day of trading, on Thursday.

On Thursday the Yen (USD/YEN) increases in the last five days of trading, for the first time. The 100-day average moving facilitated the pair going forward, performing as a powerful support area, in addition to the positive U.S. equity market.

Investments Myths in Forex trading

2009-05-14T18:04:00.002+05:30

Forex market is the biggest economic market of the world, with more than $1.5 trillion daily, dealing in currencies. FX trading is the buying and the selling of currencies in pairs. For example you buy UK Sterling pounds and sell US dollars or you sell Japanese Yen and buy German Marks.

Usually newcomers in Forex have hallucination that they can also easily start earning profit as the others in the market are earning, newbie in the market have a tendency to forget it that there is lot of research is done and there are strategies in order to make winning trades and incomes from trading.

A newbie shouldn’t get trapped in such kinds of myth, and better make yourself perfect and be realistic while trading. If you are uncertain about a how to trade, you better take classes and read carefully about the coordination required in FX trading. It could be hazardous and can break your pocket if you aren’t watchful.

Just because you are trading with a minimum marginal deposit doesn’t mean that you should deal at stages beyond your risk level. Never over leverage yourself. Make safe small investments so there will be no big losses.

Another myth is that newcomer may think that Forex is a market to protect his or her investments but its not true one should be very careful in watching their investments so that shattering situation may be avoided. One can become rich quickly in Forex trading is a myth, the truth is that short term trading, which is disreputable term for spinning profits quickly, is not for the novice.

Lastly, a novice may think that leverage will help him allow playing with the big players in Forex and still stay safe. This can be an awful supposition and he or she may over leverage them if they are not cautious. So, do lot of investigation and research work and think before you step into the dealings of

Forex updates-Dollar hit 4-month lows and Euro touches 7-week high

2009-05-13T14:21:00.002+05:30

Forex updates: The USD hit 4 month low of 81.871 against basket of currencies and 7 week trough versus the Euro on Wednesday, facing changed selling in the middle a recovery in risk appetite that has restricted safe-haven buying of Dollars.

The Euro hit a 7-week high of $1.3722 on trading platform EBS, and now struggling at levels near its March peak of $1.3739. The Euro would go to its highest level in 4 months through break above that March high.

On Tuesday after detaching some gains, the Euro was 0.3% higher from late U.S. trading at $1.3690.

Last week, the Dollar index violated support at the 200-day moving average while the Euro broke above a similar moving average against the dollar.

The Dollar may figure out a head and shoulder pattern in opposition to the Yen on technical charts and looked weak; although it could show some support from the 90-day moving average around 95.45 Yen, market players said.

Forex: What is Fundamental Analysis

2009-05-12T17:47:00.001+05:30

Most Forex traders depend on analysis for building their trading strategies. The two basic types of analysis are technical and fundamental. This article will throw a glance at fundamental analysis and how to use it as part of your FOREX strategy in Fx Trading.

The fundamental analysis tells you about an organization. Fundamentals are allied with the political and economic conditions that may affect currency prices. It is calculated in terms of revenues, assets, liabilities, earnings, Return on Assets (ROA), Return on Equity (ROE), Return on Investments (ROI), growth projection and cash flows, etc. Traders who use fundamental analysis as their trading strategy depends on news reports to collect information about unemployment rates, fiscal policies, inflation, and growth rates.

In Forex trading, the fundamentals play a vital role and mark a country. The fundamentals include not only interest rates and central bank policy but also different plans, unpredictable behaviors, unanticipated events and natural calamities. Always keep one thing in mind fundamental analysis is a very efficient means to predict financial conditions, but not necessarily exact market prices.

Forex updates- Dollar Weakens on Positive Economic News

2009-05-09T15:16:00.000+05:30

On Friday the USD closed much weaker against all of the other major currencies, better than expected NFP reports. The recent optimistic global economic news has assured traders that the most terrible of the recession possibly will be over. Traders are moving away from the greenback in favor of riskier, higher yielding assets making market sentiment dollar negative. Equity markets moved higher up with the DOW gaining triple digits and the S&P adding 20 points. The Euro rushed on Friday, it broke all the records of 200 day simple moving average, and closing above the 1.3600.

Since January 2009 the pound closed at the highest level, it hiked at 230 pips on Friday. The pound strengthened against the dollar as the greenback weakened across the board after the employment figures was released and after traders’ worries were calmed with the release of the stress test results.

The Australian Dollar (Aud/Usd) strongly gains all the benefits on Friday after positive news about the stress tests and global equity markets. The pair gained approximately 150 pips, closing above 0.7650 and added 365 pips for the week.

Advantages of Using Forex Online Platforms

2009-05-07T13:18:00.002+05:30

Nowadays, Forex has become one of the most popular home-based programs and profit making of the net. No doubt, forex has so many financial benefits. Leverage, Flexibility and high income possible are some of them. If you want other source of earnings being a trader, forex has showed time and time again that it can make many millionaire traders.

As a person who wants to hit into this forex profitable idea, what are the merits of using online platforms in access to the forex market? Here is the answer:

Online Platforms is a channel where in a company or a person has access to trade the currency markets anywhere and anytime. This takes the pro of the main benefit of trading: Flexibility. Traders can do business whatever time they decide as the forex market is available almost 24 hours a day. And anywhere because it is not biased into any physical place and can be accessed there is an internet connection available.

For most online platforms, one of the biggest advantages is that there is no software download require for trading, so even if you have not to access your own computer, you can still trade as long ad you know access to the online platform.

Updates: Every time online platform is updated. So you need not to get the newest in the market, accessing your reputed online platform source can keep you updated. Platforms also keep you updated with the daily market reports.

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Majors Currencies turn down on Negative Equity Markets

2009-05-06T14:30:00.001+05:30

On Tuesday, the Dollar reinforced against the Swissy, Euro and the Cad, but to some level it lost the ground against the Yen and the Pound, where the Aussie closed the last trading day at breakeven. Dollar strength came during tonight’s Asian session and on Tuesday as the US equity markets closed just in the red, indicating the market’s risk-aversion position. Ahead, the calendar is filled with top-tier releases over the next-three days of trading, something that will undoubtedly be reflected in the intra-day session.

The Euro (EUR/USD) lost 90pips in the last trading day, on Tuesday, as the pair traded in the Us trading hours and in the early overnight session. In the Asian session, the Euro turned down another 30pips, shedding every pip gained this week.

The Pound (GBP/USD) lost 40 pips during tonight’s Asian session, shedding every pip gained one-day before on Tuesday. Additionally, the pound advanced as much as 140pips during the intra-day session, but lost most of its ground in the second part of the US session.

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Australia’s Worsening Economy

2009-05-05T15:51:00.001+05:30

Australia’s declining economy and soaring state borrowing has started to harm the popularity of Prime Minister Kevin Rudd’s centre-left government ahead of elections next year, a poll showed on Tuesday.

Support for Rudd’s Labor Party dropped 5% points to 42%, based on major votes, the News poll survey found in the Australian newspaper. The conservative coalition was only 4 points behind Labor at 38%.

The closely- watched poll is the foremost to show the government’s primary vote going backwards.

Rudd and Treasurer Wayne Swan have assured tax cuts in the May 12 budget to balance A$52 billion in stimulus spending, including pensioners and cash handouts for families, to help the economy weather the coming slump.

But there are signs voters are becoming more and more concerned with a deficit forecasters think could increase close to A$70 billion ($51.5 billion) in the next financial year with unemployment seen increasing to around 1 million people by mid-2010.

The government in February predicts redundancy would hit 7% by June next year with economic growth in next fiscal year of 0.75% and a deficit of A$35.5 billion.

Asian Market and US futures advanced in the first trading session

2009-05-04T13:24:00.001+05:30

The US futures and Asian markets advanced in the first trading session of the week, in spite of the Nikkei being closed for business tonight, as the country observes the Greenery Day Holiday.

There were no important news releases in the weekends. However, in Asia, a group of nations decided to set up a $120 billion foreign-currency reserve fund with Japan offering another $60 billion in swap facilities to assure the Yen’s liquidity.

There have been discussions for quite long time about such measures in the area, but up till now the Asian nations failed to make an agreement. The reserve fund, also called the Chiang Mai Initiative which allow the Asian countries to borrow as much as 20% of a pre-decided amount without any limitations, but the rest of the 80% will only come after numerous restrictions have been place.

This measure is very good for the region’s constancy and will also allow some countries like Japan, China and South Korea to establish themselves as regional economic leaders, experts said. The three nations will add substantial amounts to the funds, which help them in development.

Commercial property sales fall down globally

2009-05-02T14:14:00.001+05:30

On Friday, global sales of investment grade property plummeted 73% to $47 million in the first quarter from a year ago, or just one-sixth of the level two years before, according to real estate research firm Real Capital Analytics.

A total of 1,014 properties, each value more than $10 million, sold worldwide from January through March, the firm said in a monthly report, noting that the fall involved all property types and just about every market.

Making things poorer, the number of properties that require re-financing or needing capital infusions is soaring. New reports of defaulted mortgages and failed commercial property companies exceeded $55 billion in the first quarter, bringing the total known concerned commercial properties to $153 billion.

Additionally, capital which flowed across borders during the increase of 2004 to 2007 has retreated to home countries, as investors with local information look for chances there among the distress.

Distress amid US property is accelerating, according to a separate statement by Trepp that tracks commercial mortgage-backed securities. The securities, backed by commercial loans, are frequently used as a gauge for the rest of the loan market.

Australia sees job loss more than 8%

2009-05-01T13:09:00.002+05:30

Australia’s coming budget will predict unemployment to peak above 8%, leaving a million people out of work, as the economy records its first annual contraction since the early 1990s.

The Australian, quoting disclosed information from a closed-door meeting of state and national governments on Thursday, said the May 12 budget would also estimate 0.5% economic contraction for the year to June 2010.

Treasurer Wayne Swan had told the meeting that Australia’s economy was set to do its long-term trend into 2010-11, pushing unemployment to the “mid-to-high eights”, the Australian said, quoting officials who presented in meeting.

This suggested the number of unemployed would increase by more than 50% from its present stage of 650,000. The unemployment rate stands at 5.7%.

The centre-left government’s predicts would be the most negative of any budget, showing zero development on average over 2008-09, a contraction in 2009-10 and a return to development in 2010-11 though under long-standing growth of about 3%.

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Asian Market Raise on US Consumer Spending

2009-04-30T13:02:00.001+05:30

Asian markets grew for the first time in last few days of trading which help by positive US reports. The US futures market continued to increase in the after-hours session, something that helped the Asian markets.

Even though the US GDP numbers came in much poorer than estimated, the financial market found the power to progress as consumer spending increased, while stockpiles decreased, which can make the perfect environment for the economy to improve later this year.

The combination of consumers rising their spending, where companies decrease their inventories may give the financial markets expect that the economy will rebound in the coming months, expert said. They also said that at this point, the market is in very positive form it overcame a report saying that 6 banks failed in the Treasury’s stress-test.

As such companies that have direct disclosure to the overseas markets placed important gains during the Asian session. Retail companies advanced also in the Asian equity markets, increased the gains from the US session.

Statistical Arbitrage is known as Risk Arbitrage

2009-04-29T18:10:00.000+05:30

Statistical arbitrage is not correct arbitrage since it does not bring a certain profit; in fact many statistical arbitrageurs have finished large fatalities. The term is frequently abbreviated to statarb. Even though statistical arbitrage is often described as being synonymous with pair trading, it is probably more precise to speak that the terms partly cover. Only because of it is not possible to lay down an unqualified regulation when tradition varies as a good deal as it does.

It is known as Risk arbitrage as well, Statistical arbitrage is very frequently overlapped while buy or short couple trading as well as other complicated quantitative methods, where highly developed trading technologies are implemented. Statistical arbitrage trading frequently involves a black box methodology. This is a computer mock-up which is specially programmed to trigger a buy or sell signal when certain financial variables are met. For example a buy signal could compare a stock previous P/E to the 90 day moving average P/E or use certain sophisticated fundamental as well as technical analysis to trigger buy and sell orders directly to the exchange.

These models are very often created by professional scientists and mathematicians who are skilled at back testing using advanced computer programs. Statistical arbitrage is also involved with the miss pricing of derivatives where the derivative is selling away from its quantitatively derived fair value price.

US Futures Declined at a Strong Pace, But Asian Market Rise

2009-04-27T13:15:00.000+05:30

US Futures post significant decline tonight, although Asian markets are trading in the green. The main cause of concern seems to be the swine flu that just hit the US borders.

It seems that the swine flu is the problem to hit the US and the global financial system. For now, the investors are anxious that the cost of combating the new disease will only add another streak on the government’s budget, already influenced by the huge rescues that financial sector requisite. Also, like this time, consumers tend to spend less, which will also affect the business cycle rising significantly the recovery period. Experts said.

However, Asian equity markets seem unaffected up to now, reaching the maximum valuation in the last three months of trading. The financial sector constant to progress tonight, helped by the unofficial, preliminary stress test outcomes, which show that most banks have a sufficient capital base. Equally with the financial sector, pharmaceutical companies also placed some major gains tonight, as drug sales are possibly to raise up.

Additionally, the Japanese government decreased yet again the GDP projections for 2009, down to 3.3%, something that should have pulled the Asian markets worse.

