RBI Cracks Down on Speculative Forex Trading to Check Rupee Fall

RBI cracks down on speculative forex trading to check rupee fall:

Concerned about the rupee's fall to a record low, the Reserve Bank has discreetly phoned trading desks with unusually explicit messages to cut their speculative positions in the currency, said three senior market participants with direct knowledge of such calls.

While the Reserve Bank of India (RBI) regularly monitors positions and flows in the currency market, the sources said it was unusual for the RBI to call so often or state so explicitly that banks should cut their intraday net open position limits — or their outstanding positions in futures and forwards markets.

A bank's net open position is its aggregate exposure to foreign exchange risk.
The pressure highlights the limited options for a central bank that has seen the rupee hit hard in last month's emerging markets rout, but is reluctant to sell too much of its US dollar foreign reserves given they are enough to cover only seven months of imports.

While the RBI has succeeded in curbing speculation in India's roughly $8-9 billion currency futures and forwards markets, it also runs the risk of choking off liquidity and creating volatility, making it harder for banks to manage genuine client currency needs.

It could also drive further currency trading to offshore markets such as Singapore via non-deliverable forwards, beyond the RBI's reach. Non-deliverable forwards are a derivative instrument that allow investors to speculate on a currency's movement without having to hold the currency.

"You are in this new environment where they say jump and you say how high. You don't take them on," a senior official at a large bank told Reuters.
The RBI did not have any immediate comment.

Forex Trading Dollar vs Yen News. July 4, 2013 - National Forex

Forex Trading Dollar vs Yen News. July 4, 2013 - National Forex: "Forex Trading Dollar vs Yen News. July 4, 2013
The dollar was lower against the yen on Thursday and pushed higher against the euro and the pound amid caution ahead of policy announcements by the Bank of England and the European Central Bank later in the day, as well as Friday’s U.S. nonfarm payrolls report."

During European morning trade, the dollar was lower against the yen, with USD/JPY sliding 0.22% to 99.68.

Meanwhile, the euro edged lower against the dollar, with EUR/USD dipping 0.08% to 1.2999.

The ECB was expected to leave interest rates on hold following its policy meeting and to reiterate that an exit from loose monetary policy remains distant.

Concerns over a political crisis in Portugal eased on Thursday, amid hopes that the government wouldn’t collapse following talks between the coalition partners overnight.

The future of the country’s coalition government was thrown into doubt earlier in the week, following the resignation of country’s foreign minister and finance minister in protest over government austerity policies.

Meanwhile, investors were awaiting Friday’s U.S. nonfarm payrolls report for further clues on when the Federal Reserve may decide to unwind its USD85 billion-a-month stimulus program.

Data on Wednesday showed that the U.S. private sector added 188,000 jobs in June, more than expectations for an increase of 160,000.

The dollar rose to session highs against the pound, with GBP/USD down 0.20% to 1.5248.

The BoE was widely expected to keep its benchmark interest rate on hold after its policy meeting later Thursday, the first under the leadership of new Governor Mark Carney.

The dollar gained ground against the Swiss franc, with USD/CHF rising 0.21% to 0.9482.

The greenback was broadly lower against its Australian, New Zealand and Canadian counterparts, with AUD/USD up 0.47% to 0.9127, NZD/USD climbing 0.28% to 0.7800 and USD/CAD edging up 0.06% to 1.0509.

The Australian dollar was boosted after the deputy governor of the Reserve Bank of Australia said comments by Governor Glenn Stevens on Wednesday about the bank’s July policy meeting had been misinterpreted by markets.

Stevens said the board “deliberated for a very long time” before deciding to keep rates on hold, fuelling speculation that the bank considered a further rate cut.

The dollar index , which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.10% to 83.47.

Trade volumes were expected to remain light on Thursday, with markets in the U.S. closed for the Independence Day holiday.

Australian dollar above 0.9110 – market is thin today

Australian dollar above 0.9110 – market is thin today:

Its already July 4 in Australia, but its not officially a holiday - but the market is less liquid than usual and also skittish after yesterday's drop in the dollar following Glenn Stevens' joke comment re deliberating for a long time about not cutting rates. markets read this as strongly indicative of a cut in August, but have probably over-reacted. AUD/USD has jumped above 0.9100 and 0.9110 - resistance is up ahead now from 0.9125/35 Support 0.9075/85 and again 0.9025/35

GBP/USD Static Trading

GBP/USD static trading:

 The GBP/USD foreign exchange rate has been trading sideways Thursday in the afternoon of US trading, amidst muted trading due to the July 4 holiday.

