International Forex Inforamtion

Neal Wolkoff, CEO of ELX Futures, was in Chicago this week serving as Chairman and host of The LaSalle Street Dinner Dance, which benefits the Chicago Area Council, Boy Scouts of America. While not...

Michael Moscow, former president of the Federal Reserve Bank of Chicago, said we could expect a slow, sluggish recovery with unemployment most likely remaining above 7% through 2012, as he addressed attendees of the second annual CME Group Global Financial Leadership Conference in Naples, Fla.

Moscow led off an impressive group of speakers who all focused on economic conditions in light of the financial crisis the economy is still grappling with. Moscow said that inflation was not a problem short-term but does pose a problem longer-term. He said that as the economy slowly recovers, "the Federal Reserve will be under pressure to delay tightening monetary policy."

While not suggesting when they should act or by how much, Moscow said, "They will have to do it before employment is back," adding, "I think the Fed will do the right thing."

Moscow said the Fed’s job is complicated by the United States’ large fiscal deficit, which he described as "unsustainable," a theme echoed throughout the day by other speakers.

Following Moscow, a group of central bankers, including former Fed Governor Frederic Mishkin discussed the current economic condition in light of the credit crisis.

The panel compared the economy to a critical patient needing to be revived. While everyone on the panel agreed that the patient has survived emergency procedures and is out of intensive care, no one believes that it is back to normal.

Mishkin, who was at the Fed as it struggled with the fallout of the Lehman Brothers bankruptcy a year ago, said that the financial disruption was more complex than the shock that caused the Great Depression. He added that the Fed was faced with a choice of extending its activities and expanding its role or not expanding and risking another depression. "The probability of a depression was not low," Mishkin added.

Later former Fed Chairman Paul Volcker addressed the crowd after being delayed in Washington as the advisory committee he chairs met with President Obama.

Following the theme of past speakers, Volcker said of the economy, "the patient is out of the operating room and I think he is out of intensive care but I’m not sure about it."

"For a decade, this country has been living beyond its means," Volcker said. "It is unsustainable. It was [made possible] by the magic if financial engineering."

Of his meeting with the President, Volcker said that the President understands the importance of not having to rely on consumption and rebuilding our exporting capacity.

In its statement today the Federal Open Market Committee said it would maintain the Fed funds rate at 0 to 0.25% and that economic conditions "are likely to warrant exceptionally low levels of the Federal funds rate for an extended period."

New York Court Imposes $500,000 Fine and Other Sanctions Against David P. Lee, Former Natural Gas Trader for Bank of Montreal

Lee settles CFTC charges of mis-marking and mis-valuing the Bank’s natural gas options book to exaggerate trading profitability; court also bans Lee from commodity-related trading.

Washington, DC — The Commodity Futures Trading Commission (CFTC) today announced that it has entered into a consent order settling charges brought against David P. Lee of New Jersey, a former trader for the Bank of Montreal (BMO), for mis-marking and mis-valuing BMO’s natural gas options book and deceiving the bank (see CFTC Press Release 5571-08, November 18, 2008).

Judge George B. Daniels of the U.S. District Court for the Southern District of New York entered an order on November 5, 2009, requiring Lee to pay a $500,000 civil monetary penalty. The order also permanently bans Lee from any commodity-related trading.

The order stems from the CFTC’s complaint filed on November 18, 2008, that charged Lee with unlawfully mis-marking his natural gas options positions between at least May 2003 and May 2007 and with mis-valuing other natural gas options positions from October 2006 until May 2007. Further, the complaint charged that Lee and various brokers deceived BMO by fabricating purportedly independent broker quotes delivered to BMO’s back office for price verification. The order found that this conduct violates anti-fraud and false reporting provisions of the Commodity Exchange Act (CEA) and CFTC regulations. The CFTC’s litigation against other named defendants continues.

The CFTC thanks the Manhattan District Attorney’s Office, the Federal Bureau of Investigation and the U.S. Attorney’s Office for the Southern District of New York for their assistance.



The following CFTC staff members are responsible for this case: Joan Manley, Christine Ryall, Eugene Smith, Patricia Gomersall and Paul Hayeck.

The U.S. Commodity Futures Trading Commission (CFTC) today announced that it obtained a consent order against Michael Kourmolis, of Brooklyn, N.Y., permanently prohibiting him from engaging in any activity related to trading any commodity interests, including soliciting funds, registering with the CFTC and trading on behalf of others or himself.

The court’s order, entered on November 10, 2009, in the U.S. District Court for the Eastern District of New Year, stems from a CFTC complaint filed July 23, 2003, against defendants Kourmolis, Thomas Qualls, and International Foreign Currency, Inc. (IFC) (see CFTC Press Release 4825-03, July 30, 2003). The CFTC’s litigation continues against IFC and Qualls.

The CFTC complaint alleged, and the court’s order finds, that Kourmolis fraudulently solicited customers to open accounts at IFC to trade foreign currency futures contracts. The order finds that in his solicitations, Kourmolis falsely told at least one customer that because of IFC’s “large fund and our banks and institutions overseas,” IFC had the ability to “maximize profit potential while also minimizing capital risk.” Kourmolis also misleadingly represented in writing that customers would have personal accounts and that their funds were insured by a bank for up to $25 million.

In a related matter, in January, 2007, a grand jury in the U.S. District Court for the Eastern District of New York indicted Qualls on several counts of wire and mail fraud and obstruction of justice. The obstruction of justice counts alleged in part that Qualls concealed documents with an intent to impair the CFTC’s action and made false statements in a CFTC deposition. On November 5, 2008, a jury convicted Qualls (US v. Thomas Qualls, Criminal Docket No. 07-014 (E.D.N.Y.). Prior to the verdict, Qualls fled and was later arrested in Canada.

The following CFTC Division of Enforcement staff members are responsible for this case: James H. Holl, III, Katherine Scovin Driscoll, Gretchen L. Lowe and Vincent McGonagle.




The U.S. Commodity Futures Trading Commission (CFTC) today announced that it obtained a consent order against Michael Kourmolis, of Brooklyn, N.Y., permanently prohibiting him from engaging in any activity related to trading any commodity interests, including soliciting funds, registering with the CFTC and trading on behalf of others or himself.

The court’s order, entered on November 10, 2009, in the U.S. District Court for the Eastern District of New Year, stems from a CFTC complaint filed July 23, 2003, against defendants Kourmolis, Thomas Qualls, and International Foreign Currency, Inc. (IFC) (see CFTC Press Release 4825-03, July 30, 2003). The CFTC’s litigation continues against IFC and Qualls.

The CFTC complaint alleged, and the court’s order finds, that Kourmolis fraudulently solicited customers to open accounts at IFC to trade foreign currency futures contracts. The order finds that in his solicitations, Kourmolis falsely told at least one customer that because of IFC’s “large fund and our banks and institutions overseas,” IFC had the ability to “maximize profit potential while also minimizing capital risk.” Kourmolis also misleadingly represented in writing that customers would have personal accounts and that their funds were insured by a bank for up to $25 million.

In a related matter, in January, 2007, a grand jury in the U.S. District Court for the Eastern District of New York indicted Qualls on several counts of wire and mail fraud and obstruction of justice. The obstruction of justice counts alleged in part that Qualls concealed documents with an intent to impair the CFTC’s action and made false statements in a CFTC deposition. On November 5, 2008, a jury convicted Qualls (US v. Thomas Qualls, Criminal Docket No. 07-014 (E.D.N.Y.). Prior to the verdict, Qualls fled and was later arrested in Canada.

The following CFTC Division of Enforcement staff members are responsible for this case: James H. Holl, III, Katherine Scovin Driscoll, Gretchen L. Lowe and Vincent McGonagle.



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Forex Ultimate Hedge Plays

The S&P/Eur correlation will be there while the global business cycle is not showing expansion, and using that correlation to trade, or hedge the S&P while the NYSE is closed, can be done in forex. If a trader expected a drop in the S&P, they could open a position in SDS, for example, the Ultra-Short S&P500 ETF, that trades on the NYSE.

