Rupiah Drops to Four-Month Low as Central Bank Helps Exports

Indonesia’s rupiah fell to the lowest level since February after the central bank said it will allow weakness in the currency to help exports.

Bank Indonesia is letting the rupiah be temporarily “undervalued” to improve the competitiveness of the nation’s shipments and to reduce imports, Senior Deputy Governor Mirza Adityaswara said in Jakarta yesterday. The trade shortfall widened to $1.96 billion in April, the largest since July last year. That weighs on the current-account deficit, which is set to expand this quarter from the 2.06 percent of gross domestic product recorded in the first three months of the year.

The currency fell 0.5 percent to 12,043 per dollar as of 9:44 a.m. in Jakarta, prices from local banks show. It reached 12,048 earlier, the lowest level since Feb. 13. In the offshore market, one-month non-deliverable forwards declined 0.5 percent to 12,106, trading 0.5 percent weaker than the onshore spot rate, data compiled by Bloomberg show.

Spending typically rises during the Muslim fasting month of Ramadan, which will start in late June, while Indonesians head to polls on July 9 to choose a president. Oil prices have climbed this month as militants captured territory in Iraq, the Organization of the Petroleum Exporting Countries’ second-largest producer.

The rupiah’s one-month implied volatility, a measure of expected swings in the exchange rate used to price options, rose five basis points to 9.99 percent. Bank Indonesia set a fixing used to settle rupiah forwards at 23,027 per dollar today, from 12,000 yesterday.

The government’s 8.375 percent bonds due March 2024 declined for the fourth straight day, pushing the yield one basis point, or 0.01 percentage point, higher to 8.20 percent, according to the Inter Dealer Market Association. That’s the highest level since March 26

Singapore to Require Banks to Hold Liquid Assets for Crises

Banks in Singapore will soon be required to keep certain amounts of easy-to-sell assets on hand in the country to support themselves in times of stress.

The new liquidity framework applies to lenders with a “significant retail presence” in the country and covers all currencies, Lim Hng Kiang, the deputy chairman of the Monetary Authority of Singapore, or MAS, said in a speech last night. Banks will also need to hold liquid Singapore dollar assets separately to manage their liabilities in the local currency.

The so-called liquidity coverage ratio is part of an overhaul of banking standards by the Group of 20 nations in response to the financial crisis that followed Lehman Brothers Holdings Inc.’s 2008 collapse. MAS’s proposal comes six months after it warned that rising global interest rates could weigh on household and corporate debt and pose risks for banks.

The requirement for overseas currency exposures “is going to be a huge challenge for banks in Singapore, which is a major foreign-exchange center and where the local economy is not the lion’s share of the business,” Jim Antos, a Hong Kong-based analyst at Mizuho Securities Asia Ltd., said by phone today. “It may be fine for banks in Ohio because there’s no foreign exposure, but not in Singapore.”

Under the global rules formulated by the Basel Committee on Banking Supervision, banks must have enough assets on their books that they can sell to survive a 30-day funding squeeze. The regulations, which allow assets ranging from cash and central bank reserves to government bonds and some corporate debt, are set to be phased in from next year.

Foreign banks will need a Singapore dollar liquidity coverage ratio of 100 percent, Lim said, meaning they would have to hold enough high-quality, liquid assets to match net cash outflows during a month of stress. He didn’t specify a deadline for meeting the requirement.
The coverage for other currencies will be 50 percent as their head offices are probably subject to similar ratios, he said. Citigroup Inc. (C), HSBC Holdings Plc and Standard Chartered Plc (STAN) are among foreign banks operating in the country.

For such firms, “while MAS recognizes that there may be cost efficiencies in managing liquidity centrally at the group level, there can be significant obstacles to the free movement of liquidity across borders during a stress scenario,” said Lim, who is also the minister for trade and industry.

MAS will consider a bank as having a significant retail presence if its share of resident customer deposits exceeds 3 percent, and if it has more than 150,000 depositors with balances of as much as S$250,000 ($200,000).

For the country’s three local banks -- DBS Group Holdings Ltd. (DBS), Oversea-Chinese Banking Corp. (OCBC) and United Overseas Bank Ltd. (UOB) -- the requirement for a 100 percent Singapore dollar liquidity coverage ratio will be set for the start of 2015, Lim said. Coverage for other currencies is set at 60 percent from 2015, increasing to 100 percent by 2019, he said.

OCBC already complies with the liquidity framework for 2015 and DBS is “comfortable” with the requirements as they’re in line with Basel III rules, the banks said in separate statements.

Despite country's spending, forecast GDP brought down to 1.5.

