General World Currency News (archive)


World markets stumble to end of brutal quarterAFP

NEW YORK, Sep 30, 2011 (AFP) - World stock markets ended one of the most brutal quarters in years Friday, with bourses in New York and Europe seeing sell-offs to match the 2008 crisis and the bubble.

The New York Stock Exchange stumbled to the end of its worst three-months since the depths of the financial crisis exactly three years ago, while markets in Italy, Germany and France lost a quarter of their value.

The Dow Jones Industrial Average closed the quarter down 12 percent from the start of July as fears of another global slowdown dogged markets.

Compared with sister markets, traders in New York got off lightly.

In Europe where debt worries have plagued several countries and called the future of the eurozone into question, the sell-off was even more pronounced.

In the last three months Italy's main stock exchange has lost 27 percent of its value, while Frankfurt's DAX and Paris' CAC-40 have each lost 25 percent.

In Madrid losses were limited to 18 percent and on London's FTSE to just under 14 percent.

"We're closing the week, the month and the quarter on a very, very negative note and on heightened volatility," said Peter Cardillo of Rockwell Global Capital.

"It's been an ugly quarter. We had some good economic news but nevertheless it's still a continuing fear factor."

The final downward push on Friday came from news of rising inflation in Europe and declining purchasing power for Americans.

The US Commerce Department data that pointed to weakening consumer power as incomes fell by 0.1 percent in August, the first decline in nearly two years, even as prices for goods picked up.

"It seems very unlikely that consumers can lead the economy to a faster recovery pace," economists John Ryding and Conrad DeQuadros of RDQ Economics told clients in a briefing note.

Meanwhile there was unexpected news of sharply rising inflation across the eurozone, creating a dilemma for European Central Bank chief Jean-Claude Trichet who chairs his final policy meeting next week.

Trichet must now make a difficult call on whether to reduce interest rates to face a weak economy despite rising prices.

With firm hopes by investors that major central banks ease monetary policy in an effort to rekindle growth, inflation creeping up in the eurozone is sure to disappoint as it probably makes a rate cut from the ECB less likely.

In Asia, the Hong Sen Index plummeted 21.5 percent in the quarter, while key Shanghai, Bombay, Australia and Japanese indices all slid in the 11-14.5 percent range.

Throughout the last quarter Europe's sovereign debt crisis loomed over investors, and Friday was no different.

In Athens EU-IMF auditors played cat-and-mouse with protestors just as Greek Prime Minister George Papandreou in Paris gained assurances from President Nicolas Sarkozy of France's commitment to Greece, one day after German deputies agreed to boost the bloc's bailout fund.

France's own banks are critically exposed to sovereign debt from Greece and other weak links in the eurozone chain -- Italy, Spain and Portugal.

Fears on French and European banks have underscored major market falls.

"It's been one hell of a third quarter and the excitement of recent weeks is likely to continue over the next three months," said Kathleen Brooks, analyst at trading group

"We end the quarter no closer to a long-term solution to the European sovereign debt crisis ... and the global economic outlook is still a confusing picture.

"The euro is looking weak ... and stocks, which have had their worst quarter since 2008, look fragile. Will there be another leg lower for risk, or will Germany save the eurozone and cause a huge relief rally?" she said.

"These are the questions we grapple with as we enter the last three months of the year."



IMF: Sept 2011; Global Financial Stability Report

Posted: September 14, 2011 by THE CURRENCY NEWSHOUND - Just Hopin in Iraqi Dinar/Politics
Tags: , , , , , , ,

Global Financial Stability Report
Grappling with Crisis Legacies
September 2011
©2011 International Monetary Fund

Link to PDF report


Operationalizing macroprudential policies requires progress on a number of fronts: developing
ways to monitor a risk buildup, choosing indicators to detect when risks are about to materialize, and designing and using macroprudential policy tools. Establishing these robust frameworks will be a lengthy process. Using a structural model and empirical evidence, the following analysis takes a solid step forward on each of the interrelated tasks.

Detecting both the slow buildup and the sudden materialization in systemic risk is the key to implementing
good macroprudential policies. These two phases require two different sets of indicators. Slow-moving leading
indicators signal risks are building up in the financial system and propagating to the real economy through
financial intermediaries. High-frequency market-based indicators predict an imminent unwinding of systemic
risk and potentially provide information on the extent of interconnectedness of financial institutions and its
possible consequences.

This chapter uses a structural model with financial and real sector linkages to help policymakers understand the underpinnings of a systemic risk buildup. Empirical exercises further test the capabilities of indicators to predict financial crises and alert policymakers to the need for action. After identifying the buildup in systemic risk, policymakers will inevitably want to consider policies best suited to address the problem. The chapter illustrates how a countercyclical capital requirement would operate—with the accumulation of capital when risks are building and a drawdown of this capital buffer when high-frequency indicators are flashing an imminent crisis—as well as how it can be successful in cushioning the economy’s real output during a crisis.

The chapter provides a few practical guidelines for operationalizing macroprudential policies.
• Movements in indicators for systemic risk buildup vary with the underlying root causes. Distinguishing
“good” shocks (such as expected productivity gains) from “bad” shocks (asset price bubbles and lax lending standards) is important if policymakers are to avoid using macroprudential policies to squash healthy
economic growth inappropriately.
• Credit growth and asset price growth together form powerful signals of systemic risk buildup as early as two
to four years in advance of crises. Other variables can also help.
• Initial comparative analyses of high-frequency indicators suggest that those using a combination of the
LIBOR-OIS spread and the yield curve could signal an imminent crisis and put policymakers on alert to
execute contingency plans.
• Macroprudential policy tools can be used across countries with different economic characteristics as long as
policymakers understand the source of shocks. However, tools need to be calibrated more conservatively for
managed exchange rate regimes that feature widespread lending denominated in foreign currencies because
these characteristics tend to amplify the transmission mechanism of any shock.
• Macroprudential and monetary policymakers need to coordinate in at least two areas: understanding the
basic source of shocks and their policies in managed exchange rate regimes with widespread foreign currency lending

South Korea watches the currency market closely...

S. Korea closely watches currency market situations: finance ministry
SEOUL, Sept. 15 (Yonhap) -- South Korea is closely watching currency market conditions as volatility increases amid growing concerns over fiscal woes in Europe, a senior finance ministry official said Thursday.

   "In any direction, excessive fluctuations in the currency exchange rates are not desirable," Eun Sung-soo, head of the finance ministry's international financial bureau, told reporters. "We are now closely watching the market situations."

