Daily Exchange Rate

Currency	bid	offer	Time
EUR/USD	1.44003	1.44015	Wed Aug 5 03:59:59 2009
USD/JPY	95.001	95.012	Wed Aug 5 03:59:57 2009
GBP/USD	1.69235	1.69256	Wed Aug 5 03:59:59 2009
USD/CAD	1.07547	1.07589	Wed Aug 5 03:59:58 2009
USD/CHF	1.06131	1.06149	Wed Aug 5 04:00:00 2009
EUR/JPY	136.802	136.826	Wed Aug 5 03:59:58 2009
EUR/GBP	0.85080	0.85097	Wed Aug 5 03:59:59 2009
EUR/CHF	1.52838	1.52857	Wed Aug 5 03:59:59 2009
GBP/CHF	1.79609	1.79651	Wed Aug 5 04:00:00 2009
GBP/JPY	160.769	160.808	Wed Aug 5 04:00:00 2009

Employees' pension program 10 trillion yen in red

Depressed stock prices, deficits in public pension programs nearly doubled to 10.1795 trillion yen in fiscal 2008 from the previous fiscal year, the welfare ministry reported Tuesday.

In addition, the national pension program for self-employed, unemployed, part-time workers and other people chalked up a red ink figure of 1.1216 trillion yen, the ministry said.

The deficits, based on market values, were the largest since fiscal 2001. Comparable data for the period before that was not available.

Both pension programs were in the red in fiscal 2007 as well. The deficit for the employees' pension program at that time came to 5.5909 trillion yen and the national pension program ran a loss of 777.9 billion yen.

The Ministry of Health, Labor and Welfare attributed the biggest losses mostly to investments in reserve funds. The global financial crisis that flared last September caused share prices to tumble.

The employees' pension program lost 8.7252 trillion yen through various market investments in fiscal 2008, and the national pension program was down 592.4 billion yen, the ministry said.

The reserve funds in both programs fell sharply to 116.6496 trillion yen for the employees' pension program, down 13.5314 trillion yen from fiscal 2007, and to 7.1885 trillion yen for the national pension program, down 1.2789 trillion yen.

As for revenues, the employees' pension program received premiums worth 22.6905 trillion yen in fiscal 2008, up 721.4 billion yen from fiscal 2007.

The higher revenue owed largely to the fact that 496,000 more people were in the program than in the previous year due to a relatively stable labor market at the beginning of fiscal 2008.

As for the national pension program, 752,000 fewer people paid premiums than in the previous year, mostly because many baby boomers reached an age and no longer had to pay them.

This was a main reason for the drop in the program's revenue for fiscal 2008 to 1.747 trillion yen, down 111.2 billion yen from fiscal 2007.

Because pension benefits are funded by both premiums and tax money, deficits in a single year will not immediately affect payouts.

"We have devised long-term prospects for pension financing, taking into consideration stock prices and other factors up until the end of last year," said a welfare ministry official.

"A balance between the burden and the payments will be maintained in the future," the official added.

However, if the economic slump continues for a prolonged period, pension benefits could drop in the future.

Dollar Stuck Near 2009 Lows Versus Most Majors

he dollar saw very little movement versus most majors on Tuesday, taking a breather after falling to its lowest levels of the year during the previous session.

Its been a brutal stretch for the dollar, which has given back a major portion of its post-economic meltdown gains. During the throes of the near-collapse of the financial system, the dollar rose to multi-year highs, but has since fallen under the weight of increased risk appetite.

With stocks rocketing higher, traders have been in hot pursuit of riskier, higher-yielding assets. Consequently, the dollar has fallen to levels not seen since 2008 versus all majors but the yen.

Traders on Tuesday weighed a pair of economic reports, but participants will be marking time until Friday's pivotal monthly jobs report. Pending home sales increased for the fifth consecutive month in June, according to industry data.

The dollar barely budged on either report, staying near yesterday's 8-month low of 1.4444 versus the euro. Meanwhile, the buck improved very slightly from a 10-month low of 1.7004 against the sterling.

With the price of oil stabilizing near $70, the dollar held its ground versus the loonie. After hitting a 10-month low of C$1.0630, the dollar hovered near C$1.0700.

The buck extended its run of choppy trading versus the yen, bouncing back and forth around 95.

In global economic news, the Eurostat said in a report that Eurozone industrial producer price index or PPI dropped 6.6% year-over-year in June, compared with a 5.9% fall in the previous month. The May month figure is revised from 5.8% decline reported initially. The PPI came in line with economists' expectations.

U.K.'s CIPS/Markit Construction Purchasing Managers' Index rose to 47 in July, a survey from the Chartered Institute of Purchasing & Supply and Markit Economics showed Tuesday. Economists were expecting the index to rise to 45 from 44.5 logged in June. However, the index stood below the neutral level.

Forex trading challenge to start in August

Varengold Bank is offering traders a second chance to put their FX trading skills to use by virtual trading to win $250,000 AUM. “This is a great opportunity for both beginners and sophisticated forex traders, to join in and put their trading skills to the test,” said Ilja Perschbacher, Managing Director of Varengold Bank Dubai.