G24- Developing Countries harder hit by Global Recession

2009-04-25T14:54:00.000+05:30

Group of 24 nations said on Friday the global financial and economic crisis is hurting to developing countries, which will have to deal with the fallout long after advanced economies.

The G24, made up of developing countries from Latin America, Asia and Africa said quick turn down in increasing and falling currency reserves were leading to growing unemployment and poverty levels.

The risks of a more protracted worsening in the world economy remain significant a G24 communique said after a meeting on the sideline of the spring meeting of the World Bank and International Monetary Fund.

The communique noted the crisis had originated in advanced economies and was affecting developing economies through sharp falls in remittance, exports, private capital flows and a global credit crisis.

The group said that developing countries will require unprecedented and urgent support from global financial institutions like the World Bank and IMF.

The G24 also supported an early review of the role of the IMF in the international monetary system, including the role of major currencies like the Euro, Yen, Dollar and British Pound.

Gold and EURO given reason to smile

2009-04-24T18:12:00.002+05:30

EUR/USD has been facing hard times since early week and the pair held 1.2930 support level and has appreciated more than 250 points since then. The pair found some momentum that was extended towards 1.3270 which gives more strength. As long as 1.3060 holds for now we expect further improvement in the next week. However, for now 1.330 is the next level that euro bulls should be aware.

GBP/USD has been trading choppily since UK budget released in Wednesday. After the news we witness a big slide in the pair, the pound manages to reverse all losses and continue to rise towards 1.4750. The risk appetite returned and traders were happy to trade both pound and euro. As long as the pair continues to trade above 1.45 we might witness some range forex trading in the coming days, as investors are still deciding which way to go.

The currency is now trading in the aftermath of the news, with euro still being strong and pound weakening as the day progress. Later on, we have very important number in the US with durable goods and new home sales. It will be interesting to see some improvement in numbers but more interestingly, I would be awesome to see the reaction of the investors if better numbers are printed.

Regarding the economic future markets is still under pressure. So far, future and equities, managed to sustain the upside and it will be interesting to see how DOW JONES will close the week.

With the G7 meeting starting today and forwarding in the weekend, let’s see what the 7 world leaders say about the current position and we are definitely going to hear something new about the way to solve the deepening global recession.

Global Financial Crisis fuels qualms of US workplace violence

2009-04-22T14:57:00.001+05:30

A worker recently fired from his job by US financial services. The company disappointed that the firm had followed to be sure he did not remove violently at his ex- bosses or co-workers.

‘Tough times will cause people to do crazy things’, said Kenneth Springer, who is company Corporate Resolutions Inc. did the surveillance. “People are taking more precautions”.

Job uncertainty, Job losses and slashed budgets are all straining that could push somebody over the edge.

An expert says workplace violence can range from intimidation to violence and harassment and homicides.

While economic pressure can make some people violent, it would not turn just anybody into killer, said Laurence Miller.

Statistics on workplace violence in this financial crisis will take years to collect and examine an expert says. From 1997 to 2007, the most recent year for which data is available, there above 7,000 professional homicides countrywide, according to the US Bureau of Labor statistics.

More insights from equities and earnings reports

2009-04-21T16:17:00.000+05:30

Markets are in the process of bottoming out with sentiment changing as the global crisis faces more challenges and investors are ready to take more risks.

Stocks in the US and Asia rose on financials with better than expected earnings from Wells Fargo and Goldman Sachs and speculation that other US banks will also post robust quarterly results (JP Morgan Chase on Thursday, Citigroup on Friday and Bank of America and Morgan Stanley next week). In Europe, UBS announced $ 1.7 billion loss, cutting 7.5k jobs.

Fed Beige book gave signs of stabilization with deceleration in the pace of economic decline in 5 of 12 districts and reaffirmed general weak economic conditions (weaker manufacturing, industrial production lowest since 98, sluggish retail spending, weak labor market conditions and residential real estate, downward pressure on inflation) while builder optimism jumped. US retail sales on Tuesday showed unexpected fall.

USD gained as uncertainties persist ahead of the earnings reports.

EUR fell after ECB official said ECB to announce “Non standard measures” to boost the Euro zone economy. ECB expected to cut rate from 1.25% to 1% at its May 7th meeting.

GBP still enjoying a strong rally in the absence of bad news with UK housing data boosting it above key 1.50 level.

Rangebound Gold pressured by lower US consumer inflation and firmer USD.

Crude Oil range trading around 50USD since the start of April despite crude stocks rising to highest since Sept 90. Focus on USD, inflation and stocks.

Stimulus Plans are starting to show results

2009-04-20T12:47:00.002+05:30

Stimulus plans are beginning to work, obviously in China and uncertainly in the US, but the governments require being arranged to do more, the head of the OECD (Organization for Economic Cooperation and Development) said on Monday.

Angel Gurria, OECD secretary-general, said that the world economy would not bottom out until 2010 and would possibly begin rising again towards the finish of that year.

Gurria, speaking on the sideline of a meeting in Beijing, said that China’s 6.1% annual development in the first-quarter presented by the government’s fiscal stimulus and rising and falling bank loans were making up for about half the country’s export deficit.

He also added that it is very strong, very powerful, stimulus, which means it, is already starts to have some effect.

Gurria also said that the combination of higher public spending as well as support to the banking sector was also helping to alleviate the US economy.

But he also said that the 2009 year would remain very complex. Last month OECD predicts that its 30 member nations would bond -4.3% this year.

Asian Stocks climbed for sixth week as Recession Concern Reduces

2009-04-18T14:31:00.000+05:30

Asian Stock rally for sixth week, the highest line of gains in more than two years, on rising confidence the worst of the global financial crisis is over.

China Cosco Holdings Co., the world’s biggest operator of dry-bulk ships, surged 21% on increasing Chinese shipping rates and exports. PT Bumi Resources, Asia’s biggest exporter of power-station coal increased 21% in Jakarta. JFE Holdings Inc., Japan’s second-largest steel maker, rose 22% on speculation it would not make big price cuts and as the government revealed a record stimulus package.

This week the MSCI Asia Pacific Index increased 2.0% to 89.69, completing the highest stretch of gains since December 2006. Asian market has climbed 27% since the MSCI benchmark fell down to a six-year low on March 9.

Japan’s Nikkei 225 Stock Average lost 0.6%. South Korea’s Kospi index fall down 0.5% as brokerages cut recommendation on financial companies. Thailand’s SET Index increased 0.6% in a week reduced by New Year holidays. The Thai government called a state of emergency following collides between protestors in Bangkok and security forces.

MSCI’s Asian Index plummet by a record 43% last year as the credit crunch tipped the world’s biggest economies into financial crisis, forcing companies to cut jobs among falling profits.

Forex Updates- JPY falls against USD, AUD, NZD

2009-04-17T16:27:00.001+05:30

On Friday, the yen fell down against the dollar and other major currencies as short-term traders pushed it down, but improbability about economic improvement scenario left the market stressed for momentum as it also expected result from Citigroup.

On Thursday, the yen had rose against the commodity currencies and greenback after China's 6.1% economic growth rate let down many who had expected on a quick step.
Bit it failed to uphold the gains into Friday, quickly short-term traders to push the dollar ahead instead, prompting dollar buy orders at upper levels and taking the like of the NZD and AUD ahead with it.

In Sydney, the senior currency strategist at RBC Capital Market Sue Trinh said that it is investors and intraday trading which is running the market action.
The dollar which has risen increasingly against the yen as hitting a 13-year low in January rose 0.3% to 99.65 yen on Friday, after breaking support from its 200 day moving average at 98.88 on Thursday but after that not settling below it.

U.S. Interbank loan Rates are down

2009-04-16T17:56:00.001+05:30

U.S government disclose on Thursday U.S. loan rates are lower. In May U.S, government will disclose the results of stress tests of financial institutions.

On Thursday, Obama government that they would publish results of stress test on 19 on this month of the U.S. largest financial institutions.

Obama spokesperson said on Thursday, this move has been taken to ensure confidence in financial market and provide as much transparency as possible to the common mass.

British bankers association said on Thursday, overnight U.S dollar labor lost 1.25 bps to 0.25% while the three-month labor was down 0.56 bps to 1.11%.

In another place the overnight Canadian dollar, Libor was up to 0.33 bps to 0.43%, while the three month remained unmoved at 1.00%. The euro Libor gained 3.38 bps to 0.83% while Libor fell 0.13 bps to 1.41% in the three-month. Sterling Libor was flat 0.60% while Libor declined 1.00 bps to 1.52% in three-months.

Risk and Reward

2009-04-15T18:57:00.000+05:30

This question is very difficult to answer in a precise way, as it does not have an exact answer. Hence, the question of risk and reward always changes with the circumstances of the moment. The traditional ration is 2:1 risking half the amount of pips as you are trying to make. So if your profit aim is 100 then your stop would be around 50.

Theoretically, it sounds like a fantastic plan. You just need to be right four out of 10 times to make money. However, no trader put this basic principal in real practice. I have read various views in this regard from analysts, trading gurus and whole host of others who have never risk so much money on trade. I have never seen anyone who actually makes living from the market employ 2:1 risk reward ratio.

Might be thinking why?

The basic reason behind this is that most people who trade do not give importance to such things they believe there is no such things in the market. In fact, market does not respond according to the goals. Just imagine a trade where you risk 100 points with a profit target off 200 points. At the start, trade moves in the favor and touches 199 points. However, you waited the profit to touch mark of 200 points but guess what? The forex market all of a sudden falls. It could be a nightmare where positive turns negative in a matter of minutes. What is your loss? On paper you loss 100 points but actually your loss is 299 points. This is what can happen in real trading. Theoretically 2:1 risk reward is far more elusive then you imagine.

Profit cannot be predicted in the market. The only thing you can control is risk. That is why we always trade with two units. That is why we always take short target and attentively control risk by trailing our stops. It may not be stunning but that the only way to cope up risk and reward.

Slow and Realistic Euro Sink

2009-04-14T17:57:00.000+05:30

With humongous US budget slump it is hard to get thrilled about the US position and dollar outlook. Overall confidence in short term the euro zone economy is likely to dip further. Euro is going to come further down against the dollar. The best strategy now is to sell euro on rally above the 1.3350 level.

After slipping on Thursday and Friday, the euro eyed strong recovery on Monday. Trading liquidity is still very low especially in European market due to Easter holidays. From 1.3120 the euro rallied around 1.3390 in New York.

After doing great than the expected outcome positive earnings data from the US banking sector would help and would lean to lessen dollar demand.

There will be still lying dark clouds in the euro zone economy with default spreads on German debt lying higher. Comments from ECB officials have confirmed that they are going to continue further interest rates cut again. Euro weakness was illustrated by declines against pound and the franc over the last 24 hours.

Before US bank earns, Dollar rises up against Yen

2009-04-13T17:09:00.001+05:30

On Monday, the dollar rises up vs. yen in quiet trade with many overseas companies even now left for the Easter holiday and further to come until the US market earnings season gets into full form.

This week the US banks which includes Citigroup and Goldman Sachs JPMorgan are prepared to report Q1 results and traders are eager to look for how stock market respond to these earnings reports.

The dollar increased against the yen, last week, buoyed by a meeting in US stocks after better earnings advice from the US bank Wells Fargo.

Market spectators said the currency market has valued in positive US earnings records, so the market is more expected to react to any negative surprises.

The dollar was around 100.33 yen or Fx trading, as compare with 100.22 yen in late Tokyo trading on Friday. Last week the US currency touched 101.45 yen; it’s uppermost in six months.

On Friday, the euro was figured at $1.3144, down from $1.3186 when it also falls to $1.3090, a rank not seen since middle of the March.

Glimpse of hope for Obama of recovering financial system, after meeting

2009-04-11T15:41:00.001+05:30

On Friday, President Obama said that we are starting to see is ‘glimmers of hope’ across the economy to reporters after a meeting with teams of economy and regulatory also with Federal Reserve Board Chairman, Treasury Secretary and the Chairman of the Federal Deposit Insurance Corp. He also added, “We’re starting to see progress”.

Obama mentioned to improve refinancing of home mortgages, money flows from $787 billions stimulus package and 20% raise in government backed loans to small business over the previous month only. He also said we are still lots of job losses and lots of hardship.

The talks that lastly about one hour, pointed on stabilizing banks, stimulating the economy, the rising unemployed rate, falling strain in the credit markets, the health evaluation of banks and the mortgage refinancing, which also includes “stress tests” being organized by the Fed. The result of the Test, due at the end of this month, are awaited by the financial market.

He also said in the meeting that in the coming next few weeks, you will be seeing other actions by the administration but gave no details.

Barack Obama plans meeting for bank stress tests

2009-04-10T14:23:00.001+05:30

On Thursday, a White House speaker said U.S. President Obama plans to meet with the top financial regulators to talk about the “stress tests” being scheduled at the 19 biggest U.S. banks,

Obama will converse with Treasury Secretary, Federal Reserve Chairman and Federal deposit Insurance Corp Chairman and with top White House economic adviser, on a “wide” range of financial topics.

In an attempt to assess banks’ capital require, the government is testing how they would charge under more unfavorable conditions than are predictable. The markets are worriedly expecting the results that owe at the end of April, to see which firms will probable require more taxpayer help and which firms get a clean bill.

The regulators is expected to present Obama a progress report on what the regulatory stress tests is show the condition of the top banks.