Brazilian swap rates declined to a seven-month low as evidence of a weakening economy added to speculation that policy makers will limit further increases in borrowing costs.

Swap rates on contracts maturing in January 2016 fell 10 basis points, or 0.10 percentage point, to 11.20 percent at the close of trade in Sao Paulo, the lowest level on a closing basis since Oct. 31. They closed down two basis points this week. The real climbed 0.3 percent to 2.2243 per U.S. dollar, advancing 1 percent since June 6.

The central bank reported today that its economic activity index, a proxy for gross domestic product, dropped 2.29 percent in April from a year earlier. That was worse than the 1.85 percent contraction forecast by economists surveyed by Bloomberg. Slowing growth spurred the central bank to hold its target lending rate at 11 percent on May 28 after nine consecutive increases to curb inflation.

Speculation that President Dilma Rousseff will face a runoff following October’s vote after overseeing a stalled economy and faster inflation has helped to push the real up 6.2 percent this year, the most among 24 emerging-market currencies.

Morgan Stanley said in a research report to clients that it cut its economic growth forecast for Brazil this year to 1 percent from 1.5 percent.

The World Bank cut this week its estimate for Brazil’s 2014 economic growth to 1.5 percent from 2.4 percent.

Consumer prices increased 6.37 percent in the 12 months through May, the fastest pace in almost a year and approaching the 6.5 percent upper limit of the official target.

To support the currency and limit import price increases, Brazil sold today $198.7 million of foreign-exchange swaps and rolled over contracts worth $494.4 million. The central bank announced June 6 that it was extending its intervention, which was initially scheduled to end this month.

Binary Options - 03 June 2014

http://goo.gl/gJTV6c

Binary Options - 03 June 2014

Quite a wait tonight but worth the wait.

2 done deal: 2 wins, 0 Lose

2 x 76% = 152% Profit (Based on per trade size)

I am out for tonight.

http://goo.gl/gJTV6c

Euro Gains on Bets ECB Action Won’t Weaken Currency More

http://goo.gl/gJTV6c

The euro rose against most of its major counterparts as traders speculated any stimulus measures this week from the European Central Bank won’t be enough to further weaken the 18-nation currency.

The shared currency strengthened from almost its lowest level in three months versus the dollar even as a report showed the jobless rate in the euro area was near a record low in April. Australia’s dollar advanced after the Reserve Bank said growth appeared to be accelerating. Brazil’s real climbed versus its 16 major peers after the central bank increased support for the currency. South Africa’s rand dropped.

The euro gained 0.3 percent to $1.3638 at 9:14 a.m. New York time, after weakening 0.3 percent yesterday. The currency fell to $1.3586 on May 29, the weakest since Feb. 13. The euro advanced 0.3 percent to 139.64 yen. The U.S. currency was little changed at 102.40 yen after gaining 0.6 percent yesterday.

South Africa’s rand was the biggest loser among 16 major peers amid the outlook for sluggish growth in the euro region, the country’s biggest trade partner. The rand depreciated as much as 0.8 percent to 14.6429 per euro, the weakest since May 7, before trading at 14.6336, down 0.7 percent.

http://goo.gl/gJTV6c

Dollar Strengthens as Durable Goods Orders Gain in April

http://goo.gl/gJTV6c

The dollar strengthened to almost a one-month high after a report showed U.S. orders for durable goods unexpectedly rose in April.

The euro headed for the biggest monthly drop since January versus the U.S. currency after European Central Bank President Mario Draghi signaled yesterday that policy makers are ready to expand stimulus. Hungary’s for-int extended losses after the central bank cut interest rates to a record low. The Turkish lira fell the most in a week as consumer confidence dropped. A gauge of volatility in Group of Seven currencies fell to almost the lowest in seven years.

The Bloomberg Dollar Spot Index, which tracks the greenback against the performance of a basket of 10 major currencies, gained 0.1 percent to 1,011.19 as of 9:55 a.m. New York time. The index reached 1,012.43 on May 23, the strongest level since April 24.

http://goo.gl/gJTV6c

Binary Options - Trades Done (21 May 2014)

After a long break, managed to catch two entry tonight. 

2 wins. 76% x 2 = 152% profit.

I am out for tonight =]

Dollar Rises With U.S. Yields Before Fed Minutes

The dollar rose as Treasury yields increased from almost six-month lows before the release of minutes from the Federal Reserve’s April meeting.

The pound rallied as retail sales jumped more in April than economists forecast and the Bank of England said the case for interest-rate increases is becoming more balanced. The yen reached a three-month high earlier after the Bank of Japan refrained from expanding stimulus that tends to weaken a currency and said it projects a moderate economic recovery will continue.

