Foreign Exchange Markets: A Practical Guide

This online guide aims at creating a coherent understanding of the foreign exchange market, by tying in real life market scenarios with the relevant theories of international finance and the classic schools of technical and quantitative analysis. Although there is a vast amount of literature on international finance, technical analysis and chartism, there is a scarcity of instructional materials incorporating actual market events such as interest rate decisions, interventions and geopolitical events.
Another area largely overlooked by currency guides is the integration of fundamental and technical analysis for making decisions. The distinctiveness between the two types of approaches dissuades many from factoring them together. But knowing how to combine them can be highly advantageous in unraveling the trend and timing of currency moves.

This material focuses on teaching how to think for yourself in understanding global currency markets, rather than depending on a pre-set trading system which recommends decisions without providing input on the whys of making right and wrong decisions. Rather than rehashing the classic theories driving currency analysis, this guide will offer investors, researchers and students an innovative approach, paramount in grasping and anticipating the moves in the major currency pairs.

Table of contents is illustrated below

U.S.: Unemployment’s Rate is the Achilles Heel


As housing is giving some relief to household pockets, the Federal Reserve warns about a slow recovery. The Euro, in the mean time, is testing key resistance levels against the U.S. dollar. U.S.: housing still supportive
Tangible signs of improvements are beginning to show up, albeit the recovery remains fragile in the United States. In July, the conference board index increased 0.6% month-on-month from + 0.8% in June. It was the fourth consecutive month of increase, giving further prove that the U.S. economy might have bottomed. In a speech at the Jackson Hole Symposium, Fed Chairman Bernanke confirmed that the worst might be over for global economies, thus indirectly anticipating a safe-haven demand’s decline for U.S. dollars and Treasuries in the coming months. Nonetheless, the Federal Reserve will keep rates low for the first part of 2010 with inflation so mild. In July, the producer price index (PPI) fell 0.9% versus the expected -0.4%. In reality, after two months of gains, 6.5% in June and 15% in May, housing starts slid by 1.0% in July to 581,000 annualized (+2.5% expected). Nevertheless, singles component (three-quarters of the market) rose 1.7%, while multiple houses declined 13.3%. Starts are still above the average of the first three months of the year, although away from the over 2 million produced in 2005. Angelo Airaghi is a Commodity Trading Advisor, registered with the National Futures Association and the Commodity Futures Trading Commission. He has been an active professional since 1990 working for major international financial companies. In the past 10 years, Angelo Airaghi has been an analyst and commentator for national and international media. This article contains the following sections:
  • U.S.: housing still supportive

  • Is the German’s recovery sustainable?
  • U.S dollar: Looking For The Line of Least Resistance


    As housing continues to improve, unemployment could rise again in the coming months. In Germany, confidence is growing, while the economy might take advantage of global growth U.S.: housing is back?
    Unemployment remains the biggest challenge for the U.S. economy, despite losses declining to 220,000 from 247,000 in July. In reality, we are experiencing the lowest job contraction in more than a year, but the unemployment rate could again rise due to the slow recovery in the last part of 2009. At the contrary, the real estate market is confirming the good trend and it is expected to positively contribute to the Gross Domestic Product (GDP) numbers, along with inventory growth for various goods. In July, new home sales moved up 9.6% year-on-year to 433,000 units from June’s 395,000. It has been the fourth consecutive monthly increase and the largest gain since February of 2005. With three regions out of four posting good results, inventories are now 7.5 months supply from 8.5 months in June, far away from the peak of 12.4 months reached in January. Angelo Airaghi is a Commodity Trading Advisor, registered with the National Futures Association and the Commodity Futures Trading Commission. He has been an active professional since 1990 working for major international financial companies. In the past 10 years, Angelo Airaghi has been an analyst and commentator for national and international media. This article contains the following sections:
  • U.S.: housing is back?

  • Germany: economic expectation on the rise

  • EUR/USD: Testing key resistance lines.
  • EURO: At Key Levels Against the U.S. dollar

    The Federal Reserve and the European Central Bank should keep rates steady for the first part of 2010 as well, since the economic recovery remains fragile in some sectors and inflation is low. The Euro is once again at key resistance lines against the U.S. dollar. A breakout would possibly set the currency for a strong move up.

