India's Official Reserves Fall

Friday, the Reserve Bank of India said in its weekly report that the nation's official reserves accounted for US$296.21 billion as on August 15, down from US$300.01 billion recorded as on August 8.

Foreign currency reserves accounted for US$285.97 billion, down from US$289.76 recorded in the previous week. Gold reserves amounted to US$9.7 billion, unchanged from the previous week. Special drawing rights decreased to US$4 million from US$11 million. India's reserve position with the International Monetary Fund fell to US$496 million from US$504 million. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

LONDON, Aug 22 (Reuters) - STOCKS NEWS Reuters Results diary

Stocks on the move [HOT-RTRS] Real-time Equity News [E] [WEU/EQUITY]

06:46GMT 22Aug2008-European shares set to edge up, commodities eyed

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European shares are set to open higher, steadying after falls in the previous session, with commodity stocks benefitting from strong metal and crude prices and exporters lifted by a slight weakening in the euro.

Futures for the DJ Euro Stoxx 50 , Germany's DAX and France's CAC <.FCEc1> add 0.2 to 0.5 percent.

With the corporate and economic diaries thin, investors are looking to a second release of UK second quarter GDP, eurozone industrial orders and a speech on financial stability by U.S. Federal Reserve Chairman Ben Bernanke at the Federal Reserve Bank of Kansas Economic Symposium.

South African Rand Heads for Weekly Gain as Commodities Rally

By Garth Theunissen

Aug. 22 (Bloomberg) -- South Africa's rand was poised to snap two weeks of losses against the dollar as gains in gold and platinum boosted revenue prospects for world's biggest producer of precious metals.

The rand was the best performer of the 16 most-actively traded currencies monitored by Bloomberg this week as gold headed for its biggest weekly advance in almost seven years and platinum surged for a third day. The metals rose with other commodities as a weaker dollar and higher oil prices spurred demand for alternative investments and hedges against inflation.

``Commodities are a strong theme for the rand at the moment,'' said Kay Muller, a currency researcher at Rand Merchant Bank in Johannesburg. ``Strong gains in oil and a weaker dollar are fueling gold and platinum, which is positive for the rand.''

The rand was 0.2 percent lower at 7.6700 per dollar by noon in Johannesburg, parings its weekly advance against the U.S. currency to 2.6 percent. It climbed 1.6 percent versus the euro on the week, to 11.3801.

``Positive momentum has returned to commodities, which along with a dollar correction, is keeping the rand buoyant,'' said Tolga Ediz an emerging-markets currency strategist in London at Lehman Brothers Holdings Inc. ``There's still enough risk appetite to help high-yielding currencies.''

Commodities headed for their biggest weekly gain in 33 years as the dollar traded near the lowest level in more than two weeks against the yen and was set to drop in the week versus the euro.

Gold climbed 5.6 percent in the week to $834.08 an ounce, the biggest advance since May 2001 and the first in six weeks. Platinum surged 5 percent from Aug. 8 to $1,440.20 an ounce. South Africa produces almost 80 percent of the world's platinum and about 10 percent of its gold, typically causing the rand to move in tandem with the metals' prices.

Crude oil rose 6 percent this week to $120.62 a barrel, headed for its biggest weekly increase in more than two months.

Government bonds fell this week, with the yield on South Africa's benchmark 13.5 percent security due September 2015 adding 13 basis points to 9.27 percent. Yields move inversely to bond prices.

Pound Plummets As Growth Stalls, Euro Follows Suit

Previous Articles

• Aug 22 - Pound Plummets As Growth Stalls, Euro Follows Suit
  
• Aug 22 - Euro Open: UK Gross Domestic Product to Print at 15-Year Low
  
• Aug 21 - Forex Emerging Markets Weekly - August 21, 2008
  
• Aug 21 - Forex Trading Forecast: US Dollar to Weaken Before Further Rallies
  
• Aug 21 - Euro Open: Will Switzerland Follow the EU into Recession?
  
• Aug 21 - Pound Reverses Despite U.K. Retail Sales Rebound, Euro Heavy As PMI Remains In Contraction
  
• Aug 20 - Can Chinese Demand Keep Japan Out of Recession?
  
• Aug 20 - Dollar May Drop Without Action From The Fed
  
• Aug 20 - Australian Dollar Could Fall Like a Rock
  
• Aug 20 - BoE Voted 7-1-1 to Leave Rates Unchanged, Besley Votes For Hike.
  
• Aug 20 - Euro Open: Is The Bank of England Closer to Cutting Interest Rates?
  
• Aug 19 - Forex Seasonality Update: We Forecast USDCAD Declines
  
• Aug 19 - Euro Falls As German ZEW Shows Current Conditions Worsening
  
• Aug 19 - A Drop in U.S. Housing Starts Would Validate EURUSD Technical Outlook
  
• Aug 19 - Euro Open: Will Producer Prices Help the ECB Cut Interest Rates?
  
• Aug 18 - Japanese Yen Forecast Ahead of BoJ Meeting
  
• Aug 15 - Forex Trading Weekly Forecast 08.18.08
  
• Aug 15 - Carry Trade Plunges, But Yen Pairs Testing Support
  
• Aug 15 - US Consumer Confidence Improves For Second Consecutive Month, Dollar Gains
  
• Aug 15 - Forex Emerging Markets Weekly - August 15, 2008
  

Written by John Rivera, Currency Analyst

The pound reversed yesterday's gains after the second reading for 2Q GDP was flat. After reaching as high as 1.8797 during the U.S. session the sterling dropped over two hundred points to 1.8573. Growth in the U.K. was unexpectedly revised lower to 0.0% from the first reading of 1.5%.

