Forex Trading :- Euro, Sterling Correction To Gather Pace On Increased Fears

Talking Points
Euro: ECB Holds Cautious Tone, Sees Risk Of Economic Contraction
British Pound: BoE Talks Up Speculation For More QE, Correction To Accelerate
U.S. Dollar: Benefits From Risk Aversion, Rebound To Gather Pace
Euro: ECB Holds Cautious Tone, Sees Risk Of Economic Contraction


The European Central Bank’s struck a cautious outlook in its monthly report and reiterated that the economic outlook remains tilted to the ‘downside’ as the region faces a slowing recovery. At the same time, ECB board member Jozef Makuch highlighted an increased risk of a double-dip recession, noting that the economy may contract over the medium-term should ‘downside risks materialize.


In addition, the EU warned that some commercial banks may need a 9 percent capital buffer to weather the ongoing turmoil within the financial markets, and we may see the ECB take additional steps to shore up the ailing economy as it aims to encourage a sustainable recovery. According to Credit Suisse overnight index swaps, market participants still see the Governing Council scaling back the benchmark interest rate from 1.50 percent over the next 12-months, and the committee may carry its easing cycle into the following year as the outlook for growth and inflation deteriorate. As the near-term rally in the EUR/USD tapers off ahead of the 61.8% Fibonacci retracement from the 2009 high to the 2010 low around 1.3880-1.3900, the pullback from 1.3832 may gather pace over the remainder of the week, and the single-currency is likely to face additional headwinds over the near-term as European policy makers struggle to restore investor confidence. In turn, the near-term forecast for the Euro remains bearish, and the euro-dollar may threaten the rebound from 1.3145 as the fundamental outlook for the region deteriorates.


British Pound: BoE Talks Up Speculation For More QE, Correction To Accelerate


The British Pound struggled to hold its ground on Thursday as the Bank of England talked up speculation for additional monetary support, and the sterling may trade heavy over the coming days as the central bank maintains a highly dovish outlook for future policy. BoE board member Charles Bean said the central bank may ‘undertake further purchases’ as the region faces an increased risk of falling back into a recession, and went onto say that the European debt crisis risks could ‘lead to a seizing up of the financial system’ according to an interview with the Guardian newspaper. As the MPC steps up its effort to shield the U.K. economy, we may see a growing argument to expand the asset purchase program beyond the GBP 275B target, and speculation for further easing is likely to weigh on the exchange rate as market participants weigh the outlook for monetary policy. In turn, the GBP/USD may trade heavy ahead of the BoE minutes on tap for the following week, but the exchange rate may give back the rebound from 1.5273 should the central bank keep the door open to expand policy further.


U.S. Dollar: Benefits From Risk Aversion, Rebound To Gather Pace


The greenback gained ground following the shift in market sentiment, and the reserve currency may continue recoup the losses from earlier this week as it benefits from safe-haven flows. As the U.S. stock market opens lower, we should see risk aversion gather pace throughout the North American trade, and risk trends are likely to heavily influence price action for the major currencies as the economic docket remains fairly light for Thursday. As global policy makers continue to cast a dour outlook for global growth, the shift away from risk-taking behavior should gather pace over the remainder of the week, and the greenback may resume the upward trend from the previous month as the fundamental outlook for the global economy deteriorates.

The Reserve Bank of India (RBI) has opposed the creation of a $20 billion sovereign wealth fund, for acquisition of energy assets overseas, out of foreign exchange reserves and wants the government to create the corpus for it from the Budget.

A Group of Ministers headed by Finance Minister Pranab Mukherjee on Thursday deliberated on the possible ways of creating a fund on the lines of ones that exist in countries like China.

“Various things were discussed but no view has emerged,” Oil Minister S. Jaipal Reddy said after the 75-minute meeting.

Sources privy to the deliberations said the RBI was against using the nation’s forex reserves for setting up the fund. So, the Planning Commission has been asked to work out surplus that may be generated after accounting for all Plan and non-Plan expenditure.

“What they are talking is $1-2 billion corpus which is hardly the size...for acquisitions of oil and gas fields or coal and other mineral mines,” a source said.