    U.S.: Some improvements, but not enough
    Growth remains weak in the United States, but sings of improvement are showing at various levels of the economy. Housing has clearly found a bottom, while consumer confidence has increased slightly in the recent months. For the first time since 20007, the ISM manufacturing survey moved up to 52.9 in August from 48.9 the previous month. New orders rose to 64.9 from 55.3, marking the strongest gain since 2004. The ISM services climbed instead to 48.4 from 46.4 in July. Nevertheless, the price paid component jumped to 63.1 from 41.3, thus anticipating some inflationary pressure ahead. The Federal Reserve is expected to keep rates accommodative the first part of 2010 as well, since the recovery is still very fragile and household savings weak.


    Angelo Airaghi is a Commodity Trading Advisor, registered with the National Futures Association and the Commodity Futures Trading Commission. He has been an active professional since 1990 working for major international financial companies. In the past 10 years, Angelo Airaghi has been an analyst and commentator for national and international media.

    This article contains the following sections:

  • U.S.: Some improvements, but not enough

  • Europe: Unemployment increasing more?

  • EUR/USD: Trying the resume the long-term uptrend.

  • EURO: Setting The Long Term Trend?


    As the European economy is moving out of recession, the Euro currency is at key levels against the U.S. dollar. A movement above the next resistance could set the trend for the next weeks/months.
    U.S.: consumer spending to increase?
    More time is needed to see some tangible results, but the economy is on the move again in the United States. Last week, the Beige Book confirmed that the economic activity is stabilizing, as the job market and the manufacturing sectors are registering some minor upticks. In reality, the average duration of unemployment is at historical highs and jobless rate for young people is almost 26%. Public offices are laying-off employees, since some states are registering declines in tax revenues. Initial jobless claims fell to 550,000 in the week of September 5th, versus the expected down move of 570,000. Nevertheless, they remain near the high of the year. Housing, at the contrary, appears to be finally out the woods. Inventories are declining, while building permits are increasing. Angelo Airaghi is a Commodity Trading Advisor, registered with the National Futures Association and the Commodity Futures Trading Commission. He has been an active professional since 1990 working for major international financial companies. In the past 10 years, Angelo Airaghi has been an analyst and commentator for national and international media. This article contains the following sections:
  • U.S.: consumer spending to increase?

  • Europe: domestic demand improving

  • EUR/USD: Resistance holding for now.
  • U.S Dollar: Short Term Rebound


    The recovery remains mild for now in the United States and in Europe, as unemployment is high and saving is increasing. The Euro is at important resistance lines against the U.S. dollar. A corrective move is possible, but the long-term trend stays bullish. U.S.: Rates to remain low, but an exit strategy is ready.
    The economic growth is on the move again and some tangible results should be seen shortly. Inventories are being implemented and production is increasing. Spending will improve, along with commodity prices, supported by the world economic recovery. In August, car sales have moved up more than 50% year-on-year in China, India and Brazil. The housing market should continue to show the way in the United States. Housing starts rose 1.5% in August, while existing home sales declined 2.5%, but they remained well above the low registered in November. In effect, during last week FOMC¡¦s meeting, the Fed appeared more optimistic about the economic growth, albeit activity should remain subdued for some time. Durable good orders fell 2.4% (+0.5%) in August, after having increased 4.8% in July. Orders are up overall for the quarter, capital goods orders (excluding aircraft and defense) increased almost 9.0% annualized over the three months, but activity is not strong enough to relief the unemployment rate from the bottom yet. As a result, rates will remain low for now and an exit strategy will be implemented as soon as the economics¡¦ turnaround becomes sustained. The Federal Reserve postponed the timeline for the purchase of mortgage-backed and agency debt to the end of the first quarter of 2010. However, current recovery should be mild, since recapitalization is still in process. The huge deficit will weight on U.S. growth and limit the American economic potential. Unemployment will remain high and savings will increase. Americans are adapting to the new reality, characterized by tight credit and increasing commodity prices, by reducing spending and tempering debt. The strong expansionary cycles of the past are history. Angelo Airaghi is a Commodity Trading Advisor, registered with the National Futures Association and the Commodity Futures Trading Commission. He has been an active professional since 1990 working for major international financial companies. In the past 10 years, Angelo Airaghi has been an analyst and commentator for national and international media. This article contains the following sections:
  • U.S.: Rates to remain low, but an exit strategy is ready.

