The Euro and the British Pound pulled back from the highs seen in US trading as risk appetite rebounded following US authorities’ rescue of Citigroup Inc. Grim European fundamentals are unlikely to stir prices in the upcoming session, with forex traders looking ahead to the implications of the US GDP release.
The Euro pulled aback from the US affair top at 1.2948 in abrupt trading, bottomward beneath the 1.29 mark to analysis resistance-turned-support at 1.2809, the 11/19 high. The British Pound followed suit, testing the 1.51 level. Both European currencies raced college bygone as accident appetence rebounded afterwards US authorities stepped in to accomplishment cyberbanking behemothic Citigroup Inc.
Signs of global economic slowdown were clearly on display in the economic releases out in Asian trading hours. Japan’s Corporate Service Price index registered at -1.4% in October, the worst reading in over 5 years.
New Zealand’s 2-Year Inflation Expectation predicted annualized inflation would slow to 2.8% looking one year ahead from the fourth quarter, the first decline in 18 months. The metric predicted consumer prices would slow to 0.5% in the three months through December, the lowest in over a year. Still, traders are pricing in a 1.25% rate cut from the Reserve Bank of New Zealand at the bank’s next meeting and a total of 225 basis points in cuts over the next 12 months.
On balance, the forex market is likely to continue to eschew fundamental considerations as risk appetite rebounds, battering the greenback. A very strong showing on Wall St has carried over into overnight trading with key Asian bourses up over 4% and US index futures in positive territory. Investors’ exuberance may be fleeting however as the US GDP report threatens to show the world’s largest economy did worse than originally expected in the third quarter, shrinking -0.5% versus early estimates at -0.3%.
Sunday, December 21, 2008
Wednesday, December 17, 2008
Bunye raises euro generals violation of RP forex rules
Former Press Secretary and now Monetary Board member Ignacio Bunye wondered out loud yesterday why the government had not held top officials of the Philippine National Police (PNP) who were apprehended in Russia for bringing in excessive cash to answer for violation of the country’s own foreign exchange regulations.
Bunye said the recent Congress investigations involving top officials of the PNP have brought to the fore questions on the country’s foreign exchange regulations, or how much foreign currency one could legally bring out of the country.
Retired PNP comptroller Eliseo de la Paz, who with his companions earned the moniker “euro generals,” also admitted during last week’s congressional inquiries that he had likewise carried 45,000 euros to buy expensive watches in behalf of his businessman friend Tyrone Ng Arejola.
This amount, plus another $20,000 that De la Paz said his wife brought to Europe as a “personal fund,” were on top of the 105,000 euros still being held by the Russian authorities.
Bunye acclaimed that during the time of the backward Bangko Sentral ng Pilipinas (BSP) Gov. Rafael Buenaventura, the BSP active with government agencies such as the PNP, the Bureau of Community (BoC), the Manila All-embracing Airport Authority (MIAA), the Bureau of Immigration (BI), the Air Transportation Office (ATO), and the Philippine Ports Authority (PPA) a announcement of acceding (MoA) which approved to ensure "the able accomplishing of BSP rules, accurately BSP Annular 308 and Section 4 of Annular 1389, on the concrete cross-border carriage of adopted currencies and the Philippine peso."
BSP Circular 308, as amended, requires “any person who brings in and out of the Philippines in excess of $10,000 or its equivalent, to declare the same in writing using the prescribed foreign currency declaration form,” he said.
The BSP circular warned that disregarding the Bank’s rule would subject the violator to sanctions provided for in Section 36 of Republic Act 7653, such as a fine of P50,000 to P200,000 or imprisonment of two to 10 years.
The former Palace official said Buenaventura recalled that during the MoA signing, other countries such as the United States, South Korea, and Malaysia likewise require similar customs procedures in the transport of foreign currency.
The former BSP chief has said the circular had been issued as part of a package of measures that would help curb money laundering activities, adding the BSP had adopted anti-money laundering measures as early as June 2000 “to be at par with international practices,” said Bunye.
Bunye said the BSP, of late, had reminded airport authorities to conspicuously post reminders of the BSP circular for the benefit of outgoing passengers.
After two public hearings and an executive session, the committee on public order and safety of the House of Representatives temporarily suspended last Thursday hearings on the Moscow fund mess while awaiting the documents it asked the PNP officials to submit.
Bunye said the recent Congress investigations involving top officials of the PNP have brought to the fore questions on the country’s foreign exchange regulations, or how much foreign currency one could legally bring out of the country.
