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[Darika]

Thursday, Fitch Ratings maintained the stable outlook on Malaysia's local banks' credit ratings, despite very weak macro economic indicators.

The firm said the probability of capital impairment for Malaysian banks still appeared fairly low, despite the extremely stressed macro economic conditions and the reasonably-stressed assumptions simulated by the agency. Fitch said this in the context of its report titled "Stress Test on Malaysian Banks", where it attempts to simulate a fairly-stressed scenario for Malaysian banks.

The firm also noted that although banks' earnings were likely to be lower in 2009 and 2010 compared with 2008, they appeared adequate to fully absorb the credit costs associated with asset quality deterioration. This means their loss absorption capacity would likely remain adequate and financial strength largely intact, Fitch said.

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[Darika]

The pace of deterioration in the U.K. job market is slowing as private sector demand for staff began to stabilize following a surge of redundancies earlier in the year, results of the latest quarterly CIPD/KPMG labor market outlook survey revealed Monday.

The survey of more than 900 employers in all sectors of the economy found that not only are far fewer employers expecting to make staff redundant but the scale of planned redundancies has also reduced. However, signs of improved employer optimism in the private sector are offset by mounting pessimism in the public sector.

"When it comes to the immediate jobs outlook, the best that can be said is that things are getting worse more slowly," John Philpott, chief economist at the CIPD said. But, he warned that "It is far too soon to rule out another avalanche of private sector redundancies later in the year." According to the survey, employment will keep falling and unemployment is still on course to top 3 million in 2010. Due to a fall in expected redundancies, the private sector unemployment would be less compared to the public sector.

The balance of private firms cutting over those recruiting fell to minus 2 from minus 30 recorded in the spring. By contrast, in the public sector the negative balance has increased from minus 3 to minus 28.

Moreover, the survey found that the pay outlook has worsened, with only 15% of respondents planning to conduct a pay review this quarter, compared to 32% in the previous quarter.

Andrew Smith, chief economist at KPMG said, "This conservative approach indicates that business remains unconvinced that current economic green shoots will lead to sustainable healthy growth in the near term."

Average pay increase expectations have dropped below the rate of inflation to 1.7%. Smith said this will result in a reduction in real earnings and could stifle any consumer led recovery.

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[Darika]

Wednesday, the yen extended its yesterday's uptrend against other major currencies as Asian stocks tumbled today and prompted investors to further liquidate yen short positions ahead of a policy statement from the U.S. Federal Reserve later in the day.

Asian shares plunged today after losses on Wall Street and as investors locked in profits as they waited to hear what the U.S. Federal Reserve would say about prospects for recovery in the world's largest economy.

Japan's Nikkei 225 was down 1.17%, South Korea's Kospi Composite fell 0.87%, Hong Kong's Hang Seng was 1.93% lower while China's Shanghai Composite slipped 2.93% and Taiwan's main index dropped 0.15%.

The Fed will conclude its two-day policy meeting and release a statement around 2:15 pm ET today, with investors looking to its assessment of the economy and whether it unwinds some of the unconventional easing measures currently in place.

There is mounting speculation that Fed might grow more optimistic about a recovery after a better-than-expected jobs report for July.

The U.S. Labor Department report showed that non-farm payroll employment fell by 247,000 jobs in July following a revised decrease of 443,000 jobs in June. Economists had been expecting employment to fall by 325,000 jobs compared to the drop of 467,000 jobs originally reported for the previous month. The Labor Department also said that the unemployment rate unexpectedly edged down to 9.4% in July from 9.5%, recording a decrease for the first time since April 2008.

The Fed has kept its target rate for overnight loans between banks in a range from zero to 0.25 percent since December. The Federal Open Market Committee will keep rates unchanged today, analysts expect. The central bank has bought $252.761 billion of U.S. Treasuries since it announced a six-month plan in March to purchase $300 million of Treasuries to help keep borrowing low.

Japan's corporate goods price index fell at a record pace in July, adding to concerns that deflation in the world's second largest economy is accelerating.

The Bank of Japan's CGPI data, which tracks prices of domestically produced and used goods traded among companies, plunged 8.5% in July from a year earlier, breaking the record 6.7% drop set in the previous month. Moreover, this was the seventh consecutive month of decline.

Today's results will likely heighten fears of persistent price falls in Japan, as overall economic activity has yet to show signs of a full-fledged recovery.