   The remarks come as the nation's financial market has been suffering turbulent trading recently. Volatility is deepening over growing concerns over the fiscal debt crisis unfolding in some European countries.

   The local currency closed at 1,116.4 won against the dollar, down 8.6 won from the previous day. It fell to as low as around 1,120 won in intra-day trading but gained back some ground following the verbal intervention, the first of its kind in 17 months.

   On Wednesday, the currency plunged more than 30 won from Friday's close on the news that Moody's Investors Service cut its credit ratings on two major French banks, citing their exposure to Greece struggling with deepening credit default woes.

   Finance Minister Bahk Jae-wan earlier said that there is no reason to panic on the increased volatility given the nation's fiscal health, short-term borrowings and the overall financial situations.


Bill Ackman Bets Hong Kong Will Let City’s Currency Appreciate

September 15, 2011, 3:35 AM EDT

More From Businessweek

By Katherine Burton and Fion Li

(Adds Hong Kong Monetary Authority’s response in fourth paragraph.)

Sept. 15 (Bloomberg) -- William Ackman, founder of hedge fund Pershing Square Capital Management LP, said he’s placed a wager that would profit if Hong Kong allows its currency to appreciate against the dollar.

Ackman is buying Hong Kong dollar call options, which give investors the right to buy the currency at a set price by a specific date, because they are inexpensive, he said. The easiest way for the authorities to allow the currency to appreciate would be to change the peg to HK$6 versus per U.S. dollar, a 30 percent gain, and then link to the yuan over three to six years, he said.

“It’s a small trade, but if it’s successful, it will be our most profitable,” said Ackman, speaking at an investor conference yesterday in New York organized by CNBC and Institutional Investor.

The Hong Kong dollar has been kept at about HK$7.80 versus the greenback since 1983, causing it to weaken 7 percent against the Chinese yuan in the past two years, fueling inflation and a surge in property prices. The Hong Kong Monetary Authority “has no plan or intention to change the system as it continues to serve Hong Kong well,” the de facto central bank said in an e- mail reply to questions from Bloomberg News today.

Given the small and externally oriented nature of the Hong Kong economy, maintaining exchange-rate stability remains appropriate for the city, the Hong Kong Monetary Authority said in an earlier reply on Sept. 6.

Implied Volatility

The implied volatility on two-year options for the exchange rate between U.S. and Hong Kong dollars has jumped to 3.6 percent from 1.7 percent at the start of the year, according to data compiled by Bloomberg. Implied volatility, which traders quote and use to set option prices, signals the expected pace of swings in an underlying currency.

Implied volatility on two-year options for the exchange rate between U.S. and the yuan rose to 7.37 percent from 5.25 percent at the beginning of the year, Bloomberg data show.

The fixed exchange rate means Hong Kong monetary policy is largely dictated by the U.S., where a 9.2 percent jobless rate and housing slump have led the Federal Reserve to favor near- zero interest rates and asset purchases to prop up the economy. Hong Kong’s 3.5 percent unemployment rate is near the lowest level since 2008, and real-estate values climbed in each of the last 10 quarters, jumping 75 percent in that time. Inflation was 7.9 percent last month, the fastest pace since 1995.

Interest Rates

Some economists and bankers agree that Hong Kong can’t sustain the current peg with the U.S. dollar. In January, Hong Kong lawmakers Chim Pui Chung and Lam Tai Fai urged a review of the peg. HSBC Holdings Plc chief executive Stuart Gulliver and his counterpart at the Bank of East Asia Ltd., David Li, said last month that any shift by Hong Kong could be to a link with a basket of currencies.

“The inflation print in Hong Kong remains quite high and the low-interest rate policy isn’t appropriate,” said David Dimmock, director of fixed income and currencies at Societe Generale SA in Hong Kong. “However, with slowdown in growth and more uncertainty in the global environment, it’s difficult to see the HKMA will take the risky move to change the policy until things settle down.”

Chinese officials told European Union business executives that the yuan will achieve “full convertibility” by 2015, EU Chamber of Commerce in China President Davide Cucino said on Sept. 7. Inability to exchange the currency freely prevents it from being used in reserves or in a linked exchange-rate system.

“Pegging the Hong Kong dollar to the yuan is only possible when the Chinese currency is convertible, which will likely be in at least 2015,” said Tommy Ong, senior vice-president of treasury and markets at DBS Bank (Hong Kong) Ltd. “Linking to an appreciating currency like the yuan could harm Hong Kong’s exports. It’s not something Hong Kong wants to see given the gloomy economic outlook.”

Ackman, 45, has been hinting at a new trade since an Aug. 17 investor letter, in which he wrote about “an attractive standalone investment and one that offers significant hedging benefits for our portfolio. For a modest amount of capital commitment, this investment offers the potential for extraordinary profits.”

--Editors: Christian Baumgaertel, Ven Ram

To contact the reporters on this story: Katherine Burton in New York at; Fion Li in Hong Kong at

To contact the editor responsible for this story: Christian Baumgaertel at

09 Sep 2011

Gold hits record high as recession fears bite

LONDON, Sep 09, 2011 (AFP) - Gold prices hit fresh record highs this week during a roller-coaster week for commodities, as investors tracked growing expectations that the global economy was heading towards fresh recession.

Prices took a knock on Friday along with stock markets, in part owing to scepticism over a plan to boost jobs in the United States, traders said.

"Macroeconomic data and associated sentiment held sway over the trajectory of commodity prices this week and sensitivity to the macro picture remains acute," said Barclays Capital analyst Sudakshina Unnikrishnan.

The eurozone debt crisis threatens to create pockets of recession and a great degree of uncertainty, a gloomy OECD report said on Thursday.

PRECIOUS METALS: Gold, seen as a safe bet in times of economic uncertainty, jumped on Tuesday to a record high price of $1,921.15 an ounce on the London Bullion Market but fell over the week as profit-taking set in.

The precious metal's status as a safe haven was meanwhile set to strengthen after Switzerland this week shocked markets by weakening its currency.

The Swiss National Bank on Tuesday placed a floor on the euro's value against a surging Swiss franc, which like gold is seen as a traditional safe bet among investors.

"This surprise move from the SNB is gold beneficial in the long run," said Andrey Kryuchenkov, a commodities analyst at Russian financial group VTB Capital.

"And, assuming that risk aversion escalates from here, bullion is still your investor darling."