Retired PNP comptroller Eliseo de la Paz, who with his companions earned the moniker “euro generals,” also admitted during last week’s congressional inquiries that he had likewise carried 45,000 euros to buy expensive watches in behalf of his businessman friend Tyrone Ng Arejola.
This amount, plus another $20,000 that De la Paz said his wife brought to Europe as a “personal fund,” were on top of the 105,000 euros still being held by the Russian authorities.
Bunye acclaimed that during the time of the backward Bangko Sentral ng Pilipinas (BSP) Gov. Rafael Buenaventura, the BSP active with government agencies such as the PNP, the Bureau of Community (BoC), the Manila All-embracing Airport Authority (MIAA), the Bureau of Immigration (BI), the Air Transportation Office (ATO), and the Philippine Ports Authority (PPA) a announcement of acceding (MoA) which approved to ensure "the able accomplishing of BSP rules, accurately BSP Annular 308 and Section 4 of Annular 1389, on the concrete cross-border carriage of adopted currencies and the Philippine peso."
BSP Circular 308, as amended, requires “any person who brings in and out of the Philippines in excess of $10,000 or its equivalent, to declare the same in writing using the prescribed foreign currency declaration form,” he said.
The BSP circular warned that disregarding the Bank’s rule would subject the violator to sanctions provided for in Section 36 of Republic Act 7653, such as a fine of P50,000 to P200,000 or imprisonment of two to 10 years.
The former Palace official said Buenaventura recalled that during the MoA signing, other countries such as the United States, South Korea, and Malaysia likewise require similar customs procedures in the transport of foreign currency.
The former BSP chief has said the circular had been issued as part of a package of measures that would help curb money laundering activities, adding the BSP had adopted anti-money laundering measures as early as June 2000 “to be at par with international practices,” said Bunye.
Bunye said the BSP, of late, had reminded airport authorities to conspicuously post reminders of the BSP circular for the benefit of outgoing passengers.
After two public hearings and an executive session, the committee on public order and safety of the House of Representatives temporarily suspended last Thursday hearings on the Moscow fund mess while awaiting the documents it asked the PNP officials to submit.
Friday, December 12, 2008
HK pumps billions into forex market to defend US dollar peg
The Hong Kong Monetary Authority said Wednesday it pumped 600 million US dollars into the forex market to defend the local currency's peg to the greenback.
The de facto central bank said it bought 4.65 billion Hong Kong dollars worth of US currency in two interventions, after the Hong Kong dollar repeatedly hit its upper trading band of 7.75 to the US unit.
The authority also intervened on Tuesday night, injecting 1.16 billion Hong Kong dollars to rein in the local currency.
Under the city's pegging system, the Hong Kong dollar is set at 7.80 to the US dollar, but is allowed to trade between 7.75 and 7.85.
The latest injections increased Hong Kong's aggregate balance to 57.7 billion dollars from 53.1 billion dollars.
A strong demand for the Hong Kong dollar by banks seeking greater liquidity has boosted the local currency as investors have become more risk averse since the global financial crisis deepened.
The de facto central bank said it bought 4.65 billion Hong Kong dollars worth of US currency in two interventions, after the Hong Kong dollar repeatedly hit its upper trading band of 7.75 to the US unit.
The authority also intervened on Tuesday night, injecting 1.16 billion Hong Kong dollars to rein in the local currency.
Under the city's pegging system, the Hong Kong dollar is set at 7.80 to the US dollar, but is allowed to trade between 7.75 and 7.85.
The latest injections increased Hong Kong's aggregate balance to 57.7 billion dollars from 53.1 billion dollars.
A strong demand for the Hong Kong dollar by banks seeking greater liquidity has boosted the local currency as investors have become more risk averse since the global financial crisis deepened.
Wednesday, December 10, 2008
Forex Market Update: Euro-Dollar (EURUSD) Fails to Regain
Euro-Dollar (EURUSD) was unable to regain 1.2600 after the sharp drop in the currency this morning. EUR-USD gapped from NY closing levels of 1.2700 to 1.2560 after the G20 failed to offer any concrete solutions, last week's poor Euro-Zone GDP data and in the wake of weekend comments by ECB Stark and Bini Smaghi of more weakness in the Euro-Zone economies ahead.
EUR-USD fell to lows of 1.2513 before the bounce in the Nikkei helped EUR-USD recover to highs of 1.2597 but EUR-USD was unable to rise above that level, drifting back to 1.2563 this afternoon. Offers are eyed at 1.2600 and 1.2640 with bids at 1.2500 and 1.2450 reported.