Still, BOJ Governor Masaaki Shirakawa said at a regular press conference on Tuesday that the BOJ doesn't expect Japan to fall into a deflationary spiral now, though "it may take time for falls in prices to end."

On a monthly basis, the domestic CGPI rose 0.4% in July, following the 0.3 percent decline in the previous month.

Meanwhile, a final report from the Ministry of Economy, Trade and Industry showed that Japan's industrial production growth in June came in at 2.3% on a monthly basis, revised down from 2.4% estimated initially. From the previous year, production plunged 23.5%.

The yen that closed yesterday's trading at 96.01 against the dollar strengthened to a 5-day high of 95.35 during Asian deals on Wednesday. The next upside target level for the yen is seen at 94.7.

The yen plunged to near an 8-week low of 97.80 against the dollar on August 07 as the dollar gained 2% on that day following better-than-expected U.S. jobs data.

But the yen is showing strength this week on encouraging economic reports from Japan. Reports showed this week that Japan's current account surplus and the machinery orders rose more than expected in June. Thus far, the yen has advanced 2.5% against the dollar.

In Asian trading on Wednesday, the yen rose to a 9-day high of 134.91 against the euro. This may be compared to yesterday's closing value of 135.84. On the upside, 133 level is seen as the next target for the Japanese currency.

After hitting a 2-month low of 138.73 against the euro on Friday, the yen has appreciated 3% thus far.</p>

<p>The yen jumped to a 12-day high of 157.29 against the pound in Asian deals on Wednesday. If the yen edges up further, it may likely target the 154.2 level. The pound-yen pair was worth 158.21 at yesterday's close.

Thus far this week, the yen has depreciated 3% against the pound.

During Asian deals on Wednesday, the yen soared to a 12-day high of 88.16 against the Swiss franc. The next target level for the Japanese currency is seen at 87.1. At yesterday's close, the franc-yen pair was quoted at 88.78.

The yen that slumped to near an 8-week low of 90.74 against the franc on Friday has gained 3% since then.

In Asian deals on Wednesday , the yen jumped to a 13-day high of 78.47 against the Aussie and an 8-day high of 63.33 against the NZ dollar. The next upside target level for the yen is seen at 77.0 against the aussie and 63.0 against the kiwi. The aussie-yen pair closed trading at 79.63 and the kiwi-yen pair at 64.09 on Tuesday.

Consumer confidence in Australia rose to a near two-year high in August, as reported today by Westpac Bank and the Melbourne Institute. The group said its index of consumer sentiment was up 2.7 percent compared to July, reaching its highest level since October 2007. The index has increased 27.8 percent since May, making it the sharpest three-month gain since the survey's inception in 1975.

Against the Canadian dollar, the yen surged up to a 2-week high of 86.53 in Asian trading on Wednesday. On the upside, 86.3 is seen as the next target level for the Japanese currency. At yesterday's close, the loonie-yen pair was quoted at 87.15.

The loonie declined as oil steadied below $70 a barrel today after four consecutive days of losses as the market waited for a second set of U.S. inventory data and kept an eye on the outcome of the U.S. Federal Reserve's two-day meeting.

U.S. light crude for September delivery rose 9 cents to $69.54 a barrel in Asian deals, having lost $1.15 on Tuesday on Wall Street losses and after the Energy Information Administration (EIA) revised lower its global oil demand forecast. London Brent crude fell 6 cents to $72.40.

Looking ahead, the French July CPI and June current account, Italian final July CPI, Euro-zone June industrial production, U.K. labor market reports as well as the Bank of England's quarterly inflation report are expected to influence trading in the upcoming session.

From the U.S., the trade balance report for June is due at 8:30 am ET.

At the same time, the Canadian June trade balance and new housing price index reports are scheduled for release.

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[Darika]

The US dollar that showed signs of recovery against most of its major rivals immediately following the release of the S&P/Case-Shiller home price index for June lost ground shortly. As of 9:10 am ET, the greenback drifted lower to 1.0571 against the Swiss franc, 1.6447 versus the pound and 1.4362 against the euro.

The report showed that the S&P/Case-Shiller 20-City Composite Home Price Index fell at an annual rate of 15.4 percent in June compared to a revised 17 percent drop in May. Economists had expected prices to fall 16.4 percent compared to the same month a year ago.