The majority of forex flows comes outside of the U.S., and as such any position in SDS is likely to have moves building while the U.S. cash market is closed. As such, using the correlated moves in Eur/Usd as a play to either hedge investment portfolios, or to play the momentum in S&P without the market being open, is an option.

Finding correlated price action in a futures market is a benefit, if the market your investment vehicle is bought and sold in is closed, (S&P Futures move virtually 24 hours a day, while SDS trades for 7 and a half on the NYSE).

If price action is strong in the open market that will determine an assets value (SDS for example), how do you protect an open SDS position, in a closed NYSE market? Why not trade the market that is open, with a high correlation, even if it is just to hedge your other position?

The institutional use of forex is not in a leading indicator capacity, and as such the flows we see on our charts are created by the read on global risk tolerance in correlated markets. It always has been, and it always will be. It must make sense to hedge your investment portfolio with trades that are in a market that is actually open, if at all possible, and that is the beauty of using forex as it is designed; hedging forward commitments, or open positions.

Trade Plan of the Day: TheLFB Trade Plan is one of the six that are available to members on the major pairs each day, plus four Jpy based cross pairs, S&P futures, oil, gold, and the dollar index.

U.K. and Euro-zone 52.6% (01:00 EDT-11:00 EST). Asia 21.1%. (18:00 EDT-02:00 EST). U.S. 16.6% (07:00 EDT-16:00EDT). Overlap 9.7%.

The above is the International Bank for Settlement numbers that analyze the global flow of forex trade. It reveals that the European futures market open, from around 01:00 EDT through until the Chicago reversal at 07:00 EDT are the main times to expect sustainable moves, over the long run in forex, and by default, those moves are set by the direction of the global equity market, both futures and cash. There will be periods of change, but overall the reads are very reliable.

Forex is a commercial market, used to hedge forward commitments, and garner interest rate differentials. As such, it is a market that follows the moves in risk tolerance, or not, at any given time, as it shows itself in the correlated global market place.

Take a look at S&P and euro charts; euro has followed, not lead that move. S&P leads, Eur/Usd follows, and will hold that 85-90% correlation until global expansion hits the business cycle, and at that time it will drop to between 65-70%, as we have seen in forex cycles since 1979.

At that point, interest rate differentials will take over, and the central banking and commercial lending sector will hang their hats on Libor rates and Ted spreads. In the mean-time, trade the charts when the market is open, and hedge the position with 24 hour forex.

TheLFB Charting LinkTheLFB Charting: S&P Elliott Wave view
4 Hour chart trend: Long. Main price points: 1098.50, and 1015-1120. Looking for: Wave C
S&P futures traded lower into the 1080 – 1083 support zone as discussed and posted here yesterday, where traders may already be seeing some up-side reactions from the 38.2% Fibonacci test. The current wave count structure signals for a final push higher in wave V), which may find the top somewhere around the 1115-1120 zone, especially once the wave III) top at 1100 is taken out.
Overall, an expanding diagonal pattern in black wave 5, or the C position, does not look to be complete. Each leg of our expanding diagonal pattern should be structured by three waves, labeled as wave A, B and C. On the four hour chart below, the market is trading in the last leg of our pattern, wave 5), with an extended red wave C in process.

The US dollar index (USDX) is an important analytical tool for traders in just about any market. The USDX is actually a futures contract which means that if you have a futures trading account you could trade this instrument like corn, oil, gold or currency futures contracts. However rather than trading the USDX most retail traders use it as way to analyze the relative strength or weakness of the US Dollar in general.

The USDX compares the US dollar (USD) against a basket of other world currencies. This basket represents most of the largest free floating, major currencies in the world on a weighted average basis. The currencies included are the euro, yen, British pound, Canadian dollar, Swedish krona and Swiss franc. Each of these currencies are given a weight within the index with the largest weight given to the euro.

The euro is typically half the total weight included in the average the chart for the USDX and will often look like a chart of the USD/EUR futures contract. Spot forex traders will notice that the USDX is very similar to an inverse of the EUR/USD spot forex pair. However, because the USDX includes 6 different currencies it is a better measure of USD strength than any single currency pair including the EUR/USD.

The USDX was established in 1973 with a starting value of 100. That means that if the USDX is measuring less than 100 the USD has lost relative value compared to what it was worth in 1973 and if it is above 100 then the USD is stronger than it was in 1973. Currently the USDX is hovering around 82, which means that it is 18% weaker than its starting value. The dollar has not always been weaker than it was in 1973, the USDX showed a 20% improvement in value in the USD in 2001 and 2002.

The USDX is particularly useful for traders in the bond, currency and gold markets. For example, a strong USD is usually correlated with falling gold prices, which means that gold traders are very interested in a break out on the USDX even though they may not be trading the USD directly. Similarly, global crises often increase demand for the USD as investors seek a shelter from uncertainty. This will drive the value of the USD up and often bond yields will drop. These are just two examples of how the USDX is one more inter-market tool you can use for evaluating capital flows and finding new trading opportunities.

Charts for the USDX on the pairs analysis pages in the forex section of the Learning Markets website but if you are interested in trading the USDX you have two attractive alternatives. First, you can open a futures account. There are futures and options on futures available on the USDX that trade on the New York Board of Trade.

Second you can trade ETFs that track the USDX itself. PowerShares offers two ETF alternatives for trading the index. The first is UUP which invests in long futures contracts on the USDX, which means it will move the same direction as the dollar index. The second is UDN which invests in short futures contracts on the USDX, which means that it will rise in value when the dollar index weakens. If you are bullish the dollar you could buy UUP and if you are bearish the dollar you could buy UDN.

(RTTNews) - The Japanese economy expanded 1.2 percent in the third quarter of 2009 compared to the previous three months, the Cabinet Office said on Monday - sharply higher than the 0.7 percent increase that had been forecast after the 0.6 percent quarterly gain in Q2.

It also marked the fastest growth since the first quarter of 2007.

On an annualized basis, real gross domestic product surged 4.8 percent - again shattering expectations for a 2.9 percent increase following the 2.3 percent gain in the second quarter.

Nominal GDP was down an annualized 0.3 percent in the third quarter, while the deflator was up 0.2 percent after adding 0.5 percent in the previous three months.

(RTTNews) - Foreign Direct Investment in China increased for the third consecutive month in October, the Ministry of Commerce reported Monday. FDI rose 5.7% year-on-year to US$7.1 billion in October, slower than the 18.9% increase seen in September. During January to October period, China attracted US$70.8 billion of actual FDI, down 12.6% from the previous year.

RTTNews) - India's economy is likely to grow above 6% in 2009-10 as demand is up across sectors, and the economy is getting back to its growth path, said Confederation of Indian Industries (CII). In a meeting of its National Council held in Mumbai on Friday, over 70% of CII members believed the economy would grow above 6% in the current fiscal.

The industry body said the industry and services have shown signs of recovery with the help of stimulus packages. However, CII expressed concern about the agricultural output, which might pose some risks to the GDP.

CII Director General Chandrajit Banerjee said the industrial production has risen considerably with increase in business confidence, along with the return of stabilized financial markets and capital inflows, all indicative of upside prospects. The industry grew 9.1% in September.

In its survey of 1,022 firms in manufacturing and service sectors, the CII report showed that the second quarter results of the current fiscal showed signs of stabilization.

(RTTNews) - Producer prices in New Zealand saw a 1.4 percent decline in output prices in the third quarter of 2009 compared to the previous three months, Statistics New Zealand said on Monday, versus forecasts for a 0.2 percent increase following the 0.7 percent fall in Q2.

Input prices for PPI were down 1.1 percent on quarter, compared to expectations for a repeat of the flat quarter three months earlier.

Both output and input prices were influenced by falling dairy prices. The dairy cattle farming index was down 24.3 percent, marking the largest fall since the series began in the June 1994 quarter. The dairy product manufacturing index was down 20.9 percent, which was the largest quarterly fall since the September 2002 quarter.