The market widely believes that the ECB is behind the curve on cutting rates, and this remains a factor weighing on the EUR. Even the IMF head Strauss-Kahn today said that the ECB has further scope interest rates.
UK Shadow Chancellor Osborne is arresting his warnings of a GBP collapse, afterwards he declared on the weekend that Brown's borrowing run's a accident on the sterling, and that the bill could accept a able "collapse." Prime Minister Brown hit aback on the comment, advertence that he abjure the accessory allocution from the opposition. Subsequently, Osborne has dedicated his comments, adage he should acquaint the accuracy about the ballooning debt. The comments accept had little absolute appulse on admirable however, which followed the broader trend set by AUD and EUR today.
EUR-USD fell to lows of 1.2513 before the bounce in the Nikkei helped EUR-USD recover to highs of 1.2597 but EUR-USD was unable to rise above that level, drifting back to 1.2563 this afternoon. Offers are eyed at 1.2600 and 1.2640 with bids at 1.2500 and 1.2450 reported.
The market widely believes that the ECB is behind the curve on cutting rates, and this remains a factor weighing on the EUR. Even the IMF head Strauss-Kahn today said that the ECB has further scope interest rates.
UK Shadow Chancellor Osborne is arresting his warnings of a GBP collapse, afterwards he declared on the weekend that Brown's borrowing run's a accident on the sterling, and that the bill could accept a able "collapse." Prime Minister Brown hit aback on the comment, advertence that he abjure the accessory allocution from the opposition. Subsequently, Osborne has dedicated his comments, adage he should acquaint the accuracy about the ballooning debt. The comments accept had little absolute appulse on admirable however, which followed the broader trend set by AUD and EUR today.
Saturday, December 6, 2008
Benpres loses P841M in 9 mos on lower earnings, forex losses
Benpres Holdings Corp., the investment holding firm of the Lopez family, incurred a net loss of P841 million in the first nine months of the year, largely due to foreign exchange losses and lower net earnings of subsidiaries.
In a banking address filed with the Philippine Stock Exchange, Benpres said the 14 percent access in circumscribed revenues was account by the 89 percent bead in disinterestedness in net balance of investees from P2.21 billion to P251 million. Aboriginal Philippine Holdings Corp. incurred a P272 actor net loss, a changeabout of the P3.79-billion accumulation appear a year earlier.
The abrasion of the peso to 47.05 to a dollar in September 2008 from 41.28 in December endure year resulted to a accident of P1.27 billion, Benpres said.
Provisions for losses fell seven percent to P104 actor from P112 actor due to lower debt accompanying advances. Absorption and added expenses-net beneath eight percent due to lower absorption rates.
Media conglomerate ABS-CBN Broadcasting Corp., the crown jewel of the Lopez Group of Companies, reported a nine percent rise in net profit to P1.2 billion. Similarly, earnings before interest, taxes, depreciation, and amortization (EBITDA) went up 12 percent to P4.43 billion, for an EBITDA margin of 27 percent.
Consolidated revenues rose 15 percent to P16.54 billion largely driven by sale of services, which jumped 61 percent year-on-year due to the consolidation of SkyCable's revenues in ABS-CBN as well as the continued subscriber growth of ABS-CBN Global.
Telecommunications unit Bayan Telecommunications Inc., on the other hand, incurred a net loss of P2.57 billion as against the P595 million income reported the same period a year ago. This is mainly due to the foreign exchange loss amounting to P2.482 million this year compared to recognized foreign exchange gains last year of P625 million. Benpres' investment in Bayan have been fully written off. Thus, Benpres does not equitize income or loss from Bayan.
In a banking address filed with the Philippine Stock Exchange, Benpres said the 14 percent access in circumscribed revenues was account by the 89 percent bead in disinterestedness in net balance of investees from P2.21 billion to P251 million. Aboriginal Philippine Holdings Corp. incurred a P272 actor net loss, a changeabout of the P3.79-billion accumulation appear a year earlier.
The abrasion of the peso to 47.05 to a dollar in September 2008 from 41.28 in December endure year resulted to a accident of P1.27 billion, Benpres said.
Provisions for losses fell seven percent to P104 actor from P112 actor due to lower debt accompanying advances. Absorption and added expenses-net beneath eight percent due to lower absorption rates.
Media conglomerate ABS-CBN Broadcasting Corp., the crown jewel of the Lopez Group of Companies, reported a nine percent rise in net profit to P1.2 billion. Similarly, earnings before interest, taxes, depreciation, and amortization (EBITDA) went up 12 percent to P4.43 billion, for an EBITDA margin of 27 percent.