The SNB set a minimum exchange rate of 1.20 francs per euro, saying the current value of the Swiss currency was a threat to the economy.

The Swiss franc has risen strongly in response to the eurozone debt crisis, hitting Swiss exporters and the tourism industry hard.

Gold meanwhile has set a series of record highs over the past few months.

"Longer-term, this SNB decision should strengthen gold's claim as a safe-haven asset and will likely be much in demand for wealth preservation," said Credit Agricole analyst Robin Bhar. Gold is also a good hedge against inflation.

By late Friday on the London Bullion Market, gold fell to $1,851 an ounce from $1,875.25 the previous week.

Silver dipped to $41.40 an ounce from $42.06.

On the London Platinum and Palladium Market, platinum retreated to $1,842 an ounce from $1,873.

Palladium decreased to $748 an ounce from $785.

OIL: Crude futures retreated as the dollar rose against the euro and as traders gave a lukewarm response to President Barack Obama's plan to fuel jobs growth in the United States -- the world's biggest oil consumer.

The European single currency dropped under $1.37 on Friday for the first time since February as concerns grow over the eurozone debt crisis.

A stronger greenback makes dollar-denominated commodities like oil more expensive for buyers holding rival currencies, denting demand for the raw materials and pushing down prices.

Across the Atlantic, Obama on Thursday proposed a $447 billion plan to revive the US economy, which includes cutting payroll taxes for employees and businesses, spending billions fixing roads and bridges and extending and revamping unemployment benefits.

Oil prices closed lower on Thursday ahead of Obama's jobs speech and despite data showing a drop in US crude inventories of four million barrels last week.

The drawdown was not caused by strong demand from US consumers, analysts said, attributing it instead to a temporary disruption of oil production in the Gulf of Mexico caused by Tropical Storm Lee.

"We had an oil inventories report showing crude oil supply in the US actually falling more than expected, and that has provided some support to prevent oil from falling further," said Victor Shum, an analyst at Purvin and Gertz energy consultancy in Singapore.

By late Friday on London's Intercontinental Exchange, Brent North Sea crude for delivery in October slipped to $112.19 a barrel from $113.23 a week earlier.

On the New York Mercantile Exchange, West Texas Intermediate (WTI) or light sweet crude for October, fell to $86.66 a barrel from $87.06 a week earlier.

BASE METALS: Base metals were mixed as traders reacted to macro-economic developments.

"Metals were under pressure as the stronger dollar and lingering concern about the European debt situation continued to weigh on the markets," said MF Global analyst Edward Meir.

"Threats of (mining) strikes kept the losses in copper somewhat in check, but could not dispel the selling entirely," he added.

By late Friday on the London Metal Exchange (LME), copper for delivery in three months dipped to $8,883 a tonne from $9,025 the previous week.

Three-month aluminium decreased to $2,375 a tonne from $2,427.

Three-month lead declined to $2,443 a tonne from $2,478.

Three-month tin increased to $23,900 a tonne from $23,870.

Three-month zinc grew to $2,196 a tonne from $2,182.

Three-month nickel advanced to $21,450 a tonne from $21,348.

COCOA: Prices headed south owing to high supplies of the commodity used to make chocolate.

"Ideal growing conditions have seen strong production from key West African producer states, with a robust crop emerging not just in the Ivory Coast but in neighbouring Ghana as well," said Barclays Capital analyst Sudakshina Unnikrishnan.

By Friday on LIFFE, London's futures exchange, cocoa for delivery in December fell to A£1,862 a tonne from A£1,955 the previous week.

In New York on the NYBOT-ICE, cocoa for December dropped to $2,905 a tonne from $3,094.

SUGAR: Sugar rebounded despite the prospect of high supplies.

"We reiterate our bullish view on sugar in 2011/12 despite the possibility of a surplus in the market," said Standard Chartered analyst Abah Ofon.

"We argue that the surplus (output less consumption) will do little to boost global end-of-season stocks, which have not recovered since the drawdown that followed two consecutive seasons of poor harvests in India," he added.

By Friday on NYBOT-ICE, the price of unrefined sugar for delivery in October gained to 29.19 US cents a pound from 28.95 cents the previous week.

On LIFFE, the price of a tonne of white sugar for October grew to A£767 from A£752.30 the previous week.

COFFEE: Coffee prices retreated in New York on profit-taking, a week after reaching the highest level since May on stretched global supplies.

By Friday on NYBOT-ICE, Arabica for delivery in December fell to 279 US cents a pound from 288 US cents the previous week.

On LIFFE, Robusta for November declined to $2,179 a tonne after $2,274 a tonne.


06 Sep 2011


Value of Iran's gold reserves triples: CBI Tehran Times

TEHRAN - To prevent a freeze of its foreign reserves Iran withdrew its deposits from foreign banks and allocated 13 billion dollars of that reserves to buying gold and now that value of that gold has tripled. Bahmani said the central bank bought gold at a price of $656 per ounce and now the price of each ounce of gold has jumped to 1870 dollars and this shows that value of the gold that Iran bought has increased about three times.

The central banker also added that value of Iran's foreign exchange reserves has increased 6.5 billion dollars as the central bank changed some its reserves from dollar to other currencies.

Sanctions against central bank a political bluff

Bahmani called attempts by the U.S. Senate to impose sanctions on Iran's central bankIran's central bank a 'political bluff'.
His comments came after some U.S. senators signed a letter to President Barack Obama pressing him to sanction Iran's Bank Markazi.

The American legislators claim that the measure could potentially freeze Iran out of the global financial system, and make it nearly impossible for Tehran to clear billions of dollars in oil sales every month.
Bahmani said U.S. officials previously accused Bank Markazi to money laundering and financial terrorism during the 2010 annual meeting of the IMF and the World Bank in Washington.

"We responded to the accusations in the meeting and proved that U.S. views the matter purely political, so the participants of the meeting accepted the remarks of Iran's delegate and the issue was terminated there," Bahmani explained.

Bahmani announced that he will participate in the next IMF meeting to "defend Iran's banking legitimacy and dismissing U.S. accusations".

Iran is not afraid of new sanctions and any move to isolate the country economically will only spur self-sufficiency, he noted.

Last month, Iranian lawmaker Ali Aqazadeh-Dafsari told Mehr News agency that the U.S. should save its failing economy and resolve its financial woes before considering fresh sanctions against Iran.