In the year to the September 2009 quarter, the PPI inputs index fell 5.8 percent for the largest annual fall since the series began in the December 1977 quarter. The PPI outputs index fell 2.1 percent.

Also on Monday, New Zealand's Capital Goods Price Index fell 0.4 percent in the September 2009 quarter. The non-residential buildings index was down 1.4 percent to fall for the fourth consecutive quarter. The plant, machinery, and equipment index eased 0.6 percent - largely due to a stronger New Zealand dollar, analysts said. The residential buildings index fell 0.4 percent on lower labor and material costs, the data showed.

Offsetting influences this quarter came from rises in the transport equipment index (up 0.8 percent) and the other construction index (up 0.5 percent).

The CGPI rose 2.3 percent in the year to the September 2009 quarter, compared with rises of 3.8 percent in the year to the September 2008 quarter and 2.3 percent in the year to the September 2007 quarter.

After speculations set the real down last week versus the greenback before the G-7 meeting, now the outcome of world wealthiest nations discussions provided support for higher yielding currencies to grow, favoring the real in foreign-exchange markets.

The pound was once again hit by negative domestic data which forced the British currency down versus the euro, Swiss franc as manufacturing in the country declined to the lowest level in more than a decade, raising concerns about the British economic future.

The pound was once again hit by negative domestic data which forced the British currency down versus the euro, Swiss franc as manufacturing in the country declined to the lowest level in more than a decade, raising concerns about the British economic future.

Speculations suggesting that the world economic conditions will improve faster than previously imagined, helped stocks and commodities to rally today, consequently helping the Canadian dollar to grow versus its U.S. counterpart.

The Brazilian real continue to set new record highs for 2009 today as risk appetite emerged influenced by a Australian central bank decision to raise its benchmark interest rates, fact which was interpreted as an evident sign of economic improvement globally.

The Brazilian currency strengthened beyond $1.75 today versus the U.S. dollar, rate which was only perceived last year prior the global slump worst moments in the second semester of that year. Commodities and stocks also rose, attracting investors back to emergent markets and decreasing attractiveness for the U.S. dollar.

USD/BRL closed today’s session trading at 1.7598 in Sao Paulo.

If you want to comment on the Brazilian real’s recent action or have any questions regarding this currency, please, feel free to reply below.

The dollar sold off sharply in the Tuesday session, tumbling to its lowest level against the Aussie since August 2008 at 0.8917 and slumping versus the Canadian dollar to its lowest level since September 2008 at 1.0549. Commodities climbed higher, with spot gold touching a fresh record high beyond the $1,040 per ounce level and crude oil edging up past the $72 per barrel level. The catalyst for part of the move was unsubstantiated rumors that the Mid East oil producing nations would soon abandon the US dollar as the pricing currency for oil.

The US economic calendar is light this week, with the reports due out toward the latter half of the week including weekly jobless claims, wholesale sales, wholesale inventories and the August trade deficit.

(RTTNews) - Warning that volatile Afghan-Pakistan border region has become the "modern epicenter of jihad," the United States had ruled out any pull out from Afghanistan, saying a Taliban takeover of the south-west Asian country could hand al Qaida a "hugely empowering message."

Speaking at a joint interview with secretary of state Hillary Clinton, U.S. defense secretary Robert Gates said a victory for Taliban in the war-torn land-locked country would allow al-Qaida to gain foothold and would empower the terrorist network.

He said any withdrawal of U.S. forces from Afghanistan, before the mission to defeat al-Qaida and the Taliban is achieved, would give a huge boost to the Islamic radical movement in other parts of the globe.

He said a reassurance of no pull back from Afghanistan had been given to Pakistan despite a strategic review of the Af-Pak policy about "next step forward" in the Afghan war being underway in White House.

Gates said that there should be no uncertainty in terms of U.S. determination to remain in Afghanistan though there may be some short term uncertainty among U.S. allies, in terms of the new steps.

The defense secretary said the terrorists groups are aiming to hand out the same fate to the U.S. similar to that given to the Russians, referring to the Soviet defeat in the 1980s at the hands of Islamist fighters.

Gates remarks came as the Obama administration was reviewing its new Af-Pak policy and demands by the Generals for troop reinforcements for Afghanistan even as an equally strong lobby in Washington strongly opposes any move to send more troops.

(RTTNews) - Australia's monthly leading indicator of employment rose for the fourth consecutive month in October, after falling for a revised 19 consecutive months, the Department of Education, Employment and Workplace relations said Wednesday.

The leading indicator climbed to minus 0.934 in October from minus 1.104 in the previous month.The report said the indicator was still tentatively foreshadowing a quickening in the pace of employment growth to above its long-term trend rate of 1.8% per annum.

"Another two consecutive monthly increases in the Indicator are required to confirm that there was a turning point in the Indicator in June 2009", the DEEWR added.

Meanwhile, cyclical employment dropped for the 17th consecutive month in October.

The DEEWR leading indicator of employment is the average of four time series variables: the ANZ newspaper job ads series, Dun and Bradstreet employment expectations,Westpac-Melbourne Institute leading index of economic activity, and the Westpac-Melbourne Institute consumer sentiment index.

(RTTNews) - Wednesday, a slew of statistical reports are due from European economies. Among the major reports, German factory orders and Switzerland's unemployment data are expected to dominate the scene.

At 1.45 am ET, Switzerland's State Secretariat For Economic Affairs is slated to release its unemployment figures for September. The seasonally adjusted unemployment rate is expected to rise to 4.1% from 4% in August.

The GDP indicator data for July is expected from Statistics Finland at 2.00 am ET. The GDP indicator is forecast to drop 10.4% year-on-year, after the 11.1% decrease in the previous month.

At 3.00 am ET, trade balance figures for the Czech Republic is due. Economists expect a surplus of CZK 7.1 billion for August, down from July's surplus of CZK 12.3 billion.

At the same time, Romania's National Institute of Statistics is set to release its industrial production and retail sales data for August.

Norway's statistical office is scheduled to issue industrial production data for August at 4.00 am ET. Industrial output was down 0.5% on a monthly basis in July. Manufacturing output is forecast to rise 0.3% in August from last month but expect a fall 9.1% from a year ago.

At 5.00 am ET, the Eurostat is expected to release revised GDP numbers for the second quarter. According to initial estimate, the Eurozone economy contracted 0.1% sequentially and 4.7% annually in the second quarter. The statistical office is expected to confirm the initial estimate.

Germany's factory orders for August is scheduled for release at 6.00 am ET from the Federal Ministry of Economics and Technology. Economists expect factory orders to rise 1.1% on a monthly basis, after rising 3.5% in July. Meanwhile, production is forecast to drop 20% year-on-year compared to a 19.8% fall the last month.

(RTTNews) - Japan's leading index climbed to 83.3 in August from 82.5 in the previous month, the Cabinet Office said Wednesday. The indicator came in line with economists' expectations. The leading index has been rising now for six consecutive months.

The coincident index increased to 91.4 from 89.8 in July, remaining on a rising trend for the fifth consecutive month. Further, the lagging index increased to 83.8 from 82.8 in the previous month.

* G7 policymakers debate future of group as G20 rises

* Lack of action hurts G7's reputation, IMF chief says

* G7 retains claim on currencies, but compromised

* Could become faction within G20

By Brian Love

ISTANBUL, Oct 4 (Reuters) - After decades in charge, the club of rich, industrialised nations is fast losing sway as a share of global economic power shifts towards big developing countries.

That was a lesson of the Group of Seven's meeting in Istanbul at the weekend, when the absence of China showed the G7 could no longer tackle the world's economic problems on its own.

Finance ministers and central bank chiefs from the G7 implored China in a diplomatically worded statement to let the Chinese currency rise, as they have done for several years.

But China showed no sign of complying, and the G7 spent much of its time to discussing whether it should meet less often, with less pomp and perhaps with fewer public statements.

G7 statements have all too often "interested nobody because there's no follow-up most of the time", said Dominique Strauss-Kahn, the head of the International Monetary Fund.