A source well-known with the meeting said regulators plan to also converse with Obama what another steps may require after the tests.

Forex Book

2009-04-09T15:05:00.007+05:30

There is undoubtedly about it that forex book is very helpful for new currency trader and evenly for the traders who want to develop their skills with new strategies. Nowadays there is a huge range of currency trading training resources presented in both offline and online which includes forums, seminars, online courses, members-only websites, conferences and even one-to-one training from professional tutors. But there are times as a good traditional book is just that you require.

No matter whether your forex book is available on paper or downloads as an eBook, it can be the good method to learn in many situations. It has both the option prices and convenience.

Another benefit of forex books is that you save time by skipping more the things you already know. If you have any knowledge at all, going more than the basics, it can waste lots of your time in preparation that is based around seminars or even online audio/video sessions as you stay for everybody else to be shown the methods that you have already expert.

It is said that the currency trading market is area where you can hope to find a sure amount of publicity. Do not to be too fast to make negative decisions only because a book or eBook is promoted with the fair amount of tough sell. Keep in mind that the advertising copy is possibly written by the professionals, not any writer of the book.
So you can carefully ignore most of the publicity in the promotional advertisements and look for the thing that you really require to know. These are:

• What fields of expertise is covered in the book.
• Whether it is correct for you, i.e. whether it is meant for your experience level and skill.
• What is the pay back that you individually can expect to get from it

Eurozone GDP Contracts

2009-04-08T12:23:00.003+05:30

Eurozone economy has recorded a bigger shrunk in its economy than was estimated in the last three years of 2008.As per the EU's Eurostat office GDP in the 15 nation area fell 1.6%, more than the 1.5% expected.

In Fx trading, euro declined against the dollar to $1.3270 amidst fears the economy could contract even further in 2009.As of now the Eurozone includes 16 countries that use euro as their national currency. Slovakia was the 16th nation to switch to the euro at the beginning of this year.

Analysts are worried that GDP contraction in the eurozone must have been worse in the first quarter of 2009.The data and survey evidence collected has largely been gloomy. Analysts are expecting slow recovery.

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U.S. Budgt Deficit Worth 1 Trillion

2009-04-07T12:44:00.002+05:30

The U.S. recorded a gigantic budget deficit of nearly $1 trillion in the first six months of this fiscal year which began on October 1.

The estimates released on Monday by the Congressional Budget Office said the government likely recorded $953 billion in red ink from October through March.

WHY DEFICITS MATTER

Increased debt costs for government
Increased risk of inflation
Long-term pressure on dollar
Could lead to higher taxes and spending cuts later

The CBO, the nonpartisan budget analyst for Congress, said the drop in corporate receipts was the largest in more than three decades.
In addition to dropping revenue and the bailout money for Wall Street, the government has poured more money out the door to try to jump-start the ailing economy, which has been in recession since December 2007.

An arm of the U.S. Treasury Department also loaned $10 billion to credit unions to help them address recent liquidity pressures, the CBO said.

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UK's Budget Deficit to be Worse Than Predicted

2009-04-06T14:58:00.005+05:30

The budget deficit is at least 2.7% more than what was being expected in the pre budget announcements by the Chancellor Alistair Darling.Darling (seen in picture) who will be presenting the budget later in the month said the recession in UK has been more severe than expected.

In Fx Trading, the pound has tumbled amid these persistent economic problems here.

The £39bn (approx 58bn US dollars) deficit could be financed by either raising the tax limits or by putting a five-year real freeze in total public spending.The Institute for Fiscal Studies (IFS) estimates that taxes in Britain will have to rise by at least £20bn a year to cover record borrowing.

Noticeably, at the last week Summit of the leaders of the world's largest economies, a deal worth $1.1 trillion (£681bn) was reached at to tackle the global financial crisis.

The British Prime Minister Gordon Brown will be meeting the chancellor and the Bank of England governor to discuss about measures agreed at the concluded G20 summit.The prime Minister here is hopeful the consensus reached at the meeting will help build the dwindling confidence in the banks, and will make a difference to the lives and to the aspirations of families and businesses in the UK.

Read All Entries Tagged UK Recession

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A New World Order in the Making

2009-04-04T12:45:00.006+05:30

The world leaders meet at the G20 Summit in London with the motto of Stability Growth and Jobs has ended marking a turning point in the world history. Overall, there have been mixed responses regarding the success of the Summit.

The distinction between the developed and the developing countries seemed to fade away as there was marked difference in the particularity of America. China Brazil and India drew as much attention.While the G20 meet did end in global settlement to boost the world growth there have been some misses. Here are some of the highlights from the Summit.

Hits

US president Barack Obama called the Meeting Historic in its pursuit to recover from the financial quagmire.
IMF's managing director was happy after the summit and especially enthusiastic about IMF issuing $250bn worth of its own currency, the SDR. Top jobs in the IMF will be open to people from all parts of the world which until now had only Europeans on them.
Countries like China and India have been given bigger say in the working of this international institution.
Leaders called the summit a "real progress" in efforts to enforce tighter regulation of the financial system.
G20 meet succeeded in inciting cooperation on crackdown on tax havens as also greater support for the poorest countries.

Misses

The Summit's biggest failure is being seen in its inability to settle on a global plan for recovery from the crisis.
There have been no major deals on plans of co-ordinated global stimulus packages.
A representative from the World Development Movement said one of the biggest misses of the summit is that leaders failed to get a consensus on a global green new deal that puts the interests of poor people and the environment as an important part of the international trade and finance.

On the whole the summit is being as mixed bag of goodies. The summit is being widely considered to have taken only insufficient measures to meet the challenges facing the global economy even while a clearer financial structure is expected to emerge out of the chaos.

It remains to seen when and how the pledges at the Summit get transformed into real worth.
The G20 Summit is best being regarded as embarking of the journey of a new beginning.

Read all entries tagged G20 Summit...

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Global leaders begin G20 summit

2009-04-02T15:43:00.007+05:30

High Hopes from the G20 Meet:
Leaders from across the world have assembled for the G20 Summit in London to discuss about one of the worst financial crisis since the 1930s.Security is beefed up at the at the Excel Centre in London's Docklands where the summit began today. Leaders at the summit have only a few hours to reach agreement on plans to revive the world economy.

Key Issue is the Global Financial Calamity: Consensus on boosts in public spending to revive the world economy is likely to be arrived. Leaders will debate however if a target figure should be put on the size of the stimulus plans already announced.

Other Agendas:A number of other issues will also come up which require commitment of money figures from the governments One of the important ones being how much more money should be given to the International Monetary Fund (IMF), whose role in the present financial climate has increased radically.

Future of the Dollar:
Debate has been fired on the future of the US dollar as the main reserve currency in the world that will continue for some time.China's voice is likely to grow stronger on this issue as there is already agreement that it will be given a bigger say in the IMF from 2011.

Most other developing countries are eager to get a bigger influence too, and would like the US to be stripped of its veto power.Leaders are also expected to pledge additional funds to help the poorest developing countries who have been hit by the crisis

Here are Some Pictures from the Summit in London

Forex ~ Afternoon Forex Updates

2009-04-01T15:39:00.006+05:30

US Dollar slips:
Risk sentiment has been soured with reports that bankruptcy could a viable option for the car makers like GM. Economists have warned that the collapse of big automakers may reverberate beyond North America given the network of global supplies chains.The warning followed news from the Bloomberg that the Obama administration is looking at a prepackaged bankruptcy for GM.

In fx trading,US dollar came off highs with further news that this report is "not accurate" and that President Barack Obama's thinking on the crisis facing GM has not changed since Monday. The dollar fell about 0.1 percent against the yen.

Traders alert before key events later this week:
Forex Traders are wary of chasing prices aggressively in view of key events including the G20 Summit, later this week.Investors are treading cautiously ahead of the G20 meeting and the ECB policy announcement in the coming days.

Banks take to 'unconventional' ways:
U.S., British and Japanese central banks have turned to unconventional steps to pump funds into their economies, including outright buying of government and corporate debt. ECB is expected to follow suit.

Business confidence at record low in Japan:
A survey by the central bank in Japan has showed that business confidence among manufacturers in Japan is at a record low. Government reports yesterday showed that U.S. home prices are still plunging and consumer confidence is holding at just above record lows.In online forex trading the yen traded near its weakest level in almost a month against the greenback.

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Germany Records rise in Unemployment

2009-03-31T16:08:00.003+05:30

Recession in Europe is worsening with Germany recording a rise in unemployment. Rate of Joblessness in Germany has risen to 8.6% in March, worsening slightly over 8.5% in February this year. Germany's export driven economy has been hit by global economic down swing.

Europe is mired by extended recession:
The rate translates into 3.4 million jobless people, an increase of 69,000 since the last year.

Labor market in Europe has been adversely affected by the economic slump. Unemployment concerns in Europe are growing with Spain recording the highest jobless rate at 14%.

Forecasts fell short:
The number of unemployed workers here has already exceeded the figures forecast by many analysts. Economists say the rate of unemployment has been stronger than was expected. A weaker economy is being seen as the main reason behind the increase. Further decline in the economy and stabilization in the second quarter is estimated by analysts.

Unemployment to rise:
Further deterioration in the job market is certain. Germany is expected to have around four-million Unemployed people by the end of 2009.

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Car Factory output falls in Japan; Asian Stocks plummet

2009-03-30T17:44:00.004+05:30

Japan's car factory output has fallen sharply for the fifth consecutive month in February.
Annual car production in Japan has fallen by more than 9% in this financial year. An independent industry data has showed that Car production in Japan had plummeted by 56% in the previous month.
In Fx trading today, yen rose against the euro on speculation investors will reduce holdings of higher-yielding assets.

IMF predicts gloomy picture:
Revenue from exports have seen a sharp fall as the worldwide demand for goods has been sapped. Output in related sectors like the passenger cars, trucks and buses has fallen as we well.
The IMF expects Japan, one of the largest economies in the world, to register a contraction of up to 5.8% in the up coming financial year.

The finance minister has said that Japan plans to inject a stimulus package worth more than 2% of its GDP.

Asian Stock Nosedive:
World stocks fell on concerns the global slump is deepening.Worst performers have been the Asian stocks which nose dived on speculation over persistent problems in the US car industry.

GM's chief executive has been asked by the US president to step down even as GM and Chrysler, two of the car firm giants, requested another round of Government bail-out.

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Young Minds on the Global Crises

2009-03-28T13:44:00.001+05:30

Students around the world have been discussing how the global financial crises have affected them.

Here's what students from Glasgow (UK), Islamabad and Mbabane (South Africa) think about the upcoming G20 Summit of the leaders from around the globe. Students spoke their heart on

The current financial slump-how it has affected them,
How it could affect them in the near future and,
What they would tell the G20 leaders if they got a chance.

In Swaziland,South Africa:
A student from the Waterford Kamhlaba United World College, Mbabane, Swaziland tells that the world crisis has not affected them directly yet. He does expect that they may have fewer scholarships in the future.
And is worried about if there would be enough job opportunities for them when they grow up.

Students In Britain:
Students in the UK say they have noticed a stark difference in their lifestyles due to the global crisis.” It has become difficult for us to find part time jobs as shops are closing down”.Unemployment has seen a steep rise in the U.K.

Students say that they have given up hobbies such as sports classes etc because they are unable to afford them now.
Undergraduate students here are concerned about what universities they will attend because of the high cost of living.
As also about enough working opportunities when they finish the education.

School Girls In Islamabad:
Frustration is rising here, students in Islamabad say. People are distressed because of the rising prices. It has become increasingly difficult to make both ends meet.

Prices have shot up since the global slump. Students say that their families are finding it harder to manage within shrinking budgets. Political tension has also heightened due to the financial crisis.
Students are concerned about scholarships and government funds to pursue further studies.
If given a chance the students will show the G20 leaders the beggars and destitute in their country, along the roads and at garbage disposals searching food.

Students are deeply disturbed about rising unemployment which they say may see a” waste of the brilliant potential of the youth of their generation.”Recession in Asia is deepening in some countries like Japan.

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U.K. Contracts More than Estimated

2009-03-27T17:57:00.005+05:30

Britain's economy has shrunk more than expected. The last three months of 2008 have registered the slowest growth since 1980.U.K's Economy has shrunk 1.6%, more than the estimated 1.5% in the last year.In Online forex trading pound dropped against the U.S. dollar.

In the last quarter of the previous financial year U.K's GDP has contracted by 2% in stead of the 1.9% calculated.

On the whole, analysts are only expecting the economy to shrink further in 2009.Among important figures is the household expenditure which fell by 1%. All other major sectors have also recorded contraction.The drastic fall in the output in the construction sector is being seen as the prime reason behind the slump. Output in the construction sector fell by 4.9% in the last year.

The savings ration has increased by at least 5% with more people putting aside the money for hard times.Unemployment in the U.K. has been on the rise since the beginning of the year.

Economists are citing the rise in savings as a good sign."It means that a large portion of the necessary re balancing of the economy away from spending and towards saving has occurred already", pointed out an economist.

U.S may have shrunk more than estimated

2009-03-26T18:11:00.002+05:30

The US economy may have contracted more than previously calculated with the pace of firings having increased in the last week. The world’s largest economy shrank at a 0.5 percent annual rate in last year’s third quarter.