Consolidated revenues rose 15 percent to P16.54 billion largely driven by sale of services, which jumped 61 percent year-on-year due to the consolidation of SkyCable's revenues in ABS-CBN as well as the continued subscriber growth of ABS-CBN Global.
Telecommunications unit Bayan Telecommunications Inc., on the other hand, incurred a net loss of P2.57 billion as against the P595 million income reported the same period a year ago. This is mainly due to the foreign exchange loss amounting to P2.482 million this year compared to recognized foreign exchange gains last year of P625 million. Benpres' investment in Bayan have been fully written off. Thus, Benpres does not equitize income or loss from Bayan.
India loses $44 bn forex on global woes
India's foreign exchange reserves, having peaked at $314.62 billion in May, dropped by over $44 billion in the past two months.
Forex reserves have come down to around $250 billion, latest RBI figures indicate.
Pressure on forex reserves was felt more between September and October as foreign institutional investors (FIIs) took away about $6 billion from the market. Besides, imports rising at a faster pace than exports also took a toll on the country's forex pool.
Against over $80 billion import-export gap during the last fiscal, the deficit has reached close to $60 billion in the first half of 2008-09, as per official figures.
However, Chairman of Prime Minister's Economic Advisory Council Suresh Tendulkar is not perturbed over the sharp decline in forex reserves. As per his estimates, the credit for a swelling forex kitty also went to the booming share market early this year.
The depleting forex reserves because of capital outflows are also reducing the fiscal headroom for the government to increase public expenditure for reviving business confidence.
Forex reserves have come down to around $250 billion, latest RBI figures indicate.
Pressure on forex reserves was felt more between September and October as foreign institutional investors (FIIs) took away about $6 billion from the market. Besides, imports rising at a faster pace than exports also took a toll on the country's forex pool.
Against over $80 billion import-export gap during the last fiscal, the deficit has reached close to $60 billion in the first half of 2008-09, as per official figures.
However, Chairman of Prime Minister's Economic Advisory Council Suresh Tendulkar is not perturbed over the sharp decline in forex reserves. As per his estimates, the credit for a swelling forex kitty also went to the booming share market early this year.
The depleting forex reserves because of capital outflows are also reducing the fiscal headroom for the government to increase public expenditure for reviving business confidence.
US Dollar: Retail Sales, Import Prices Fall By Most On Record
The US dollar initially spiked higher amidst the 8:30 ET release of US retail sales and import prices, as we continue to see that risk trends are dominating the forex markets. The data wasn't fundamentally bullish for US assets, but instead, the disappointing nature of the news triggered flight-to-quality.
Indeed, the Advance Retail Sales Basis fell by the a lot of aback record-keeping began in 1992 at a amount of 2.8 percent in October, which aswell apparent the fourth beeline ages of declines.
A breakdown of the address shows that shows that about every basic contracted, led by anemic auto, gasoline station, furniture, and cyberbanking sales. Given the arresting abasement of the activity markets and record-low levels of customer confidence, spending is about advancing to arrangement added in advancing months.
Meanwhile, the Acceptation Amount Basis aswell fell by the a lot of on record, traveling aback to 1989, at a amount of 4.7 percent during the ages of October acknowledgment to a attempt in article prices forth with the ample acknowledgment of the US dollar. Overall, this morning's bread-and-butter releases will alone add to belief that the Federal Reserve will cut ante further, with Credit Suisse brief basis swaps absolutely appraisement in a 50bp abridgement on December 16.
Indeed, the Advance Retail Sales Basis fell by the a lot of aback record-keeping began in 1992 at a amount of 2.8 percent in October, which aswell apparent the fourth beeline ages of declines.
A breakdown of the address shows that shows that about every basic contracted, led by anemic auto, gasoline station, furniture, and cyberbanking sales. Given the arresting abasement of the activity markets and record-low levels of customer confidence, spending is about advancing to arrangement added in advancing months.
Meanwhile, the Acceptation Amount Basis aswell fell by the a lot of on record, traveling aback to 1989, at a amount of 4.7 percent during the ages of October acknowledgment to a attempt in article prices forth with the ample acknowledgment of the US dollar. Overall, this morning's bread-and-butter releases will alone add to belief that the Federal Reserve will cut ante further, with Credit Suisse brief basis swaps absolutely appraisement in a 50bp abridgement on December 16.
Australian Dollar Looks to G-20 Summit, Risk Trends for Direction Cues
The Australian Dollar will again find itself at the mercy of risk sentiment as a light economic calendar is unlikely to produce a catalyst to derail the priced-in fundamental outlook familiar to forex traders.