Marco Annunziata, chief economist at UniCredit bank in London, said: "Istanbul is being seen by many as the G7's swan song, before it relinquishes power."

The G7's weakness in Istanbul was a far cry from the status it enjoyed before the financial crisis of the past two years.

Founded in 1976 to bring together top financial officials of Britain, Canada, France, Germany, Italy, Japan and the United States, the G7 guided world financial markets for decades.

In 2000, G7 central banks intervened in the foreign exchange market to boost the value of the euro off record lows.

Now, as the world emerges from the worst slump since the Great Depression, policymakers have once again to deal with imbalances in the global economy -- but China is a major source of the trade imbalances, and it is not a member of the G7.

G20

As a result, world leaders decided in Pittsburgh last month that the larger Group of 20, which includes China, India and other big developing nations in addition to G7 countries, should become the premier forum for managing the global economy.

China seized on the Istanbul meeting to ram that point home in a commentary by the official Xinhua news agency.

"As emerging markets have substantially increased their weight in the global economy, especially after the subrprime crisis exploded, the G7 cannot effectively address international economic issues, and its replacement by the G20 conforms with the tide of history," Xinhua said.

Before the Istanbul meeting, some G7 officials said the group might not bother to issue its customary policy communique. Tim Adams, a former U.S. Treasury undersecretary for international affairs who attended many G7 meetings, said there was speculation the G7 might even decide to shut itself down.

Those worst-case scenarios did not happen. Canada said it would host a G7 meeting next February, declaring that the group would continue to play a "pivotal role".

By issuing a communique, the G7 kept alive its claim to have some jurisdiction over key areas of global economic policy, such as foreign exchange.

But Adams, now managing director at the Lindsey Group, a macroeconomic consultancy in the United States, said the G7's image in the currency market had been somewhat compromised.

"To carry optimal weight and force, there has to be more than the G7 as part of the currency discussion," he said.

"What we saw yesterday was the G7 commenting about exchange rate policy including China, but China was not at the table at those discussions. With an empowered G20, that kind of commentary looks a bit awkward."

NEW ROLE

G7 officials did not reach concrete decisions in Istanbul on exactly how the group would continue operating and what role it would play.

But the common thread in comments from several officials was that the G7 should consider reinventing itself as a more informal forum which met less often to discuss important issues, including exchange rates.

"It might be better we meet more informally with less of an entourage," said British finance minister Alistair Darling.

There was also talk that the G7 might be used to prepare for G20 meetings. Conceivably, it could become the focus of a rich nations' faction within the G20.

"There is a long history of interactions among those individuals and those countries; there's an infrastructure and relationships that were incredibly important in a time of crisis," said Adams.

"So it's worth keeping it around for some time, as a kind of subcommittee of like-minded interactive entities, until they figure out how the G20 is going to work on a more operational basis."

One veteran G7 official, who declined to be named, remained sceptical.

"The moment you have to tell people you are still relevant, it's because you are not relevant," he said. (Additional reporting by David Lawder and Sumeet Desai; Editing by Andrew Torchia)

ATHENS, Oct 4 (Reuters) - Greece's conservative Prime Minister Costas Karamanlis conceded election defeat and resigned as head of his party on Sunday after results showed the opposition Socialists winning a comfortable governing majority.

"I want to congratulate (socialist leader) George Papandreou for his victory. As every Greek, I hope he succeeds in the great challenge to deal with difficult circumstances," he told reporters. "I assume responsibility for the defeat and start procedures for the election of a new party president."

With about 45 percent of the national vote counted, the Socialists were ahead with nearly 44 percent against the New Democracy's 35 percent.

Papandreou has promised to tax the rich and protect the poor, while pouring money into a slowing economy. (Reporting by Dina Kyriakidou and Harry Papachristou; Editing by Sonya Hepinstall)

BUDAPEST, Oct 4 (Reuters) - Hungary's central bank (NBH) has proposed regulations to the government to limit foreign currency lending, national news agency MTI said on Sunday, quoting NBH Governor Andras Simor.

An NBH press officer confirmed to Reuters that the bank had proposed loan-to-value and payment-to-income limits to cut the risk of non-payment as exchange and interest rate fluctuations can boost payments for households with foreign currency loans.

According to the proposals, the loan-to-value limit in mortgage lending would be 54 percent for euro loans and 35 percent for other foreign currencies. Monthly payments would be limited to 23 percent of the income of low-income households for all euro loans and to 15 percent for other foreign currencies.

"The new rules, which cut the country's financial vulnerability, could somewhat slow future economic recovery in the short term, but would lead to growth in a more healthy structure, and could even lift growth in the long term," the press officer said.

(Reporting by Sandor Peto; editing by John Stonestreet)

* Official projection shows Socialists winning Greek vote

* Voters punished conservatives for scandals, economy

(Updates with official vote projection, comments)

By Dina Kyriakidou

ATHENS, Oct 4 (Reuters) - Greece's Socialists have won Sunday's election with enough seats to form a government and oust conservatives who angered voters for failing to tackle graft and the economy, an official projection said.

If the final result matches the projection, PASOK will win an absolute majority in parliament at a time when the Mediterranean country, seen as the euro zone's weakest link, needs a strong government to deal with an economy on the verge of recession.

With about 20 percent of the vote counted, PASOK had won about 43 percent of the vote and the ruling New Democracy trailed with 36 percent.

The Interior Ministry projected, based on partial results, that PASOK had won nearly 44 percent of the vote, giving it 160 out of 300 seats in parliament, and New Democracy was trailing with about 34 percent and 92 seats.

"It is a great victory, a historic victory that means we have a great responsibility to meet the expectations of the Greek people," senior PASOK party member Evangelos Venizelos told reporters.

Thousands of jubilant PASOK supporters waited for party leader George Papandreou to appear at headquarters in central Athens, waving green flags and honking car horns.

Papandreou had promised a 3 billion euro ($4.36 billion) stimulus package on a platform of taxing the rich and helping the poor, while the outgoing Prime Minister Costas Karamanlis called for two years of austerity.

Markets were likely to be pleased with the result.

"Not because they have a preference between the two parties but because a new government with a parliamentary majority will have a fresh mandate to pursue its programme over a four-year term," said Alexander Moraitakis, president of the Greek brokers association SMEHA.

It was the third face-off for Papandreou, 57, a U.S-born soft-spoken politician, and Karamanlis, 53, a powerful speaker who appeals to the average Greek, both the heirs to two of Greece's most powerful political dynasties.

Opinion polls had showed most Greeks appeared ready to end five years of conservative rule that started amid high hopes of ending endemic corruption but soon sunk amid its own scandals.

Weakened by the scandals and a fragile parliamentary majority, Karamanlis called the snap poll, gambling he had a better chance of winning now than later in his four-year term.

Papandreou will face a budget deficit topping 6 percent of GDP, rising unemployment and deep unhappiness with the education system, social security and immigration.

"The main challenge for the new government is to submit a credible budget and a realistic timetable for reducing fiscal imbalances," said Nikos Magginas, an economist at National Bank.

After years of robust growth, Greece's output, about 2.5 percent of the euro zone's total economy, is set to slow to zero growth or even enter negative territory this year, with key drivers and job providers like tourism particularly hard-hit.

Economists question the wisdom of Papandreou's spending plan, saying it may lead to more borrowing in a country which already has the euro zone's second biggest debt after Italy as a percentage of GDP. (Additional reporting by Renee Maltezou, Harry Papachristou, Lefteris Papadimas, Ingrid Melander and George Georgiopoulos; Editing by Sonya Hepinstall)

($1=.6879 Euro)

By Emily Kaiser

WASHINGTON, Oct 4 (Reuters) - If this is the recovery, it doesn't look much different from the recession so far.

U.S. companies are still cutting jobs. German consumers aren't in a buying mood. In Japan, even a recent glimmer of good news was met with skepticism. Figures on Friday showed the unemployment rate unexpectedly fell in August, yet many economists questioned whether it was just a one-month blip.