The lawmaker also stated that attempts by U.S. senators to impose sanctions on Bank Markazi over Iran's peaceful nuclear program is simply meant to divert the American public opinion from the financial crisis that has hit the country.
© Tehran Times 2011

02 Sep 2011


Demand for credit cards on the rise

Friday, Sep 02, 2011

Gulf News

How do consumer credit trends compare with those of the United States?Gulf News

During the second quarter of 2011, more consumers opened card accounts than closed them, and they had bigger credit limits to charge with, too, says the Federal Reserve Bank’s Quarterly Report on Household Debt and Credit.

The number of credit card accounts jumped by 10 million, to 389 million, between April 1 and June 30. In addition, aggregate credit limits went up by $60 billion. In 2010, the US census bureau is reporting that US citizens have over $886 billion in credit card debt and that figure is expected to rise to $1.177 trillion this year. The total amount of consumer debt in the US stands at nearly $2.4 trillion, according to Federal Reserve.

Based on the 2010 Census statistics, that works out to nearly $7,800 in debt for every man, woman and child that lives in the US.

Average debt

More specifically, the report states that each cardholder has an average credit card debt of $5,100 and this number is projected to reach $6,500 by the end of the year.

The number of cardholders in the US was expected to reach 181 million by the end of 2010. They own approximately 1.5 billion cards, an average of nearly nine credit cards issued per credit cardholder.

By Saifur Rahman?Business Editor

© Gulf News 2011. All rights reserved.
Sept. 1, 2011, 9:24 a.m. EDT

Turkey and Vietnam Among Destinations Providing Best Currency Value for Travelers

Travelex Reports on Locations Offering "Best Bang for Your Buck"

NEW YORK, NEW YORK, Sep 01, 2011 (MARKETWIRE via COMTEX) -- According to a recent assessment by Travelex, the U.S. dollar has strengthened against the currencies of Turkey, Vietnam, Egypt and Argentina, among other top destinations for U.S. travelers. As the world's largest non-bank foreign currency provider, Travelex constantly monitors exchange rates and is therefore able to determine which overseas destinations are offering the greatest value at any given time.

The Turkish Lira, for example, experienced a year-over-year change of almost 14 percent, which means a visitor to the Eurasian country would receive 14 percent more for his or her currency this year compared to last year. The Vietnamese Dong, Egyptian Pound and Argentinian Peso are also offering a better bargain for U.S. travelers in 2011, with year-over-year percent changes ranging from approximately five to seven percent.

"When comparing last year's exchange rates to the rates for 2011, we have noticed the U.S. dollar weakening against the currencies of several common vacation spots for U.S. travelers, including Canada and Australia" said Jon Dario, president of Travelex Currency Services Inc. "However, the U.S. dollar has also strengthened against some top exotic destination currencies, such as the Turkish Lira and Vietnamese Dong, and our job is to help customers obtain and use that information to get the most out of their currency exchanges."

The U.S. dollar also weakened against the Euro, Chinese Renminbi, Israeli Shekel and Swiss Franc, making these frequently visited destinations more expensive for American travelers. Of particular note, the Swiss Franc experienced a year-over-year increase of more than 23 percent, indicating U.S. travelers will receive 23 percent less for their currency when traveling to Switzerland in 2011. In such destinations, where exchanging currency is significantly more expensive on the ground, Travelex recommends purchasing a greater amount of currency prior to departure in order to lock in the best exchange rates and avoid paying a commission to foreign banks and exchange bureaus each time more money is needed.

Travelex's website also offers historical currency charts, mapping out the daily changes each currency has experienced when compared to the U.S. dollar. The tool helps travelers monitor rates and plan vacations based on the trending history of the currency corresponding with the destinations they plan to visit. For more information, visit the easy to use currency conversion tool.

For more information on Travelex or to locate a Travelex retail store, visit . Customers can also purchase the company's chip and PIN Cash Passport(TM) MasterCard(R) in stores or online.

About Travelex:

Travelex is the world leader in the foreign currency business, with more stores, more airport relationships, and more annual transactions than any competitor. Recently voted "Best Passenger Services" by major North American airports, Travelex has more than 700 retail stores across 30 countries at key airport, seaport, rail and tourist locations. Travelex is also one of the world's leading providers of outsourced travel money to banks, credit unions and travel agents. Among the innovative services the company offers is Cash Passport(TM), which allows users to pre-load their travel budget onto a convenient card for safe and convenient use in millions of ATMs, shops, and restaurants worldwide. Cash Passport is PIN and signature protected and is not connected to the user's bank account, thereby minimizing the risk of identity theft due to the loss or theft of a Cash Passport.

Cash Passport(TM) is a trademark of Access Prepaid Solutions, a MasterCard Worldwide company.

The Euro and British Pound Cash Passport is issued by West Suburban Bank(R), pursuant to licenses by MasterCard Worldwide.

Contacts: Mark Jorgensen
Online Content & PR Manager

30 Aug 2011 Tehran Times

Iran's inflation rate hits 17.2%

TEHRAN - The Central Bank of Iran (CBI) governor said the country's twelve-month inflation rate ended to the calendar month of Mordad (July 23-August 22) reached 17.2 percent, showing a modest growth despite implementing the subsidy reform plan.

The Mehr news agency quoted Mahmoud Bahmani as saying that the direct share of the subsidy reform plan in the 16.3 percent inflation of the last month was only 4.5 percent and the indirect share was 1.9 percent. 

Earlier this month, the CBI chief predicted that inflation will reduce in the coming months and the country will achieve its goal of single digit inflation in the next Iranian calendar year.

The subsidy reform plan, which was implemented in October 2010, charts out how the Iranian government will gradually slash national energy subsidies over the course of five years, with low-income families being compensated directly with cash subsidies.
© Tehran Times 2011

"Act now" to save global recovery, IMF chief urges

Related News

International Monetary Fund (IMF) Managing Director Christine Lagarde speaks at the Council on Foreign Relations forum in New York July 26, 2011. REUTERS-Shannon StapletonInternational Monetary Fund (IMF) Managing Director Christine Lagarde speaks at the Council on Foreign Relations forum in New York July 26, 2011.

Credit: REUTERS/Shannon Stapleton

By Ann Saphir and Mark Felsenthal

JACKSON HOLE, Wyo | Sat Aug 27, 2011 6:37pm EDT

JACKSON HOLE, Wyo (Reuters) - The new head of the IMF on Saturday called on global policymakers to pursue urgent action, including forcing European banks to bulk up their capital, to prevent a descent into a renewed world recession.

"Developments this summer have indicated we are in a dangerous new phase," International Monetary Fund Managing Director Christine Lagarde said at a conference for top officials and leading economists from around the globe.