The Australian Dollar will again find itself at the mercy of risk sentiment as a light economic calendar is unlikely to produce a catalyst to derail the priced-in fundamental outlook familiar to forex traders. The Retail Sales reading is expected to see receipts correct a bit to grow 0.4% in the third quarter versus a -0.6% contraction in the three months through June. Still, traders are likely to take the improvement with a grain of salt with the pace of sales growth slower by close to 80% from a year before.
The Australian Dollar will again find itself at the mercy of risk sentiment as a light economic calendar is unlikely to produce a catalyst to derail the priced-in fundamental outlook familiar to forex traders. The Retail Sales reading is expected to see receipts correct a bit to grow 0.4% in the third quarter versus a -0.6% contraction in the three months through June. Still, traders are likely to take the improvement with a grain of salt with the pace of sales growth slower by close to 80% from a year before.
Tuesday, December 2, 2008
Pak politicians, bureaucrats involvement found in forex scam
Quoting FIA sources, the Daily Times reported that during investigation, Javed Khanani and Munaf Kalia had offered to bring down the price of US dollar to Rs 72-74 if they were let off the hook.
One of the chief FIA officials, who is a allotment of the analysis team, said that billions of rupees could acknowledgment to Pakistan in a actual abbreviate time if the capital culprits in the case were not appear and the analysis connected after any pressure.
Another address said that Khanani and Kalia appear that 11 humans transferred dollars account Rs 38 billion away in the endure one ages alone.
Meanwhile, Prime Minister's Interior Adviser Rehman Malik said that added arrests were accessible with attention to the banking scam.
The foreign exchange transferred through the system would be brought back to the country within 48 hours, the paper quoted him as saying.
No leniency would be shown to Khanani and Kalia moneychangers, despite request by some circles in the money-changing business, Malik said and added that the hawala business had damaged the country's economy and strict action would be taken against those involved in illegal transfer of foreign currency.
One of the chief FIA officials, who is a allotment of the analysis team, said that billions of rupees could acknowledgment to Pakistan in a actual abbreviate time if the capital culprits in the case were not appear and the analysis connected after any pressure.
Another address said that Khanani and Kalia appear that 11 humans transferred dollars account Rs 38 billion away in the endure one ages alone.
Meanwhile, Prime Minister's Interior Adviser Rehman Malik said that added arrests were accessible with attention to the banking scam.
The foreign exchange transferred through the system would be brought back to the country within 48 hours, the paper quoted him as saying.
No leniency would be shown to Khanani and Kalia moneychangers, despite request by some circles in the money-changing business, Malik said and added that the hawala business had damaged the country's economy and strict action would be taken against those involved in illegal transfer of foreign currency.
Monday, December 1, 2008
Vietnam's forex policy to support exports
Vietnam will maintain a flexible monetary policy and tailor its forex policy to support exports, while following market signals to determine foreign exchange rates, central bank governor Nguyen Van Giau said on Wednesday.
"We have identified exports as a driver and our policy has been to support exports," Giau said, citing the weakening of the Vietnamese dong currency since 2007.
Vietnam would "build up our policy on foreign exchange rates based on the market demand and supply", Giau told the parliament in a televised broadcast.
The comments came a week after Giau's State Bank of Vietnam cut the country's three most important interest rates in a bid to help the economy at a time of uncertainty about the economic health of some of Vietnam's main trading partners.
Vietnam last week also widened the band in which its currency, the dong, trades against the dollar, effectively allowing it to depreciate to boost exports and propel growth. The government has forecast economic growth of 6.7 percent this year and 6.5 percent next year.
So far, Vietnam's banking system remained safe, with bad debt worth 35 trillion dong at the end of September accounting only for 2.92 percent of total loans, while banks have so far put aside 22 trillion dong for risk prevention funds.
"We have identified exports as a driver and our policy has been to support exports," Giau said, citing the weakening of the Vietnamese dong currency since 2007.
Vietnam would "build up our policy on foreign exchange rates based on the market demand and supply", Giau told the parliament in a televised broadcast.
The comments came a week after Giau's State Bank of Vietnam cut the country's three most important interest rates in a bid to help the economy at a time of uncertainty about the economic health of some of Vietnam's main trading partners.
Vietnam last week also widened the band in which its currency, the dong
So far, Vietnam's banking system remained safe, with bad debt worth 35 trillion dong at the end of September accounting only for 2.92 percent of total loans, while banks have so far put aside 22 trillion dong for risk prevention funds.
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