"Did someone say that the crisis is over?" said Lena Komileva, head of G7 market economics at Tullett Prebon in London. "Even when a genuine recovery ... gets underway and lifts growth above the zero mark, broken credit channels are likely to perpetuate the feeling of recession."

That sinking feeling is likely to be on the minds of finance officials gathering in Istanbul this week for International Monetary Fund and World Bank meetings.

World Bank President Robert Zoellick warned leaders on Friday not to mistake signs of stabilization for a sustainable recovery and conclude their crisis-fighting work is done.

"The danger today is one of complacency," he said. "There will be a natural tendency to return to business as usual, and it will become harder to convince countries to cooperate in order to address many of the problems that led to this crisis, that put millions of livelihoods of people at risk."

That point probably won't be lost on European Central Bank and Bank of England officials, who hold policy-setting meetings on Thursday. Both are expected to keep benchmark interest rates steady at record lows, although they may acknowledge a somewhat brighter economic outlook.

MIDDLE OF THE "W"

Although the global economy appears to have resumed growth in the just-ended third quarter, there is no disguising the continuing pain in the labor market. In the United States alone, more than 7 million people have lost their jobs since the recession began in December 2007.

Employment normally doesn't rebound until well after the recession ends, but the high and rising tally bodes ill for consumer spending and debt repayment, both of which are essential to healing the economy and the banks.

That is why some economists are beginning to worry that this recovery may be nothing more than a brief upswing before the next slump -- the dreaded "W" shaped double-dip recession.

Harm Bandholz, an economist at UniCredit in New York, is concerned that once businesses have restocked depleted inventories and government stimulus spending runs dry, economic growth will evaporate.

Indeed, he said a disappointingly tepid report on manufacturing last week marked "the most clear-cut signal that the technical rebound of the U.S. economy might have reached the middle of the 'W'."

Consumer spending is at the heart of the U.S. economy, and it remains a weak link. The next big test of the consumer psyche comes on Thursday, when many of the largest retailers report September sales results. Analysts expect another lackluster month as households cut back on all but essentials.

William Dunkelberg, chief economist with the National Federation of Independent Business, said small retailers in particular were feeling the pinch from newly frugal customers. His group surveyed 827 small business owners in September and found that only 7 percent planned to create new jobs in the next three months while 16 percent planned to cut.

"We should see retailers getting ready to hire (for the holiday season) and in our survey that didn't happen," he said. "We still have more firms in retailing planning to reduce jobs over the next three months than planning to add."

Some of that is a consequence of the broken credit channels that Tullett Prebon's Komileva mentioned. Small businesses are having an especially tough time getting loans.

The same goes for consumers. Whether by choice or by force, Americans are paring credit card debt at a rapid clip. Federal Reserve figures due on Wednesday are expected to show consumer credit dropped by $10 billion in August, which would mark a seventh consecutive month of declines.

Demand looks weak elsewhere, too. Euro-zone August retail sales are scheduled for release on Monday, and are likely to show a decline, according to analysts polled by Reuters.

Yet there are a handful of prominent economists who think growth will snap back, even if consumers are downbeat. Dean Maki, an economist with Barclays Capital in New York, argues that businesses cut too deeply into payrolls and other expenses when the financial crisis peaked a year ago.

"The downturn proved deep, but the economy avoided a depression," he said.

"It is now rebounding in a way that is probably surprising to many firms, and profit growth is accelerating. Once firms get the sense that the recovery will last, we believe the investment cutbacks that looked prudent when sales were plummeting will start to look excessive." (Editing by Neil Stempleman)

(Embargoed for release at 0800 GMT, Monday Oct. 5)

* Mauritius best in African governance survey

* Southern African region outpaces other regions

* Somalia, Chad and Zimbabwe worst performers

CAPE TOWN, Oct 5 (Reuters) - Mauritius' government and private sector delivered the best services and public goods to its citizens, ranking first in an African-wide governance survey released on Monday by the Mo Ibrahim Foundation.

The Indian Ocean island scored top in all four of the survey's main categories, beating Cape Verde and next best Seychelles, with an average total score of 82.8 percent.

Fourth and fifth positions went to Botswana and Africa's strongest economy South Africa.

In its third year and for the first time including all 53 African countries, the 2009 Ibrahim Index of Governance measures 84 indicators -- broadly categorised under safety and security; participation and human rights; sustainable economic opportunity and human development.

Released at the University of Cape Town, it showed the Southern African region faring best on average with 58.1 percent, followed closely by North Africa at 57.7 percent. The worst performing region was central Africa, averaging 40.2 percent, with West Africa placed third at 51.7 and East Africa fourth at 46.9.

The seven countries of central Africa, including Democratic Republic of Congo and Equatorial Guinea, all ranked outside the top 20, and with the exception of Gabon, performed below the continent's average score.

Anarchic Somalia, a haven for pirates launching attacks on foreign ships and where an Islamist insurgency has helped paralyse effective government, propped up the index with the weakest total score of 15.2 percent.

It registered the continent's lowest scores for economic opportunity at 0.9 percent, and 9.1 percent for safety and rule of law.

Just above in 52nd place was Chad, and next was Zimbabwe, where the unity government of President Robert Mugabe and rival Prime Minister Morgan Tsvangirai faces an uphill battle to rebuild a ruined economy.

The Ibrahim Index of African Governance was created to help civil society track government performance in Africa. This year it was compiled with the assistance of various institutions, including Afrobarometer and the American University in Cairo.

Mo Ibrahim is a Sudanese-born telecommunications entrepreneur.

The full report is available at www.moibrahimfoundation.org (Reporting by Wendell Roelf)

Crude is trading at $69.50 as of 11:40am, London Time.

Oil fell below $70 a barrel on Friday due to concerns about the strength of the U.S. economy ahead of key employment data, while tensions between the West and Iran over the OPEC member's nuclear plan eased. "There is a bit of caution over the U.S. economic data which has been softer than expected," said Mark Pervan, senior commodity strategist at ANZ in Melbourne, adding that oil demand remained weak between the end of the U.S. driving season and the start of winter. Crude is trading at $69.50 as of 11:40am, London Time.

FXstreet.com (Córdoba) – The Euro is moving away from intra-day high. EUR/USD jumped to 1.4648 after the opening bell at Wall Street, posting the highest price of Friday. Greenback then recovery and the pair started to fall. Currently the pair is being traded below 1.4600 at 1.4584/87, or 0.32% above today’s opening price.

The Dow Jones is at the same levels it had at yesterday’s close. The stock index was falling more than 50 points after the opening bell but recovered and actually turned positive for a moment. Markets in Europe closed with declines of more than 1% on average.

FXstreet.com (Córdoba) – Greenback ended the week mostly up across the board but without considerable gains and far from intra-week highs. Stocks fell worldwide for the second week in a row. Economic data release during the week suggested that economic recovery will take time.

Dollar and Yen higher

The Dollar fell on Friday but it was not enough to erase previous gains. EUR/USD managed to finish below 1.4600, but also Greenback failed to hold below 1.4500. After the release of NFP the pair rally downside but quickly turn around and jumped. The Euro is still pulling back from year high at 1.4842.

Against the Yen, Dollar finished just a few pips above Monday’s opening price, but still remains under extreme pressure as trend favors the yen. USD/JPY fell at the beginning of the week to an 8-month low at 88.20. The Yen rose against European currencies and posted multi-month highs but finished far from those levels. EUR/JPY is holding above 130.00, a clear close below that level could send the pair lower and next week could be decisive. Against the Swiss Franc, the Yen confirmed a break of an important uptrend line, suggesting that CHF/JPY could fall further over the next days.

Cable revived in the middle of the week after tumbling on Monday, falling to multi-month lows across the board. The mid-term outlook for the Pound remains unclear and next week, the Bank ok England will decided on monetary policy. This event could bring sharp moves to the Pound.

Stocks lower

The International Monetary Found joined a lot of economist and said that the recession was over. But the problem now is the speed of the recovery. Economic information showed that the process could take a lot of time. The non farm payroll revealed that the U.S. labor market weakened in September. The unemployment rate rose to a 26 year high.