"The stakes are clear; we risk seeing the fragile recovery derailed. So we must act now," she said.

Two years after the end of the worst of the financial crisis, growth in the United States and Europe is sputtering as government debt burdens surge.

Borrowing costs for European banks are rising as lenders balk at providing any but the shortest maturity funds on fears over bank exposure to shaky euro zone sovereign debts. Sharp swings in global financial markets have intensified strains.

Complicating the picture is policymaker indecision on both sides of the Atlantic.

European leaders are fighting over who should pay the bill for taming a raging sovereign debt crisis.

In the United States, lawmakers and President Barack Obama fought a contentious budget battle earlier this summer that resulted in the loss of the nation's coveted "AAA" debt rating from Standard & Poor's.

Federal Reserve Chairman Ben Bernanke warned here on Friday that the fight had shaken confidence and sapped U.S. growth.


Lagarde said the Group of 20 leading economies should use a meeting in November to address the global economy's woes in a convincing fashion, and she used her speech -- her first major policy address since taking the helm at the IMF in July -- to open a new front in dealing with strains at European banks.

She called for a "mandatory substantial recapitalization," through private channels if possible, but otherwise through some form of public, Europe-wide funding, such as the European Financial Stability Facility.

Lagarde also warned advanced economies away from tightening their belts so fast that it imperils recovery.

"Put simply, macroeconomic policies must support growth," the former French economy minister said. On Friday, she made the same point in a phone conversation with U.S. President Barack Obama, in which the White House said they agreed on the need for policies to spur job creation.

"Monetary policy also should remain highly accommodative, as the risk of recession outweighs the risk of inflation," Lagarde said, adding that central banks should stand ready to jump back into unconventional policy actions if needed.

In his speech on Friday, Bernanke stopped short of promising the Fed would resume the bond buying that has been the centerpiece of U.S. monetary policy for the last few years, but he said the central bank would discuss options for further easing, and the need for it, at its next meeting in September.

European Central Bank President Jean-Claude Trichet, who appeared alongside Lagarde, emphasized the need to safeguard price stability as a foundation for healthy growth.

"It is something we consider absolutely essential for confidence," he said.

Lagarde suggested a fractured political process in Europe was contributing to insecurity.

"Europe must recommit credibly to a common vision, and it needs to be built on solid foundations -- including, for example, fiscal rules that actually work," Lagarde said.

Trichet echoed that theme.

"We are ourselves challenged paradoxically not necessarily -- as a group, as an entity -- because our fundamentals are very bad. Our fundamentals are not very bad," he said. "The problem is that we are challenged in our governance."


Lagarde said shoring up European banks was key to "cutting the chains of contagion" in the continent's spreading debt crisis.

European banks have been under pressure to raise more capital after stress tests last month showed a potential vulnerability to losses on European sovereign debt, particularly Greek bonds.

The cost of insuring against bank defaults in Europe -- as indicated by the iTraxx senior financial CDS index -- has soared high above levels seen in early 2009 when the financial crisis was reaching its apex.

Lagarde said individual European countries must also put in place deficit-cutting plans with a "credible finance path" -- including continued support from the ECB.

In the United States, the focus on long-term fiscal consolidation must not ignore the importance of fostering near-term growth, she said.

"After all, who will believe that commitments to cut spending can survive a lengthy stagnation with prolonged high unemployment and social dissatisfaction?" she asked.

Policymakers must also stop the slide in the U.S. housing market, which is dragging on consumer spending and slowing the recovery, Lagarde added. The nation could turn to intervention by government housing finance agencies and more aggressive programs to reduce homeowner debt, she said.

(Editing by Padraic Cassidy)

26 Aug 2011 The Saudi Gazette

Dinar shields Kuwait from dollar fluctuation

KUWAIT CITY - Kuwait's decision to peg the dinar to a basket of currencies helped shield the country's economy from the dollar's fluctuation and increase stability, the Gulf Times said on Thursday.

Kuwait Central Bank governor Sheikh Salem Abulaziz Al-Sabah said the dinar's peg to a basket of several currencies has "assisted in shielding Kuwait from often volatile fluctuations in the values of other currencies."

Its turn "induced a measure of stability to the local economy", the Gulf Times quoted him as saying.
Kuwait has pegged its dinar since 2007 to an undisclosed basket of currencies from other countries with which it shares financial and trade ties. But the dollar is assumed to still hold a significant weight in the basket. 

Before 2007, Kuwait pegged its currency to the dollar, a policy still being followed by other members of the Gulf Cooperation Council (GCC). 

The other five GCC states -- Saudi Arabia, the UAE, Qatar, Bahrain and Oman -- have maintained their currency pegs to the dollar. 

There have been speculation that the other GCC members might review their currency pegged, following the weakening of the dollar after the US credit rating was downgraded by the Standard & Poor earlier this month and the uncertainty over the US economic outlook.
© The Saudi Gazette 2011

Japanese turn in millions in found cash

Much of that money, lost in the earthquake and tsunami, was returned to the rightful owners. Would the same thing happen in the US?

By Karen Datko on Fri, Aug 19, 2011 6:01 PM

Thousands of wallets containing the equivalent of $48 million in cash have been found amid debris since the earthquake and tsunami in Japan -- and turned in to authorities. More than 5,700 safes containing another $30 million washed ashore and were taken by rescue workers and regular folks to police, according to news reports.

 We have to wonder: Would this have happened in the United States? Post continues after video.

"The National Police Agency says nearly all the valuables found in the three hardest hit prefectures have been returned to their owners," ABC News reported from Japan. Often, finding the owners was very difficult because they had been forced to relocate.

 Readers were duly impressed. "Gerrylea" commented at ABC News:

Another reason to admire the Japanese ... unlike our wonderful US citizens who looted and vandalized their cities after our 'natural' disasters (such as Katrina). The Japanese have shown the world what true honor and civility are all about.

"Mrluckyman" commented on The Huffington Post, "In the USA the money would mysterious­ly vanish."

People are supposed to make a good-faith effort to return lost money to its rightful owner. Local laws vary, but you may be required to give the money to police or publicize the find. Of course, if no one else knows, your conscience will be the ultimate guide.

 Don't we all love reading about people who do the honest thing, like New York City cab driver Mohammad Asadujjaman, who returned a purse containing $21,000 to an Italian tourist who'd left it in his cab, and New Jersey cabbie Mohammed Khalil, who found a $4 million Stradivarius that a famous violinist had forgotten and reunited it with its grateful owner.