“We decided we will take a look at it after the (12th Five Year) Plan approach paper is approved,” Planning Commission Deputy Chairman Montek Singh Ahluwalia said.

Asked if RBI agreed for sharing a part of the over $300 billion forex reserves, he said: “Those are some of the issues. I mean one view is that it could be done through use of forex reserve. There are some operational problems there. The other view is that if you do it out of budgetary resources.”

He added, “...obviously if you use budgetary resources then you are taking from other use of plan fund. That’s what we have to look at.”

From - thehindu.com

Euro Weighed By Debt Fears, All Eyes on EFSF Vote

Fears surrounding the sovereign debt crisis resurfaced on Tuesday as European Central Bank President Jean-Claude Trichet held a cautious outlook for the region, and the shift away from risk-taking behavior may gather pace throughout the North American trade as European policy makers struggle to restore investor confidence. 
Talking Points
Euro: Greece To Receive Next Payment In November, All Eyes On Slovakia
British Pound: Halts Two-Day Rally, Sideways Price Action Ahead
Euro: Greece To Receive Next Payment In November, All Eyes On Slovakia
The Euro fell back from an overnight high of 1.3671 as European Central Bank President Jean-Claude Trichet talked up the risk for contagion and warned that the debt crisis has reached ‘systemic dimension.’ Moreover, Mr. Trichet encouraged the EU to act swiftly in recapitalizing the European banking system and stressed the importance of increasing the flexibility of the European Financial Stability Facility as the fundamental outlook for the euro-area turns increasingly bleak.
The EU, International Monetary Fund and the European Central Bank said Greece will receive its next bailout payment in early November after completing its fifth review of the economy, but warned that the 2011 fiscal target is no longer within reach, which will put increased pressures on the government to take additional budget-cutting measures in 2013-14. Nevertheless, all eyes are on Slovakia as lawmakers are scheduled to vote on broadening the powers of the EFSF, and the outcome is likely to sway market sentiment as European policy makers step up their efforts to address the debt crisis. However, it seems as though the EUR/USD has carved out a short-term top just below 1.3700, and the single-currency may consolidate over the near-term as market participants still see the ECB scaling back the benchmark interest rate from 1.50%. Bets for lower borrowing costs continues to dampen the outlook for the single-currency, and the euro-dollar may threaten the rebound from 1.3145 as the ongoing turmoil in Europe bears down on investor confidence.
British Pound: Halts Two-Day Rally, Sideways Price Action Ahead
The British Pound slipped to an overnight low of 1.5611 as market participants scaled back their appetite for risk, and the GBP/USD looks poised to face range-bound price action over the near-term as investors weigh the prospects for future policy. Indeed, the Bank of England stepped up its effort to shore up the ailing economy and increased its asset purchase program to GBP 275B, but the slowing recovery in the U.K. may lead the central bank to expand monetary policy further as the region faces an increased risk of a double-dip recession. With the BoE minutes on tap for the following week, it seems as though the pound-dollar will trend sideways over the coming days, and the slew of economic event risk scheduled for the rest of the week may lead the GBP/USD to give back the rebound from 1.5273 as the fundamental outlook for Britain deteriorates. In turn, the MPC may keep the door open to expand monetary policy further, and the central bank may carry its easing cycle into the following year in an effort to encourage a sustainable recovery.

GLOBAL FOREX: Euro Surges After German-French Summit

The promise of a comprehensive plan to stem Europe's debt turmoil helped propel the euro to its largest one-day surge against the dollar since July 2010 Monday, as investors anticipated that the global economy might escape the fallout of a potential default or restructuring by Greece.

Over the weekend, Germany and France pledged to present a "comprehensive package" of measures designed to buttress the euro zone's banking sector and fortify the Continent's bailout mechanism, the European Financial Stability Facility, by the end of October. Although details were scant from the Franco-German meeting, markets across the world leapt on expectations that the end of the long-running debt saga might finally be at hand.

As investors piled back into stocks and higher-returning currencies, safe-haven demand for the dollar evaporated and sent the euro on a surge of more than 3.5 cents on the day. That represented a stark turnabout from last week, when the euro tumbled to an eight month low at $1.3145.