Recent reports however show that retail sales, residential construction and home sales have improved. “The worst is probably behind us,” said an economist at JPMorgan in New York. “Hopefully, if policy works, we can actually start to see some daylight as we get to the middle of the year.”

Stepped-up efforts by the Obama administration and the Fed may help sustain the improvement in the economy. Carmakers are counting on the policy measures for survival.The revised figures for GDP, the sum of all goods and services produced, are expected later today in Washington.

Japan Gripped by Global recession

2009-03-25T18:06:00.004+05:30

Japan is mired by deepening global recession as exports halved for a second consecutive month in February.Exports in January had been dismal as well. In Fx trading yen is being expected to stay on the back foot having regained some ground after dropping against the euro and the Australian dollar yesterday.

Japanese economy is exclusively export based:
As one of the world's largest export based economy Japan has suffered more setback than other countries. The island country has recorded a 49.4% plunge in its exports even as consumers all over the world tighten their belts to cut costs.

Car exports have been most adversely affected in particular having fallen more than 70% in the last month.Diminishing global demand has forced Car manufacturing firms to cut jobs and reduce shifts.

Another stimulus package anticipated:
Japan has officially been in recession since October last year when it saw an annual growth contract of 12%. The contraction had been one of the biggest ever in developed nations.

The government is expected to introduce a third round of stimulus package worth 20 trillion soon.

World Trade to Shrink By 9%

2009-03-24T15:06:00.004+05:30

Global trade volume will shrink by at least 9% in the present year. In a forecast by the World Trade Organization (WTO), developed nations are being seen to be hit the hardest. Developed nations across the world can expect a 10% drop in the trade percentage. Poorer nations could expect 2-3% fall.

Falling Trade responsible for recession:
While blaming the shrinking trade volume as the reason for global slump, WTO also said that it could well be a "potent tool' for coping with the same.

World trade has witnessed the biggest fall since World War II.

WTO Director-General Pascal Lamy also called up on world leaders to fight protectionism. Lamy pointed out that Protectionist measures counter the effect of efforts to recover from the global recession. And that such measures could "threaten more job losses". World Trade is an important agenda at the upcoming G-20 Summit on April 2 in London.

Optimistic Outlook:
Global trade is unusually falling simultaneously around the world.

WTO, however, marked that there have been some positive signs with China, Singapore and Taiwan recording a rise in export- for the first time in months.China is counting on recovering sooner than rest of Asia.

China Counts on Early Recovery

2009-03-23T15:27:00.004+05:30

China may be the first country to recover from global crisis, according to the analysts there. Researchers in China are saying that it has the capacity to step out of the world crisis and maintain a stable growth in the coming times.In forex trading, yuan dropped the most in three weeks against the US dollar.

Officials Forecast Early Recovery:
The 4 trillion Yuan ($585 billion) worth stimulus package announced earlier in the year will run through 2010, adding 1.9% to this year’s expansion by spending on creation of roads, railways and houses.

As per the experts and officials in China some industries are showing early signs of recovery. Officials reaffirmed China's annual growth target of 8%, even as the global economy copes with the first contraction since World War II.

Chinese Premier Jiabao had cited last month that China will likely be the first major economy to recover. And that it has “adequate ammunition” to revive its economy.The Government Stimulus package is being said to have effect as domestic lending and spending have surged.

World Bank had announced previously in the month that there have been early signs of stabilizing in China.

How far that turns out to true remains to be seen:
China's economy has suffered a setback from the diminishing global demand and consequently plummeting exports.Unemployment has risen with millions of migrant workers losing jobs as factories are cutting production or shuting down.

China registered slowest growth in factory output in the January and February this year.The world's largest and most populous country is planning a record 950 billion yuan budget deficit this year. The risk posed by the deficit is “under government control,” vice minister of finance was quoted.

Americans Still in Fear of Home Prices Drop

2009-03-21T16:20:00.003+05:30

Americans are still in fear that prices will drop steeply even after the Fed's efforts to revive the economy the real estate sector are going on full fledged, according to a poll here.
The Reuters surveyed homeowners who forecast their home values would fall by 2.2 percent in the year ahead.

The decline in home prices in March has been more than the expected 1.9%.Ever since the housing bubble burst, there have been heavy losses in the stock market and massive job losses across the US.

Consumers in the US are still nervous about home prices. The chances of the US recession ending this year have become bleaker in such a case.Analysts say that the fall in home prices in the country has been so sharp that it will take years to completely erase the negative wealth drag.

House Prices in the US have tumbled more than 26 percent since their peak three years ago.

People on Jobless Benefit in U.S. Rises to Record

2009-03-20T15:13:00.009+05:30

Unemployment in the U.S. is on the rise. According to the recent reports from the Labor Department the number of U.S. workers seeking unemployment benefits has hit a new record.

In forex trading the U.S. dollar plunged for a second straight session. Unemployment rate has skyrocketed in the recession mired U.S.

Figures underscore the difficulty of finding a new job:

5.47 million People staying on the jobless rolls or the unemployment social security benefit.
That makes the number of people filing new claims for jobless benefits rise to 646,000 from 658,000 the previous week.
Over 4 million jobs lost in the country since the recession began 15 months back
Jobless rate has hit 25-year high of 8.1 percent.
Percentage of insured workers receiving jobless benefits jumps to the highest since 1983 to 4.1%

According to market analysts U.S. is likely to lose more than 700,000 jobs this month. The pressure on employment in the U.S. is building without any signs of it easing in sight. Analysts are not predicting a strong growth for the American economy until 2010.

Previous Posts Tagged U.S Unemployment
Related Posts:Unemployment in UK highest since 1991

AIG Being Forced to Pay back the Bonuses

2009-03-18T18:00:00.005+05:30

US is forcing the ailing insurer AIG to pack back the highly controversial bonuses it awarded after taking public bail-out money.73 AIG executives - including 11 who no longer work for the company - were each last week given bonuses worth more than $1m.

Geithner Faces Heavy Censure:
US treasury secretary Geithner is already facing heavy criticism for his handling of the increasingly controversial issue.Geithner in a letter to congressmen said that $165m would also be taken from $30bn the firm is due to get as part of its government bail-out. Also promising that a contractual commitment will be imposed on AIG to pay the Treasury from the operations of the company the amount of the retention awards just paid.

"Outrageous" Bonuses:
Obama called the AIG bonuses "an outrage" on Monday. Obama is trying to channelize the public frustration without himself becoming the object of anger.
Republicans have raised questions about when Obama was told about the bonuses - and also criticized Mr. Geithner for not preventing the payments before they were paid. The US Treasury plans to renegotiate the deal.

Read Previous Related Posts

UK Sees Steep Rise in Unemployment

2009-03-17T17:33:00.003+05:30

UK is reeling under growing massive unemployment. The job loss rate in UK has more than doubled in the past years. On an average, each job is being chased by at least 10 jobseekers. In Fx Trading pound rose for a fourth day against the dollar today.

According to the trade union body there a year earlier it was only 4 people seeking a job. At other council areas there are at least 20 people per job vacancy. In other figures, between January and March this year, there have been two million unemployed people in the UK.Job loss rate has already climbed to 8.1% in the U.S.

The decrease in job vacancies has been equally shocking.”The government can no longer claim there is plenty of work available when there are as many as 20 dole claimants per job centre vacancy in parts of the country" said the Trade Union General Secretary.

According to The British Chambers of Commerce (BCC), over the second half of the next year, more than 10% of the total workforce in Britain can be without a job.

UK is witnessing the first recession since 1991.

UK economic output fell by 1.5% in the last three months of 2008, after a drop of 0.6% between July and September. This met the widely accepted definition of a recession - two consecutive quarters of negative economic growth.

"U.S. Recession to End This Year"

2009-03-16T17:34:00.002+05:30

Ben Bernanke, the head of the US central bank, said in a TV program, that he expects America's recession to end this year. How far his estimates turn out true remains to be seen. His remarks are being seen as helpful in curbing the worldwide pessimism to creep still deeper.

Bernanke expects the recovery to begin next year. According to Bernanke, the government fund of $500bn is stabilizing the mortgage market and business lending is picking up.

Noticeably, Mr. Bernanke had previously said in January that he believed that the recession that took hold at the end of 2007 would end this year.

At the interview, Bernanke cited that lack of political will to solve problems could well be the biggest risk to recovery from the global economic crisis.

The remarks do sound unusual. Bernanke said that this was an extraordinary time, adding that the world came close to financial meltdown.I think the comments are critically timed with the G-20 Summit due next month. The meeting is being seen as very vital in averting a 1930s like scenario.

The US employment rate had risen to 8.1% in February last month.

Obama seeks coordination of worldwide efforts

2009-03-14T12:14:00.004+05:30

One of the prime agendas at the upcoming G-20 summit at London next month is the coordination of the worldwide efforts in reviving the world economy.

US President Barack Obama is seeking to coordinate efforts his country is undertaking to deal with the economic crisis with that of most other countries worldwide.
Talks on his subject had been going on for quite some time now already. India's Prime Minister Manmohan Singh will also be attending the summit.The GDP or the gross domestic product, one of the chief indicators of a country’s economic growth, has taken a downturn in many countries globally.

Asian countries including China and Japan have already introduced massive stimulus packages to increase consumer spending. President Obama is looking to match the simultaneous efforts his country and the countries overseas are making to cope with the economic crisis.According to the IMF, we could expect a world recession in decades.

Expect First Global Recession in Decades

2009-03-13T13:12:00.001+05:30

The world economy is likely to shrink for the first time in decades this year. According to the IMF, the prediction can only be gloomier.

The head of the IMF Dominique Strauss-Kahn, speaking at a conference in Tanzania said that trade was falling at an alarming rate and business and consumer confidence had collapsed.

Africa is already reeling under global negative growth. Decrease in worldwide demand has undermined demand for many industrial commodities, which are important exports for several African countries. Exports including oil in Nigeria, Angola and Equatorial Guinea, and copper in Zambia form a substantial part of the Continent's revenue.

Sub-Zero Growth
For the first in most of our lifetimes we can expect the global growth rate to fall under the zero
The outlook from the World Bank is no less pessimistic. As IMF's sister institution, the WB also expects the global economy to shrink for the first time in decades.

China factory output growth slows-Optimism Remains

2009-03-12T17:52:00.006+05:30

Growth Output Falls to Record Low
China witnessed slowed Industrial production growth in the past two months because of the plunging worldwide demand. China’s exports have been hit badly.

As a result China has been battered by a fall in demand for its goods. China's export figures fell a record 25.7% in February. In Fx trading, Yuan changed a little against the U.S. dollar.

Optimism On Rebound
There are signs however that things will start looking up. The government's stimulus package is being said to have an impact. The banks have already increased lending to inject more money in the economy.
Output in February increased showing growth in concrete production which in turn reflects higher construction spending.

The government in China has introduced the 4 trillion Yuan ($585bn) stimulus package in a hope to reduce the country's heavy dependence on export of its goods. China has strong credit base and according to analysts China will be among the first Asian economies to see policy-driven recovery by mid-year.

Australia Headed for Recession

2009-03-10T14:41:00.008+05:30

Australia's economy has shrunk for the first time in eight years, raising fears that the country may be heading for a recession.

The economy contracted by 0.5% in the last three months of 2008 from the previous quarter. Economists had been expecting it to grow by 0.2%.

Hit Hard:
If Australia's economy shrinks again the current quarter, it will enter recession, usually defined as two consecutive quarters of contraction. Australia's resource-based economy has been hit hard by the decline in commodity prices.
The country's mining firms are cutting back on spending, slashing staff numbers, and shelving projects. This is being seen as an unsurprising outcome illustrative of the magnitude of the global recession and its impact on the continent.

Other developed economies of the world are already reeling under the worldwide meltdown. Japan’s GDP dropped 3.3% in the final quarter of 2008. Japan recorded its biggest deficit in 13 years. The US saw a 1.6% drop and the UK contracted by 1.5%.

Recession was inevitable:
According to analysts, Australia had hoped to duck the worst of the global recession, but this no longer looks possible."After surviving the 1997 Asian financial crisis and the 2000 dotcom bubble, Australia had hoped to complete the impressive hat-trick of not being forced into recession by the global financial crisis," our correspondent says.

Australia is being regarded as faring better than others. However, this seems to be the recession that Australia could not avoid.

Japan's exports halved in January

2009-03-09T17:47:00.002+05:30

Japan's exports halved in January.Japan's current account recorded its largest deficit on record in January, reaching 172.8bn yen ($1.8bn). This is Japan's first deficit in 13 years.In forex trading yen has weakened further.

Corporate blow:
Car exports alone dropped 66.1%, with semiconductor and electronic parts exports down 52.8%.
Consumers around the world no longer want to buy Japanese cars. Consumers in Asia, Europe, the Middle East and the United States are not buying pricey Japanese goods such as cars and electronic goods.

Honda has had to cut production, and Sony is set to register its first annual loss in 14 years.
Shares tumbled on the news, with the benchmark Japanese index, the Nikkei, closing down at a 26-year low.

Dismal Economy:
"We incurred the current account deficit due to a plunge in exports. Our exports to key regions, including the United States, Europe and Asia, were all down sharply due to the deteriorating global economy," a finance ministry official said.
"Japan's export-driven economy is really engulfed by waves of the global economic crisis. “An economist pointed out.

Japan has already passed the legislation to hand out cash to its people as an economic stimulus.