Stock fell sharply on Friday in Europe. On Wall Street, main indexes ended lower but far from intra-day low. Considering the week stocks plunged worldwide for the second week in a row and continues to pull back after posting year highs. On many markets the results for the week where the worst since mid June.

On the other side, Treasuries notes soared and finished at the highest level since May, despite that the Federal Reserve will soon end it purchases.

FXstreet.com (Córdoba) – Dollar closed the week with gains against the Swiss Franc for the first time after three with losses. USD/CHF moved away from intra-week highs. The pair peaked at 1.0452, posting a fresh 3-week high on Thursday but then pulled back ending Friday around 1.0350.

USD/CHF is moving with an upside trend in four hour chat but still faces a downside pressure in bigger timeframe charts.

The Swiss also lost ground against Cable. GBP/CHF pulled back strongly after falling to a 7-month low at 1.6219. The pair managed to finish the week above 1.6500.

EUR/CHF plunged Thursday and Friday, losing completely the gains of Wednesday: the pair rallied surprisingly jumping from 1.5070 to 1.5240 bringing the attention to the Swiss National Bank.

FOREX actually means Foreign exchange and is used in lieu of currency or fx. FOREX means exchanging one currency for another currency or trading one currency type to another currency type. Generally speaking, FOREX is done through foreign exchange markets within different countries throughout the world. FOREX markets are the biggest markets one can find today. A typical foreign exchange market trades currency between large governmental and private sector banks, multinational companies, currency speculators, huge financial institutions. The large size of forex markets can be seen by the figure of $3trillion which is the currency trading on a daily basis.FOREX markets are special throughout the world due to their daily trading volumes, different and varied kinds of traders involved, extremely volatile markets throughout the world, longer trading hours of 24 a day, geographical distribution of the markets, numerous factors affecting the exchange rates, high amount of risk involved in trading due to huge volumes and volatility of markets. Novel financial instruments called derivatives also trade around $2 trillion daily in addition to the traditional ones.
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Trading
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Currency
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Currencies
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Online
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Charts and market that are confirmed to you during your trading tutor group are always made effortless, sheer and straightforward. The faculties why is that plans are frequently cherry-elect to show you “spot-on” business examples, so that you can appealingly incarceration what your transactions should look like. And with these type of direction, the entries, stops and profit targets are just about always “spot on”.
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After Attending Trading Courses
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FXNewsEffects depicts the timing of economic-related announcements relative to changes in exchange rates. Announcement times, shown as green dots, are superimposed on the rates curve. Clicking on a green dot causes details of the announcement to be displayed in the table below the graph. The rates shown in the graph were OANDA FXTrade dealable rates at the time.
Economic announcements occur when government agencies and central banks release macro-economic information. Such announcements have always been a major factor behind forex market movements. The impact of announcements on market prices differs depending on the type of announcement and the degree to which the specifics of the announcement were anticipated. Some announcements have a strong and immediate impact with sharp increases or decreases in rates. Other announcements affect the market gradually over a longer period of time. Still other announcements can affect the market before the announcement either because of leaks or because their content is anticipated based on other publicly available data.
FXNewsEffects helps traders learn from past impacts of economic announcements and therefore can help increase their forecasting skills and trading time precision.

(RTTNews) - While the Institute for Supply Management - Chicago released a report on Friday showing a continued contraction in manufacturing activity in the month of July, the pace of contraction slowed by a little more than economists had been expecting.

The ISM - Chicago said its index of activity in the manufacturing sector rose to 43.4 in July from 39.9 in June, with a reading below 50 indicating a contraction in the sector. Economists had been expecting the index to come in at 43.0.

A slower pace of contraction in new orders contributed to the improvement in the sector, with the new orders index rising to 48.0 in July from 41.6 in June.

Employment also contracted at a slower pace compared to the previous month, as the employment index rose to 35.3 from 28.9.

At the same time, the report showed an acceleration in the pace of contraction in order backlog, with the order backlog index slipping to 32.1 in July from 37.6 in the previous month.

On the inflation front, the prices index fell to 35.0 in July from 36.3 in June, indicating a faster pace of contraction in prices.

Peter Boockvar, equity strategist at Miller Tabak said, "Bottom line, the data confirms the backdrop for an improvement in GDP."

"The degree and sustainability of the recovery will however remain in the hands of end demand, aka, predominantly the U.S. consumer," he added.
While the Institute for Supply Management - Chicago released a report on Friday showing a continued contraction in manufacturing activity in the month of July, the pace of contraction slowed by a little more than economists had been expecting.

(RTTNews) - The euro edged higher against its lower-yielding rivals as a better-than-expected GDP report in the U.S. fueled hopes of an economic recovery.

The European currency added to recent gains against both the dollar and yen amid higher risk appeal. On the other hand, the euro hovered near a monthly low against the sterling.

On the economic front in the Eurozone, consumer price inflation stayed negative for the second month in July with the latest decline being the biggest on record, extending support to a low interest rate regime. Unemployment reached the highest level since June 1999 as more employers cut headcount in June.

The euro climbed above 1.4250 in mid-day trading against the dollar, moving within a cent of its 2009 high. The European currency slipped to a two-week low of 1.4006 earlier this week.

The U.S. Commerce Department revealed gross domestic product fell 1% in the second quarter. Economists had expected GDP to fall at a 1.5 percent pace. This follows a 6.4-percent contraction in the first quarter.

The euro was choppy against the sterling and moved near its overnight levels around 0.8530 in the early afternoon. The European currency lingered near a monthly low from yesterday.

The euro edged to a three-day high of 135.54 against the Japanese yen, extending the mild rally that began on Wednesday. If the European currency reaches above 136.08 it will reach a monthly high.

In Japan, the seasonally adjusted headline Nomura/JMMA Purchasing Managers' Index or PMI rose to 50.4 in July from 48.2 in the previous month, the first improvement for seventeen months. A PMI reading above 50 indicates expansion in the sector.

On the economic front in the Eurozone, a flash estimate from the European Union statistics office, Eurostat, revealed a 0.6% annual fall in consumer prices in July compared to a 0.1% drop in June. The decline in July was the biggest on record. Prices also dropped more than the expected 0.4%.

Inflation turned negative for the first time in June. The European Central Bank aims at inflation rates below, but close to 2% over the medium term.

Friday, the European Commission approved EUR100 million to Serbia as general budget support to help with the stabilization of the country and ease the economic and social consequences of the crisis.

(RTTNews) - The Treasury and Energy Departments announced Friday that they are now accepting applications for grants to boost renewable energy projects.

The grants, which come in the form of a cash advance on the renewable energy tax credit, are hoped to spur development of energy projects around the country and are funded through the $787 billion recovery and stimulus bill that Congress passed earlier this year.

The departments estimate the program will distribute at least $3 billion in funds to roughly 5,000 bio-mass, solar, wind, and other types of renewable energy production facilities.

"As we move quickly to get our economy back on track and to repair the financial system, we must make investments that lay the foundation for a stronger economic future," Treasury Secretary Timothy Geithner said in a written statement. "Too many renewable energy projects have stalled due to a lack of financing."

He added, "The Recovery Act program will lead to investment in our long-term energy needs, move us towards energy independence, increase jobs at energy-specific businesses, and protect our environment."

Energy Secretary Steven Chu said the goal of the grants is to spur private investment in renewable energy projects, leveraging the federal funds to greater effect.

"This program will play a major role in encouraging private sector capital to invest in clean energy development, creating new jobs that can't be outsourced," he said. "It is an investment that will continue to help our economy grow and ensure advancement in clean and renewable energy development."

Although the tax credit has been widely used in the past, private financing for renewable energy projects had fallen off during the economic downturn and recession.