"Euro selling has been pretty relentless since last week," said David Gilmore, partner and analyst at FX Analytics. He noted that gloom about Europe had become "extreme", so the bilateral French-German summit gave investors an opportunity to reduce bets the euro would fall further.

"Price over time can shape the narrative, so it all bears watching," he added. "If [the euro] gets back above $1.40 people won't be so pessimistic."

The single currency pared some of its gains after political wrangling in Slovakia heightened the possibility that the governing party may reject the EFSF. According to established rules, all 17 nations which use the euro must ratify the bailout fund.

Late Monday, the euro was at $1.3637 from $1.3380 late Friday, according to EBS via CQG. The dollar was at Y76.70 from Y76.76, while the euro was at Y104.60 from Y102.85. The U.K. pound was at $1.5671 from $1.5561. The dollar was at CHF0.9038 from CHF0.9271.

The ICE Dollar Index, which tracks the U.S. dollar against a basket of currencies, was at 77.567 from about 78.726. Meanwhile, the Australian dollar breached parity with the greenback for the first time since Sept. 22.

Risks to the market's budding optimism are still vulnerable to political realities in Europe. A European Union summit was postponed from Oct. 17-18 to the 23rd, underscoring how divisions among euro zone politicians are making it difficult to find a solution to what ails the Continent.

Analysts say that the longer the uncertainty persists, the more intense the risks are to a global economy already suffering from weaker growth and a near-incalculable overhang of debt. A default by Greece could echo across Europe's banking sector and the global economy. It also carries with it the possibility of sending the borrowing costs of Italy and Spain, the euro zone's third and fourth largest economies, soaring to unsustainable levels.

"For now, the markets are rallying on the belief that there is forward moment on dealing with the European bank crisis," said Andrew Busch, global foreign exchange strategist at BMO Capital Markets in Chicago. "To me, this is an exercise in placing funding sand bags around the global banks to ensure they are not flooded by the rising river level of a Greek default."

FOREX-Euro falls on caution before Slovak EFSF vote

 Slovak coalition remains split on EFSF vote


* But positioning may lead to further short squeeze


- The euro dipped on Tuesday on caution over a Slovak vote on changes to the euro zone's rescue fund but held in positive territory for the week as hopes for a solution to the debt crisis triggered a squeeze of short positions in the currency.


The Slovak ruling coalition remained split over a deal to broaden the EFSF and any delay in passing the legislation could dent sentiment towards the euro.


"The general view is 'by hook or by crook the Slovaks will get this deal through', though they may have to rely on the opposition to so," said ING currency strategist Tom Levinson.


Slovakia is the last of the euro zone's 17 members still to ratify changes to the 440-billion-euro European Financial Stability Facility.


The euro was down 0.3 percent on the day at $1.3600, but it stayed well above last week's low around $1.3145. It surged 2 percent on Monday for its biggest daily percentage gain in 15 months, hitting $1.3698.


Monday's rally followed a Franco-German pledge to do what was necessary to shore up banks, settle the Greek crisis and accelerate euro zone economic coordination.


This prompted investors to take profit on hefty short euro positions that had built up, and analysts said there was still scope for further short covering to lift the euro.


"At least for the moment the case to continue selling the euro has disappeared," said Richard Falkenhall, currency strategist at SEB in Stockholm.


SEB forecasts the euro at $1.38 within a month, but Falkenhall said gains would be gradual, with any rise likely to encounter some profit-taking.


Data from the U.S. Commodity Futures Trading Commission showed currency speculators increased their net short positions in the euro to 82,697 contracts in the week ended Oct. 4, the biggest in four months.


"The euro can go higher because short positioning is still extreme. Monday's rally only partially offset that position." said Manuel Oliveri, currency strategist at UBS in Zurich.


Traders cited decent bids for the euro from $1.3570 down to $1.3550, which could help cap its falls.


However, major resistance was seen at $1.3680-90, the 38.2 percent Fibonacci retracement of the $1.4550/$1.3145 move and the Sept. 28 high. Traders reported offers around $1.3670 and more ahead of a $1.3700 option barrier.