The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major currencies, rose 0.1 percent to 1,009.95 as of 9:13 a.m. New York time.

The U.S. currency added 0.3 percent to $1.3664 per euro. The yen was little changed at 101.31 per dollar, after reaching 100.82, the strongest level since Feb. 5. Japan’s currency appreciated 0.3 percent to 138.42 per euro after touching 138.15, the most since Feb. 6.

Treasury 10-year note yields rose three basis points, or 0.03 percentage point, to 2.54 percent. The yield reached 2.47 percent on May 15, the lowest level since October.

Pound Rallies as Retail-Sales Jump Stokes Rates Bets

The pound rose for a fifth day against the dollar as a jump in U.K. retail sales last month stoked speculation the Bank of England will move closer to raising interest rates as the economy strengthens.

Sterling appreciated versus all but two of its 16 major counterparts. While minutes of this month’s meeting showed officials on the BOE’s Monetary Policy Committee voted unanimously to keep the benchmark interest rate at a record-low 0.5 percent, they also indicated the policy decision was becoming “more balanced” for some of the nine members. U.K. government bonds fell for a fourth day.

The pound rose 0.3 percent to $1.6886 at 10:34 a.m. London time after reaching $1.6921, the highest level since May 9. Sterling added 0.3 percent to 81.17 pence per euro, after touching 81.03 pence, the strongest level since January 2013.

The U.K. currency strengthened in the past 12 months as speculation shifted to the timing of the first increase in central bank rates from bets the BOE may have been prepared to add stimulus. Sterling gained more than 10 percent since this time last year, the best performer among 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The euro added 4.5 percent, and the dollar fell 2.2 percent

Pound Climbs to 4-Year High on U.K.’s Resurgent Economic Growth

The pound advanced to the strongest level in more than four years against the dollar this week as signs the U.K. economic recovery is gathering momentum boosted the allure of British assets.

Sterling climbed for a fourth week versus the greenback as data showed growth accelerated in the first quarter and house prices rose at the fastest pace since 2007. The U.K. currency advanced against the euro as a purchasing managers index for manufacturing rose more than analysts forecast. Government bonds were little changed after Bank of England Governor Mark Carney said the recovery is starting to “broaden out” before the Monetary Policy Committee’s interest-rate decision on May 8.

The pound rose 0.4 percent this week to $1.6865 at 5:07 p.m. London time yesterday after rising to $1.6920 on May 1, the highest level since August 2009. The U.K. currency strengthened 0.2 percent since April 25 to 82.20 pence per euro.

Sterling has climbed 5.5 percent in the past six months, the best performer among 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes, as the strengthening recovery fuels speculation the Bank of England will raise borrowing costs sooner than other central banks. The euro gained 2.1 percent and the dollar weakened 1 percent.

Adding to signs economic resurgence, a Markit Economics index will show growth in services output accelerated in April, according to the median forecast of analysts in a Bloomberg survey before the data is released on May 6. U.K. markets are closed for a public holiday on May 5.

Benchmark 10-year gilt yields were little changed on the week at 2.64 percent. The price of the 2.25 percent bond maturing in September 2023 was at 96.77.

Gilts returned 3.3 percent this year through May 1, according to Bloomberg World Bond Indexes. German securities earned 3.2 percent and U.S. Treasuries gained 2.6 percent.

Fed Resigned to Diminished Growth Expectations

Federal Reserve Chair Janet Yellen and her colleagues have lowered their sights on how fast the economy needs to expand to meet their goal of cutting unemployment.

No longer are they saying growth must accelerate from the 2 percent to 2.5 percent pace it has generally averaged since the recession ended. Instead, they are stressing the importance of preventing the expansion from faltering.

Exhibit number one: the Fed chief herself. Yellen said on April 16 that a key question facing the central bank is what “may be pushing the recovery off track.” Contrast that with her comments on March 4, 2013, of the importance of seeing “a convincing pickup in growth.”

The central bank on April 30 pushed ahead with its plan to gradually wind down its asset-purchase program in spite of news earlier in the day that growth ground to a virtual halt in the first quarter. Saying the economy is rebounding, the Federal Open Market Committee voted unanimously to reduce its bond purchases by another $10 billion a month, to $45 billion.

Most FOMC participants forecast gross domestic product growth of 2.8 percent to 3 percent this year and 3 percent to 3.2 percent in 2015, according to projections released March 19.

Yen Declines as Signs of Global Recovery Damp Demand

The yen weakened, dropping most against its higher-yielding peers, as the latest round of international sanctions against Russia failed to damp speculation of a strengthening global economic recovery.

