Forex: AUD/USD firm above 0.9900 - NASDAQ
FXstreet.com (Barcelona) - Fourth consecutive daily advance for the AUD so far, bolstered by increasing risk appetite in the global markets.
After a dreadful May, the Aussie dollar is finding some relief at the beginning of June: the RBA cut the overnight rate 'only' 25 bps on Tuesday, against a widely expected 50 bps; GDP figures for the first quarter have surprised growing 4.3% YoY and the unemployment rate has come in at 5.1% early in the Asian session, in line with expectations.
J.Kruger, Technical Strategist at DailyFX, affirms that the bearish outlook on the cross remains unchanged, although he assesses the likeliness of a rebound due to technical studies showing 'oversold' conditions, "…and we see shorter-term risks for more of a bounce towards 1.0000-1.0200 area where the next major lower top is sought out ahead of underlying bear trend resumption…".
AUD/USD is now advancing 0.32% at 0.9946, with the next hurdle at 1.0016 (high May 15) ahead of 1.0028 (50% of 1.0475-0.9581) and 1.0070 (high May 14).
On the flip side, a violation of 0.9875 (hourly sup Jun.6) would bring 0.9767 (MA10d) and 0.9738 (hourly low Jun.6).
Money skills programme to help Neet young people goes national - Children & Young People Now
A financial education programme for young people not in employment, education or training (Neet) is expanding following successful pilot projects.
Many young people do not have a household budget, so Barclays Money Skills aims to give them the skills to manage their finances. Image: Barclays
Barclays is linking up with a consortium of youth and information charities – the National Youth Agency, Citizens Advice, Rathbone UK, UK Youth, YouthNet, and Youth Access – to roll out the Money Skills champions programme.
The project aims to recruit young people who are classed as Neet, giving them skills and “money know-how” training to then go on to share the knowledge with their peer group.
Eventually it is hoped that 5,000 young people will be trained as “champions”, who can then go on to share financial capability skills with up to 100,000 other young people.
Fiona Blacke, NYA chief executive, said: “Young people are facing significant challenges and want to reach out to people they trust for help and advice.
“It is essential that the information they receive is accurate, to ensure they are appropriately equipped to negotiate financial problems and money management issues.
“The programme will prepare young people who need it most with skills and knowledge to support themselves and their friends."
Pilot projects for the programme have been completed in eight areas across England.
More than 100 of the 450 adult support workers that the project needs to roll out nationwide have so far been recruited.
Michelle Smith, head of community affairs in the UK for Barclays, said: “It is vital that young people are given the best start in life.
“Having good money management skills, particularly when faced with a constrained budget and trying to be financially independent for the first time, is vital to enhancing their life opportunities and preparing them for a secure future.”
CSC finance director exits as fraud probe hits UK - Computer Weekly
The Cabinet Office has meanwhile extended negotiations with CSC over the NHS contract until 31 August, a year-after the coalition government said it had resolved its NHS IT problems.
Computer Weekly understands finance director Neil Malcolm left within the last month. CSC refused to discuss the nature of his departure.
A CSC spokeswoman said: "It is company policy not to comment on internal matters or matters relating to staff departures."
$25m of "Intentional irregularities" were found in the accounts of CSC's £3bn NHS IT contract after a year-long investigation by independent auditors, said CSC in a financial statement last week.
"Certain CSC finance employees based in the United Kingdom were aware prior to fiscal 2012 of the aforementioned errors, but those employees failed to appropriately correct the errors.
"Therefore, the Company has classified these errors as intentional. As a result, certain personnel have been suspended and additional disciplinary actions are being considered."
The errors had overstated CSC's income from the NHS contract by $24m after failing to account for costs.
Andy Thomson, vice president of international finance at CSC, refused to confirm whether Malcolm's departure was related to any fraudulent activity. He refused to answer any questions about the matter.
Investigators had found other accounting problems with the NHS contract, on which CSC wrote off $1.5bn last year after its continued failure to meet a 2007 deadline to deliver computer systems to health bodies over two-thirds of England. The investigation was ongoing. CSC did not expect further revelations would involve amounts large enough to dent its financials.
The US SEC probe, which is also ongoing, led to a string of revelations about intentional accounting errors in CSC's Nordics, Australia and Americas businesses. CSC Denmark CEO Carsten Lind resigned as details of the accounting problems broke last Autumn. Hundreds of redundancies have followed in the wake of a major Danish public sector IT failure and the loss of CSC's largest private sector customer in the region, the telecoms firm TDC, to Indian outsourcer Tata.
CSC is making approximately 1,100 redundancies in the UK, thought to be about 15 per cent of its local workforce, as it stands down teams that had been working on the NHS contract and absorbs the shock of financial results that recorded a $4.3bn world-wide loss last week.