LASTING RALLY UNLIKELY


A lasting euro rally was seen unlikely, however, with uncertainty over EU policymakers' plans to recapitalise banks, in the face of expectations that Greece could default, keeping investors wary.


Risk-reversals, a measure of the premium required to hold bets on a currency falling or rising, showed investors still hedging against a weaker euro. The one-month 25-delta risk-reversal traded around 2.55 in favour of euro puts, compared to 2.80 at the end of last week.


Among growth-linked and perceived higher risk currencies, the Australian dollar fell 0.35 percent to $0.9951 , giving back some gains after climbing 2.4 percent on Monday, its biggest one-day rally since June 2010.


The Aussie faces stiff resistance at $1.0035 -- a 38.2 percent retracement of its slide from a $1.1081 high in late July to a $0.9388 low plumbed in early October.


The U.S. dollar was down 0.7 percent against the Swiss franc to 0.9097 francs after falling more than 2 percent on Monday when the U.S. currency came under heavy selling pressure as equity markets rose and appetite for risk improved.


Against the yen, the dollar held steady at 76.63 yen , not far from a record low around 75.94 struck in August.

FOREX DROP :- FOREX-Euro drops versus dollar as debt worries persist

* Geithner urges end to loose talk about euro break-up

* Bank of Portugal cites unreported debts at Madeira

* Funding strains ease after central banks move (Updates prices)

NEW YORK, Sept 16 (Reuters) - The euro dropped on Friday, hurt by a spate of negative news out of Europe ranging from the German chancellor's rejection of a euro zone bond to unexpectedly low private participation in Greece's debt program.

Analysts, however, were unsure as to where the euro is headed going into next week, seeing vulnerability in both directions.

The weak trend could persist, some said, as no new policy initiatives to deal with the euro zone debt crisis came out of the European Union Finance Ministers' meeting on Friday.

On the other hand, other analysts said, it seemed all efforts are being undertaken by individual euro zone governments to ease the region's fiscal problems. The euro, they argued, could stabilize next week and trade above the seven-month lows beneath $1.35 hit on Monday.

"The market probably senses that even though there is no comprehensive solution in the immediate offing, the risks that had been factored in at the beginning of the week have not been prevalent," said Bob Lynch, head of G10 FX strategy at HSBC in New York.

Shares in BNP Paribas (BNPP.PA) and Credit Agricole (CAGR.PA) slumped on Friday, with traders citing talk that ratings agency Moody's could downgrade Italy after the market close on Friday. BNP Paribas and Credit Agricole are the two French banks most exposed to Italy.

The euro was last down 0.7 percent at $1.37851 EUR=EBS, off a one-week peak of $1.39370 hit on Thursday but held above a seven-month trough below $1.35 plumbed on Monday. The euro has gained around 1.6 percent so far this week, its best weekly performance since the week of July 24 on trading platform EBS.

It fell to a session low of $1.37530, with traders saying it extended losses after stop-loss orders were triggered on the break of $1.37700, with more stops at $1.37500.

German Chancellor Angela Merkel's reiteration on Friday of her objection to the introduction of euro bonds, and an unexpectedly low 75 percent participation in Greece's debt initiative, below the 90 percent target, added pressure to the euro. [ID:nB4E7K901L] [ID:nWEA4691].

U.S. Treasury Secretary Timothy Geithner is taking part told EU finance ministers on Friday they should end loose talk about a euro zone break-up and work more closely with the European Central Bank to tackle the debt crisis. [ID:nL3E7KG0KC]

The euro had hit a one-week high after a coordinated move by central banks on Thursday to provide dollars. Funding strains, evident through the cross currency basis swap market, which had hit some euro zone banks, appeared to be easing.

The three-month euro/dollar cross currency basis swap EURCBS3M=ICAP, or the relative premium for swapping euro LIBOR for dollar LIBOR, tightened to minus 88 basis points on Friday, a day after the central banks acted. It narrowed from as wide as minus 115 basis points on Monday.

FED MEETING AHEAD

While investors remain wary of the euro, they are also reluctant to take long positions in the dollar ahead of a Federal Reserve meeting next week, where policymakers may flag another round of quantitative easing to boost the economy.