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[Darika]

House prices in the UK rose for the fourth consecutive month in August, increasing by 1.6% month-on-month on a seasonally adjusted basis, the Nationwide building society said Thursday. Economists had forecast house prices to grow only 0.5% after a revised increase of 1.4% in July.

Compared to the previous year, house prices fell 2.7% in August, much slower than the 6.2% decline seen in July. The average price of a typical UK property stood at GBP 160,224, up from GBP 158,871 in July.

Over the first eight months of 2009, the seasonally adjusted index of house prices has risen by 3.2%, though relative to the October 2007 peak it is down by 14.4%, the Nationwide said.

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[aamattsmith]

Good post thanks, I like the analysis

[Darika]

Glad you like it. Find more daily information at our website news line: REMOVED MARKETING POST

[Darika]

During early European deals on Monday, the US dollar rose to new multi-day highs against its major counterparts as a fall in most Asian and European stocks boosted demand for the safe haven greenback.

The dollar and the yen are viewed as safe-haven currencies and both currencies gain, when investors turn risk averse and fall when risk appetite improves.

Most of the stock markets were modestly lower today as investors look to this week's Federal Reserve meeting for more clues about the strength of the U.S. Recovery.

Early in Europe, Britain's FTSE 100 lost 0.4 percent, Germany's DAX fell 0.8 percent and France's CAC-40 dropped 0.3 percent.

In Hong Kong, the Hang Seng fell 150.60 points, or 0.7 percent, at 21,472.85 in back-and-forth trade, while South Korea's Kospi lost 0.3 percent to 1,695.50. China's Shanghai benchmark was up 0.2 percent at 2,967.01 and Australia's benchmark shed 0.3 percent.

Japanese financial markets are closed today for public holidays. Financial markets in India, Indonesia, Malaysia, Philippines and Singapore were also closed Monday for holidays.

World markets posted more gains last week as U.S. Federal Reserve Chairman Ben Bernanke said recession in the world's largest economy was "likely over."

This week, investors will watch closely what the Fed has to say about the economy and the scale of the recovery after a two-day meeting that wraps up Wednesday.

At its August meeting, the FOMC decided along the expected lines and maintained the fed funds futures rate unchanged. In its post-meeting policy statement, the Fed noted that economic activity is leveling out, an improvement from its previous opinion that the pace of contraction is slowing. There weren't any major changes to the references the committee made towards other measures.

Regarding its Treasury securities purchasing program, the central bank said the committee would gradually slow the pace of these transactions. The central bank anticipates the full amount of $300 billion to be purchased by the end of October. The FOMC reiterated its commitment to retain interest rates at exceptionally low levels for an extended period.

Against the European currency, the US dollar edged higher during early deals on Monday. At 2:35 am ET, the dollar reached a 6-day high of 1.4639 against the euro, compared to 1.4704 hit late New York Friday. The next upside target level for the dollar is seen around 1.437.

The US currency that closed Friday's North American session at 1.6246 against the British pound rose to a 19-day high of 1.6137 at 2:35 am ET Monday. The pound-dollar pair is currently trading at 1.6168 with 1.603 seen as the next target level.

British house prices increased in September on rising confidence and dwindling stock of property, results of a closely watched survey showed Monday.

Average asking prices were up 0.6% in September from August as autumn sellers raised price expectations, the property website Rightmove reported. House prices had declined 2.2% in August after rising 0.6% in July.

Meanwhile, the latest Quarterly Bulletin from the Bank of England showed today that sustainable rebalancing in the UK and the global economy depend on structural forces, including the extent to which consumers in deficit nations remain restrained and domestic demand in surplus countries pick up.

Against the Swiss franc, the greenback traded higher during Monday's early deals. At 5:15 am ET, the dollar-franc pair climbed to a 4-day high of 1.0357, compared to Friday's closing value of 1.0305. If the pair gains further, 1.055 is seen as the next target level.

The Swiss National Bank said today in a report that the M3 money supply increased 7.7% year-on-year in August, unchanged from the previous month. A year ago, the M3 money supply was up 2.5%. The M2 money supply climbed 41.8% on an annual basis in August, faster than the 41.3% growth in the previous month.

