Forex Research -
Open Market Comments
The Pak. Rupees has remain motionless against the Dollar , the trade start off at Rs. 81.40 and remain unchanged until the end. In the International Market the Foreign-exchange strategists said the Swiss National Bank sold the franc twice on June 24 and once more yesterday as it tried to support the economy. Nicolas Haymoz, a Swiss central bank spokesman, declined to comment yesterday on whether the bank acted in foreign-exchange markets.
“The SNB has to convince markets that it considers a strong franc as unwelcome,” Unicredit SpA analysts Armin Mekelburg in Munich and Roberto Mialich in Milan wrote in a report today. “We fear that franc bulls will start further attempts to wipe out the line in the sand of 1.50.”
The franc climbed 0.6 percent to 1.5219 against the euro, one of only five major currencies to advance today versus Europe’s 16-nation currency. The franc advanced 1.2 percent to 1.0814 compared with the dollar.
The Swiss currency declined on June 24 to 1.5380 versus the euro, the weakest level since mid-March, when the SNB said it intervened to weaken the franc.Dollar Index
The ICE’s Dollar Index fell below 80 on the call from China for an alternative to the dollar as the world’s main reserve currency. The gauge tracking the greenback versus the currencies of six leading trading partners decreased 0.8 percent to 79.84.
“To prevent the deficiencies in the main reserve currency, there’s a need to create a new currency that’s delinked from the economies of the issuers,” the People’s Bank of China, or PBOC, said in its 2008 review released today. China is the biggest foreign holder of U.S. Treasuries, with $763.5 billion in April.
The dollar won’t be supplanted as the world’s leading currency, Federal Reserve Bank of Dallas President Richard Fisher told reporters after a speech in today.
The 10-year Treasury yield headed for its third weekly drop, the longest stretch of decreases since December, as investors bet the Fed will keep interest rates close to zero for the rest of the year. Policy makers said on June 24 inflation “will remain subdued for some time” and the economy warrants an “extended period” of low rates.Russia on Dollar
Russian Finance Minister Alexei Kudrin said on June 13 after the Group of Eight meeting in Italy that his country had full confidence in the dollar and that it’s “too early” to speak of alternative reserve currencies. Japan has “unshakable” trust in the strong-dollar policy of the U.S., Finance Minister Kaoru Yosano said in Tokyo yesterday.
China called on the U.S. to guarantee the safety of its assets in March, when Premier Wen Jiabao said the nation was “worried” about its holdings of Treasuries.
People’s Bank Governor Zhou Xiaochuan urged the IMF that month to expand the functions of its unit of account and move toward a “super-sovereign reserve currency.” Russian President Dmitry Medvedev proposed on June 5 that nations use a mix of regional reserve currencies to reduce reliance on the dollar.
“There may be signs here of tensions mounting between the PBOC’s economic concerns over China’s holdings of dollars and the Chinese government’s diplomatic reasons for doing so,” Stephen Gallo, head of market analysis at Schneider Foreign Exchange in London, wrote in an e-mail.Yen Versus Euro
The yen earlier dropped versus the euro on speculation Japanese investors are adding to their purchases of foreign securities. Japanese investors were net buyers of foreign bonds during the week ended June 20, according to figures based on reports from designated major investors released by the Ministry of Finance in Tokyo.
“The global environment for investors’ risk taking is gradually improving,” said Tsutomu Soma, a bond and currency dealer at Okasan Securities Co. in Tokyo. “The bias is for the yen to be sold, especially as trust funds are being launched to attract bonuses.”
Japan’s currency slid as much as 0.5 percent to 134.94 against the euro before gaining 0.2 percent to 133.99 after a 0.2 percent decrease in the Standard & Poor’s 500 Index revived demand for safety.Content Department