That move should weigh on the dollar and help riskier assets rally, although analysts said some market players thought "Operation Twist" was the more likely outcome.

In such a scenario the Fed would buy longer-dated Treasury bonds and sell shorter-dated ones to keep rates at the longer end lower without expanding the balance sheet.

The ICE Futures' dollar index was last up 0.5 percent at 76.633 .DXY. Against the yen, the dollar was up 0.2 percent at 76.870 yen JPY=EBS. The threat of Japanese intervention has helped keep dollar/yen in a tight range and above its all-time low of 75.94 yen. (Reporting by Gertrude Chavez-Dreyfuss and Wanfeng Zhou; Editing by Chizu Nomiyama )

SOURS :- reuters.com

I WORLD FOREX NEWS :- Euro Falls On Lack Of Greek Resolution

The euro fell Friday, after a closely-watched European Union finance ministers meeting failed to produce an agreement on how to resolve the Continent's intensifying debt woes.

A meeting in Wroclaw, Poland, between euro zone finance officials exposed the deep divisions that have characterized efforts to prevent Greece's financial issues from reverberating across the world economy. With investors seeking resolution to the long-running saga, ministers postponed until next month a decision to release more money to the cash-strapped Hellenic republic.

Despite a surprise move Thursday by five major central banks to flood European banks with dollars, markets are still unconvinced that the financial distress battering markets will be alleviated anytime soon. In addition, all euro zone parliaments must ratify a move to increase the size of the European Financial Stability Fund, and the outcome is far from guaranteed.

"Greece has a substantial problem, perhaps an insoluble one," said David Feldman, President and co-chief investment officer at investment firm Palladiem Partners, L.P. "I don't see an easy exit for them."

The lack of a permanent solution means the probability of a disorderly default are "uncomfortably close to 50/50," he added. That would heap further pressure on the euro, which just this week sank to a near seven-month low below $1.35.

Late Friday, the euro was at $1.3802 from $1.3875 late Thursday, according to EBS via CQG. The dollar was at Y76.82 from Y76.70, while the euro was at Y105.91 from Y106.45. The U.K. pound was at $1.5788 from $1.5804. The 0.8763 from CHF0.8693.

The ICE Dollar Index, which tracks the U.S. dollar against a basket of currencies, was at 76.552 from about 76.277.

U.S. Treasury Secretary Timothy Geithner attended the EU meeting Friday. He called on euro zone nations to overcome damaging divisions and remove "catastrophic risk" from markets.

EU finance chiefs did agree on a compromise to increase economic governance and prevent another crisis. However, they failed to give investors any clarity on the current crisis menacing Greece and threatening Italy and Spain.

Italy--the euro zone's third largest economy--just passed a package of austerity measures designed to prevent investors from punishing its sovereign debt in the same manner of Greece, Ireland and Portugal. But analysts are nervously awaiting an imminent decision from Moody's Investors Service on whether Italy will suffer a downgrade of its sovereign credit rating.

"Italy is not Greece," said Steve Wyatt, finance chair of the Farmer School of Management at Miami University. But with its heavy debt and sluggish growth, "there's a real worry of infection into a place like Italy, which???has to get its fiscal house in order and needs breathing room."
SOURS :- http://online.wsj.com

I FOREX NEWS :- US Dollar ends week lower

 Greenback finished the week mostly lower in the market with moderate losses weakened by risk appetite and by the announcement of major central banks. The Aussie and the Pound were also among the worst performs.

The US Dollar started the week on a strong note, rising sharply to fresh monthly highs but it bounced sharply and turned to the downside, falling in the next days. The EUR/USD bottomed at 1.3497 on Monday, jumped to 1.3935 on Thursday and finished the week around 1.3780/90.

The GBP/USD moved all week in a small range of less than 200 pips and finished the week just 50 pips below the price it opened Monday’s Asian session. “The pair finished the week lower after the latest jobs report which braded ‘unwelcome’ by the Employment Minister Chris Grayling prompted market participants to speculate over the potential need for an additional monetary policy easing by the BoE; in addition to that, BoE's Weale said that risk of recession increased since July and that growth prospects have worsened in the last few weeks,” the Talking-Forex.com analysis team affirmed.