US jobless rate climbs to 8.1%

2009-03-07T17:58:00.005+05:30

U.S. Jobless rate Increases:
The US jobless rate jumped in February to 8.1%, according to official figures from the U.S. Labor Department. The number of people out of work rose by 651,000 during the month.Both figures are bigger than expected.
A total of 12.5 million people are now unemployed in the US.

President Obama said that the number of jobs lost so far in the recession was "astounding" adding that he had signed his economic stimulus package in order to save jobs.Rising unemployment has also meant greater demand for free meals.

Across sectors:
Jobs were cut in most sectors, with only government, education and health services adding staff.
In the manufacturing sector 168,000 jobs were cut in the month.
104,000 jobs went in construction and 375,000 were cut in the service sector.

Grim Future Ahead:
Federal Reserve Chairman Ben Bernanke told Congress earlier in the week that economic indicators "show little sign of improvement" and that "labor market conditions may have worsened further in recent weeks".

Indian contest for rupee symbol

2009-03-07T12:16:00.007+05:30

The Indian finance ministry has begun a public competition to select a design for the symbol of the rupee. Unlike the major currencies of the world like the dollar, the pound, the yen and the euro, the rupee does not have a globally recognized symbol.

Ethos of India:
The rupee is generally shortened to Rs or sometimes the currency is described as INR (Indian rupee).But, the government says, these are not symbols, they are mere abbreviations for rupee.To get an internationally-accepted symbol, the finance ministry has invited entries from the public.

"The symbol should represent the historical and cultural ethos of India," the deputy secretary in the finance ministry's coin and currency department, BS Rawat, told the BBC.

Guidelines for entries:
"The entries can be in any of the Indian languages. They can even be in English which is also an accepted language of use by the government," Mr Rawat said. Each entry has to be accompanied by a fee of 500 rupees ($10) and a participant can send a maximum of two entries. The rules also say that the "symbol should be applicable to the standard [computer] keyboard".

Officials say the winning entry will be chosen by a seven-member jury of experts drawn from various art institutes, the government and India's central bank, the Reserve Bank of India. Five short listed entries for the final selection will be awarded a prize of 25,000 rupees ($500) and the winner will take 250,000 rupees ($5,000).

Implementing new currency symbol can be an expensive exercise:
According to one estimate, when the euro was introduced in 1999 it cost Europe's biggest companies more than $50bn to update their computer systems to deal with the changeover.” We have not thought about the costs yet," Mr Rawat said. "First, we'll select a symbol and then we'll do the costing," he added.

The contest closes on 15 April at 1300 local time (0730G).The contest is open only to resident Indians, a release on the ministry website says. Detailed guidelines on how to prepare the entries have been put up on the finance ministry's website.

Satyam Given the Go-Ahead

2009-03-06T17:45:00.003+05:30

SEBI has approved plans for fraud-hit IT firm Satyam to sell a 51% stake as it seeks to win back clients and restore customer confidence.

As per the reports IBM and Indian engineering firm Larsen & Toubro are frontrunners for the stake.Satyam has struggled since former boss Ramalinga Raju admitted inflating their assets by more than $1bn.Shares in Satyam already jumped 18% after the company's state-appointed board got approval to sell the majority holding.

Satyam had lost more than 80% of its market value following the CEO's confession in January.The auction for the stake will be global and potential buyers who would need to have assets of at least $150m.The buyer then would not be able to sell its stake for at least three years, Satyam said in a statement.

Satyam had been one the biggest players in the booming Indian IT software market, supplying back-office services to firms from around the world.

Oil price up over petrol demand

2009-03-05T17:15:00.003+05:30

Oil prices have risen nearly 9% after the US government reported an unexpected drop in crude stocks and an increase in demand for petrol. Prices were also supported by a rise in China's manufacturing index. China is the second biggest oil consumer
US crude stocks fell by 700,000 barrels for the last week of February.

US crude stocks fell by 700,000 barrels for the last week of February, while demand for petrol over the past four weeks was up 2.2% from a year ago. US light crude rose by $3.73 to $45.38.

"Overall the (US oil inventory) numbers are very bullish... again, gasoline remains the one bright spot in the market that can really pull the complex higher,"pointed out an analyst.

Stock markets around the world have been rising on Wednesday on hopes China will announce an expansion to its economic stimulus plan.However, an analyst at Oil Price Information Service said that crude inventories had been swollen for months and that oil prices won't move higher without some signs that the economic malaise has bottomed out.

"It's going to be a shaky year. The fundamentals are still poor," he added.

Japan to Hand Out Cash to People

2009-03-04T17:05:00.004+05:30

Japan's parliament has passed legislation to give a cash hand-out to every resident in an attempt to boost the recession-hit economy. People will get at least 12,000 yen ($121) under the $20bn plan. In forex trading Yen has been growing weaker.

There are fears however that most Japanese people, who have a strong tradition of saving, will hang on to the cash instead of spending it. The cash hand-out is the centerpiece of a stimulus package to revive Japan's economy. Japan is in a far sharper recession than the US or Europe.

Japan's GDP had dropped 3.3% in the final quarter of 2008, a much steeper decline than in the US, which saw a 1.6% drop. UK’s economy had contracted by 1.5%.

Critics of the plan say it is a ploy to boost the popularity of Prime Minister Taro Aso and this will only expand Japan's already bulging budget deficit.The legislation enacting the stimulus plan has been mired in Japan's parliament for weeks. In a political battle sort of, the bill was passed after the government-controlled lower house overruled a no vote in the upper house, which is dominated by the opposition.

Japan has been one of the first countries in Asia to be hit by the global meltdown and lead the recession into the continent.

Standard Chartered defies Pessimism

2009-03-03T16:55:00.002+05:30

Standard Chartered bank which focuses on Asia, Africa and the Middle East, has defied the gloom afflicting the banking sector by reporting a rise in profits. The bank said its pre-tax profit for 2008 was $4.8bn (£3.4bn), up 19% compared with a year earlier.

A spokesperson for the Standard Chartered said that it was on a "firm footing" for 2009.It warned, however, that its core markets, which have so far proved more resilient to the credit crisis, have begun to feel the heat.

John Peace, the acting chairman of Standard Chartered, said last year's turmoil on the financial markets had been "truly extraordinary" and an extreme test for the banking industry. He warned further the uncertainty and the contraction of economies will continue this year and the situation can worsen.

The company said its focus on Asia and its sensible attitude to liquidity and costs had helped it to weather the storm.

The bank’s chief executive remarked that the over-leverage and over-complexity of the banking crisis in the UK and the US are not present to nearly the same extent in Asia. Asian banks, even while they are feeling the stress of dollar liquidity drying up and credit environment deterioration, are in much better shape than many counterparts in the West.

U.S. has raised its stake in Citigroup. The government has also already extended its aid to AIG this week as part of a new government rescue bid.

Forex and global stocks fall sharply on fears financial sector could worsen

2009-03-02T15:45:00.004+05:30

Forex and financial markets have been gripped by fears the global financial sector may perform worse than calculated. Investor confidence has already been hit by talk that US insurance giant AIG will need a further injection of government cash with its report due to be released today.

In Europe, the UK's FTSE 100 fell by 3.2%, while Germany's Dax was down 2.76% and France's Cac 40 lost 2.67%.Earlier in Asia, Japan's Nikkei 225 index closed down 288.27 points, or 3.8%, at 7,280.15. In Hong Kong, the Hang Seng fell 3.9% to 12,314.5 points.

China's manufacturing sector had declined further last month. South Korean imports and exports slumped to a record as well. Japan reported a steep drop in car sales. Weak economic data from China and South Korea has also underscored fears about Asia's export-dependent economies.

Monday morning slide in forex and stock indices was followed by a poor performance on Wall Street on Friday last week after data showed that economic growth was even weaker than thought.

This is turning out to be one of the most tumultuous times on record in the global financial markets. "You're seeing the U.S. is sinking lower and lower, and we're still desperately searching for a bottom," remarked an analyst.

Forex-Currency update on Monday

2009-03-02T15:39:00.002+05:30

Forex Daily Currency Update
2nd March 2, 2009 Monday

EURO:
Euro fell to a one-week low vs the dollar after European Union leaders rejected calls to back an aid package for eastern Europe, fueling concern the 16-nation region’s recession will deepen.

YEN:
The yen may extend its worst month in 13 years into March on speculation traders will keep reducing holdings of long positions in the currency that bet on a rise in the exchange rate. Japan’s currency weakened 7.9 percent versus the dollar in February, the poorest month since August 1995.

NZD & AUD:
New Zealand’s dollar fell to a 6 1/2-year low and Australia’s currency extended three weeks of declines after U.S. and Asian shares slumped, prompting investors to seek the safety of the greenback.

ASIAN CURRENCIES:
The South Korean won and the Indonesian rupiah led declines in Asian currencies on concern the global recession is worsening, deterring investors from buying emerging-market assets.

RUPEE:
India’s rupee slid to a record low as mounting global stock losses added to concern investors will pull money out of riskier emerging-market assets.The currency extended a two-week slump on speculation Standard & Poor’s will soon cut the nation’s debt rating to junk. The rupee also fell on concern the current-account deficit will widen from a record as exports decline amid a deepening global economic slump.

India lauds Obama climate plan but sees concerns

2009-02-28T12:08:00.003+05:30

India's chief climate envoy Shyam Saran said on Friday he welcomed President Barack Obama's policy on climate change but warned there would be no global deal if rich nations insisted on emission targets for all.

"There is no doubt that Obama has brought a renewed focus…(but )negotiations at a key Copenhagen climate summit in December would not yield any results if Western nations linked any cut in their emissions to targets accepted by developing countries"Indian prime minister's special envoy on climate change, said in his first comments on Obama's policy speech.

Saran repeated India's stance that it was not in a position to commit to an emissions target.

About 190 countries are trying to craft a broader climate treaty by December to replace the Kyoto Protocol that only binds wealthy nations to emissions targets between 2008 and 2012.

Rich and poor countries remain divided over funds for clean energy investment and technology transfer, as well as new targets to cut greenhouse gas emissions blamed for causing droughts, floods and disease.Developing nations such as India and China -- among the world's worst polluters -- are exempt from adopting emission targets under the Kyoto Protocol because they need to burn fossil fuels to lift massive chunks of their population out of poverty.

U.S. to Raise Stake in Citigroup

2009-02-27T15:27:00.003+05:30

The U.S. Treasury Department reached a deal late Thursday to take a stake of 30 to 40 percent in Citigroup as part of a third bailout of the embattled bank, according to several people close to the deal. Vikram S. Pandit, the chief executive, will remain at the helm, but Citigroup will have to shake up its board so that it has a majority of independent directors, a move that federal regulators had already been pursuing.

The Obama administration will probably come under intense pressure to take a much larger role in shaping the bank’s direction. Taxpayers, after pumping more than $45 billion into the bank, have become Citigroup’s single largest shareholder. The government will not put in any additional money for now, but some analysts believe Citigroup may require more down the road.

The move is one of the most drastic steps federal officials have taken to prevent the collapse of an institution deemed “too big too fail,” as its downfall could send shockwaves through the global forex trading and financial markets. The government also took a major ownership stake in the American International Group, AIG, which is already seeking additional funds, and seized control of Fannie Mae and Freddie Mac in September. So far, none of those deals have turned out well.

Read the full story ...

Downturn Creeping Into Asia

2009-02-26T15:27:00.002+05:30

Japan’s exports fell by 46 percent in January, and Hong Kong’s economy contracted 2.5 percent in the last three months of 2008, furthering signs that the economic downturn in Asia is set to drag on through this year.

Japan leads recession in Asia:
The Japanese economy was one of the first in Asia to tip into recession since last three months of 2008 as weakness stemming from poor domestic demand was mixed with evaporating demand from overseas. Exports plunged 46 percent from a year earlier and imports dropped 32 percent. Similar sharp declines have been reported recently by China and Taiwan also.

Worsening Yen:
Japan’s export decline was significant from a grim December 2008, when exports fell 35 percent. The yen — whose strength against the dollar has made Japanese goods more expensive for American consumers — has weakened during the last three weeks, trading at around 97 to the dollar on Wednesday, compared with about 89 in early February.
Exporters have continually cited the yen as a main reason for sharply reduced sales that are expected to lead to deep losses this year.

Rest of the Continent:
In Hong Kong, the government said on Wednesday that it expected the economy to shrink 2 to 3 percent in 2009. Elsewhere in the region, South Korea said it would start a $13.2 billion fund to bolster its commercial banks .India had Malaysia have already recorded the slowest growth in at least last seven years.
Much of Asia’s growth in recent years was based on an export boom, allowing the recession in the United States and Europe to spread through a region that had been insulated from the American financial troubles that ignited the current downturn.

Read details on NYTimes

Dollar Gains as Obama expresses Optimism

2009-02-25T14:28:00.003+05:30

The dollar strengthened against the euro after President Barack Obama expressed optimism that the U.S. will emerge from its recession “stronger than before.”

The greenback gained for a third day versus the yen as well in forex trading as Obama said the world’s largest economy “will recover” and the tools to revive growth were within reach. Japan’s currency fell for a sixth day against the euro, the longest stretch since April, after the Ministry of Finance said the trade deficit widened in January to the most since at least 1986. The dollar rose to $1.2816 per euro as of 1:40 p.m. in Tokyo from $1.2846 late yesterday in New York. The greenback climbed to 97.10 yen from 96.64 yen.