GBP/USD trading at support

In recent minutes, the GBP/USD is entrenched in negative territory, still down -1.29% off its opening and settling 1.5080. The Mataf.net analyst team has identified supports at 1.5059, ahead of 1.4989. 

GBP/USD negative expectations

According to the Technical Analyst Team at ICN.com, “The GBP/USD dropped failing our positive expectations by stabilizing below 1.5165 which is considered negative, we also see the pair currently trading around the bullish key support level that held the pair’s trading from bottom at 1.4833. Prolonged stability below 1.5165 is negative forcing us to favor extending the downside move today and the upcoming period.”

US. dollar closes lower on Taipei forex (update) | Economics | FOCUS TAIWAN - CNA ENGLISH NEWS

US. dollar closes lower on Taipei forex (update) | Economics | FOCUS TAIWAN - CNA ENGLISH NEWS:

Taipei, July 4 (CNA) The U.S. dollar fell against the Taiwan dollar Thursday, shedding NT$0.103 to close at NT$30.199 on buying by foreign banks in the wake of a rebound staged by other regional currencies, in particular the South Korean won, dealers said.

The local central bank intervened toward the end of the session, as it has done in recent sessions, to help the greenback recoup some of its earlier losses in a bid to slow the pace of the Taiwan dollar's appreciation, they said.

Despite the central bank's intervention, turnover in the local foreign exchange market remained thin, as many investors stayed on the sidelines ahead of the conclusion of a policymaking meeting of the European Central Bank later in the day, the dealers added.

The U.S. dollar opened at NT$30.302 and moved between NT$30.015 and NT$30.305 before the close. Turnover totaled US$495 million during the trading session.

Selling in the greenback emerged soon after the local foreign exchange market opened, with foreign banks rushing to cut their holdings in the currency by taking advantage of the gains posted by the unit in the past two sessions, the dealers said.

The strength of other regional currencies also encouraged foreign banks to buy the Taiwan dollar, a move that added downward pressure on the U.S. dollar throughout the session, they said.

The rising won served as a clear indication to traders here to buy into the Taiwan dollar after Goldman Sachs said in a report that the South Korean currency will gain against the U.S. dollar over the next three months, the dealers said.

The stronger won also reflected a promise by the Seoul authorities to come up with measures to create jobs in the service sector and enhance the country's global competitiveness in a bid to boost its economy, they said.

Gains posted by the Chinese yuan also led traders in the local market to raise their Taiwan dollar holdings after the People's Bank of China hiked the reference rate for the yuan against the U.S. dollar, they added.

Trading volume in the local foreign exchange market was thin, as many traders took to the sidelines waiting to see what the ECB will decide on its monetary policy after its policymaking meeting, the dealers said.

The ECB meeting has been watched closely, as investors fear that political tension in debt-ridden Portugal could complicate the debt situation in the eurozone, they said.

ForexLive European morning wrap: All waiting for the BOE & ECB

ForexLive European morning wrap: All waiting for the BOE & ECB:

Forex trading headlines from the European session 4 July Nikkei closes down 0.26% at 14,018.93 UK Halifax HPI june m/m +0.6% vs +0.4% exp  y/y +3.7% vs +2.6% prev BOJ quarterly report raises economic assessment for many regions based on improved sentiment Italian Q1 public deficit to GDP ratio 7.35 vs 6.6% prev Equity markets have a better morning Happy Independence Day to all our US readers, and I'm sure many of you will be glued to your desks before heading off to celebrate! It's been an extremely quiet morning as markets anticipate the chaos and mayhem coming up shortly with the BOE and ECB set to announce their latest decisions. The Pound has had a couple of sell moments but so far cable has held onto 1.5225 support with EURGBP failing to break through 0.8540 sell interest. USDJPY has been in snoozeville having had one little run down to 99.50, as has EURUSD which has spent the morning mainly in a 1.2995-1.3005 range. AUDUSD found support at 0.9100 after an early dip from the Asian session rally, but has so far found sell interest at 0.9150 one step too far. Equity markets have calmed and firmed this morning, and bond yields have eased led by a better performing Portugese market in the belief that they can find a solution to the current political turmoil. So it's all been about clock watching as the big events loom large. Not long to wait now.

Blog Claim Details for Site "FOREX MARKET" - Technorati

Blog Claim Details for Site "FOREX MARKET" - Technorati:

'via Blog this'  JH97HQMNEYUN