The USD/CHF ended slightly lower while USD/JPY failed to hold above 77.00 despite risk appetite and fell back below 77.00. The Aussie and the Kiwi posted gains versus the US Dollar and the Aussie finished with small losses.
SOURS :- FXstreet.com

FOREX TRADE NEWS :- Forex - GBP/USD up in Asian trade

The British Pound was higher against the U.S. Dollar on Friday.

GBP/USD was trading at 1.5810, up 0.06% at time of writing.

The pair was likely to find support at 1.5707, Wednesday's low, and resistance at 1.5885, Monday's high.

Meanwhile, the British Pound was up against the Euro and the Japanese Yen, with EUR/GBP shedding 0.10% to hit 0.8773 and GBP/JPY rising 0.14% to hit 121.37.


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SOURS :- MONYCONTROl

FOREX NEWS :- Euro steady on move by central banks, EU meet eyed

* Euro clings to gains, though vulnerable to mood swings

* EU meeting to focus on leveraging bailout fund

* Closure of Goldman fund behind recent Aussie falls -traders

By Cecile Lefort and Antoni Slodkowski

SYDNEY/TOKYO, Sept 16 (Reuters) - The euro clung to gains on Friday, boosted by coordinated action from key central banks to add liquidity to the European banking system, though the rally is unlikely to last as the Greek debt crisis remains in a critical state.

Investors were reluctant to make heavy bets ahead of a meeting of EU finance ministers in Poland which U.S. Treasury Secretary Timothy Geithner will also join. Discussions are expected to focus on leveraging the euro zone's bailout fund to make it more effective in fighting the debt crisis.

The euro last changed hands at $1.3861 , off a one-week peak of $1.3937 hit on Thursday, but also well off a seven-month trough below $1.35 plumbed on Monday. The common currency has bounced some 2 percent so far this week.

"If we again only hear some verbal reassurances about Greek problems and no concrete action, that'd surely be the end of the rally in the euro," said Sumino Kamei, senior currency analyst at Bank of Tokyo-Mitsubishi UFJ.

Technical analysts also said that despite hovering near technical indicators showing that the euro is oversold in the short-term, it is vulnerable to further falls.

"Valuation-driven retracements to resistance at 1.4014 and 1.4263 are expected to attract renewed selling interest for a test of the next support level at 1.3428. A daily close below here would then expose 1.3246, with a close above 1.4484 required to nullify our bearish view," George E. Davis, an analyst at RBC Capital Markets, wrote in a note to clients.

The rally followed an announcement that the European Central Bank will liaise with the U.S. Federal Reserve, the Bank of England, the Bank of Japan and the Swiss National Bank to provide three-month dollar loans to banks to prevent the money market from freezing up.

That lifted bank stocks, metal prices and commodity currencies, while safe-haven U.S Treasuries pulled back.

Euro zone banks have faced dollar funding strains in recent months on mounting fears Greece will default on its debt, hitting institutions that have large exposure to the nation.

"Obviously it's not a long-term solution, we need to see some resolution to the sovereign debt issue to give markets confidence that we'll have stronger growth over the medium-term," said Spiros Papadopoulos, a senior market economist at National Australia Bank.

"Certainly these policy measures will help improve confidence in the short-term," he added.

For now, support for the euro is seen at $1.3704, while major resistance is at $1.3937 and a break above would target $1.3975/$1.4000.

WELCOME FILLIP

The Australian dollar , received a welcomed fillip after the central banks' move and gained more than one cent to last trade at $1.0336, off an overnight trough of $1.0183.

It has been under pressure this week following heavy liquidation by foreign funds of long positions in Asian currencies on growing fears another global credit crunch may be looming.

Asian traders linked falls in the Aussie to the liquidation by Goldman Sachs of its roughly $1.6 billion Global Alpha fund and some expected that owing to its size, it could still put more pressure on the currency. The fund will be closed in the next few weeks.

"It's perfectly believable that they have been taking profits on whatever outperforming Asian assets they held, after massive losses sustained earlier by the fund," said a trader for a Japanese bank.

Global Alpha had tumbled 13 percent by early September, delivering a far worse performance than other hedge funds that rely on computer programs.