“The markets like the fact that Obama’s trying to tighten things up and striking an optimistic tone…that would be supportive of the dollar.”Obama, delivering his first address to a joint session of Congress, also said the credit crisis paralyzing the banking system must be fixed or “our recovery will be choked off before it even begins.”

”AIG is already seeking additional funds from the Government before its report due on nest Monday.

AIG Seeking More Government Aid

2009-02-24T14:42:00.001+05:30

Preparing to announce a mammoth fourth-quarter loss, the largest in U.S. corporate history, troubled insurer American International Group, Inc) is reportedly seeking additional funds from the government. The company is in discussions with the government to secure more funds so that it can keep operating after next Monday, when the nearly $60 billion loss is announced.

The huge loss, stemming mainly from write-downs on assets including commercial real estate, is likely to lead to downgrades in its insurance and credit ratings, which will force AIG to raise collateral that it does not have. Also, if AIG's book value falls below a certain level, which is very much likely, it will trigger default in some of its debt instruments.

AIG, which until last September was the world's largest insurer, was saved from going bankrupt, after receiving an initial $85 billion U.S. government bailout package. The Federal Reserve and Treasury have already provided over $150 billion of aid to AIG and the federal government now owns 79.9% of the company. Not helping AIG in its crisis could unfold a chain of events that could lead to problems for several financial institutions, which still rely on AIG to insure them against losses on loans and other debt.

However, helping AIG this time around is a little tricky, as the government's stake cannot exceed the current limit. The situation creates an opportunity for officials to find a new way by which value can be transferred to the U.S. in lieu of AIG reducing its debt so that it can then borrow more from the government to meet its collateral calls.

China & U.S. can lead world to recovery says Clinton; Obama vows to spend stimulus money wisely

2009-02-21T12:04:00.004+05:30

U.S. Secretary of State Hillary Clinton said on Saturday the United States and China could help the world recover from economic crisis by working together, adding that Washington appreciated Beijing's confidence in U.S. government debt.

"I appreciate greatly the Chinese government's continuing confidence in United States Treasuries. I think that's a well grounded confidence," Clinton said at a news conference with Chinese Foreign Minister Yang Jiechi.

China invests the bulk of its reserves in liquid debt, notably U.S. Treasury bonds. Beijing is wary of taking excessive risks after suffering heavy book losses on stakes in financial firms such as Blackstone and Morgan Stanley.

On Friday, Clinton said Washington would press China on human rights but added that this would not keep them from working together on a range of issues such as the financial crisis. The United States has long accused China of human rights abuses and pressed Beijing to grant greater autonomy to Tibet. Clinton will also meet President Hu Jintao and Premier Wen Jiabao on Saturday.

Meanwhile U.S. President Barack Obama vowed strict oversight Friday of his $787 billion stimulus plan, pushing back against Republicans who have labeled the centerpiece of his economic agenda fiscally irresponsible.

Obama said he would name a team of managers to ensure that billions of dollars slated for infrastructure projects would be spent wisely. "The American people are watching. They need this plan to work. And they expect to see the money they worked so hard to earn spent in its intended purpose without waste, inefficiency, or fraud." Obama said at a gathering at the White House. The signing this week of the bill -- the most expensive in history -- marked a big victory for Obama and his Democratic allies in Congress.

Compiled news from the Reuters.

Russians Retrench as Crisis Evokes Memories of 1998 --Déjà vu?

2009-02-20T16:12:00.006+05:30

It took Marina Zaporozhtseva a decade to save for a new car after Russia’s last economic crisis. Scared of living through a repeat, she’s hanging on to her money.

Back in 1998, when the country let the ruble plunge, defaulted on debt and millions of people’s savings were wiped out, the Moscow accountant couldn’t find a job and had to work as a cook to make ends meet. “Now, once again, there are nightmares at work,” said Zaporozhtseva, 46. “I have to think over every little purchase because I’m not sure if I’ll have a job tomorrow.”

Staggering growth in Russia:
Russia has lurched into reverse after 10 years of uninterrupted growth driven by revenue from oil, gas, metals and consumer spending. The government expects the economy to shrink 2.2 percent this year after expanding about 7 percent a year since 1999. Already, household incomes have sunk with the 35 percent plunge in the ruble against the dollar since Aug. 1 and inflation surged to 13.4 percent in January because of the cost of imported goods.

Russian President Medvedev said on Feb. 15 that lower global demand for commodities like oil and gas, which constitute Russia’s main source of export, unemployment has risen and become the “biggest problem” and the “biggest pain,”. According to the head of research at a Moscow-based investment bank Russia has been hit twice as hard- first through the tremendous drop in commodity prices, and second by the global financial crisis.

Retail sales Diminish:
The jobless rate in Russia rose to 8.1 percent in January, the highest since March 2005.
For those who have jobs, the average monthly wage fell 4.6 percent in December from a year before to 17,112 rubles ($470), the first contraction since October 1999.That 'fueled' slow growth in retail sales to the slowest pace in nine years.

Soaring Interest Rates:
The Russian central bank has raised its benchmark repurchase rate four times since November, to 12 percent. Car loan rates have almost doubled to as much as 21 percent in ruble terms, compared with 12 percent to 13 percent “before the crisis,” or between January and May last year. Russia’s peers including Brazil, India and China, have cut borrowing costs.

Irina Pivovarova, 25, a manager at an aviation company, said she decided against buying an apartment for 3.8 million rubles after VTB Bank decreased the amount of mortgage she had applied for and said it would raise rates. “I couldn’t get that much money anywhere,” she said. Tatyana Volkova, 26, an advertising specialist, also pulled out of purchasing a home for 4.5 million rubles ...

Living through it:
Yet the weaker ruble is pushing some Russians towards shopping rather than saving, meaning consumer spending is growing at a reduced pace rather than falling like in countries in Western Europe. Volkova ended up buying a car instead of an apartment because “you can’t keep rubles now,” she said.

For people like Zaporozhtseva, the fear is there might be no escape from the sudden reversal in Russian fortunes. Unlike the previous years, she has no vacation plans and is wary of her travails a decade ago.

“Obviously the current crisis is reminding me of the one in 1998,” said Zaporozhtseva. “It’s just that we’ve lived through so many economic shocks we’re used to them by now.”

Euro witnesses Gain, USD plummets against Canadian Dollar

2009-02-19T12:24:00.009+05:30

Euro sees rise:

The euro rose from near a three- month low against the dollar since yesterday on speculation German Chancellor Angela Merkel will signal Europe’s largest economy plans to take action to help avert the financial turmoil in the region. Optimism about the stabilization of the European financial system is being seen as helpful to halt the recent steep decline of the euro.

The euro climbed to $1.2589 as of 12:57 p.m. in Tokyo from $1.2530 late in New York yesterday, when it touched $1.2513, the lowest level since Nov. 21.

Europe’s single currency advanced to 117.94 yen from 117.50 yen. The dollar traded at 93.69 yen from 93.79 yen yesterday, when it reached 93.96, the highest level since Jan. 7. The Bank of Japan may today unveil details of a plan to buy corporate debt and extend lending programs in place to prevent a shortage of credit from deepening the nation’s recession, according to a Bloomberg survey.

Bank Results can affect Euro adversely:

Gains in the euro may be tempered by concern European companies will report steeper-than-expected losses stemming from the global financial turmoil.

USD near Peak Versus Canada’s Currency:

Demand for the dollar was tempered by speculation the U.S.’s largest automakers will fail unless they get increased government aid. General Motors Corp. and Chrysler have a 70 percent likelihood of filing for bankruptcy.They are seeking as much as $21.6 billion in additional federal assistance.The Canadian dollar is being seen as emerging with a cyclical growth profile that is as good as or better than that of the U.S. dollar.

U.S. Data:

The Labor Department’s report on producer prices, scheduled for today, may show wholesale prices fell 2.5 percent last month from a year earlier, according to a Bloomberg survey, signaling the world’s largest economy may be heading for a period of sustained deflation. Federal Reserve policy makers lowered their projections for economic growth this year, with most seeing a contraction of 0.5 percent to 1.3 percent, according to minutes of the Federal Open Market Committee meeting Jan. 27-28 released yesterday.

FOREX-Daily Market Digest

2009-02-18T12:41:00.008+05:30

Yen sees gain:
The yen gained in currency trading for a third day against the euro on speculation European banks will reveal increasing losses due to the financial crisis in the region.

Yen strengthened versus 13 of the 16 most-active currencies on concern stock declines will spur investors to sell higher-yielding assets they bought with funds from Japan. The euro traded near a 10-week low against the dollar. The Risk-averse sentiment is being seen as likely to persist. “The yen may be bought.” Traders noted demand for the yen increased after Asian equities fell. The Nikkei 225 Stock Average slipped 1.4 percent and the MSCI Asia- Pacific Index of regional shares weakened 1 percent, prompting investors to reduce holdings of higher-yielding assets.

AUD weakens:
Australia’s currency may slide to as low as 50 U.S. cents as the global recession can drive down commodity prices. The central bank may lower borrowing costs to a record. The global economic collapse, the weakness of commodity prices, the prospect of Australian interest rates going to 2 percent or less and a severe domestic recession suggest the Australian dollar could weaken sharply, accordingly to analysts.

BSE and NSE move upwards:
Indian shares turned positive after opening 1.1 percent lower on Wednesday as investors hunted for bargains in the battered market that had fallen 6.2 percent in the previous two days. Technically, the market had become oversold-so now it is rebounding, remarked an analyst here in Mumbai. By 10:05 a.m. (0435 GMT), the 30-share BSE index was up 0.38 percent at 9,069.26 points, with 21 components rising. The 50-share NSE index was up 0.47 percent at 2,783.60.

Current recession one of the worse:
Alan Greenspan, the former U.S. Federal Reserve Chairman on Tuesday said the current global recession will be the longest and deepest since the 1930s and more government rescue funds will be needed to stabilize the U.S. financial system. In a speech to the Economic Club of New York Greenspan said The U.S. Treasury's Troubled Asset Relief Program (TARP) designed to help bail out banks has been partially successful and that additional funds will be required to stabilize the American banking system and restore normal lending.

News compiled from the Reuters and Bloomberg.

FOREX-Euro falls to 2-mth low vs. US dollar on rates,Yen deterioates

2009-02-17T12:14:00.005+05:30

Euro Worsens Against Dollar,Yen:
The euro fell to a 10-week low against the dollar adding to concern financial turmoil in the region is worsening. The euro also weakened against 14 of the 16 major currencies on speculation its recent declines triggered the execution of automatic sell orders. Meanwhile the yen here also dropped to a five- week low from yesterday against the dollar after Japan’s Finance Minister said today he would resign after budget bills are passed in the nation’s parliament.

Report pushes euro further down:
The Moody’s research and risk analysis report aided push euro down below 1.27 and accelerated dollar gains across the board. The euro needs to find support at $1.2330, the weakest since April 2006, which it touched in October, according to analysts. The euro’s decline against the dollar and the yen accelerated after stop losses on investors’ long positions on the currency were activated.

Traders said a sudden bout of heavy selling had forced the euro lower, triggering a series of sell orders and sending it down about 1 percent to $1.2665, it’s lowest since early December U.S. markets were closed for a holiday on Monday, when the euro lost about half a percent against the dollar and 0.8 percent against the yen as European equities fell and concerns about western banks' exposure to problems in Eastern Europe weighed.

Japan’s Concern:
Japan’s Finance Minister’s resignation spurred growing concern over the world’s second-largest economy .The market sentiment is to short the dollar and long the yen, so there’s a bias to buy back the U.S. currency and sell Japan’s, with forecast predicting the yen may fall to 93 per dollar today. Japan’s benchmark index Nikkei fell to its lowest in more than two months as the stronger yen hurt exporters and investors await the U.S. automakers' plans. According to a Reuter’s poll, Confidence among Japanese manufacturers remained mired near record lows, as exports and output dived amid the global slump and deepening recession at home.

FOREX-Top Headlines on Monday Morning

2009-02-16T12:39:00.004+05:30

Yen Rises, South Korean Won drops to two month low:
The yen climbed to 91.65 against the dollar as of 2 p.m. in Tokyo from 91.93 late in New York on Feb. 13 in forex trading. It advanced to 116.92 per euro from 118.37. Japan’s currency gained 1.2 percent to 59.63 versus Australia’s dollar and rose 1.1 percent to 47.50 against New Zealand’s dollar. The U.S. dollar gained to $1.2756 per euro from $1.2862 in New York last week, and climbed to 1.1668 Swiss francs from 1.1590. The British pound fell 1 percent to $1.4214 and weakened 0.2 percent to 89.75 pence per euro.

The yen snapped two days of losses against the dollar from the Friday session last week.

South Korea’s won shed 11 percent this year, the biggest drop among the 10 most-traded Asian currencies outside Japan, on concern that a deepening global economic slump will discourage investors from buying emerging-market assets.
A forecast revealed the Korean economy will shrink 6 percent this year as the world recession takes a bigger toll on over-leveraged households and smaller companies than during the 1998 Asian crisis.