The euro fell for the first time in six days after German inflation accelerated less than economists forecast in April, increasing pressure on the European Central Bank to add stimulus. South Korea’s won advanced to the strongest level since 2008 after the nation said its current-account surplus widened. Russia’s ruble climbed after the sanctions over Ukraine failed to penalize the country’s major companies or banks.

The yen fell 0.2 percent to 102.70 per dollar at 8:42 a.m. New York time after dropping 0.3 percent yesterday. It was little changed at 141.92 per euro. Europe’s shared currency declined 0.3 percent to $1.3817 after touching $1.3879, matching the strongest level since April 11.

The yen declined 0.7 percent against the won, 0.6 percent versus the South African rand and 0.4 percent against the Norwegian krone.

German Inflation Misses Estimates as ECB Pressure Mounts

German inflation (GRCP2HYY) accelerated less than economists forecast in April, increasing pressure on the European Central Bank to add stimulus in the euro area.

Inflation, calculated using a harmonized European Union method, was 1.1 percent, up from 0.9 percent in March, the Federal Statistics Office in Wiesbaden said today. Economists predicted a rate of 1.3 percent, according to the median of 21 estimates in a Bloomberg News survey. Eurostat, the EU’s statistics office in Luxembourg, will release consumer-price data for the euro area at 11 a.m. tomorrow.

ECB President Mario Draghi has signaled he’ll use unprecedented measures from negative interest rates to quantitative easing if needed to avert the risk of deflation in the 18-nation currency bloc. Inflation in the region was 0.5 percent (ECCPEST) in March, the lowest rate in more than four years and well below the ECB’s goal of just under 2 percent.

The euro dropped after the report and traded at $1.3812 at 2:30 p.m. in Frankfurt, down 0.3 percent today. The yield on the 2-year German bund slid 11 basis points to 0.161 percent. The Stoxx Europe 600 Index was at 337.48, up 1 percent.

Consumer prices in the euro area probably rose 0.8 percent this month from a year ago, according to a separate Bloomberg survey before tomorrow’s data. Economic confidence in the bloc unexpectedly fell, while remaining near the highest level since 2011, a European Commission report showed today.

The ECB’s 24-member Governing Council gathers in Brussels next week and will announce its interest-rate decision on May 8. The Frankfurt-based central bank has kept its benchmark rate at a record low of 0.25 percent since November and the deposit rate has been at zero since July 2012.

Brazil Real Tumbles as Central Bank Avoids Holding Rollover Sale

Brazil’s real fell the most this year after the central bank refrained from calling an auction to roll over foreign-exchange swaps, adding to speculation that it is easing support for the currency.

The real declined 1.3 percent to 2.2436 per U.S. dollar at the close of trade in Sao Paulo, the worst performance among 16 major currencies tracked by Bloomberg. The drop was the biggest since Dec. 11, pushing the currency down 0.3 percent for the week.

The central bank avoided scheduling an auction for today to extend maturities on swaps contracts due next month, marking the first time since April 3 that it didn’t call such a sale. The sale of swaps under a program to support the real and limit import price increases has helped it rally 5.2 percent this year, the most among 24 emerging-market currencies.

The central bank, which usually sends statements calling rollover auctions the night before at 6:30 p.m. Sao Paulo time, declined to comment when contacted by Bloomberg News. It rolled over about $6.5 billion of the $8.7 billion in currency swaps due May 2. In March, the bank extended the maturity on about $7.5 billion of $10.6 billion of swap contracts due April 1. Brazil did sell $198.2 million of foreign-exchange swaps today.

In the interest-rate futures market, swap rates on contracts maturing in January 2015 climbed one basis point, or 0.01 percentage point, to 11 percent.

Euro Advances on Industry Growth; Aussie Falls

The euro rose the most in two weeks versus the dollar as manufacturing and services in the currency bloc expanded more than economists forecast, damping bets the European Central Bank will further ease monetary policy.

Australia’s dollar slumped the most in more than a month against the greenback after a government report showed inflation was less than analysts forecast. New Zealand’s currency fell before the central bank is forecast to raise interest rates. The Bloomberg Dollar Spot Index fluctuated as the U.S. is scheduled to report on new-home sales and manufacturing. A measure of market volatility slid toward a seven-year low.

The euro advanced 0.2 percent to $1.3836 at 8:54 a.m. New York time, after touching $1.3855, the highest since April 17. The shared currency fell 0.1 percent to 141.58 yen, snapping a six-day gain. Japan’s currency rose 0.3 percent to 102.33.

