| Australia Dollar Pares Loss on Speculation Rates to Rise in May
April 4 (Bloomberg) -- The Australian dollar pared losses on speculation the central bank will raise its benchmark interest rate next month after leaving borrowing costs unchanged today. Government bonds rose. The currency fell as much as 0.9 percent immediately after the Reserve Bank of Australia said it left rates at a six-year high of 6.25 percent. The decision surprised many traders, particularly after an April 2 report showed higher-than-expected retail sales. The chance of an increase in May is 52 percent, according to a Credit Suisse index. ``The market had built itself into a frenzy, so there was a knee-jerk reaction after the announcement,'' said George Kapasakis, a senior foreign-exchange trader at Mizuho Corporate Bank Ltd. in Sydney. ``Then the bottom pickers and guys who missed out on the way up last time came in'' to buy the currency.
RBZ Withdraws Tobacco Growers' Forex Entitlement
THE Reserve Bank of Zimbabwe has with immediate effect scrapped the tobacco growers' 15 percent foreign currency entitlement held in Foreign Currency Accounts. It said in a circular this week if farmers want to retain this portion then they will have to buy foreign currency at the ruling interbank rate of US$ to Z$250. .
Euro hits 2-year high versus $
NEW YORK: The euro reached a two-year high against the dollar and approached a record versus the yen as signs of faster growth in Europe raised speculation the European Central Bank will increase interest rates. Gains in the euro accelerated after it rose above $1.34, triggering orders to buy back the currency, traders said. ECB officials said this week that higher borrowing costs are needed to contain inflation as reports showed strength in manufacturing. The Bank of England kept rates unchanged on Thursday. "The euro is aggressively bought," said Tim O'Sullivan, chief foreign exchange trader at Forex.com, a unit of online currency trading company Gain Capital in Bedminster, New Jersey, which has about $250 million funds under management. "The ECB has more room to go to hike rates." The euro advanced 0.47% to $1.3431 in morning trade in New York, the highest since March 2005.
BOT rejects fears it will peg currency
The Bank of Thailand (BOT) has rushed to dismiss a market rumour that it plans to peg the exchange rate at Bt36 to the greenback.
"We found that some banks have reaped profits from the currency, so we have asked the Thai Bankers' Association to take care of the issue. If banks take benefit from the foreign exchange rate, they should stop doing so. The central bank also affirmed that we would not peg the foreign exchange rate and we don't have any new measures. Fully hedging measures are good enough," BOT governor Tarisa Watanagase said. "We summoned the banks because there was a rumour in the market that the central bank would fix the foreign exchange rate. Don't worry, we will not do so. We did not issue a circular letter to require banks to buy the US dollar," BOT assistant governor Nitaya Pibul-ratanagit told reporters after a meeting with executives of the banks.
Dollar drops to six-year low against local currency
The dollar hit an almost six-year low on Friday against the shekel: NIS 4.155. Yesterday the greenback recovered slightly in options trading on the Tel Aviv Stock Exchange, since there is no foreign currency trading on Sundays. The shekel-dollar exchange rate reached NIS 4.161.
To weaken the shekel, the Bank of Israel has been cutting interest rates. But it hasn't worked as foreign investors continue to buy shekels to make investments in Israel.
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