But both Treasury and Energy expect to see a rapid increase in applications for the payment in lieu of the tax credit, which will likely also provide a stimulus effect in local economies around the country.
The Treasury and Energy Departments announced Friday that they are now accepting applications for grants to boost renewable energy projects. The grants, which come in the form of a cash advance on the renewable energy tax credit, are hoped to spur development of energy projects around the country and are funded through the $787 billion recovery and stimulus bill that Congress passed earlier this year.

(RTTNews) - President Barack Obama said Friday's gross domestic product figures show that the $787 billion economic recovery and stimulus bill passed earlier this year is succeeding in slowing the nation's recession.

The economic figures released Friday showed that the GDP shrank by 1 percent in the second quarter of 2009, less than the 1.5 percent predicted by many economists.

"This morning, the GDP revealed that the recession we faced when I took office was even deeper than anyone thought at the time. It told us how close we were to the edge," Obama said. "But the GDP also revealed that in the last few months, the economy has done measurably better that we had thought -- better than expected."

The stimulus and recovery bill, along with other measures taken by the administration, Obama said, "have helped us put the brakes on the recession," pointing to efforts to help homeowners, spur lending for families and small businesses, tax cuts and extensions to unemployment benefits.

However, Obama noted that unemployment was still worse than had been initially projected.

"I realize that none of this is much comfort to those Americans who are still out of work and struggling to make ends meet," Obama said. "And when we receive our monthly jobs report next week, it's likely to show that we're still continuing to lose far too many jobs."

He added, "As far as I'm concerned, we won't have a recovery as long as we keep losing jobs. And I will not rest until every American who wants a job can find one."

But economic growth is an essential precursor to job creation, Obama said.

"Today's GDP is an important sign that the economy is headed in the right direction and that business investment, which had been plummeting in the last several months, is showing signs of stabilizing," he said. "This means that eventually, businesses will start growing and they'll start hiring again. And that's when it will truly feel like a recovery to the American people."

Obama urged the American people to have patience, saying that recovery may take "many more months." He also emphasized the need to transform the economy in to one of "robust growth" based on a trained workforce and clean energy.

"I will continue to work every single day and take every step that's necessary to make sure that happens," he said. "I also intend to make sure that we don't return to an economy where our growth is based on inflated profits and maxed-out credit cards -- because that doesn't create a lot of jobs."

Obama pointed to the "Cash for Clunkers" program, which offers tax credits to those who trade in old cars for newer, more fuel-efficient models, as an example of the approach the country needs to take.

The program has proved so popular and successful that the House voted Friday to add another $2 billion to the program to keep it from running out of money months before it was scheduled to be brought to a close.

"This gives consumers a break, reduces dangerous carbon pollution and our dependence on foreign oil, and strengthens the American auto industry," Obama said. "I'm happy to report that it has succeeded well beyond our expectations and all expectations, and we're already seeing a dramatic increase in showroom traffic at local car dealers."

He added, "I am guardedly optimistic about the direction that our economy is going. But we've got a lot more work to do. ? This administration will not rest until the movement that we're seeing on the business side starts translating into jobs for those people and their families."
President Barack Obama said Friday's gross domestic product figures show that the $787 billion economic recovery and stimulus bill passed earlier this year is succeeding in slowing the nation's recession. The economic figures released Friday showed that the GDP shrank by 1 percent in the second quarter of 2009, less than the 1.5 percent predicted by many economists.

(RTTNews) - After the first days of talks in the U.S.-China Strategic and Economic Dialogue, U.S. officials told reporters that initial sessions had gone well, but not to expect substantive agreements in this series.

David Loevinger, senior coordinator for China affairs at the Treasury Department, said that the economic track discussions had brought all of the senior ministers dealing with economic concerns from China to meet with their counterparts including Treasury Secretary Timothy Geithner, Federal Reserve Chairman Ben Bernanke, U.S. Trade Representative Ron Kirk and Larry Summers, head of President Obama's council of economic advisors.

Loevinger said that both sides had been struck by the similarity of their nations' responses to the global financial crisis.

"It's been very clear how the crisis has kind of highlighted and reinforced how interdependent our two economies are," he said. "The U.S. and China, in some ways, have acted more like each other than many of the other major economies. In particular, both the U.S. and China have put in place a very aggressive fiscal and monetary stimulus policies."

He added, "Both sides talked about the encouraging signs that they're seeing in both places. The stimulus policies are starting to take effect, but it was very clear that neither side was complacent at all."

Both U.S. and Chinese officials also agreed on the need for "structural reforms to rebalance their economies" Loevinger said, referring to U.S. efforts to shift to a clean energy economy and Chinese efforts to promote more domestic consumption to reduce their reliance on exports to the U.S.

Loevinger said the tone of the economic meetings was "very focused and serious," adding that White House Budget Director Peter Orszag had underscored to the Chinese the administration's commitment to bring fiscal deficits down to sustainable levels.

U.S. officials also stressed their support for China's efforts to be brought on to the boards of a broad range of global financial institutions that were created in a very different era, Loevinger said.

"Both sides I think agreed that these institutions need to be modernized to reflect the rise of China and other dynamic emerging economies," he said.

However, a senior State Department official said that while the talks were going well the goal of the meeting was more to set the stage for future action rather than make specific progress at this week's sessions.

"Very constructive, very candid discussion," he said. "This is our effort to identify and then pursue a broad range of common interests with the Chinese."

He added, "We're going to spend most of our time getting to know each other in this session, in this round. We're going to spend a lot of time trying to identify those common interests and between now and the next Strategic and Economic dialogue we're going to try and devise some concrete ways of going after those common interests."

Other discussions had impressed on the Chinese the importance that the U.S. places on global efforts to cut carbon dioxide emissions to fight global warming, said Todd Stern, a U.S. special envoy on climate change.

"I think that they do see this as an issue that is of very significant importance, as a substantive matter, but also in the U.S.-China bilateral relationship and increasingly something that's going to be important for the way that they are perceived by the rest of the world," he said. "I think that is sinking in at a very high level."

Stern said he was hopeful that through incremental progress the U.S. and China could reach some emissions deal in advance of an upcoming summit in Copenhagen, Denmark, based on the framework that industrialized nations would reduce their emissions below a certain, fixed level, while emerging nations' goals would be based on their projected increase of emissions should they not act.
After the first days of talks in the U.S.-China Strategic and Economic Dialogue, U.S. officials told reporters that initial sessions had gone well, but not to expect substantive agreements in this series. David Loevinger, senior coordinator for China affairs at the Treasury Department, said that the economic track discussions had brought all of the senior ministers dealing with economic concerns from China to meet with their counterparts including Treasury Secretary Timothy Geithner, Federal

(RTTNews) - New Zealand's trade deficit grew faster than expected in June.

Statistics New Zealand reported Tuesday that the country's trade balance for the month was NZ$417 million. The figure represented 13.1 percent of exports.

Most economists were forecasting a surplus of NZ$215 million, following an upwardly revised surplus of NZ$907 Million in May.

Exports for the month were valued at NZ$3.2 billion, a decrease of NZ$395 million or 11.0 percent from the month before.

Import values totaled NZ$3.6 billion, down NZ$192 million or 5.1 percent on month.

For the three month period through June, the trade balance was a deficit of NZ$217 million, representing 2.1 percent of exports.

Exports for the quarter were down 5.4 percent while imports were down 3.4 percent.

(RTTNews) - The Conference Board's Leading Economic Index for Australia declined in May, the first drop after three months of increases.

The board said its Leading Index declined 0.1 percent, thanks largely to lower building approvals and exports of rural goods.

The Leading Index now stands at 113.0.

The Coincident Index, which measures current economic activity, increased 0.3 percent, with a continued rise in retail trade boosting the figure.

The Coincident Index now stands at 112.4.

The Board said the rate of decline in the Leading index continued to slow in May, while the strengths among its components have grown more widespread.

(RTTNews) - The results of Albania's parliamentary elections announced Monday by State Election Commission indicated that Prime Minister Sali Berisha's Democratic Party and its coalition partners have won enough seats to form a government.

While the Democratic Party won 68 seats in the country's 140-seat parliament, their coalition partners Republican Party and the Party of Democratic Integration won one seat each. Meanwhile, the opposition Socialists and an ally manged to win only 66 seats.

