Daily Exchange Rate

Mon Aug 3 07:45:01 2009
Currency	bid	offer	Time
EUR/USD	1.43132	1.43141	Mon Aug 3 07:44:59 2009
USD/JPY	94.911	94.922	Mon Aug 3 07:44:53 2009
GBP/USD	1.68334	1.68358	Mon Aug 3 07:44:44 2009
USD/CAD	1.06665	1.06717	Mon Aug 3 07:44:56 2009
USD/CHF	1.06488	1.06506	Mon Aug 3 07:44:54 2009
EUR/JPY	135.826	135.850	Mon Aug 3 07:44:56 2009
EUR/GBP	0.85019	0.85037	Mon Aug 3 07:44:59 2009
EUR/CHF	1.52434	1.52453	Mon Aug 3 07:44:59 2009
GBP/CHF	1.79262	1.79304	Mon Aug 3 07:44:55 2009
GBP/JPY	159.758	159.797	Mon Aug 3 07:44:54 2009

Central Bank to restart dollar purchases

Turkey’s Central Bank said it will resume buying dollars through daily auctions starting Tuesday, taking advantage of a stronger lira to strengthen its reserves.

The Bank will buy $30 million a day with an option to purchase an additional $30 million, it said in an e-mailed statement from Ankara Monday.

International risk appetite has risen, increasing capital flows to Turkey and making “conditions right for the Central Bank to strengthen its reserves,” the statement said. The Turkish Lira has gained 18 percent against the dollar since March 9, when it hit a record low at 1.808 per dollar.

Mehmet Büyükekşi, head of the Turkish Exporters’ Assembly, on July 23 urged the Bank to buy dollars to curb the increase in the lira, which he said is damaging exports. Central Bank Governor Durmuş Yılmaz said on July 29 he was considering a restart to the purchase auctions, which were last held on Oct. 15.

The lira weakened after the announcement, dropping 0.1 percent to 1.472 per dollar after rising as much as 0.2 percent earlier.

The Central Bank had reserves of $65.8 billion on July 24, according to the latest data. It sold $900 million for lira through daily auctions in March as the currency weakened against the dollar.

Gold above $950/oz, weak dollar lifts hard assets

LONDON (Reuters) - Gold held above $950 an ounce in Europe on Monday, underpinned by weakness in the dollar, but fresh gains were capped by a dearth of demand for physical stocks of the metal from jewellers and exchange-traded funds.

Silver prices climbed to five-week peak, however, as the largest silver-backed ETF reported a 61-tonne rise in its holdings of the metal to a new record high.

Spot gold was bid at $954.10 an ounce at 4:29 a.m. EDT, against $953.90 an ounce late in New York on Friday. Silver was at $14.16 an ounce against $13.89, having earlier touched a high of $14.19.

"Though dollar weakness and recovery in risk appetite could push (gold) higher, its failure so far to break above a key resistance point suggests prices have limited upside scope," said Pradeep Unni, senior analyst at Richcomm Global Services.

"Lackluster investment demand and the low physical demand are adding to the concerns that the summer rally may fail to hold on to the gains," he added.

Holdings of the largest gold-backed ETF, New York's SPDR Gold Trust, were unchanged for a second straight session on Friday, having fallen nearly 50 tonnes in July.

London's ETF Securities meanwhile said holdings of its three gold-backed exchange traded commodities (ETCs) fell 1.2 percent last week. ETFs, including ETCs, issue securities backed by physical commodities, and their buying was a big source of gold demand in the first quarter.

Jewelry demand was also lackluster as Indian consumption weakened on the back of higher prices. "Traders are waiting for lower prices," said one dealer.

But weakness in the dollar, which is boosting demand for hard assets such as bullion as well as making it cheaper for holders of other currencies, is firmly underpinning gold prices.

The U.S. currency hovered near its lowest point this year against a basket of currencies as higher oil prices, rising global stock markets and positive U.S. economic data diverted investment into currencies seen as riskier.

STOCKS CLIMB

World stocks climbed to a new 2009 high on Monday after signs of a pick-up in Chinese economic activity lifted Asian shares. European shares also rose after a volatile start to the day.

Rising equity markets and optimism over Chinese demand for hard assets boosted interest in oil, with prices rising to a one-month high. Stronger crude prices generally support interest in gold as a hedge against oil-led inflation.

Oil and the dollar also fueled gains in silver prices, but the metal took further support from a fresh inflow into the largest silver-backed ETF, New York's iShares Silver Trust.

Its holdings rose more than 60 tonnes to a record 8,828 tonnes on Friday

"We expect silver to continue broadly tracking gold and the dollar in the coming sessions, with scaled-up resistance expected around $14.40/14.65," said TheBullionDesk.com analyst James Moore.

Platinum was at $1,211.50 an ounce against $1,207.50, while palladium was at $261 against $261.50. Platinum group metals traders are awaiting U.S. car sales data due later in the session for direction.

As both platinum and palladium are chiefly used in autocatalysts, prices have suffered from a downturn in car demand in the last year.