There is speculation that the Swiss franc's sharp fall after the SNB imposed a ceiling for the franc against the euro might have triggered the massive losses.

The dollar index gained 0.15 percent to 76.36. Against the yen, the dollar remained stuck at 76.75 yen .

The markets brushed off weak U.S. data showing higher-than-expected inflation and jobless claims, reinforcing views that the Federal Reserve will offer only modest stimulus measures.

The U.S. economy barely grew in the first half of this year, making it vulnerable to an escalation in Europe's debt crisis.

sours  :- reuters.com

I FOREX NEWS :- Dollar Broadly Lower After EBC Announcement, U.S. Data

 The U.S. dollar was broadly lower against its major counterparts on Thursday, after the European Central Bank announced that it was launching a coordinated action to offset liquidity shortages at European banks and following the release of a slew of broadly worse-than-expected U.S. data.

During U.S. morning trade, the greenback was lower against the euro, with EUR/USD advancing 0.77% to hit 1.3859.

The ECB announced that it “has decided, in coordination with the Federal Reserve, the Bank of England, the Bank of Japan and the Swiss National Bank, to conduct three U.S. dollar liquidity-providing operations with a maturity of approximately three months covering the end of the year.”

The announcement eased concerns over funding shortages among European lenders, who have been finding it difficult to borrow dollars as a result of the region’s debt crisis and have had to depend more heavily on the ECB for loans.

The greenback was also lower against the pound, with GBP/USD adding 0.40% to hit 1.5832.

Earlier Thursday, official data showed that retail sales in the U.K. declined in line with expectations in August, slipping 0.2%.

Meanwhile, the greenback was higher against the yen but was down sharply against the Swiss franc, with USD/JPY easing up 0.14% to hit 76.73 and USD/CHF tumbling 0.78% to hit 0.8692.

The Swiss National Bank left its benchmark interest rate unchanged at zero for September earlier in the day and reiterated its commitment to defend the minimum exchange rate of 1.20 per euro” with utmost determination.”

The greenback was also lower against its Canadian, Australian and New Zealand cousins, with USD/CAD shedding 0.28% to hit 0.9866, AUD/USD inching up 0.04% to hit 1.0286 and NZD/USD easing up 0.08% to hit 0.8239.

Earlier in the day, the Reserve Bank of New Zealand left its benchmark interest rate unchanged at 2.5% and indicated that rates are likely remain on hold in the coming months, amid risks that the global recovery could slow “sharply.”

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.55% to hit 76.96.

The U.S. Department of Labor said earlier that the number of individuals filing for initial jobless benefits rose by 11,000 to a seasonally adjusted 428,000 last week, confounding expectations for a decline to 410,000.

Meanwhile, government data showed that U.S. core consumer price inflation rose in line with expectations August, rising 0.02%, while consumer prices including food and energy costs rose 0.4%, above expectations for a 0.2% gain.

Also Thursday, official data showed that manufacturing activity in the Philadelphia region improved less-than-expected in September, remaining in negative territory for the second consecutive month, while an index of manufacturing conditions in New York fell unexpectedly.

sours :- daily marketers 

I FOREX NEWS :- RBI relaxes forex norms for individuals

To further liberalise norms on foreign exchange transactions, the Reserve Bank of India (RBI) on Thursday announced a number of relaxations pertaining to individuals.

The central bank raised the limit of the value of securities to be transferred as gift to a non-resident Indian (NRI) to the rupee equivalent of $50,000 per financial year from $25,000 per calendar year earlier.The other changes include allowing individual residents in India to include a non-resident close relative as a joint holder in their resident bank accounts on the ‘former or survivor’ basis. However, such joint holders will not be eligible to operate the account during the lifetime of the Indian resident account holder, said RBI in a notification.
NRIs have also been permitted to open accounts with their resident close relative on the ‘former or survivor’ basis where the close relative will be eligible to operate the account as a Power of Attorney holder during the life time of the NRI/PIO account holder.

The above norms will be applicable in exchange earners’ foreign currency account, resident foreign currency account, non-resident (external) rupee account, foreign currency (non-resident) account (banks) and savings bank account.
sours :- bs