Talking Points   
•    Japanese Yen: USDJPY Climbs Back Above 109
•    Euro:  Current: Account Deficit Widens
•    British Pound: Second Quarter Growth Stagnates
•    US Dollar: Bernanke To Speak Today

Pound Plummets As Growth Stalls, Euro Follows Suit

The pound reversed yesterday's gains after the second reading for 2Q GDP was flat. After reaching as high as 1.8797 during the U.S. session the sterling dropped over two hundred points to 1.8573. Growth in the U.K. was unexpectedly revised lower to 0.0% from the first reading of 1.5%. Rising inflation has sapped consumer's purchasing power leading to a 0.1% decline in personal consumption and a 1.4% fall in imports. A 0.5% drop in exports and services remaining at 0.2%-the weakest since 2002 contributed to growth stalling. 

The lack of growth from the service industry which accounts for three-quarters has put the U.K. economy at the door step of a recession. The decline in the manufacturing sector continues to worsen as July's PMI reading was the third straight month that it contracted and lowest on record. Although retail sales rebounded 0.8% in July, inflation at 4.4% and rising and a labor market which has lost over 40,000 jobs the past two months combined will weigh on consumer spending going forward. The dour growth story for the U.K. may force the BoE to put aside their concerns about inflation and take measures to foster growth.

The Euro gave back some of its gains from yesterday as well, after the June's current account reading showed the deficit widening to 8.2 billion from a revised -5.5 billion the month prior. Pound selling and the industrial new orders report showing the biggest drop in six years also weighed on the currency. Although manufacturing demand declined 7.4% on an annualized basis, June's 0.3% decline was better than the -1.5% that was expected.

The major event risk for the U.S. dollar today other than oil prices is the scheduled speech today at 10:00AM EST by Fed Chairman Ben Bernanke at Jackson Hole, Wyoming. As DailyFX analyst Terri Belkas commented yesterday, "Given the uncertainty surrounding the health of US financial institutions, commentary on the financial markets will be watched closely and bearish sentiment by Mr. Bernanke could weigh heavily on risk-appetite." If the chairman's testimony proves uneventful the current easing of oil prices following yesterday's jump on geopolitical concerns could add to dollar strength.

Euro Zone Industrial Orders Continue Their Decline in June

(CEP News) Frankfurt - Euro zone industrial new orders fell 7.4% on a yearly basis in June, overshadowing the 6.3% decline expected as well as the 4.4% annualized fall seen in May, according to figures released by Eurostat on Friday. Among the euro zone states for which there is data, orders in France saw the most notable falls, slipping 16.9% in June 2008 compared to the same month one year ago, followed by Spain, which saw a 6.5% decline in new orders over the same period. Conversely, Portuguese industrial orders shot up 19.7% in the year ending in June as Greece saw its industrial orders' level rise 10.9% year-over-year. In monthly terms, industrial new orders' levels slipped 0.3% in June. However, economists had expected a more pronounced decline of 1.1% after orders had fallen 5.4% from April to May. Meanwhile, May's monthly figure was revised down from an initial reading of -3.5%. By Todd Wailoo, twailoo@economicnews.caThis email address is being protected from spam bots, you need Javascript enabled to view it , edited by Nancy Girgis, ngirgis@economicnews.ca

UK Q2 GDP Growth Rev. Down

The UK economy expanded 1.4% year-on-year in the second quarter, revised down from the initial estimate of 1.6%, a report released by the Office for National Statistics, or ONS showed Friday. Economists had expected the annual growth to ease to 1.5% from 2.3% recorded in the first quarter.

Compared to previous quarter, real Gross Domestic Product, or GDP remained flat in the second quarter. The initial growth estimate was 0.2% and economists were looking for a sequential increase of 0.1%.

In the second quarter, the implied GDP deflator rose 2.6% compared with 2007. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

Eurozone June industrial orders expected to decline at a faster pace

Friday, the Eurostat is expected to release the Eurozone industrial new orders data for June at 5.00 am ET. Industrial new orders are predicted to decline 6.1% annually in June, a bigger decline compared to May's 4.4% fall. On a monthly basis, industrial new orders are forecast to decline 1.1% in June compared to a 3.5% fall recorded in May.

Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

Pound Declines To 8-day Low Against Euro

In early deals on Friday, the British currency weakened against the euro. The euro-pound pair that closed yesterday's trading at 0.7935 is now worth 0.7957. This set an 8-day low for the UK currency.

If the pound falls further, it may test support around the 0.803 level. Investors now look forward to the Euro-zone June current account, industrial new orders and the UK Q2 GDP reports, which are expected to drive deals in the upcoming hours. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

ANZ Bank Says Review Found "Inadequate" Controls In Opes Crisis

Australia and New Zealand Bank said Thursday that a review of its securities lending business found a series of inadequate controls. In addition, the ANZ said two senior executives would be terminated and a number of others faced punitive measures following the probe of procedures that led to the Opes Prime crisis.

Opes Prime Group was a broker specializing in margin lending. The company, which went under in March, had obtained loans totaling A$616 million from ANZ.

 
 

The bank said it failed to adequately indentify and manage risks involving the securities lending business. In a statement to the Australian Stock Exchange, the bank said that a "range" of management and operational issues had arisen in the review, with "action involving a number of employees" already taken. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved