The News Review:
- Gold price dip slows down forex march
- Forex reserves shot up by USD 952 mn during the week ended June 30
- HK forex reserves reach $126.6 bln in June
- Greenback falls on anemic job news
- The Hindu Business Line
Gold price dip slows down forex march
Economic Times – Jul 8, 2006
The value of gold in reserves dipped $830m on the back of a $50-per-troy-ouncedip in gold prices in June. The fall in the value of gold containedthe rise in foreign exchange reserves to $952m during the week ended June 30even though foreign currency assets rose $1. According to thefigures released by the Reserve Bank of India (RBI) in its weekly statisticalsupplement (WSS) total foreign exchange reserves including gold and SDR went up$952m during the week ended June 30.
Forex reserves shot up by USD 952 mn during the week ended June 30
Myiris.com – Jul 8, 2006
htm –>Forex reserves shot up by USD 952 mn during the week ended June 30. The foreign currency assets too rose by USD 1791 million to USD 155968 million. The Special Drawing Rights (SDR) were unchanged at Rs 20 million. The Reserve Position in the IMF also declined by USD 9 million to USD 764 million while the gold reserves faced a deep decline of USD 830 million to reach the figure of 6180 million.
HK forex reserves reach $126.6 bln in June
China Economic Net – Jul 8, 2006
h3 {FNT-WEIGHT: bold; TEXT-JUSTIFY: inter-ideograph; FNT-SIZE: 16pt; MARGIN: 13pt 0cm; LINE-HEIGHT: 173%; TEXT-ALIGN: justify}DIV. union {FNT-SIZE: 14px; LINE-HEIGHT: 18px}DIV. union TD {FNT-SIZE: 14px; LINE-HEIGHT: 18px}Hong Kong Special Administrative Region’s foreign-currency reserve assets — including unsettled forward contracts — stood at 126. dollars at the end of June up slightly from 126.
Greenback falls on anemic job news
Taipei Times – Taipei Times – Jul 9, 2006
The weak job growth gave traders evidence of an economic deceleration that could ease inflation pressures. This in turn could reduce pressure on the Federal Reserve to raise interest rates which could support the greenback. But Kathy Lien at Forex Capital Markets said the data on closer inspection were not as weak as the headline suggested. Wage growth was strong and a separate household survey used by the Labor Department to calculate the unemployment rate was was stronger than the payroll survey. “Even though the headline non-farm payrolls number came in significantly below expectations the details of the number and the household survey was not nearly as dollar bearish” Lien said. “Although today’s number signals that job growth is sluggish the jump in average hourly earnings suggests that wage pressures are still prevalent in the US economy and leaves the door open for another [rate] hike in August” she said. Divyang Shah a global strategist at HBS said the payroll figure was an important market event but stressed that inflation data were more important at present… Divyang Shah a global strategist at HBS said the payroll figure was an important market event but stressed that inflation data were more important at present. “In the current environment it’s the inflation data that has proved to be much more important as it is this that has surprised to the upside” he said. “Thus while the forex [foreign exchange] market will react to payrolls and probably play on it over next week the events over the following week will prove more insightful as to the Fed rate outlook” he said. Expectations of an interest rate hike by the US Federal Reserve next month diminished substantially last week when policymakers at the central bank published a relatively mild statement alongside their decision to lift the key Fed funds rate by a quarter point for the seventeenth consecutive time to 5. “The Fed’s forecast is for a moderation in growth and [Friday's] weaker-than-expected payroll gain supports that view” commented Michael Carey a senior strategist at Calyon. Elsewhere the euro continued to make marginal headway in the wake of a strong hint on Thursday that the European Central Bank would raise its core interest rate by a quarter point at a meeting on Aug.
The Hindu Business Line
Hindu Business Line – Jul 9, 2006
Purchasing-power risk which can be traced to inflation. Reinvestment rate risk that is “interest payments received may be reinvested at a lower interest rate than the coupon rate of the bond. Foreign currency risk caused by fluctuations in forex rates. Essential read is the chapter titled `How to Read the Financial Pages. ‘ But if you wonder why one should read the financial pages the answer is that you can make better and timely investment decisions by tracking the economy. Isn’t economy too complex you may fret? True; and to add to your woes “economists are notorious for differing in their forecasts of economic growth inflation and unemployment. ” That doesn’t mean you should throw in the towel and discount the economy says Faerber.