  • EUROPE: A mild recovery so far.

  • GBP/USD: Correcting.
  • ECB: Rates to Remain Steady


    The unemployment rate remains high in the U.S and in Europe and could rise further over the short term. However, new orders are improving and a turnaround might be near. The European Central Bank (ECB) meets this week in Venice (Italy). Rates should remain steady, although an exit strategy for next year could be ready.
    U.S.: Home prices to increase.
    The U.S. economy is slowly moving out of the deep recession of the past two years, albeit the data remains volatile and unstable. Ups and downs are normal during turning points. Some sectors perform better than others, but an equilibrium should emerge as time passes by. The manufacturing industry, as an example, is performing again, since exports to major economies are increasing. In reality, the U.S. manufacturing ISM index declined to 52.6 in September, but it remains above the benchmark of 50 for the second straight month. In fact, 13 out of 18 industries registered some gains and improvements are broad-based among various economic sectors. The housing market remains nevertheless the leading force. Home inventories are declining and prices are beginning to rise. Current affordability and tax incentives are driving the market and the trend should continue in the coming months as well. However, the move could be subdued by the new saving mentality which focuses on reducing debt and improve personal finances.

    Angelo Airaghi is a Commodity Trading Advisor, registered with the National Futures Association and the Commodity Futures Trading Commission. He has been an active professional since 1990 working for major international financial companies. In the past 10 years, Angelo Airaghi has been an analyst and commentator for national and international media. This article contains the following sections:
  • U.S.: Home prices to increase.

  • EUROPE: New orders rising.

  • EUR/USD: Testing resistance line.
  • Is The U.S. Dollar Resuming the Downtrend?


    The U.S. dollar is again under pressure, as markets are anticipating a different scenario which contemplates higher interest rates next year in Europe and eventually in the U.S. U.S.: The saving’s rate to spike. Is the long consolidation of the dollar over? The decline of the greenback against major currencies and the Australian dollar/Canadian dollar in particular might be the beginning of a new leg down that could last until December. The decision of the Royal Bank of Australia to increase interest rates will eventually set a worldwide domino’s effect that could lead to higher rates, higher inflation and higher commodity prices next year. In reality, the world’s economic recovery is in motion, albeit it will be subdued by the long-lasting consumer deleveraging. The recession has changed the spending habit for one generation at least, considering that interest rates are set to rise substantially over the years, if history repeats itself. In fact, over 150 years, interest rates have shown the tendency to bottom roughly every 50/60 years (1900, 1945, 2000) and then to trend up for about 20/30 years. Angelo Airaghi is a Commodity Trading Advisor, registered with the National Futures Association and the Commodity Futures Trading Commission. He has been an active professional since 1990 working for major international financial companies. In the past 10 years, Angelo Airaghi has been an analyst and commentator for national and international media. This article contains the following sections:
  • U.S.: The saving’s rate to spike.

  • ECB: rates steady for now, but the count-down has begun.

  • USDCAD: falling?
  • Currency Rates in India

    October 18, 2009, 4:31 am


    Currency Name Buy Sell Currency Name Buy Sell
    US Dollars46.5549.95Newzealand Dollar26.9534.85
    Sterling Pound77.1582.05Norwaygian Kroner5.857.95
    Euro66.2570.35Oman Rial113.65141.25
    Australian Dollar37.1544.35Qatar Rial11.8515.25
    Baharain Dinar118.15142.35South African Rand3.456.65
    Canadian Dollar41.1546.25Saudi Rial10.1516.25
    Danish Kroners6.458.95Singapore Dollar31.1536.75
    Hong Kong Dollar4.858.95Swedish Kroner4.858.95
    Japanese Yen /1000490.65560.15Swiss Francs40.0547.65
    Kuwati Dinar155.95186.65Thai Bhat / 100125.15169.15
    Malaysian Ringtt11.5516.85UAE Dirhams12.213.95

    Forex Brokers of Pakistan

    H & H Exchange Co. (Pvt) Ltd.