 There's also the story of Ashley Donaldson, 15, who found $2,000 in an envelope on the ground in Dallas and turned it in at a nearby bank. The city planned to keep the money after it went unclaimed, citing a new city policy, but later went by Texas law, which required giving Ashley the money if no one responded to public notice of the find and proved ownership, WFAA-TV reported.

 At the time, Ashley lived in a one-bedroom apartment with her parents and four siblings. The money surely helped.

 Still, the report from Japan made a deep impression on readers. "Can we all say we'd do the same?" HuffPost user Mary Karius asked.

 "Kgr656" responded, "We could, but unfortunately, most would be lying."

11 Aug 2011 Emirates 24|7
Pressure mounting on Gulf to depeg
By Waheed Abbas

Study says falling dollar is putting inflationary stress on GCC economies

Pressure is mounting on the Gulf central banks to depeg their currencies in order to contain rising inflationary stress, according to a study released on Wednesday.

Kuwait-based Global Investment House said "the weakness in the US dollar will potentially aggravate GCC inflation by pushing up cost of importing goods to the region as it is heavily reliant on imports.

"Gulf will not only be exposed to its currency dropping against other currencies it will also be exposed to cost push inflation as well. The downgrade will undoubtedly increase pressure to de-peg the GCC currencies so as to contain inflationary pressures in the region however it a difficult decision to be made and one which involves other important factors that need consideration," said Faisal Hasan, Head of Research at Global.

Despite the downgrade and its obvious effect on the dollar and its potential risk to Gulf currencies, UAE and Bahrain have already announced that they will maintain the dollar peg.

Hasan predicted that WTI crude oil price will range between $70 to $75 per barrel this year which is in the comfortable zone for the oil-producing Gulf state to maintain fiscal spending.

"We cannot rule out the possibility of a recession in the US and further economic turmoil in European Union, which will have impact on the crude oil prices. However, we are not anticipating the average prices of benchmark oil to touch levels seen in 2008. We see the average prices of WTI crude oil to remain in the range of $70/bbl to $75/bbl in 2011. The average prices of other benchmark crude oil in 2011 i.e. UK Brent and Opec may drop a further 20-25 per cent below our current expectations in case the US enters recession. While the average prices of WTI, UK Brent and Opec could be lower by 10-15 per cent against our current expected price range for 2012. Despite this, as long as oil prices remain above $70/bbl, GCC countries are likely to remain in comfortable position and would be able to maintain their fiscal spending," he added.

© Emirates 24|7 2011

11 Aug 2011 AFP

Dollar slips towards record yen low in Asia

TOKYO, Aug 11, 2011 (AFP) - The dollar slipped further against major currencies Thursday on deepening worries over the health of the global economy because of the slow US recovery and the eurozone debt crisis.

The greenback was trading at 76.75 yen, down from 76.83 yen in New York on Wednesday. The euro firmed to $1.4187 from $1.4168, but fell slightly to 108.86 yen from 108.91 yen.

Market players have been keenly watching as the dollar has neared its post-World War II low of 76.25 yen, which it hit in the turbulent week after Japan's March 11 quake and tsunami disaster.

Global financial markets have been roiled since Standard & Poor's stripped the United States of its AAA credit rating on Friday, with fears that European nations with large debt problems may be next.

Speculation about a possible credit downgrade for France was a factor that lifted the yen against the euro.

The greenback could drop below its post-war low if Tokyo does not step into the market again or the Bank of Japan expands monetary easing, said Barclays Capital chief currency strategist Masafumi Yamamoto.

The safehaven yen has stayed strong as global investors have dumped US and European stocks and looked for a secure place to park their capital.

Because a strong yen hurts Japanese exporters, the nation's main economic engine, Japan stepped into the foreign exchange market last week to dump yen for dollars, and its government signalled it may do so again.

Finance Minister Yoshihiko Noda said Thursday he remained attentive to financial markets, telling reporters shortly before the market opened that "I think one-sided movements (in the forex market) are continuing.

"I'll continue to watch the market today with keen awareness."

Prime Minister Naoto Kan, in a televised legislative committee meeting, echoed Noda's comment, saying: "We will closely monitor the market and think about ways to deal with it."

However, Citibank chief currency strategist Osamu Takashima said the dollar/yen rate could mark a new low in the near future, adding that "the pair still has some room to move lower."

"We have many yen-buyers such as exporters and retail margin traders," he said. "The only big yen-seller we can imagine is Japan's Ministry of Finance."


© Copyright AFP 2011.

09 Aug 2011 Zawya Dow Jones News

UPDATE: Bahrain Central Bank Head: Will Keep Currency Pegged To Dollar

Tuesday, Aug 09, 2011

--Bahrain to maintain U.S. dollar peg

--Oil, foreign exchange rate fluctuations "normal"

--Working on providing stable fiscal policy

(Adds governor quote in paragraphs 6-8; background.)

DUBAI (Zawya Dow Jones)--Bahrain, the smallest economy in the six-member Gulf Cooperation Council, will keep its currency pegged to the U.S. dollar, despite the greenback's recent woes and a historic downgrade of U.S. debt by ratings firm Standard & Poor's last week, the Arab country's central bank governor said.

Rashid Al Miraj, in an emailed statement, said "the fluctuation of oil and foreign exchange rates is a normal thing which the Arab Gulf economies had witnessed during the global financial crisis."

Bahrain and four of the other GCC states--Saudi Arabia, the United Arab Emirates, Qatar and Oman--peg their currencies to the dollar. The sixth GCC state, Kuwait, has pegged its dinar exchange rate to an undisclosed basket of currencies since 2007.

The dollar has fallen sharply against other major currencies in recent weeks amid increased uncertainty over the outlook for the U.S. economy. Stock markets worldwide have tumbled since S&P's downgrade of U.S. government debt triggered investor concerns about the health of the world's biggest economy and the outlook for global growth.

"Free markets face such ripple effects continuously," Al Miraj said, adding that "sudden economic events can change the global situation very quickly, so there can be no specific foreign exchange policy set to short-term changes."

However, he said the central bank was working on setting a medium-term policy that would safeguard the country's financial sector and economy.

"We are continuously working on providing a stable fiscal policy that ensures helping Bahrain's economy against forex fluctuation. The central bank remains cautious when dealing with the current economic situation," Al Miraj said.

