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