Geithner Pressed By G-7 to Push Ahead With Bank Bailout Plan:
Finance chiefs from the Group of Seven nations joined the chorus of U.S. investors and lawmakers pushing Treasury Secretary Timothy Geithner to move faster to fix the banking system. The G-7 repeated its traditional message that “excess volatility” and “disorderly movements” in exchange rates must be avoided. The group accounts for about two-thirds of the world economy composing of the U.S., Japan, Germany, U.K., Italy, Canada and France. The yen rose against the euro and the dollar after finance ministers from the Group of Seven nations said the “severe” global slump will persist for most of 2009 and Japan’s economy shrank by the most since 1974, spurring investors to sell riskier assets.

White House dampens stimulus expectations:
President Barack Obama's aides warned Americans on Sunday not to expect instant miracles from the $787 billion economic stimulus bill he will sign this week, but said it would help eventually. "The acceleration in job loss probably means that this economy is going to get worse before it gets better," he said. The Republicans kept up their criticism on the bill saying it is incredibly expensive. “It has hundreds of billions of dollars in projects which will not yield in jobs," said John McCain, whom Obama defeated in last year's presidential election.

Congress dispatches Stimulus Package to Obama

2009-02-14T12:02:00.005+05:30

An economic stimulus package worth $787 billion is headed to President Barack Obama’s desk after Congress passed the plan that Democrats say is critical to helping pull the U.S. economy out of recession. The Senate late yesterday voted 60 to 38 to approve the package of tax cuts and more than a half-trillion dollar in new federal spending. The votes give Obama the first major legislative victory of his presidency.

Democrats predict the plan will save or create 3.5 million jobs. Its costliest item is a $400 payroll tax cut for individuals and $800 for couples. Retirees, disabled veterans and others who don’t pay payroll taxes will get a $250 payment. Democrats released the text of the plan late the night before the vote, prompting complaints from Republicans they didn’t have enough time to review the legislation before voting on it. “It is over a thousand pages- it’s physically impossible for any member to have read this bill.” said a representative from Georgia Republican. Republicans argued that the bill contains too much government spending and, because of that, won’t do enough to boost the economy. The New Hampshire Republican senator Judd Gregg, who withdrew this week as Obama’s commerce secretary nominee, voted against the plan saying the “so-called stimulus plan has become sidetracked by misplaced spending and a lack of attention to the true problems facing the nation.”

The stimulus plan provides a half-trillion dollars for jobless benefits, renewable energy projects, highway construction, food stamps, broadband, Pell college tuition grants, high-speed rail projects and scores of other programs. It raises the nation’s debt limit to about $12 trillion.

The nonpartisan Congressional Budget Office said the stimulus package will cost $787 billion, rather than $789 billion lawmakers estimated earlier this week. The plan will pump $185 billion into the economy this year and $399 billion next year, the agency said. A Wisconsin Democrat said as he urged passage of the bill, “The other tool normally available to us is monetary policy in the form of low interest rates through actions of the Federal Reserve. We’ve already fired that bullet - - the only bullet left is fiscal policy.”

Read more from Reuters…

FOREX and Other Headlines on Friday Morning

2009-02-13T12:42:00.002+05:30

Yen Falls on hope Risk Appetite Will Revive:
The yen dropped against the euro and the U.S. dollar as optimism about government efforts to revive global growth improved investors’ appetite for riskier assets, pushing up Asian stocks and Forex market for the first time this week. The yen also weakened against the Australian and New Zealand dollars after Australia’s Senate approved a 42 billion AUD ($28 billion) stimulus package aimed at ensuring the economy doesn’t enter its first recession in 18 years. The greenback fell for the first time in four days on speculation a U.S. report will show that confidence among consumers declined in February, adding to signs the recession in the world’s largest economy is worsening.

G7 Meeting:
Finance ministers and central bankers from the Group of Seven major industrial nations meet in Rome here today and tomorrow. They plan to discuss exchange-rate developments.

Indian shares rise:
Indian shares rose 1.8 percent on Friday as investors speculated on a fiscal stimulus package in an interim general budget on Monday and supported by firmer Asian markets. Traders said expectations an interim railway budget, scheduled to be presented to Parliament at 11 a.m. (0530 GMT), would propose lower freight rates also underpinned sentiment.

Stimulus Aims Two-Phase Jolt at U.S. With Tax Cuts, Spending:
The stimulus plan emerging from Congress may jolt the U.S. economy in successive waves: relief to cash-strapped consumers, businesses and states, then a job- creating lift from spending on roads, utilities and public transit. Economic activity begins to tick up in third quarter of 2009, but the biggest effect of the stimulus bill is being expected in 2010.The hope is, with the stimulus, that we actually stop losing jobs by the end of this year, marked an analyst. The stimulus bill contains about $54 billion to help states with expenses. The plan has more than $60 billion to increase unemployment benefits and a boost to food-stamp programs, housing assistance programs and other aid for the hardest-hit Americans.

Obama Pays Tribute to Abraham Lincoln:
The United States on Thursday 12th February, marked Lincoln's 200th birthday with ceremonies at the US Capitol in Washington and at historical sites across the country, including his presidential library in Springfield, Illinois and the Gettysburg battlefield in Pennsylvania. President Barack Obama often invokes the name and symbols of the assassinated president who ended slavery and brought the U.S. through the Civil War. Both men rose from the Illinois state legislature to the highest office in the land and both built reputations as skilled political orators.

Asian Stocks Fall on Doubts U.S. Stimulus Will Revive Growth

2009-02-12T11:23:00.002+05:30

Asian stocks fell for a fourth day, led by financial and consumer-related companies, on concern U.S. measures to alleviate the financial crisis won’t be enough to revive the world’s largest economy. The U.S. stimulus plans are still lacking in details,” remarked an analyst from China. “It’s still unclear how they are going to bailout the banks. The market had been awaiting the financial bailout plan with high hopes, but what was announced didn’t have much meat on the bone,” said a Tokyo-based strategist in an interview with Bloomberg Television.

The MSCI Asia Pacific Index fell 1.5 percent to 81.75 at 11:32 a.m. in Tokyo, with about three stocks advancing for each one that declined. The gauge has lost 8.8 percent this year, extending 2008’s record 43 percent, as the credit crisis triggered by the collapse of the U.S. housing market dragged the world’s biggest economies into recession.

The Nikkei 225 Stock Average slumped 1.7 percent, to 7,814.01, resuming trade following a holiday yesterday.

Indian shares started 0.6 percent lower on Thursday following losses in Asian markets on uncertainty about the global economic outlook.Top-listed Reliance Industries and outsourcer Infosys Technologies were the main losers.

US Equities Dive as Risk Aversion Prevails

2009-02-11T11:27:00.002+05:30

The safe-haven currencies benefited amid heightened risk aversion, with the dollar and yen advancing against the majors. US Treasury Secretary Geithner provided additional details on the Obama administration’s financial bail-out plan – prompting a sharp sell-off in stocks. The Dow Jones and S&P 500 were both lower by over 4% and the NASDAQ sliding by nearly 3.5% in the New York afternoon.

Geithner described buying up to $1 trillion in banks’ toxic assets and up to $1 trillion in purchases of consumer debt – in an effort to free up the credit markets. Geithner fell short of providing any key details on a comprehensive bail-out program, prompting markets to sell-off sharply amid growing uncertainty over the prospects for the government to successfully.

Euro Pressured on Russian Debt Restructure rumor:

The euro whipsawed around the 1.30-level against the greenback in the Tuesday session on a combination of news about the US financial rescue plan and speculation over potential debt restructuring by Russia. The heightened risk aversion prompted the euro to slide to 1.2812 versus the dollar and 116.68 against the yen. EURUSD remains mired near the 1.29-level, with support seen at 1.2880, followed by 1.2820 and 1.28. Further selling pressure will be tempered at 1.2770, backed by 1.2740 and 1.27. Gains will target interim resistance at 1.2930, followed by 1.2970 and 1.30. Subsequent ceilings are seen at 1.3040, followed by 1.3070 and 1.31.

FOREX-Signs of Slowdown Deepening lower Asian Currencies, U.S. Senate Vote Set for Today on $838 Billion Stimulus Package

2009-02-10T11:57:00.007+05:30

The U.S. Senate is set to vote today on an $838 billion economic stimulus package after Democrats narrowly won a key procedural vote on it. Investor sentiment is caught between the signs of a deepening global recession and optimism over the Fed’s proactive rescue measures. President Obama will hold a press conference later today while the details of the bank rescue plans are expected. The delay of the announcement from Monday to Tuesday undermined confidence in Asian and European markets on Monday.

Asian currencies fell, led by South Korea’s won, on concern the slump in the region’s economies is deepening, discouraging investors from buying local assets. India’s rupee dropped 0.2 percent 48.685 a US dollar. Korea’s currency weakened 0.5 percent to 1,386.35 against the dollar. The Indonesian rupiah dropped 0.3 percent to 11,805 and the Thai baht declined 0.1 percent to trade near a three- week low of 35.02.

The euro fell against the dollar and the yen as a Nikkei newspaper report that Russian banks and businesses may seek to reschedule $400 billion of foreign loans deepened concern financial turmoil in Europe is worsening. The euro declined 1.4 percent to $1.2823 in Tokyo, from $1.30003 late in New York yesterday, ending a two-day advance. The yen rose for a second day to 91.36 per dollar from 91.46 yesterday.

FOREX- Yen Rises on Speculation, Dollar Gains highest against Yen, Retreats shortly

2009-02-09T11:32:00.004+05:30

Dollar hits one month high vs yen later retreats

The yen rose against the dollar on Monday with demand from Japanese exporters lending support after it earlier hit a one-month low as gains in stock markets pointed to an easing of risk aversion. The dollar hit a one-month high against the yen earlier as the Japanese currency carried over its weakness from Friday, when U.S. shares rallied even as data showed that U.S. job losses in January were the deepest in 34 years
But the dollar later shed its gains against the yen due to selling by Japanese exporters, traders said. The yen advanced versus 14 of the 16 most-active currencies today. Against the yen, Australia’s dollar fell 1.3 percent to 61.23, South Africa’s rand declined 1.3 percent to 9.4747 and New Zealand’s dollar weakened 1.5 percent to 48.24. The dollar fell 0.3 percent against the yen to 91.73 yen .The dollar earlier rose to 92.42 yen on trading platform EBS, its highest since early January. The euro rose 0.1 percent to $1.2946. Against the yen, the euro was 0.3 percent lower at 118.70 yen, having retreated from a three-week high of 119.99 yen hit on EBS earlier in the day. The pound fell for the first time in five days against the dollar after the Confederation of British Industry also said Prime Minister Gordon Brown’s government must act quickly to revive lending as businesses battle the worsening credit squeeze.

U.S. financial stability plan to be outlined on Tuesday

In the near term, currencies are seen likely to take their cues from how the stock market reacts to President Barack Obama's financial stability plan, to be outlined by Treasury Secretary Timothy Geithner in a speech on Tuesday. The stabilization steps were initially due to be unveiled on Monday today, but the Obama administration pushed back the announcement as it pressed lawmakers to settle their differences over a huge economic stimulus package. The dollar broke above the triangle pattern against the yen on technical charts late last week, suggesting it has more room to rise.

Asian Currencies Climb This Week on Efforts to Revive Economies

2009-02-07T11:40:00.002+05:30

An Asian currency gauge rose for a second week as policy makers stepped up efforts to revive economies reeling from the global recession, raising speculation overseas investors are returning to emerging markets.

The Philippine peso capped the biggest weekly advance in a month. India’s rupee had a second week of gains with an advance of 0.3 percent this week to 48.7250 versus the U.S. currency. Malaysia’s ringgit traded at a one-week high as regional stocks rallied. . Malaysia is prepared to take “radical” steps to boost the economy, the government said on Feb. 5, while the Indonesian rupiah rose 0.3 percent to 11,720 today, paring this week’s decline to 2.4 percent. Indonesia a day earlier cut interest rates for a third straight month. The peso climbed 0.5 percent yesterday to 47.202 per dollar, a weekly gain of 0.4 percent Taiwan will offer tax breaks and subsidized loans to lure local investors back from China, which is increasing export tax rebates for textiles. The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 most-active currencies excluding the yen, rose 0.4 percent for the week to 105.10. Elsewhere, The Thai baht fell 0.2 percent on the week to 35 per dollar and Vietnam’s dong was little changed at 17,485.

Oil falls below $41 in Asia as US company, unemployment data reflect deep recession

2009-02-06T12:20:00.002+05:30

Oil prices fell below $41 a barrel on Friday in Asia as soaring U.S. unemployment and bleak corporate results kept investors pessimistic about demand for crude."We’re seeing too much bad news coming out of companies," said Gerard Rigby, an energy analyst with Fuel First Consulting in Sydney. "If companies are still laying off workers, then economic reports are going to be pretty bad going forward.” With millions out of work, investors fear a downward spiral of falling consumer demand and company losses could lead to further job cuts and weakening crude demand reported the Associated Press.

The Dow Jones industrial average rose 1.3 percent Thursday.

Investors are also watching for possible further production cuts by the Organization of Petroleum Exporting Countries, which has already promised to reduce output by 4.2 million barrels since September.

Meanwhile Bloomberg reported Crude oil fell on concern that fuel demand in the U.S., the world’s biggest energy consumer, may decline as a report showed the number of newly jobless climbed to a 26-year high. A release today may show the jobless rate rose to 7.5 percent in January. Oil is poised for a 2 percent drop this week, the smallest weekly change in more than five months. Prices declined 10 percent last week.

