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Forex reserves up by USD 1.36 billion - Times of India
Foreign currency assets, a major component of the forex reserves, were up by USD 1.17 billion to USD 256.95 billion during the reporting period, according to the weekly statistical supplement of the Reserve Bank.
Foreign currency assets expressed in US dollar terms include the effect of appreciation or depreciation of the non-US currencies, such as the euro, pound and the yen, held in the reserves, the apex bank said.
The gold reserves were up USD 175 million at USD 25.76 billion, the apex bank said.For the week under review, the special drawing rights (SDRs) were up USD 8.4 million to USD 4.379 billion, while the country's reserve position with the IMF was also up USD 5.6 million to USD 2.89 billion, the apex bank data showed.
FOREX-Euro falls to 2-year low vs U.S. dollar - Reuters
Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests.
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MONEY MARKETS-Betting the Fed won't hike rates until late 2014 - Reuters
* Short-term futures bet Fed won't hike rates until late 2014
* Repo stays elevated before Treasury auctions
* Libor dips again
* Euribor rates fall after ECB cuts rates to record low
NEW YORK, July 6 (Reuters) - Jobs data and monetary policy led to lower short-term interest rates o n F riday as subdued U.S. job growth prompted short-term futures traders to bet the Federal Reserve would not raise rates until late 2014 and European Central Bank rate cuts caused interbank lending rates to fall.
Futures traders increased bets the Fed would keep short-term interest rates near zero until the end of 2014 after the U.S. government reported non-farm payrolls expanded by just 80,000 jobs in June, not enough to bring down the country's high 8.2 percent unemployment rate.
Fed fund futures, tied to the overnight lending rate between banks, rose after the report, showing that traders foresaw a 55 percent chance the Fed would raise rates in October of 2014, and about the same chance it would do so in December 2014.
Euro zone bank-to-bank lending rates fell to record lows after the European Central Bank on Thursday cut the bloc's main interest rate to a historic low of 0.75 percent and its deposit rate to zero.
The ECB's overnight deposit rate acts as a floor for money market rates as banks only lend to rival banks if they can earn more interest than at the ECB.
Cutting the rate to zero was unprecedented and a move the ECB hopes will encourage more interbank lending, which could then allow increased lending to firms and households.
But analysts said zero rates might hamper money-market functioning as banks' operating costs could exceed short-term interest rates.
Moreover, some doubt whether a rate cut is enough to improve demand, especially in hard-hit southern Europe.
"If anything, (the ECB rate cut) has increased monetary divergence between the core and the periphery within the euro zone, which poses questions about the ability of fiscal policy to bridge the gap," said Lena Komileva of G+ Economics.
Three-month Libor, the London interbank offered rate, edged lower again - fixing 0.2 basis points down at 0.45760 percent.
Libor is supposed to be a neutral figure reflecting how much it costs a bank to borrow money. But it is currently at the center of a scandal in which banks are alleged to have manipulated the rate in order to give a rosier view of their health and viability as a borrower.
Three-month Euribor rates, traditionally the main gauge of bank-to-bank lending, fell the most on record, hitting an all-time low of 0.549 percent, down from 0.641 percent.
Other key rates experienced similar drops. Six-month Euribor rates fell to 0.831 percent from 0.920 percent. Shorter-term one week rates fell to 0.208 percent from 0.313 percent. Overnight rates, which do not yet factor in the benefit of the cut, inched down to 0.332 percent.
Euribor, involved in a scandal like that of Libor after it emerged that a number of banks manipulated the rates they submitted to the committee that aggregates the data , also moved lower.
Dollar-priced three-month bank-to-bank Euribor lending rates edged down to 0.991 percent from 0.996 percent. The overnight rates climbed to 0.344 percent.
General collateral rates remained elevated after closing in the high 20s in the previous session. They traded at similar levels on Friday before next week's Treasury auctions.
"Like the heat in the (U.S.) heartland, there is no relief from elevated repo funding," said Roseanne Briggen, market analyst at IFR, a ThomsonReuters unit. "Collateral is still sloshing around in search of a home."
Federal funds closed at 18 basis points on Thursday; the effective rate was 17 basis points. They last traded at 18 basis points on Friday.
Seattle Occupy group drops $5,000 from hotel to protest money in politics - The Guardian
Occupy protesters in Seattle marked the Fourth of July by throwing $5,000 out of a hotel window in a protest against the influence of money in politics.
MicCheckWallStreet, an offshoot of the Occupy movement, staged the demonstration at 5pm. The group's website declared that it is "time we declared independence from Citizens United" – citing the supreme court case which effectively ruled that corporations can make political contributions.
A video posted to YouTube shows two people tossing the cash – which MicCheckWallStreet said was in $1 and $5 bills – out of a window above downtown Seattle.
The group had signalled its intentions on its website, asking for donations to a wepay.com account. The wepay page shows that McCheckWallStreet exactly met its $5,000 goal, collected from just 37 donors.
"Every dollar you donate is guaranteed to be thrown off a building and is tax deductible, what more could you ask for?!," said a statement on MicCheckWallStreet's website.