Though the ruling alliance won enough seats in the general election to form a government, it fell one seat short of a majority. They made up the required numbers by forming an alliance with the Socialist Movement for Integration, a small leftist party that won four seats.

The newly formed alliance, the four-party coalition, consisting of the Democrats, Republican Party, the Party of Democratic Integration and Socialist Movement for Integration, now has secured 74 seats in the new parliament.

The announcement of the final results of the June 28 vote was stretched by a lengthy recount, prompted by opposition allegations that the elections were rigged to ensure victory for the ruling coalition. However, the Democrats have denied any wrongdoing.

In a preliminary report released earlier in the month, international election monitors had criticized the vote, stating that there were irregularities in the poll. They also alleged that political interference delayed the vote count. The monitors are due to submit a final report on the election and the counting process in eight weeks' time.

The election was considered a critical test to Albania's aspirations of joining the European Union. Experts say that the doubts regarding the conduct of the poll and the ballot counting process could seriously hurt Albania's EU accession ambitions.

(RTTNews) - Business confidence in Australia soared in the 2nd quarter to its highest levels since the start of the world economic crisis.

The latest National Australia Bank business confidence survey showed an index reading for Q2 of minus-four points, an improvement of 20 points from the previous quarter.

The accompanying business conditions index improved 11 points or minus 9.0 from the Q1 level of minus 20.

NAB economists said the readings showed "significant" improvement for both near and long term business operations. "Current expectations for the next 12 months are the lowest since mid 1991 and imply further deterioration in business outcomes and capital spending over the next year," they said.

NAB said its forecast for Australia's gross domestic product in 2009 remains unchanged at a contraction of 0.5 percent.

(RTTNews) - Tuesday, a report by the Bank of Korea said the manufacturers' confidence rose to 81 in July from 77 in the previous month. At the same time, the forecast for August climbed 2 points to 80.

Among the non-manufacturers, the confidence index remained unchanged at 76 in July from June. Moreover, the expectations for August also remained unchanged, at 78.

On a seasonally adjusted basis, the manufacturers' confidence improved by 8 points to 85 in July, while the non-manufacturers' confidence grew 2 points to 78.

Himalayan News Service

KATHMANDU: The gold market this week closed on Friday at Rs 23,920 per 10 gram — Rs 345 more than Sunday’s opening price of Rs 23,575 per 10 gram.
According to Nepal Gold and Silver Dealers’ Association (NEGOSIDA), the demand for gold in the international market is increasing rapidly and pushing up the gold price even in the domestic market. Gold per ounce in the international market on Sunday was $913, and which on Friday priced at $937 per ounce in the international market.
Gold opened at Rs 23,575 per 10 gram on Sunday and gained Rs 45 to reach Rs 23,620 on Monday. It remained at the same price on Tuesday. On Wednesday, it rose by Rs 85 to reach Rs 23,705 per 10 gram. Thursday saw another increase of Rs 105, with gold going up to Rs 23,835. The domestic market for gold closed at Rs 23,920 per 10 gram.
Meanwhile, silver opened at Rs 356 per 10 gram on Sunday. However, with a fall of Rs 6 it priced Rs 350. Silver continued to remain at the same price till Wednesday. A slight rise of Rs 3 was observed with silver being traded for Rs 353 per 10 gram on Thursday. Silver closed at Rs 353 per 10 gram on Friday.

International gold price rising?

COLORADO: Suddenly the pressure from China to change the world’s monetary order is pressing. At the G-8 China asked for the forum to debate proposals for a new global reserve currency! They were largely ignored! China’s rising presence in the global economy ($2 trillion reserves now) and the threatening weakness of the US dollar is prompting China to act in this way and with speed. Not only the Chinese but the French finance minister and Central Bank president called for greater currency stability and a system to avoid piling up currency reserves as we see with the dollar. It is clear that more countries are objecting to the debasement of the US dollar through Trade deficits and Quantitative Easing. In March, the People’s Bank of China (PBoC) governor, Zhou Xiaochuan’s proposed that the Special Drawing Right, a synthetic currency, (but one aimed at being a basket of the world’s most traded currencies) be used as an international reserve currency that’s delinked from sovereign nations. PBoC said, “the IMF should expand the functions of its unit of account, Special Drawing Rights.” — Agencies

By Brian Swint

July 19 (Bloomberg) -- The British economy will shrink 4.4 percent in 2009 before recovering in 2010, Ernst & Young’s Item Club will say tomorrow.

The forecast by the research group, which uses the same economic model as the U.K. Treasury, is worse than the 3.5 percent contraction predicted in April. Tomorrow it will also revise up the prediction for 2010 to show the economy expanding 0.5 percent instead of shrinking 0.1 percent.

U.K. gross domestic product plunged by the most in a half- century in the first quarter, prompting the central bank to cut interest rates to a record low and start buying assets with newly created money. Bank of England Deputy Governor Charles Bean said last week that the economy may return to quarterly growth by the end of this year.

“The economic patient has been in trauma, but thanks to the paramedics at the Treasury and the Bank of England, who pumped billions of pounds worth of medicine into the economy, the patient has been stabilized for now,” Item Club Chief Economic Adviser Peter Spencer will say in a statement. “But it remains unclear how quick and complete recovery will be and there is still a serious chance of a relapse.”

To contact the reporter on this story: Brian Swint in London at bswint@bloomberg.net.

Compared to some of its liquid counterparts, the euro saw relatively staid price action this past week. Fundamental traders can thank the market’s interest in earnings and burgeoning financial troubles which kept traders’ focus on those currencies with more blatant connections to risk appetite. However, the euro is certainly not immune to these underlying drivers; and we will likely see the euro crowd react to these influences more readily going forward.

Impressive rallies in the S&P 500 left the US Dollar lower against all major currencies except the Japanese Yen, but a relative sense of unease across financial markets highlights risks of a major USD bounce. US and European equity indices finished the week anywhere from 6-8.5 percent above their previous close—good for a 2000-3000% annualized rate of return. Early-week moves came on impressive earnings results from Wall Street titan Goldman Sachs and relatively benign economic data. It is easy to claim, however, that recent developments are unlikely to sustain such an impressive rate of returns. A relatively empty week of economic event risk ostensibly limits volatility expectation in the days ahead, but traders should keep a close watch on several key earnings reports and effects on the S&P 500 and US Dollar.

The US currency remains in a wide and choppy range against the Euro and other key currencies, and it may take a fairly significant shift in financial market risk sentiment to break the dollar from its trading channel. Had we known a week ago that the S&P 500 would break to fresh 30-day highs, we may have claimed that the EUR/USD would similarly break to fresh medium-term peaks. Yet forex markets clearly had other things in mind—constraining the heavily-traded currency pair to its two-month wedge formation. Consolidation patterns typically lead to noteworthy breakouts, but a continued downtrend in volatility expectations gives little reason to believe such a break will come in the week ahead. Indeed, the DailyFX 1-week currency volatility currently stands near 12-month lows.

The obvious question remains: What could break the US Dollar from its medium-term trading range? In short, there is no real way to know. Our natural suspicion is that it will take a substantial deterioration or improvement in financial market risk appetite to break the EURUSD below 1.3700 or above 1.4300. The rolling correlation between the EURUSD and US S&P 500 continues to trade near record-highs—emphasizing the US Dollar’s sensitivity to the key risk barometer. Equity markets remain similarly linked to the trajectory in commodity markets; the S&P – Reuters CRB Commodities Index correlation likewise trades near all-time highs. Increasingly clear connections across ostensibly unrelated asset classes underline the risk that a tumble in one will lead to sympathetic moves in another.

It remains critical to monitor the trajectory of key financial market health indicators and their effects on the US Dollar. As we continue to argue, noteworthy deterioration in financial market risk sentiment will likely be the spark to force major US Dollar rallies. Absent the correction, the Euro/US Dollar currency pair may continue to trade in a progressively narrower range.