The dollar that closed Friday's New York deals at 91.46 against the Japanese yen advanced to 92.21 at 5:15 am ET. This set a 11-day high for the dollar. On the upside, 93.4 is seen as the next target level for the dollar-yen pair.

The Conference Board is scheduled to release a report on the U.S. leading index for August at 10 AM ET. The consensus estimate calls for a 0.7% increase in the leading indicators index for the month.

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[Darika]

Singapore's consumer price index dropped 0.3% year-on-year in August, slower than than a 0.5% fall in the preceding month, a report by Statistics Singapore said Wednesday. Economists expected a 0.4% fall.

Housing costs fell 1.6%, due to lower electricity and gas tariffs and cheaper liquefied petroleum gas (LPG). Transport and communication costs fell 0.4%, mainly due to cheaper petrol prices. Excluding accommodation costs, the consumer price index declined 0.9%.

Month-on-month, consumer prices were up 0.4%, owing to higher costs of transport and communication, clothing and footwear, as also housing and stationery items. Excluding accommodation costs, consumer prices were up 0.5%. Meanwhile, after adjusting for seasonal effects, consumer prices were up 0.4% on a monthly basis in August.

In the first eight months, consumer prices rose 0.5% compared to last year.

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[ForexTitan]

Hi Darika, just wanted to add a little nugget here from Sara Ming Da:

"The Chinese Monetary Authority said it will buy $4.65 billion to defend the US dollar's peg to the U.S. dollar against major currencies during New York trade. Two Chinese major funds already sold most of their LONG position. Normally it takes about a week or two before the US market and international market fall after."

Let's see if this little action can cause some more movement.

[IFX Svetlana]

Wednesday, the yen rose to new multi-day highs against its major counterparts as a fall in global stock prices prompted investors to seek the safety of the Japanese currency.

World stock markets extended their losses today as Japan's much weaker-than-expected economic growth and rising debt loads around the world added to concerns the global recovery was faltering.

Investors in Asia were rattled after Japan downwardly revised its economic growth for the third quarter today to reflect a marked worsening of domestic demand in the country.

The Cabinet Office announced that gross domestic product expanded just 0.3% quarter-on-quarter in the third quarter, revised down from the 1.2% growth estimated initially.

Economists had expected the GDP growth rate to be revised to 0.7%.

After falling sharply Tuesday, European markets added to their losses, with benchmarks in Germany, France and Britain down 0.1 percent or more.

Earlier in Asia, Japan's Nikkei 225 stock average fell 135.75 points, or 1.3 percent, to 10,004.72.

Hong Kong's key index shed 318.76, or 1.4 percent, to 21,741.76, and Shanghai's benchmark was off 1.7 percent at 3,239.57.

Australia's market lost 0.7 percent, India's stock measure declined 0.4 percent and Singapore's market was off 0.3 percent.

The South Korean market defied the downdraft and gained 0.4 percent to 1,634.17, helped after the International Monetary Fund raised the country's economic growth forecast for 2010. Taiwan's market also rose 0.4 percent.

Against the US dollar, the Japanese yen traded higher during early deals on Wednesday. At 3:35 am ET, the yen climbed to a 6-day high of 87.49 against the dollar, compared to 88.45 hit late New York Tuesday. The next upside target level for the yen is seen around 87.1.

The Japanese unit that closed Tuesday's North American session at 130.04 against the European currency reached a 12-day high of 128.80 at 3:55 am ET Wednesday. If the yen gains further, 128.0 is seen as the next target level.

Germany's Federal Statistical Office said today in a final report that the consumer price index or CPI increased 0.4% year-on-year in November, faster than the flat reading in the previous month. The consumer price inflation in November was revised from 0.3% estimated initially. The consumer prices increased for the first time since June 2009.

French trade deficit widened to EUR 4.39 billion in October from EUR 2.80 billion deficit in September, data released by the Customs Office showed today. Economists had forecast deficit to narrow to EUR 2.3 billion.

Against the Japanese currency, the British pound edged higher during today's early deals. At 3:40 am ET, the yen rose to an 8-day high of 142.05 against the pound, compared to Tuesday's closing value of 144.07. On the upside, 141.2 is seen as the next target level for the yen.

Consumer confidence in the United Kingdom held firm in November led by greater optimism about the future economic situation, the results of a survey showed today.