Volatility Drops:
Oil prices have remained near the $40 level for the past five trading sessions. The 30-day historical volatility for crude oil has fall to 92.28 percent today, the lowest since Dec. 19, according to data compiled by Bloomberg.

World News and Currency Update

2009-02-05T11:26:00.004+05:30

EUROPE

The euro traded near a two-month low against since yesterday the dollar on concern the economic slump in Eastern Europe will deepen the recession in the 16-nation currency bloc.The currency may weaken for a second day against the yen on speculation the European Central Bank will signal it plans to cut interest rates again this year, after leaving them unchanged at a meeting today. The Czech koruna approached a two-year low versus the dollar before a government report that may show the trade deficit widened to the most in four years. Russia’s ruble was near an 11-year low after Fitch cut the nation’s debt rating.

ASIA

Indonesia’s central bank is seeking to expand its $6 billion currency swap deal with Japan and add new agreements to bolster the rupiah after foreign-exchange reserves slumped by $10 billion since July.Indonesia, which has similar agreements with China and South Korea for $3 billion each, may also initiate talks with a fourth nation, central bank Governor said, without identifying the country. The rupiah, which fell 16 percent last year, the most in eight years, declined 1 percent to 11,788 against the dollar at 10:19 a.m. in Jakarta.

US
Years of deepening recession in the developed world gnawed at investors on Thursday, after glum earnings from U.S. corporate stalwarts such as Kraft Foods and as the Bank of England looked set to cut record low rates further.As governments worldwide seek measures to ease the pain from the worst financial crisis in decades, the U.S. Senate voted to soften a "Buy American" clause in a $900 billion stimulus plan after President Barack Obama voiced concerns it could spark a trade war.

Excerpts taken from Bloomberg.com.

Currency Updates for the Day

2009-02-04T11:38:00.004+05:30

US dollar
The dollar edged up against a basket of currencies in cautious trade on Wednesday before jobs data in the United States and interest rates decisions by central banks in Europe. The U.S. currency made up for some of its losses the previous day, when an unexpected rebound in housing data and hopes for fresh stimulative economic packages in the United States sapped investor demand for the dollar as a safe haven.
"Investors are basically looking to buy the less-risky yen against other currencies because they are still avoiding risks, though the dollar is the next beneficiary currency, underpinned by prospects for economic stimulus plans," said an analyst at Shinkin Central Bank.
The dollar edged up 0.1 percent to 89.53 yen from late U.S. trading on Tuesday, but Japanese exporters selling of the U.S. currency capped its gains, dealers said. The euro slipped 0.3 percent to $1.2999 and was little changed at 116.34 yen, reported Reuters.

AUD & NZD
Bloomberg reported the Australian and New Zealand dollars rose for a second day as regional stocks gained and government spending worldwide boosted investor appetite for higher-yielding assets. Australia’s currency climbed the most in seven days after a government report showed December retail sales posted the biggest gain in more than eight years. The government yesterday announced a A$42 billion ($27.2 billion) spending package and the central bank cut interest rates to the lowest since 1964 to help the economy avoid a recession.

EURO
The euro fell toward an eight-week low against the dollar before a report that may show retail sales slid for a seventh month, supporting the case for the European Central Bank to cut interest rates.

POUND
The British pound weakened versus the greenback on concern an industry report will show U.K. services shrank at close to the fastest pace in 12 years. The yen may gain for a fifth day versus the dollar on speculation widening credit-market losses will erode corporate earnings, prompting investors to sell higher-yielding assets financed in Japan.

Yen,AUD,Rupee and Crude Oil Update

2009-02-03T11:17:00.004+05:30

YEN
The yen fell, ending three days of gains versus the dollar and euro, after the Bank of Japan said it will buy 1 trillion yen ($11.1 billion) of shares held by financial companies, reviving demand for higher-yielding assets. Japan’s currency dropped from near a one-week high versus the greenback after the central bank said in a statement it will purchase the equities through April 2010 to boost the capital of financial institutions.

AUD
The Australian and New Zealand dollars also ended a three-day losing streak against the yen after the Australian government said it will spend 42 billion AUD ($26.8 billion) to help prevent the economy entering a recession. The Australian dollar gained after the central bank cut interest rates to the lowest since 1964 and the government announced a stimulus package to avoid a recession. New Zealand’s currency rose from near a six-year low.

RUPEE
India’s rupee strengthened the most in a week even as Asian stock gains tempered speculation overseas funds will increase equity sales. The rupee climbed as much as 0.4 percent to 48.7325 a dollar, the strongest intraday since Jan. 19, before trading at 48.775 as of 10:16 a.m. in Mumbai, according to data compiled by Bloomberg. All 10 most-active Asian currencies outside Japan strengthened.

OPEC
Crude oil rose in New York on speculation that OPEC, led by Saudi Arabia, cut its output in January to avoid a supply glut and bolster prices. Production from the Organization of Petroleum Exporting Countries averaged 28.565 million barrels a day last month, down 3.5 percent from December, according to a Bloomberg News survey of oil companies, producers and analysts. A government report yesterday showed U.S. consumer spending fell in December for a record sixth consecutive month, cutting fuel consumption.

The above is compiled news excerpts from Bloomberg.com.

Oil hovers near $42 as US crude workers may strike

2009-02-02T12:06:00.008+05:30

Oil futures rose near $42 a barrel on Monday, buoyed by threats of major strikes by refinery workers in the United States and Britain, but the gains were tempered by concerns of sagging global energy demand. Signs from OPEC late last week that it may augment its record output cuts to stem the collapse of more than $100 in prices, and an abrupt end to a ceasefire in Nigeria's oil-rich Niger delta also supported prices, analysts said. U.S. Oil prices were also bolstered after Nigeria's main militant group warned of a "sweeping assault" on the country's oil and gas industry on Friday, saying it was calling off a ceasefire after a military strike on one of its camps,reported Reuters.

"The slew of economic and oil demand data which came out of the U.S. last week was all pretty negative energy demand outlook," said David Moore, a commodity analyst at the Commonwealth Bank of Australia.” But threats of refinery strikes on both sides of the Atlantic are probably giving oil some support", he further added. A report from the U.S. Energy Information Administration on Friday showed U.S. oil demand in November was 305,000 barrels per day less than previously estimated and was down 1.577 million bpd from a year earlier. Data also showed U.S. gross domestic product fell at a 3.8 percent annual rate in the fourth quarter, the biggest drop since the first three months of 1982.

In Britain, Prime Minister Gordon Brown on Sunday condemned nationwide wildcat strikes over the use of foreign workers, but unions warned more staff may down tools this week. But fears of a deep global recession and a tumble in world energy consumption continue to unsettle investors.

OPEC secretary general Abdullah al-Badri said on Friday the producer group was willing to cut output further at its meeting in March, adding to agreed cuts of 4.2 million barrels per day since September to prop up prices.OPEC secretary- general, said $70 to $90 a barrel is a “reasonable” oil price to support investment in new production.“It’s a reasonable price where we can invest and that’s the most important thing for the world...We control 75 to 80 percent of the world reserves, we need to develop that reserve so we can have more supply to the world" he added.

Japan sees investment opportunities in Asia, US

2009-01-31T11:55:00.005+05:30

Japanese companies see plenty of opportunities to make acquisitions and investments in Asia and in environmental business in the United States, the Japan External Trade Organisation JETRO said on Friday.But the strong yen and credit crunch mean investment into Japan is likely to continue falling, Yasuo Hayashi, chairman and CEO of JETRO, which promotes trade and investment between Japan and the rest of the world, told Reuters.Here's the compiled news excerpt from Forexpros.com.
Hayashi said India would offer major investment opportunities because the authorities lacked basic infrastructure.

Japanese companies were also well placed to pick up investment projects in China, especially in the environment sector, he said in an interview.
"Japanese business is looking very eagerly at business in China and sales to China of environmental equipment," he said.

Even in the United States there were opportunities, despite the economic crisis, because the new administration of President Barack Obama wanted to invest in the environment sector, an area of expertise for Japanese firms, he said.

Japanese companies will also look for investment opportunities in Southeast Asia, including plans to construct an industrial corridor linking India and Vietnam, and in commodities-rich countries in Latin America and Africa seeking to develop their resources, he said.
The long-term approach of Japanese business meant it was well placed to exploit opportunities even when commodities and energy prices were low, he said.

"For companies that are cash-rich, strong and able, now is a good opportunity," he said.Because many Japanese companies have relatively strong balance sheets after restructuring following Japan's financial crisis, they are well placed to make foreign acquisitions as well as investments, he said."Many find it a good opportunity to purchase good foreign companies which are in trouble at a reasonable price," he said.

As a result, Japanese foreign direct investment (FDI), which fell 4.7 percent year-on-year in the first 11 months of 2008 to 4.48 trillion yen, could increase this year, he said.
But FDI into Japan would continue to decline, after falling 13.5 percent in the first 11 month of 2008 to 6.43 trillion yen, reducing the outstanding stock of inward investment in the country.Hayashi said investment to Japan was falling because the financial crisis made it difficult for investors to raise capital and the strength of the yen was also a deterrent.

The poor state of the Japanese economy, which suffered a record 9.6 percent fall in industrial output in December, also discouraged inward investment, he said.

World crises are deepening

2009-01-30T11:53:00.006+05:30

Somber figures from Japan,the US and other parts indicate World crisis are deepening. While Japan sank deeper into recession with industrial output tumbling and inflation slipping to almost zero, key U.S. data later on Friday is also expected to mirror the worsening global financial crisis.Here are news excerpts from Forexpros.com.

Japanese economy worsening:
Japan's industrial production fell a record 9.6 percent in December, while annual core inflation slowed to a mere 0.2 percent. Rising unemployment, slowing household spending and no improvement in the industrial outlook added to fears that Japan was flirting with deflation and would post a horror GDP figure in February if exports do not bail it out. Wider Asian stocks were down 1.1 percent, the first daily drop in a week. Those falls followed similar declines on Wall Street after record monthly U.S. unemployment figures.Japanese companies including the Toyota Motor Corp, Sony Corp along with rival Nintendo Co, Ford Motor Co and Eastman Kodak Co, provided daily evidence of how deeply the global crisis was biting, costing governments trillions of dollars and threatening millions of jobs in the company.

More bad news is expected in the United States on Friday:
Economists think the U.S. Commerce Department will say gross domestic product, the broadest measure of U.S. economic activity, shrank at an annualized 5.4 percent in the fourth quarter even as the recession in the US is getting hold. As more jobs and company wealth were lost, Obama railed against "shameful" Wall St bonuses paid to executives at a time when taxpayer money was being used to shore up the crumbling financial system. Four U.S. airlines, led by Continental Airlines Inc, also posted losses, while Boeing Co shares fell 5.9 percent after it said it planned 10,000 job cuts

The picture in Europe is hardly any sunnier:
German unemployment rose almost twice as much as expected in January, euro zone economic sentiment hit a new low, while hundreds of thousands of French workers staged a nationwide strike demanding more was done to protect jobs and wages.

Little appetite:
Australian private sector credit shrank in December for the first time since 1992 as foreign banks cut lending to local companies.
Reserve Bank of Australia figures showed that total credit fell 0.3 percent in December, well below a forecast 0.5 percent rise, fuelling expectations the RBA would announce another hefty interest rate cut next week. Across the Tasman Sea, the once-favored New Zealand dollar fell to another six-year low after the central bank said interest rates would likely have to be cut further, a day after the benchmark rate was slashed by 150 basis points.

Intraday Currency Pair Update

2009-01-29T14:43:00.002+05:30

Dear traders
Here’s the daily intraday Update for EUR/USD, EUR/GBP and GBP/ USD for Thursday 29th January, 2009 from AVAFX.

EUR/USD intraday: the downside prevails.
Pivot: 1.3210.
Our Preference: SHORT positions @ 1.32 with 1.304 & 1.2975 in sight.
Alternative scenario: The upside breakout of 1.321 will open the way to 1.333 & 1.345.
Comment: the pair has broken below its ST bullish channel lower boundary and remains under pressure, the RSI is turning down.
Trend: ST Ltd Upside; MT Bearish
Key levels Comment
1.345** Intraday resistance
1.333** Intraday resistance
1.321*** Intraday pivot point
1.311 Last
1.304*** Intraday support
1.2975** Intraday support
1.29*** Intraday support

EUR/GBP intraday: rebound expected.
Pivot: 0.92
Our preference: Long positions above 0.92 with targets @ 0.9315 & 0.938 in extension.
Alternative scenario: Below 0.92 look for further downside with 0.9125 & 0.905 as targets.
Comment: the pair is breaking above its declining trend line, the RSI is on the upside.

GBP/USD intraday: under pressure.
Pivot: 1.4255.
Our Preference: SHORT positions @ 1.4245 with targets @ 1.4015 & 1.39.
Alternative scenario: The upside penetration of 1.4255 will call for 1.4375 & 1.455.
Comment: the pair stands within a ST bearish channel, the RSI is on the downside.
Trend: ST Consolidation; MT Bearish
Key levels Comment
1.455** Intraday resistance
1.4375** Intraday resistance
1.4255** Intraday pivot point
1.4129 Last
1.4015*** Intraday support
1.39** Intraday support
1.375*** Intraday support

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