by admin on February 24, 2010
Article from – Bloomberg.com
Inyoung Hwang and Shin Pei – Feb. 24, 2010
The euro’s decline against the currencies of Group of 10 countries
suggests that its slump against the U.S. dollar may accelerate, Bloomberg
Correlation- Weighted Currency Indexes indicate.
The CHART OF THE DAY compares the euro versus the dollar and the 16-nation’s
currency performance measured against a basket of G-10 currencies proportioned
by correlation in exchange rates. The chart shows the slump in the euro,
at its weakest level since Nov. 8, 2007, versus G-10 currencies, started
in December 2008, before concern surfaced that the fiscal health of European
Union members such as Greece were declining.
“A rescue package will give the euro a short-term reprieve, but
it’s mortally wounded,” said Richard Franulovich, a senior
currency strategist at Westpac Banking Corp. in New York. “The
euro’s peak against the G-10 currencies occurred many, many months
before the euro-dollar’s did. It’s come down a long way lately,
but the euro’s still exceptionally overvalued.”
Ballooning debt problems in the ‘P.I.I.G.S.’ nations –
Portugal, Ireland, Italy, Greece and Spain — have dimmed the outlook
for the euro zone’s economic recovery, increasing the likelihood
the European Central Bank will likely keep its target interest rate at
a record low for longer.
The euro dropped to $1.3444 on Feb. 19, its lowest level since May 18.
It has declined about 10 percent to $1.3512 since a high on Nov. 25th
of $1.5144. It plunged to 105.6 in the Bloomberg index on Feb. 18.
“Sovereign funds used to pile into the euro as a good way to diversify
from the dollar, but they’re doubting the merits of buying the
euro,” Franulovich said. “There still a lot of question marks
surrounding the euro. It’s having an existential crisis.”
by admin on February 24, 2010
Article from – Reuters.com
Samuel Shen and Jason Subler – Feb. 24, 2010
SHANGHAI — China’s banking regulator has told commercial
lenders to restrict new lending they provide to local governments’ financing
arms to ward off potential risks of default, state media reported on
Wednesday.
While relatively limited in scope, the step marks a continuation of
efforts to check explosive lending growth that has set off concerns about
asset price bubbles and the potential creation of a fresh crop of bad
loans.
The China Banking Regulatory Commission (CBRC) ordered banks to inspect
their existing loans to companies used by local governments to raise
funds, and to stop lending to those projects that are backed only by
expected fiscal revenues, the official Shanghai Securities News newspaper
said, citing unnamed sources.
The CBRC this year has also ordered banks to check that their loans
are not flowing into property or stock market speculation, while the
central bank has twice raised banks’ required reserves and ordered some
lenders to put up additional punitive reserves.
The newspaper also reported that the CBRC had ordered trust companies
to ensure that they were not supplying credit to developers to build
up reserves of land.
With property prices soaring in many major cities, the government has
sought to rein in speculation and limit practices such as land hoarding
that drive up prices.
The two detailed orders follow a more sweeping warning by the CBRC last
week that banks must not lend too aggressively and must verify that their
loans are being used for the intended purpose.
Banks lent a record 9.6 trillion yuan ($1.4 trillion) in 2009 as they
rushed to support the government’s economic recovery programme. This
year Beijing has set a loan target of 7.5 trillion yuan. ($1=6.83)
by admin on February 24, 2010
Article from – Bloomberg.com
Debarati Roy – Feb. 24, 2010
Sugar futures rose for the first time in three days on speculation that
importers will follow Pakistan in boosting purchases, tightening global
supplies.
Trading Corp. of Pakistan bought 50,000 metric tons of refined, or white,
sugar from Singapore’s Agro Corp., paying $779.95 a ton, a spokesman
said. Before today, raw-sugar futures fell 21 percent this month, after
reaching a 29-year high of 30.4 cents a pound on Feb. 1.
“At current prices, we may see more buyers coming in,” said
Hank King, the managing director of Trendphonic Futures Trading LLC in
Chicago. “We should see consolidation.”
Raw-sugar futures for May delivery gained 0.13 cent, or 0.5 percent,
to 23.81 cents a pound at 10:53 a.m. on ICE Futures U.S. in New York.
Before today, the most-active contract dropped 8.8 percent this week.
Worldwide output of the sweetener is forecast to trail demand by 9.4
million metric tons in the 2009-2010 season, a wider deficit than the
7.3 million tons estimated earlier, according to the London-based International
Sugar Organization.
Sugar prices doubled last year as adverse weather in Brazil and India,
the world’s biggest producers, curbed sugar-cane crops. That sparked
a rush for supplies by importers from Egypt to Mexico.
Pakistan will import 1.2 million tons to meet demand that has helped
push prices to near a record. It plans to import 500,000 tons by June
and another 700,000 tons by July.