The Nationwide Building Society announced that the consumer confidence index stood at 73 in November, unchanged from the upwardly revised reading for October. The expectations index rose to 108 from 107 and this was offset by a decline in the present situation index by 2 points to 20. The index measuring spending intentions rose to 106 from 104.

The yen that closed Tuesday's New York deals at 86.15 against the Swiss franc hit a 12-day high of 85.30 at 3:50 am ET Wednesday. The franc-yen pair is currently trading at 85.63 with 84.7 seen as the next target level.

Switzerland's unadjusted jobless rate rose to 4.2% in November from 4% recorded in October, the State Secretariat for Economic Affairs said today. That was in line with economists' expectations. At the same time, the seasonally adjusted jobless rate stood stable at 4.1%.

Across the Atlantic, the U.S. wholesale inventories report for October is due in the North American session.

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[Darika]

Your addition was rather useful. Thank you

[IFX Svetlana]

Pound Spikes Down Against Majors.


The British pound staged a sharp fall against its major counterparts at 2:00 am ET Thursday. The pound-dollar pair thus declined to a 2-day low of 1.6217, compared to 1.6336 hit late New York Wednesday. The next downside target level for the pair is seen around 1.621.


Meanwhile, the British currency is currently trading at 0.8885 against the euro and 1.6971 versus the franc, compared to today's early Asian session's new multi-week highs of 0.8854 and 1.7030 respectively. This may be compared to yesterday's closing values of 0.8898 against the European currency and 1.6970 versus the Swiss franc.


Against the Japanese yen, the pound is now quoted at 145.86, compared to Wednesday's closing value of 146.67.



News are provided by InstaForex.

[IFX Svetlana]

InstaForex Company sincerely congratulates all its clients, partners
and friends with upcoming holidays: Christmas and New Year 2010!
The expiring year became a serious challenge for many of us, but we
achieved the considerable success and in the coming year we are not
going to recede from the chosen course!

We wish all our clients the professional growth in trading world,
profitable trend and favorable forecasts! We wish you luck and success
in business, new opportunities and perspectives!

We wish our partners all-round development, and also we hope that
in 2010 we will have only the effective cooperation and maturing of
our partnership relations!

Happy New Year 2010!

[Darika]

The Australian dollar advanced to a new multi-day highs against the currencies of Japan, US, Europe and New Zealand as a surge in local stocks encouraged investors to bet on higher-yielding currencies.

On the equity front, the Australian market ended in the positive territory today having reopened after 4 holidays, taking cues from Wall Street where the major averages ended higher in yesterday's trading session.

The benchmark S&P/ASX200 Index advanced 54.20 points, or 1.13% to close at 4,845, while the All-Ordinaries Index ended at 4,857, representing a gain of 53.40 points, or 1.11%.

During early trading on Tuesday, the Australian dollar rose to an 8-day high of 1.6133 against the euro. This may be compared with yesterday's closing value of 1.6216. On the upside, 1.608 is seen as the next target level.

The Aussie showed strength against the Japanese yen during Tuesday's early trading. At about 4:05 am ET, the Aussie-yen pair reached an 18-day high of 81.98, with 82.8 seen as the next upside target level. At Monday's New York session close, the pair was quoted at 81.30.

In early trading on Tuesday, the Australian dollar advanced to an 12-day high of 0.8952 against the US currency. The next upside target level for the aussie-greenback pair is seen at 0.901. The Aussie-dollar pair closed Monday's deals at 0.8872.

From U.S., the S&P/Case-Shiller home price index, is scheduled to be released at 9 am. Economists expect a 7.30% year-over-year decline in the 20-city composite house price index for October following a 9.36% drop in the previous month.

The Conference Board is scheduled to release its consumer confidence report for December at about 10 am ET. The report, is expected to show that the consumer confidence index rose to 53 in December.

The Australian currency edged up against the New Zealand dollar during early Asian deals on Tuesday. At 1:55 am ET, the aussie advanced to a 6-day high of 1.2566 against the kiwi, compared to 1.2537 hit late New York Wednesday. The next upside target level for the Aussie-kiwi pair is seen around 1.262. As of now, the pair is trading at 1.2558.

The Australian dollar also traded up against its Canadian counterpart during this time period and hit as high as 0.9323 by 4:10 am ET. This may be compared with yesterday's closing value of 0.9254. On the upside, 0.951 is seen as the next resistance level.

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