-By Leila Hatoum, Dow Jones Newswires; +971-4-446-1686;

Copyright (c) 2011 Dow Jones & Co.

(END) Dow Jones Newswires

09-08-11 0927GMT

09 Aug 2011 AFP

Dollar falls further against yen

TOKYO, Aug 09, 2011 (AFP) - The dollar slid further against the yen in Asia on Tuesday as a rout in global financial markets after the US public debt downgrade again sent investors fleeing to Japan's safe haven currency.

The greenback dropped to 77.38 yen in Tokyo morning trade from 77.68 yen in New York late Monday. The euro, under pressure due to the European debt crisis, inched down to $1.4175 from $1.4179, and fell to 109.68 yen from 110.23 yen.

And the Australian dollar fell below parity with the greenback for the first time since March as investors move out of higher risk commodity-based stock.

The "Aussie" fell to 99.38 US cents, from 103.55 earlier.

Global stocks have plummeted in the wake of the Standard & Poor's downgrade while gold, seen as a safe asset in times of financial turmoil, has surged to record highs.

"It's like panic-selling. Investors are scurrying to sell with the stock market leading the downturn in a move to shun riskier assets," said Gen Kawabe, senior dealer at Chuo Mitsui Trust and Banking.

National Australia Bank said in a research note that "investors are now looking for a circuit breaker to the current extreme bout of risk-aversion and global recession concerns".

The focus is on a US Federal Reserve meeting later Tuesday, and investors will likely be disappointed unless the Federal Open Market Committee suggests more quantitative easing is coming, it said.

Kawabe said: "It's hard to tell at which point the markets will stop falling. But the upcoming FOMC meeting may help amid growing expectation for credit easing measures by the Fed."

The FOMC may take some liquidity measures later in the day, after the G7 and European Central bank also pledged to take steps, Sumino Kamei, senior analyst at Bank of Tokyo-Mitsubishi UFJ, told Dow Jones Newswires.

This could "in the near term ease cash flow concerns and curb the falls in the stocks," leading to a respite in the deterioration of the risk-averse trading environment, Kamei said.

The forex market kept a cautious eye on whether Japan, worried about the damage the high yen is doing to its export sector, will again intervene in currency markets as the greenback nears 77 yen, dealers said.

Japan last week stepped into the market to stem the rise of the yen, which threatens to derail the budding economic recovery from the March 11 earthquake, tsunami and nuclear disasters.

Japan's Finance Minister Yoshihiko Noda said: "While I will continue to watch the market for the next several weeks, I will maintain close coordination and communication" with foreign monetary authorities.

Noda also rejected media reports that he has plans to step down soon to launch a campaign to succeed unpopular Prime Minister Naoto Kan.


© Copyright AFP 2011.

06 Aug 2011

$2.5 trillion wiped off markets in one week 

JEDDAH: The fall in world stocks wiped $2.5 trillion off their value this week, as concern grew over the slowing global economy and the spread of debt anguish to Italy and Spain.

Stocks, however, picked up briefly Friday on the news that the US added more jobs than expected during July, putting a halt to one of the worst selloffs since the height of the 2008 financial crisis.

Global equities were down 1.5 percent on the day for a roughly 8.5 percent loss this week. Emerging market shares stumbled 3.2 percent on the day. The pan-European FTSEurofirst 300 fell around 1.9 percent.

Gold jumped more than 1 percent and the oil and metals markets slumped with investors seeking safe havens and reacting to the prospect of a slower global economic growth, Reuters reported.

Jarmo T. Kotilaine, chief economist at the Jeddah-based National Commercial Bank, said: "August is an unusually challenging time for global markets because thin trading volumes can easily exaggerate the impact of news. Even amid the crisis, the picture is not completely bleak with the US employment situation showing some signs of stability.

"In general, however, the mounting market anxiety clearly now reflects an intensifying concern about the health of the global economy and the ability of policymakers to effectively respond to it. It is obvious that the initial policy response to the global crisis was in many ways inappropriate."

He added this was a structural crisis, driven by excessive credit in the West, yet it has been dealt with as a cyclical crisis, as if more government demand could restore things back to normal. Instead, government stimulus responses in many markets have drained the national treasuries and had little impact on consumers and investors weighed down by excessive leverage. Now government leverage has been added to these as another source of concern and the overall situation is one where additional ammunition for policy interventions is minimal.

The Gulf stock markets closed this week mixed. In Saudi Arabia, the Tadawul All-Share Index (TASI) fell 0.33 percent this week to close at 6,423.87 points. The value of Saudi traded shares reached SR12.56 billion.

"The GCC markets have repeatedly demonstrated their vulnerability to global shocks and developments in the West are likely to depress the mood again, both through their general impact on market sentiment and the renewed prospect of oil demand concerns, however short-term in nature," Kotilaine said.

For the GCC countries, he said, this is likely to involve yet more lopsidedness in the recovery that continues to rely heavily on public sector spending rather than normalization in the private sector. The GCC is well positioned to deal with renewed global weakness given its ample reserves, admirable macroeconomic health, and generally low leverage. For instance, Saudi public debt is barely 10 percent of GDP (gross domestic product) as compared to figures in excess of 100 percent in a number of Western economies.

Nonetheless, if the global crisis intensifies again, the GCC countries will face tough policy choices about long-term investment and fiscal sustainability, even if there is little concern about near-term stimulus, he added.

Kotilaine said most key economies have extremely low interest rates and government debt levels have brought fiscal consolidation to the fore as an increasingly urgent necessity. As the world now contemplates yet more stagnation or worse, there is little that conventional economic policy can do to help. Yet necessary reforms are politically painful and hence not yet seriously contemplated. Indeed, the market anxiety has been further amplified by the seeming inability of policymakers in many Western countries to rise to the occasion. The US debt ceiling deal represented the lowest common denominator between the two parties, effectively a stopgap measure.

"The European crisis is potentially entering into a whole new, much more serious phase with Italy and Spain, although even the revised euro-zone financial stability fund does not yet satisfactorily address the problems in the countries that have received bailouts," Kotilaine said.

"The economic outlook is stressing investors to a great degree and sentiment is likely to remain extremely fragile," Reuters quoted Keith Bowman, equity analyst at Hargreaves Lansdown, as saying. "The US economy has been slowing and is moving into a phase where we are going to see spending cuts enforced. Investors are concerned as to where future growth will come from with this backdrop of debt for so many governments."

