Home

 
India Bullion iPhone Application
  Quick Links
Currency Futures Trading

MCX Strategy

Precious Metals Trading

IBCRR

Forex Brokers

Technicals

Precious Metals Trading

Economic Data

Commodity Futures Trading

Fixes

Live Forex Charts

Charts

World Gold Prices

Reports

Forex COMEX India

Contact Us

Chat

Bullion Trading Bullion Converter
 

$ Price :

 
 

Rupee :

 
 

Price in RS :

 
 
Specification
  More Links
Forex NCDEX India

Contracts

Live Gold Prices

Price Quotes

Gold Bullion Trading

Research

Forex MCX India

Partnerships

Gold Commodities

Holidays

Forex Currency Trading

Libor

Indian Currency

Advertisement

 
BLBG: South Africa's Rand Advances to One-Week High on U.S. Bank Plan
 
By Garth Theunissen

Oct. 14 (Bloomberg) -- South Africa's rand rose to the highest level in a week against the dollar after the U.S. said it will pump $250 billion into banks and urged them to use the funds to spur economic growth, stoking demand for higher-yielding emerging-market assets.

The rand advanced for a second day after the U.S. followed European governments by purchasing bank stakes to ease the financial-market crisis. The Treasury may invest about $125 billion in nine of the nation's biggest banks, including Citigroup Inc. and Goldman Sachs Group Inc., according to people briefed on the plan. Equity markets around the world climbed, with the MSCI Emerging Markets Index heading for its biggest two- day rally on record.

``Broad-based government intervention in financial markets is allowing for a return of risk appetite,'' said Elisabeth Gruie, an emerging-markets currency strategist in London at BNP Paribas SA, France's biggest bank. ``We expect emerging-market currencies to outperform in the near term.''

The rand climbed as much as 3.6 percent to 8.8352 per dollar, the strongest since Oct. 7, and was at 8.9490 by 4:34 p.m. in Johannesburg. It advanced versus all but one of the 16 major currencies monitored by Bloomberg, adding 2 percent to 12.1915 per euro.

Investors should take up ``long positions in emerging-market currencies'' in the short term, ``particularly the high yielders that have been underperforming, like the rand,'' Gruie said. A long position is a bet the price of an asset will strengthen.

``The risk to this view would be any further deterioration in financial markets, which would reduce the appetite of investors for any form of risk,'' she said.

Equities Rally

Stocks around the world rallied on coordinated efforts by governments to invest in financial institutions and guarantee bank deposits. Europe's Dow Jones Stoxx 600 Index climbed 3.3 percent and the Standard & Poor's 500 Index added 1.2 percent. South Africa's benchmark FTSE/JSE Africa All Share Index gained 3.1 percent.

The rand is ``in the middle of a nervous rally'' and is ``solely dependent on the sustainability of the rebound in equity markets,'' said Ion de Vleeschauwer, chief dealer at Bidvest Bank in Johannesburg, which runs South Africa's largest chain of moneychangers.

``There's a lot of importer demand for dollars below 9 rand to the dollar so the currency is going to find it tricky to hold onto its gains,'' he said. ``We've seen decent exporter selling of foreign exchange earnings between 9.15 and 9.20 per dollar so that provides some resistance to further weakness.''

Financial firms around the world have reported $636 billion in losses and writedowns stemming from U.S. subprime mortgage- related investments since the beginning of last year.

Government bonds gained, with the yield on the benchmark 13.5 percent security due September 2015 dropping 6 basis points to 8.96 percent. The yield on the 13 percent note maturing in August 2010 slipped 8 basis points to 9.17 percent. Yields move inversely to bond prices.

To contact the reporter on this story: Garth Theunissen in Johannesburg gtheunissen@bloomberg.net

Source