    Head Office
    Address: Suite # G-17, Ground Floor, Saima Trade Tower, Dr. Ziauddin Ahmed Road
    Karachi, Sindh 74000
    Telephone: UAN : 111 44 00 44
    +92.21.2212882-89
    Fax: +92.21.2212890

    Dollar East Exchange Company

    Head Office Address: 97-A Jail Road, Lahore, Punjab 74000
    Telephone: +92-42-7555616
    +92-42-7598529
    Fax: +92-42-7555615


    Emirates Global Islamic Bank Limited (EGIBL)

    Head Office
    Address: Shopping Arcade, Karachi Sheraton Hotel & Towers, Club Road, Karachi.
    karachi, Sindh 74000
    Telephone: +92-21-111113442


    LAXY EXCHANGE (PVT.) LTD

    Head Office
    Address: S/No. 10 & 11, Sasi Arcade, Opp. Uzma Shopping Plaza, Blk-7, Clifton, Khi
    karachi, Sindh 74000
    Telephone: +92-21-5875141


    Khanani & Kalia International (Pvt.) Ltd.

    Head Office
    Address: Suite # 1101-1105, 11th Floor, Block-A, Saima Trade Tower I. I. Chundrigar Road.
    Karachi, Sindh 74000
    Telephone: +92-21-111-554-003
    +92-21-2217001-10
    Telex
    27489KKI.PK
    Fax: +92-21-2218094
    +92-21-2218087


    ZARCO EXCHANGE COMPANY (PVT) LTD.

    Head Office
    Address: 32-A Lawrence road,
    Lahore, Punjab
    Telephone: 0800-12345, 0800-67890
    +92-42 6301253, 6301977
    Fax: +92-42 6368796, 6362217



    A Khanani and Kalia Money Exchange

    Islamabad Office
    Address: Unit # 1, Chowdry Plaza, Blue Area, Opp. Nafdeck Cinema .
    Islamabad, Punjab 74400
    Telephone: +92-51-111-554-554
    Fax: +92-51-2274457


    A TO Z MONEY CHANGER

    Head Office
    Address: 184,Paradise Shopping Centre,Saddar
    karachi, Sindh 74000
    Telephone: (92 21) 5686968
    (92-21) 5686650


    AA EXCHANGE COMPANY (PVT) LTD

    Head Office
    Address: Office# 1-2, Mezzanine Floor, Block 46, Madni Plaza, Jinnah Avenue, Blue Area, Islamabad
    islamabad, punjab
    Telephone: +92-51-2271700