On Friday, the Swiss franc hovered near record highs against the euro and dollar, while the yen rose. Both are considered safe haven currencies. The franc rose to a record high against the euro of 1.0710 francs in early Asian trade but retreated to 1.0881 in European dealing on fears of official action to weaken the currency.

"The combination of a much gloomier US economic outlook, growing economic concerns in China, persisting debt problems of euro zone peripherals and worries about the stability of the euro as well as rising risk aversion in general are a deadly cocktail for financial markets," Eugen Weinberg, head of commodities research at Commerzbank in Frankfurt, told Reuters

Benefiting from the gloom, gold rose more than 1 percent to a high of $1,669.60 an ounce, readying to test higher levels after powering to an all-time peak $1,681.67 on Thursday, its 10th record in 17 sessions. Silver followed, rising 1.2 percent to $39.28 from $38.81 on Thursday.

In the US, the Dow Jones Industrial Average was trading 1.3 percent higher at 11,530 while the broader Standard & Poor's 500 index rose 1.2 percent to 1,215.

In Europe, France's CAC-40 gained 1.5 percent to 3,369, while UK and Germany markets retraced most of their morning losses. The FTSE 100 was down 0.7 percent at 5,354 and the DAX was 0.4 percent lower at 6,392.

The stock markets in Italy and Spain -- the two countries that had become the focus of investors' debt fears in recent weeks -- were among Friday's best performers, adding 1.9 percent each.

Earlier in Asia, Japan's Nikkei 225 stock average slid 3.72 percent to 9,299.88 and Hong Kong's Hang Seng dived 4.3 percent to 20,946.14. China's Shanghai Composite Index lost 2.2 percent to 2,626.42.

Shares on the benchmark 30-share Sensex index at the Bombay Stock Exchange tumbled 702.27 points or 3.96 percent to an intra-day low of 16,990.91 -- a 13-month trough -- but then clawed back some losses in afternoon trade. The index closed down 387.31 points or 2.19 percent at 17,305.87.

Sydney slumped 4 percent, or 171.1 points, to 4,105.4 and Seoul slid 3.70 percent, or 74.73 points, to 1,943.74. Sydney has lost 8.72 percent in the past four days, while Seoul has shed around 10.5 percent in the same period.

Taipei saw the heaviest fall, diving 5.58 percent, or 464.14 points, to close at 7,853.13.

© Arab News 2011

04 Aug 2011

Gold prices cross Dh6,000 mark this week
By Joseph George

Precious metal likely to hit $1800 by the end of 2011
Gold continues to rally and has crossed the Dh6,000 mark per ounce this week even as experts predict a further increase in investment in the precious metal.

Within 24 hours gold price has shot up by $10 from moving up from $1657 on Tuesday to $1668 on Wednesday.

Compared to the last month, gold has witnessed a 10.7 per cent jump moving up by about $159 per ounce.

"The price is at an all time high and more and more investors and their fund managers are rushing into gold as a result of unsatisfactory economic condition despite the US raising the debt ceiling.

Rather than merely diversifying their investments we are witnessing a trend where investors are rushing to put all their money into gold.," said Sajith Kumar PK, Director and CEO at JRG International brokerage in Dubai.

According to him stock markets have also not been performing well and with concerns about demand for petroleum products, the prices of crude oil has also been lower.

According to reports, consumer spending dropped in June for the first time in nearly two years and incomes barely rose.

Manufacturing data from the United States, Europe and China has disappointed investors raising serious doubts about the global growth prospects.

"For all those who have still not invested in gold it is still not too late," says Kumar.

"The prices will cross the $1800 mark per ounce by the end of 2011. We will witness a sideward and upward movement. There is no immediate risk of any drop in gold prices unless there is a major sell-off by the IMF," he added.

© Emirates 24|7 2011

Business | Economy

Iran move to revalue rial gathers steam

Iran is considering strengthening the rial currency against the US dollar, a newspaper said on Sunday, citing the acting economy minister.

  • Published: 23:49 July 27, 2008

Tehran: Iran is considering strengthening the rial currency against the US dollar, a newspaper said on Sunday, citing the acting economy minister.

Iranian media have in the past reported that Tehran was studying the possibility of raising the value of the rial to fight steadily climbing inflation, now running at an annual 26 per cent, but a central bank official denied it in January.

The Donya-e Eqtesad business daily carried comments by acting Economy Minister Hossein Samsami yesterday, saying he was asked about "reports" that the value of the dollar to the rial, now at 9,300 rials, would be reduced by nearly half.

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"The amount in this drop in value [of the dollar to the rial] has not been finalised and is at the technical studies stage. Therefore, one cannot give an opinion in connection to the final figure," Samsami was quoted as saying.

Asked whether a stronger rial would make Iranian exports more expensive, he said a large part of the country's goods sold abroad were not priced in the US currency, but he also suggested dollar-dependent exports could receive incentives.

Iran, the world's fourth-largest crude producer, is reaping windfall gains from the high oil price on world markets. But economists say lavish spending of this influx of petrodollars, estimated at about $70 billion in the 2007-08 Iranian year, has also fuelled consumer price rises.

03 Aug 2011


Dollar slumps, gold soars on US economic woe

NEW YORK, Aug 03, 2011 (AFP) - The dollar fell against the euro and the yen on Wednesday as gold hit a new record high following more gloomy data on the state of the US economy.

The dollar was trading at $1.4318 against the euro in New York at 2100 GMT, compared to $1.4202 at the same time on Tuesday.

The greenback also weakened against the Japanese yen, falling to 76.97 yen from 77.14 on Tuesday.

Gold, a traditional safe-haven asset, jumped to another record, hitting an intraday peak of $1,672.80 per troy ounce in New York.

The dollar slid after the release of a report which suggested that the giant US service sector -- a key employer -- was stalling, the latest in a series of negative reports on the world's largest economy.

The Institute for Supply Management said its index of non-manufacturing activity fell to 52.7 in July, below analysts' forecasts. A level of 50 indicates no growth.

"As the service sector accounts for more than 80 percent of the US economy, this decline presented more potential risks to the vitality of the dollar," said Boris Schlossberg, director of currency research at GFT.

The greenback gained against the Swiss franc, a popular safe haven in recent months, after Switzerland's central bank pledged to curb the rise of the currency. The dollar rose to 0.7692 francs from 0.7646 a day earlier.

The dollar fell against the British pound, trading at $1.6422 against the pound on Wednesday, compared to $1.6298 on Tuesday.


© Copyright AFP 2011.
Mark Aldrich,
Jul 26, 2016, 1:15 AM