The majority of the loss was attributed to the NHS write-off and a $2.7bn loss of goodwill over numerous acquisitions CSC had made in the last 10 years. $269m was attributed to a settlement CSC made with the US Army over its Logistics Modernisation Programme, one of 11 ERP projects that caused trouble for the US Department of Defence.
Neil Malcolm was unavailable for comment.
Finance Minister Biti a 'punch bag', says prominent labour consultant - The Zimbabwean
"Our Minister of Finance, Tendai Biti, is a punch bag," Makings said in Harare addressing business people gathered for the monthly Express Management meeting.
This meeting is sponsored by the British Council and is attended by prominent business people especially those that were trained in the United Kingdom (UK).
"He cannot do anything right now because his hands are tied.
"What he says and does is all controlled by the government which as you know is broke and so there is really nothing that he can do to solve the economic crisis.
"We really cannot blame Tendai Biti because he is just a punch bag in the government."
The statement comes at a time when Zimbabwe is expecting a high level delegation from the Washington-based International Monetary Fund (IMF) in the country.
The delegation is coming to Zimbabwe to investigate and try to find out the nation's economic recovery progress.
"The IMF are coming next month (June) to see how we are faring," Anthony Hawkins Head of the University of Zimbabwe's Business School, said in an exclusive interview last month.
He said:"There is nothing really new about this but I think this time around they will ask where our diamond cash is going to and how it is being used.
"As you probably know the Minister of Finance, Tendai Biti, has said we could earn about $600 million from diamonds but the Minister of Mines and Mining Development, Obert Mpofu, on the other hand, says this might not be the case and so this will have to be clarified to the delegation."
Hawkins said he did not know whether Zimbabwe has paid anything yet to the IMF.
"I cannot comment on our repayment schedule because I have not heard about any repayments yet," he said.
"However, they will be worried about our diamond cash just like they were worried about the oil cash in Angola and how that was used before they could come in and help that country."
Hawkins said as long as the country did not repay its outstanding debts, the IMF would not "budge a finger" to help the economic recovery programme.
Zimbabwe's outstanding arrears to the IMF have now reached $140 million at a time when the country owes the Washington-based group $550 million, Biti, the Minister of Finance, has already confirmed.
He said Zimbabwe's outstanding arrears under the Fund's Extended Credit Facility (ECF) now amount to $140 million.
The ECF replaced the Fund's Poverty Reduction and Growth Facility.
"Zimbabwe does not have the capacity to pay off the IMF's arrears from its own resources," Biti said in Harare.
"In this regard, the country will need to request cooperating partners for a concessional bridging loan or grant to settle arrears to the IMF."
He said clearance pf ECF arrears would unlock new financing arrangements from the IMF, within the context of a Fund supported financial arrangement, which would then be used to repay the bridging loan obtained from the cooperating partners.
"Zimbabwe will, however, need a track record of implementing sound macro-economic policies and assurances that arrears to other official creditors are programmed to be cleared," Biti said.
Biti has already confirmed that Zimbabwe owes multilateral institutions a grand total of $2,504 billion, of which the World Bank is owed $1,126 billion, the IMF, $550 million, the African Development Bank (AfDB) $529 million, and the European Investment Bank (EIB), $221 million.
President Robert Mugabe has said there is an urgent need for Zimbabwe to achieve external debt sustainability through a comprehensive debt relief and arrears clearance programme.
"This must be strongly supported by my government and all the development partners and creditors," President Mugabe said.
Prime Minister, Morgan Tsvangirai, has also said it is "clear that Zimbabwe cannot rehabilitate its infrastructure and move forward with its socio-economic transformation reforms if the debt overhang challenge is not urgently resolved".
FOREX-Euro, growth currencies firm on stimulus hopes - Reuters
* Rising talk of more stimulus from Fed helps risk
* Euro bears cut positions as peripheral yields ease
* Spanish bond auction, Bernanke's testimony in focus
* Aussie jumps after unexpected gains in payrolls
By Anirban Nag
LONDON, June 7 (Reuters) - The euro hovered near one-week highs on Thursday and growth-linked currencies were supported by expectations that global policymakers will act soon to support a flagging economic recovery.
That drove investors to unwind bets on safe-haven currencies like the dollar and the Japanese yen. Both may stay under pressure ahead of Federal Reserve chairman Ben Bernanke's testimony later in the day, traders said.
Hopes for more stimulus from the Fed received a boost after Janet Yellen, the Fed's vice chair, laid out the case for more easing to bolster a fragile economy as financial turmoil in Europe mounts.
The global economy has floundered in recent weeks and risks to growth have risen given chances of a Greece exit from the euro zone and expectations that Spain will have to seek an international bailout to help its banking sector.
This has put pressure on euro zone politicians and global central banks to come up with a credible policy response to support growth. Also boosting risk sentiment in general, data showed Australian employment surged in May despite forecast of a fall, pushing the Aussie dollar to its highest in three weeks.