    Megapixel Wars' are over


    There are celebrations when a war ends, but sometimes confusion, too. The sense of purpose, the unifying morale lift, maybe even the economic boost, are over. That was certainly the case during the Great Megapixel Wars of 1996-2007. During these years, the world’s camera companies fought doggedly for our hearts and minds, using megapixel count as a weapon. “Ours takes 6 megapixel photos!” “Ours takes 8!” And we marched to their orders, buying a new camera every other year just to keep up. Now that that war has ended (the megapixel race has pretty much stopped at around 12) the camera companies find themselves flailing for new sales points. Cameras these days have more bells and whistles than a marching band: image stabilizers, superlong zooms, hi-def video, waterproof cases, face recognition, smile detection, even blink detection. This month, though, some kind of line has been crossed. Two new cameras from Nikon and Samsung don’t just tinker with the camera formula, they rewrite it. One adds a second screen; the other adds a built-in projector. Actually, Samsung’s DualView TL225 and TL220 cameras introduce two radical elements: a screen on the front and a gesture-and-tilt vocabulary for controlling the thing. (The TL225, priced at $350, has a 3.5-inch back screen, brushed-metal body and HDMI jack for a hi-def TV; the TL220, $300, has a 3-inch screen, plastic body and no HDMI.) What draws the most attention, of course, is that 1.5-inch front screen. When the screen is turned off, it’s invisible. It vanishes completely into the camera’s smoky-dark case. When you turn it on (by tapping that empty spot with your finger), however, it’s capable of performing several ingenious stunts. The obvious one is framing self-portraits. On ordinary cameras, that’s a matter of guesswork, or of handing the camera to passing strangers and praying they won’t just run away with it. On the DualView, you can see precisely how the shot is framed, how your expression looks and whether you’ve got spinach in your teeth. Actually, why not use it even when you’re not taking self-portraits? Shouldn’t everyone have some say in what your pictures of them look like? When you dial up Kid mode — one of the camera’s 13 canned sets of scene settings — the screen does something else clever: it displays a crude Japanese-style cartoon animation. (The camera comes with a clown animation; 20 more are available as free downloads.) It’s supposed to capture the attention of younger subjects, so that they face the camera. It works like a charm (except in bright sunlight, where it’s nearly bleached out). Even older children are captivated, if only by the presence of a video screen on a pocket camera. Close-range photos sometimes reveal the telltale off-axis look of a child who was looking at a spot beside the lens, not into it, but it beats calling out, “Tyler! Hey Tyler! Look here! Hey Tyler!” for the 14th time. The little front screen can also display a countdown in self-timer mode, current flash or macro settings, or a smiley face when you press the shutter, to cue your subjects when it’s time to pretend to be happy. The question is: do self-portraits and child shots occur frequently enough to justify the higher price of this camera? (Rival touch-screen cameras cost $50 to $100 less.) Before you answer, there’s more invention in the DualView than just the second screen. The huge, bright touch screen works really well, but what’s new is how you can control this camera, quickly and precisely, by tipping it and drawing on its screen. For example, you draw a big X on a photo to delete it. You draw a circle, clockwise or counterclockwise, to rotate it. In playback mode, you advance to the next picture either by flicking your finger across the screen, iPhone style, or by giving the camera a little shake. Cooler yet, you can switch modes — to movie mode and back, for example — by twitching the camera up, down or left while pressing a button with your thumb. It takes a couple of minutes to master, but it’s a genuine advance in the evolution of gadget controls, and wow, is it cool. Not so cool: in their “reinvent the camera” zeal, Samsung’s engineers adopted a nonstandard way to charge the battery (inside the camera, so you can’t charge a spare while using the camera), a nonstandard, proprietary computer transfer cable, and a decidedly nonstandard memory-card format (MicroSD, more common on cellphones). Whassamatter, Samsung — the SD cards used by every other camera company on earth not good enough for ya? The other radical new camera is Nikon’s CoolPix S1000pj ($430). On most cameras, to show off your photos, you can pass around the tiny screen or connect a TV cable. This one, if you can believe it, has a microprojector built right into its forehead. Last year, microprojectors wowed a lot of people. They’re little iPod-size pocketable gadgets that connect to phones, laptops or iPods to project stills and videos on any handy, light-colored flat surface. Get ready for the dawn of embedded microprojectors in cellphones — and cameras, like this one. When you’re in playback mode, a dedicated button on the top edge of the Nikon turns on a gasp-inducing projected image, which can be as large as 40 inches diagonal, depending on your distance from the wall, ceiling or T-shirt. Now, you’re not exactly going to get complaints from the neighbors; this thing pumps out only 10 lumens of light (compared with 2,000 lumens or more for conference-room laptop projectors). The projected image is only 640 by 480 pixels. The battery lasts for only an hour with the projector on. But you know what? Absolutely nobody cares. The image brightness and clarity are perfectly adequate — especially in a dark room, on a white surface, and when the camera is fairly close. Everyone who sees this stunt is captivated by the possibilities. Whenever you want to show off the pictures or videos on your camera, there’s no need to transfer them to a computer or hunt for the TV cable; just aim the camera, set it on its little stand if you like, and maybe whip out the included remote control. You can take pictures on a camping trip, far from computers or TV sets, and conduct on-the-spot slide shows. Take pictures at a party and immediately show them off. Load up a memory card with PowerPoint slides and carry your sales pitch in your pocket. It’s fantastic. This miracle comes at a price, though. An equivalent camera without the projector costs about half as much. Furthermore, while the Nikon isn’t nearly as big as it appears in photos (it’s roughly the same size as most pocket cameras), it is just as homely. Both of these cameras represent huge high-tech leaps, for sure. Both have mighty zooms (5X or 4.6X), smile and blink detection, superb close-up modes (0.6 inches away), excellent facial recognition and so on. Unfortunately, neither of them takes particularly good pictures. That could be considered a drawback in a camera. As in most CoolPix and Samsung pocket cams, these models have tiny sensors, so blur is a problem in low light or when your subjects are moving. Shutter lag is a huge problem, so sports photography is nearly out of the question. (On the Samsung, the shutter sometimes doesn’t snap until a full second after you’ve pressed the button.) The Samsung’s shots also fall consistently short of crisp sharpness. Still, there are an awful lot of goodies to distract you from the photo quality. Let’s hope that the wow-inducing ingenuity on display here makes its way, eventually, to cameras that take wow-inducing photos.

