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Still the stature of National Currency is at the stationary position

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Forex Research - Open Market Comments

Still the stature of National Currency is at the stationary position against  the Dollar.The trade start off at the same price i.e Rs: 81.40 till the market goes to its end. In the international market the dollar rose from a three-week low against the euro and erased losses versus the yen after a Chinese official said he was “not aware” of a plan to discuss a new reserve currency at a Group of Eight meeting next week
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The greenback also gained versus 13 of the 16 major currencies after  Chinese Vice Foreign Minister He Yafei said he hopes the dollar will “remain stable,” easing concern it will lose its reserve status. The yen rose from near a two-week low against the euro on speculation a U.S. report today will show the world’s biggest economy lost jobs for an 18th month, spurring demand for the relative safety of Japan’s currency.

“The minister’s remarks are definitely supportive of the dollar,” said Tsutomu Soma, a bond and currency dealer at Okasan Securities Co. in Tokyo. “It’s extremely difficult to move to a new reserve currency. For China, the value of their U.S. holdings would drop.”

The dollar climbed to $1.4109 per euro as of 1:25 p.m. in Tokyo from $1.4142 in New York yesterday, when it declined to $1.4201, the lowest since June 5. The dollar was at 96.60 yen from 96.65 yen. The yen advanced to 136.31 per euro from 136.70 yesterday, when it fell to 136.89, the weakest since June 15.


The U.S. currency dropped beyond $1.42 versus the euro yesterday after Reuters, citing G-8 sources, reported that China asked to debate proposals for a new global reserve currency at next week’s summit in Italy.

Chinese officials have sought a greater role over time for the International Monetary Fund’s unit of account, known as Special Drawing Rights, or SDRs, in an effort to reduce the dollar’s dominance.

 

Dollar Index

 The Dollar Index, which tracks the greenback against the currencies of six major U.S. trading partners including the euro, yen and pound, rose 0.2 percent to 79.794.

The yen strengthened versus all of the 16 major currencies as today’s U.S. employment report may show the jobless rate increased to the highest level since 1983, suggesting the global recession will be prolonged.

U.S. employers cut 365,000 jobs last month after reducing them by 345,000 in May, News survey of economists before the Labor Department report. The unemployment rate climbed to 9.6 percent.

“I will certainly expect the yen to strengthen if the payroll data comes in worse than expected because of risk- appetite flow,” said Katie Dean, a senior economist in Melbourne at Australia & New Zealand Banking Group Ltd., Australia’s fourth-biggest lender.


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