The single currency last stood at $1.2565, having briefly risen to $1.25859, its highest level since late May and about 2.3 percent above a two-year low of $1.2288 hit last week. Traders cited resistance at around $1.2625, the January low which was also last week's high.
"The euro can bounce up to $1.2630 but then it will be a sell on rallies as Europe's problems are ...considerable," said Stuart Frost, head of Absolute Returns and Currency at fund manager RWC Partners.
"There is also profit taking in long dollar positions. We expect Bernanke to strike a dovish tone and that will keep alive expectations of more quantitative easing."
More easing by the Fed would likely weigh on the dollar while giving a fillip to growth-linked currencies like the Australian and New Zealand dollars and to some extent the euro and the pound.
The dollar index was down 0.1 percent at 82.253.
While Yellen is known to be a dove and her comments late on Wednesday did not surprise markets, other officials, such as Atlanta Fed President Dennis Lockhart, also talked about possible need for action, saying his level of concern had risen since the Fed's April meeting.
"Since (last week's) weak U.S. job data, there's been rising speculation of more stimulus from the Fed. That is making dollar long positions uncomfortable," said Katsunori Kitakura, associate general manager of market-making unit at Sumitomo Mitsui Trust Bank.
SPANISH AUCTION
In Europe, traders said further gains in the euro will depend on the market's response to a Spanish bond auction.
The sale of up to 2 billion euros of bonds is seen as a crucial test of Madrid's ability to continue to refinance its debt. Spanish and Italian government bond yields slipped ahead of the sale.
Spain has been on investors' radar in the past two weeks, relegating worries about a Greek euro exit. While there has been no concrete progress on steps to support Spain, European sources said Germany and European Union officials are urgently exploring ways to support Spain's stricken banks.
Spain has not yet requested outside assistance and is resisting being placed under international supervision, but signs of sense of crisis hounding policymakers - such as a Group of Seven conference call on Tuesday - were making traders uneasy about holding large bearish positions against the euro.
The Australian dollar rose to three-week high of $0.9969 on upbeat jobs data, which came a day after strong growth numbers. It last stood at $0.9955, up 0.4 percent on the day.
The U.S. dollar managed to outperform the yen, which was hit broadly as risk appetite improved. The yen was also dampened by recent threats from Japanese authorities to curb its strength.
The dollar was 0.1 percent higher at 79.30 yen, off a 3-1/2 month trough around 77.65 set on June 1.
Finance Ministry Welcomes a Celebrity Bond Salesman - Wall Street Journal
By Eleanor Warnock
Despite having to deal with problems like reforming Japan’s finances and the sales tax debate, the Finance Ministry was in an ebullient mood Thursday as it welcomed sumo champion Hakuho, the new face of its “reconstruction bond” campaign.
As JRT told readers last week, Mongolian-born Hakuho is the first celebrity in this year’s lineup to market “reconstruction bonds” for Japan’s Ministry of Finance. The bonds are meant to help finance rebuilding in areas hit by the earthquake and tsunami last March.
A swarm of journalists crowded into the room where Finance Minister Jun Azumi met with Hakuho, prompting Senior Vice Minister of Finance Yukihisa Fujita to turn his camera on the crowd.
“All of you are more interesting than this!” he laughed.
Mr. Azumi even pretended to take on the 335-pound Hakuho in front of the cameras.
“Heavy,” he quipped.
The minister and the wrestler convened for 10 minutes, during which Hakuho revealed that his 26th birthday was on March 11, 2011, one of the reasons he said he felt a personal connection to the event. Since that day, he has visited the disaster areas with other wrestlers and volunteered to help victims in Tokyo.
“I am from Ishinomaki, one of the areas hit by the disaster,” Mr. Azumi said, referring to Hakuho’s trips to meet with disaster victims. “You don’t know how happy you’ve made the people there.”
After the meeting, Hakuho told reporters he hoped people would buy the bonds, and that he could provide “strength for the disaster areas.”
Four celebrities, including Hakuho, will lend their star power to the bond campaign this fiscal year though newspaper ads, television commercials, posters and pamphlets. Hakuho will promote the bonds this summer, followed by Homare Sawa of Japan’s World Cup-winning soccer team in the fall. The campaign will then feature JRT favorite AKB48 in the winter and Yokohama DeNA BayStars Manager Kiyoshi Nakahata next spring.
Hakuho has been featured before in ads for Japanese companies like Fuji Xerox Co. and Sapporo Breweries Ltd.
It remains to be seen whether the excitement today will translate to actual sales. The ministry plans issue ¥2.682 trillion ($33.87 billion) of the reconstruction bonds this fiscal year. As the euro crisis drags on, interest rates on JGBs have sunk to multiyear lows, and investors aren’t exactly looking to government bonds for the best returns.
The reconstruction bond commercial featuring Hakuho will premiere on June 9.
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