Participants are being invited to sign up for a virtual play money account and begin trading over a period of three months, from the 1 August 2009 to 31 October 2009. The challengers will be assessed on the highest risk-adjusted interest yield during the three month duration.

The winner of the challenge will be awarded with their own managed account ready for trade, Seed capital amounting to $250,000 AUM and bank-based sales support to acquire additional funding.

GBP/USD: Pound, consolidating below 1.7000

FXstreet.com (Barcelona) - GBP/USD has remained moving in a range from 1.6900 to 1.7000 after being rejected on its attempts to reach a 2009 high above 1.7000.

At the moment, the Pound is testing the lower band of the trading range at 1.6900, in case of dipping below here, next support levels could be at 1.6880 and 1.6815.

GBP/JPY has depreciated during Asian session after being rejected at levels close to 161.80 resistance area, and the Pound lost about 120 pips to levels around 160.50 at the time of writing. Support levels lie at 160.00 and 158.05. On the upside, resistance levels are 161.80 and 162.20.

South Korean Won Falls To 2-day Low Against US Dollar

During early deals on Wednesday, the South Korean won declined to a 2-day low against the US dollar as a fall in Asian stock prices reduced the appeal of the nation's assets. The won also showed weakness against the Japanese yen.

Asian markets retreated today as Japanese automakers fell on Toyota's big loss and investors waited for a U.S. employment report to shed light on how quickly the world's biggest economy can recover.

The Korean benchmark KOSPI closed at 1,559.47, down 6.90 points or 0.44% from its previous close.

The South Korean won declined to a 2-day low of 1226.60 against the US dollar at 2:55 am ET Wednesday. The next downside target level for the South Korean currency is seen around 1236.0. The dollar-won pair closed Tuesday's North American session at 1218.30.

U.K. Halifax Prices Provide Positive Stimulus Ahead of European Open

U.K. July Halifax house price index rose 1.1% m/m, largely in line with the Nationwide reading for the same month (which was 1.3%) and with the 3m y/y rate now down 12.1%. This is the third monthly increase for the index this year and follows -0.5% m/m and -15.0% 3m y/y in June. Halifax data hence serve to highlight that the housing market might now be stabilizing, though low supply is distorting price comparison.

The USD and JPY are likely to retain their inverse correlation to stock market performance and the associated ebb and flow of risk appetite. Currently we have more ebb than flow as equity markets pause after recent impressive gains, fueled by an overall better-than-expected Q2 corporate earnings season and encouraging global economic data. Concerns about a correction in China's market resurfaced today, with banking stocks pressured amid a view that Beijing may tighten capital holding requirements, while potential for further upside corporate earnings announcements and guidance is reducing simply due to the fact that the majority of companies have now reported. So, the tone for European morning trade will likely be supportive for the USD and JPY and negative for higher beta type currencies. There is some potential for a sharper recovery in the U.S. and Japanese currencies given the extent of net short positions held by the market, though we may need some sort of catalyst (i.e. negative news of data event) to spark a short-covering squeeze. A busy data calendar looms today.

Malaysian Ringgit Tumbles Against Dollar

The Malaysian ringgit plummeted to 3.5030 against the U.S. dollar at 2:20 am ET Wednesday. On the downside, 3.510 is seen as the next target level for the Malaysian currency. The dollar-ringgit pair closed yesterday's North American session at 3.4895.

Rupee strengthens as Dollar drops overseas

Mumabi: The Indian rupee rose on Wednesday, buoyed by weakness in the US unit versus majors overseas but pared some of its rise in mid-morning trade as local shares turned negative after having risen nearly 1% early.

At 10:55pm, the partially convertible rupee was at Rs47.69/70 per dollar, off an early high of Rs47.595, but still a little stronger than its previous close of Rs47.73/74.

On Tuesday, the rupee had risen to as much as Rs47.43, its strongest since 12 June. “The rupee has gained as expected. It should be rangebound today with a slight downward bias. Rs47.50-47.80 is the expected range for the day,” said Ashtosh Raina, head of foreign exchange trading, at HDFC Bank.

Dealers said weakness in the dollar versus majors and a positive start to the domestic share market had helped the rupee rise, but added that they would be watching out for cues on direction of capital flows.

The dollar was steady near 2009 lows against the euro and sterling on Wednesday, after a surprisingly strong US housing report the previous day boosted hopes that the worst of the recession was over.

The dollar index, a gauge of the US units performance versus six majors, was down 0.1%. Most Asian units were also stronger against the dollar.

Shares rose 0.9% early with positive economic data from the United States lending support, but were trading down 0.3% as caution prevailed across Asia after the recent rally.

Foreigners have so far in 2009 bought $7.6 billion worth of local stocks, after net sales of more than $13 billion last year.

One-month offshore non-deliverable forward contracts were quoting Rs47.71/81, largely unchanged from the onshore spot rate, indicating a bullish outlook in the near term.