"Be a part of it, donate today!"
Stating that "money is the new tea", the statement said that the event was "as much art installation as protest", declaring that "it sends a powerful message".
The video posted to YouTube does not show the impact at street level, although separate footage posted to UStream showed a small crowd gathered in an alley, where some of the money appeared to have fallen.
The Seattle Times reported that "wind blew some of the money onto a bar awning and into a nearby alley, sending people hunting for cash on windowsills and Dumpster lids".
It is the second "money drop" protest staged by the group. On Valentine's day activists hurled $500 from the top of a building in Seattle.
The Bank of England's black hole: As another £50bn quantitative easing disappears into thin air, are they shovelling good money after bad? - Daily Mail
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Throwing good money after bad? Mervyn King, the Governor of the Bank of England, announced more QE
An increasingly desperate Bank of England is showering the economy with another 50bn of fivers and tenners, the ink, metaphorically speaking, still warm.
It takes the total under the Quantitative Easing scheme to 375bn, a huge amount of money by any measure. Mervyn King is not actually strewing sacks of new notes into cash machines; the money is created by electronic transfer as the Bank buys up gilts from banks and pension funds.
But to put the size of the operation into perspective, it amounts to more than a third of all the gilts – government IOUs – that are in issue. And no-one has the least clue what, if any, good it is doing.
Certainly, QE3 has been greeted with a marked lack of enthusiasm in the City, which fears the law of diminishing returns.
Even if earlier bouts were effective at boosting the economy – and that is incapable of being known - the Bank is getting less bang for its buck (or pound) this time, simply because the ‘shock and awe’ factor has worn off. The City had already factored more QE into its thinking; in other words, markets are becoming addicted to their fix.
At the same time, pensioners and savers are furious that the policy is eroding their hard-earned savings.
The arrival of CBI economist Ian McCafferty on the Monetary Policy Committee that decides on interest rates and QE might, one hopes, have a good effect on that body, which at the moment is stuffed with Bank insiders, academics and professors of the dismal science of economics.
McCafferty at least has been working at close quarters with real businesses and might help focus the minds of the committee on their needs: namely, for credit so they can invest, export and grow.
QE has not succeeded in opening the sluice-gates of credit to small firms – hence the latest wheeze, an 80bn ‘funding for lending’ scheme.
Cash: The Bank of England is showering the economy with another 50bn taking the total amount under the Quantitative Easing scheme to 375bn
The initiative involves the Bank of England taking low quality loans off the commercial banks’ books. That, in turn, will free the lenders to make cheaper loans to small and medium firms, or so the theory goes (the fact it will saddle the Old Lady with a pile of dubious assets is glossed over.)
It was announced with great fanfare at the Mansion House speech. But it has all been very quiet since then.
Hardly surprising: everyone has other things on their minds.
Paul Tucker, widely seen as favourite to be the next Governor, has been dragged into the scandal surrounding Bob Gissa Job Diamond. (I have always thought a man of 60, with such a luxuriant head of hair, in such an unconvincing shade of nut brown, must be up to no good).
The Bank’s latest action on QE came as the European Central Bank cut interest rates to 0.75pc and the People’s Bank of China slashed its lending rates in a surprise move.
The latest jobs figures from the US suggest that hopes of a recovery in the world’s largest economy may have been premature. There are fears of a slowdown in China and other emerging markets, that supposedly were insulated from the malaise in the West.
Borrowing costs in Italy and Spain soared yesterday as Christine Lagarde, the head of the International Monetary Fund issued yet another dire warning that more needs to be done to shore up the single currency.
Banks need billions of pounds of fresh capital to withstand the Eurozone crisis – another Mansion House measure was the ECTR, designed to pump 5bn a month into the banks to keep them afloat.
In this terrifying battlefield, QE has been the main weapon in the Bank’s armoury. The problem is, QE does not solve anything. There is no exit strategy, and there can be no guarantees it can be unwound in an orderly fashion. It runs counter to the cultural changes in our attitudes to borrowing and sound money that are needed for a sustainable future.
At best, it is a palliative – at worst it is a monstrous gamble that risks debasing the currency.
Forex Flash: Too early to take calls for QE3 seriously - BBH - FXStreet.com
The dollar strengthened in response to the report and "there are a couple elements to the market logic", they say. "In the current environment, global growth concerns are dollar supportive. In addition, the data taken was not far from expectations and this meant it posed no obstacle to what the market wanted to do in the first place, which was to sell the European and emerging market currencies (risk off)".
After US and Canadian employment data release, "the important take away from today's data for medium term investors is 1)it is too early to take calls for QE3 seriously for the July 31 FOMC meeting, especially given that Operation Twist was just extended 2) ideas that Canada could hike rates any time soon seems misplaced".
"The important question for short-term participants is whether today will be a trend day or will consolidation emerge ahead of the weekend", BBH team says. "We lean toward the latter after yesterday's large moves, ahead of the weekend and the European finance ministers' meeting on Monday".
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