SOUTH KOREA EXPECTS FOREX RESERVES TO HIT RECORD HIGH

South Korea's foreign exchange reserves are expected to hit a record-high of US$270 billion this year, bolstered by the local currency's gains and an expanding current account surplus, the finance ministry said Sunday.

The Ministry of Strategy and Finance predicted Korea will continue adding to its reserves in the second half, pushing their total value past the current record of $264 billion, reached in March last year.

"South Korea's FX reserves will possibly exceed the previous record as the country is expected to continue to log massive surpluses in the current account, and the stabilization of the local currency is also forecast to add to the value of the reserves," an official from the ministry said.

The country's foreign exchange holdings increased for a fourth month to $231.7 billion in June, the highest level since September.

They sank to the lowest level in nearly four years in November as the government handed out foreign currency funds to local banks, who were struggling to service their debts because of the Korean won's sharp depreciation and a global credit crunch.

The reserves began to gain in March as the country registered current account surpluses.

The surplus reached the second-highest level ever at US$5.43 billion in June, after rising for a fifth straight month on reviving exports.

The won has made a remarkable recovery in that time, climbing almost 28 percent against the U.S. dollar since hitting an 11-year low in early March.

This has helped to lift reserves by driving up the value of assets denominated in foreign currencies.

The reserves will also get a boost from the government's plan to retrieve foreign currency funds extended to the banking system as well as its issuance of around $3 billion foreign-exchange stabilization bonds, scheduled for the second half of the year, the ministry said.

Adding to the optimism, data by the International Monetary Fund showed South Korea's reserves grew at the second-fastest pace among member countries.

The country's holdings rose by $14.3 billion at the end of May from a month earlier, the fastest clip after Russia.

The data excluded China due to an absence of available statistics.

"Government authorities generally favor higher FX reserves since the global financial crisis in September although they were previously concerned about excessive holdings," a finance ministry official said.

JAPANESE FINANCE REG. TO CAP LEVERAGE ON FOREX MARGIN TRADING

Japan's Financial Services Agency will limit foreign exchange traders' leverage on margin transactions, drawing down the multiple in two stages to 25 times collateral by August 2011.

The financial watchdog proposed the regulatory changes in May. Despite widespread opposition to such a cap expressed in the public comment period, the agency on Friday decided to revise the regulations, citing the risk of highly leveraged trades and the need to protect consumers. The Japan Federation of Bar Associations was among those supporting the measure.

The leverage multiple will initially be capped at 50 in August 2010, and then reduced to 25 a year later.

Three Banks Face CBN's Sanctions Over Forex Scam

The Central Bank (CBN) will, this week, withdraw the foreign exchange authorised dealership of three banks and suspend them from the foreign exchange market for three months for engaging in foreign exchange speculation.

Meanwhile, foreign exchange demand at the official foreign exchange market rose by 351 per cent even as the naira depreciated by 400 kobo at the parallel foreign exchange market.

FOREX - RUPIAH SURGES AGAINST US DOLLAR

The rupiah surged against the US dollar on the Jakarta interbank spot market here early Monday as investors continued to buy the local unit.

The Indonesian currency traded at Rp9,890-Rp9,900 per US dollar, up 30 points from Rp9,920-Rp9,935 at the market`s close over last weekend.

The rupiah gained because investors were still optimistic about the Indonesian market, bolstering foreign investment in the domestic market, Edwin Sinaga, a domestic money market observer, said here on Monday morning.

FOREX - AUSTRALIAN DOLLAR CLOSES HIGHER

The Australian dollar has finished the local session at a 10-month high after better than expected economic data in the US lifted hopes for the global economy and boosted commodities-driven currencies such as the domestic unit.

At 1700 AEST, the local currency was trading at 83.58 US cents, up 0.95 per cent from Friday's close of 82.79 US cents.

FOREX - US DOLLAR DOWN AGAINST SINGAPORE DOLLAR FOREX - US DOLLAR DOWN AGAINST SINGAPORE DOLLAR

The US dollar was trading at 1.4370 Singapore dollars at 4.30 p.m Monday, weaker than 1.4417 Singapore dollars at 4.30 p.m Friday.

FOREX - U.S. DOLLAR WEAKER AGAINST YEN

The U.S. dollar was trading at 95.04-95.06 yen at 5:16 p.m. Monday, down 0.56 yen.

EURUSD Technical Analysis August 3rd

EURUSD has formed resistance at 1.42864 and support 1.41441 price levels. The resistance line is very important now, because it has reached once more this level. In a long run bulls still have lots of strength, they managed to push up back prices to the important level. If this level can be broken sharply, a long term positive trend can begin where prices can climb up even to the 1.45595

NFA New First in First out Rule is Implemented

The new FIFO regulation issued by the NFA has officially come into effect. If you are not familiar, you need to read about it here and adjust your trading accordingly. The big question remains, how will this effect brokers that are regulated by the NFA, and will it have an effect on the global Forex market?