JPMorgan Chase & Co’s Group of 7 Volatility Index dropped to 6.56 percent, a second daily decline, approaching the record low of 5.73 percent reached in June 2007. It is down from a record high 27 percent in October 2008, shortly after the collapse of Lehman Brothers Holdings Inc.

Dollar Gains 7th Day as Economic Data Signal Growth

The Australian dollar rose the most in two weeks against the U.S. currency before a government report tomorrow that economists said will show inflation accelerated, boosting speculation interest rates will increase.

The Aussie gained versus all of its 16 major counterparts. The yen strengthened for the first time in eight days against the dollar as China’s largest manager of bad debt said the country’s bad-loan ratio increased “significantly,” spurring demand for safe-haven assets. The Bloomberg Dollar Spot Index snapped a seven-day gain before a report forecast to show U.S. home sales fell in March.

The Australian dollar gained 0.4 percent to 93.63 U.S. cents at 9:03 a.m. London time, the biggest advance since April 8. The yen strengthened 0.1 percent to 102.49 per dollar and rose 0.1 percent to 141.47 per euro. The euro was little changed at $1.3803.

The trimmed mean gauge of Australian consumer prices was 2.9 percent in the first quarter from a year earlier, up from an inflation rate of 2.6 percent in the previous three months, according to the median forecast of economists in a Bloomberg News survey before the Bureau of Statistics issues the data.

The RBA has said inflation is expected to stay consistent with its target over the next two years. The central bank reiterated in minutes published last week of its April 1 meeting that the most prudent course is likely to be a period of interest rates on hold. It targets average annual inflation of 2 percent to 3 percent.

Yen Falls Versus Major Peers After Japan’s Trade Deficit Widens

The yen fell versus its 16 major peers after a report showed Japan’s trade deficit widened more than forecast last month.

The dollar held its biggest weekly advances in a month versus the yen and the euro ahead of leading U.S. economic indicators that may back speculation the Federal Reserve will remove stimulus this year. New Zealand’s dollar remained lower before the Reserve Bank sets policy on April 24. Currency volatility sank to an almost seven-year low on April 17, the day before financial markets from Sydney to New York were closed to observe Good Friday.

The yen fell 0.2 percent to 102.63 per dollar as of 12:04 p.m. in Tokyo from April 18, when it completed a 0.8 percent weekly slide, the biggest since the five days to March 21. Japan’s currency dropped 0.2 percent to 141.74 per euro. The dollar traded at $1.3811 per euro from $1.3813, following a 0.5 percent weekly gain.

Financial markets in the U.K., Germany, Hong Kong, Australia and New Zealand are among those closed for a holiday today. The U.S. markets reopen after being shut on April 18.

Canadian Dollar Falls as Central Bank Signals Slow Export Growth

The Canadian dollar touched its lowest point in over a week after the Bank of Canada maintained a neutral bias on interest rates and said a forecast pickup in business investment has been slow to materialize.

The currency fell against most of its major peers as the central bank held its benchmark interest rate at 1 percent for the 29th straight policy meeting, as forecast by all 18 economists in a Bloomberg News survey. The economy’s recovery “hinges critically” on a shift in demand from indebted consumers to exports and business investment, which will be aided by a weaker Canadian dollar and rising U.S. orders, the bank said in a statement today.

The loonie, as the Canadian dollar is known for the image of the aquatic bird on the C$1 coin, depreciated as much as 0.4 percent to C$1.1024 per U.S. dollar, the weakest since April 4, before trading at C$1.1007 at 11:19 a.m. in Toronto, down 0.3 percent. One loonie buys 90.85 U.S. cents.

The Canadian dollar has been the worst-performing of the greenback’s 16 major peers this year as shifts in the Bank of Canada’s outlook prompted bets it would signal a need for easier monetary policy to spur inflation and boost exports.

Forex Spot (Trade Done) 14 APR 2014

Forex Spot - Trade Done 14 APR 2014

Long position was opened with GBP/JPY on 14 Apr 2014 at 10:15am (SG Time).

Entry price at 169.82, Stop Loss at 169.40 and Target Profit at 170.80.

Trade closed by Target Profit trigger on 16 APR 2014 at 8:49am (SG Time). 97pips profit.

Binary Options (Trades Done) 15 Apr 2014

Binary Options - 15 Apr 2014

Tough night, 6 done deals.

3 wins, 2 lose, 1 break-even

(3 x 70%) + (1 x 0%) - (2 x 100%) = 210% + 0% - 200% = 10% Profit (Based on per trade size)

Stamina depleting, I am out.