    High Risk Indicators


    You're just about to make that big trade, you're sure it's going to win big, your heart is pumping and everything is saying "buy." But then the red lights start flashing — from your bracelet. Analysts say that many risky trades could be avoided if only traders were not letting their emotions get the better of them, so Royal Philips Electronics and ABN Amro have teamed up to find a solution. Their answer is a flashing bracelet and natty-looking bowl that detects emotion. The "Rationalizer" consists of an "EmoBracelet" that measures the "arousal component of the user’s emotion through a galvanic skin response sensor," and an "EmoBowl." The higher the trader's arousal level, the more intense the lights on the bracelet and bowl become. When they get really worked up, the color shifts all the way from a yellow to a deep, warning red. When the red lights flash, it could be time to take a walk, or at least think twice before making that trade, the companies said. Whether a big flashing bracelet could add to the tension or not is yet to be seen, however. Philips and ABN Amro started work on the system before the collapse of Lehman Brothers and is aiming it at "serious home investors. "Research shows that home investors do not act purely rationally. Their behavior is influenced by emotions, most notably fear and greed, which can compromise their ability to take an objective, factual stance," the companies said in a statement. Experts are divided on whether emotions play a good or bad role in trading. "It's an interesting idea, but I don't think it's going to be very useful," Louis Gagnon, a professor of finance at Queen's University, told the Financial Post. "Emotion is central to the marketplace," he added.

    AMD's revenue slides 22% to $1.4 billion

    Advanced Micro Devices Inc. (AMD) lost money in the third quarter but said Thursday that sales were stronger than expected, adding to mounting evidence that consumer spending is fueling a turnaround in the personal computer market. AMD sells about 20 percent of the world's computer microprocessors, which are the brains inside PCs. Although AMD was hurt by weak consumer and business spending on computers in the first half of the year, the chipmaker said shipments rose from the previous quarter thanks to strong demand for processors used in laptop computers. That's in line with what PC industry researchers reported earlier this week. The recession has squelched consumer demand for high-end PCs, but they continued to snap up inexpensive laptops and tiny "netbooks" in the third quarter. That pushed PC shipments into positive territory for the first time this year, according to IDC and Gartner Inc. Businesses, however, aren't expected to replace old computers until sometime next year.
    It's not possible to tell from AMD's report whether PC makers were stocking up on chips to replenish low supplies, or because the computer makers expect to see a boom in sales through the holiday season. AMD's larger competitor, Intel Corp., has been more bullish than AMD in predicting a 2009 turnaround for the PC industry since spring. The chipmaker said earlier this week that the year will end with growth in PC sales. Sunnyvale, Calif.-based AMD posted a loss of $128 million, or 18 cents per share, narrower than its year-ago loss. However, the group that makes computer microprocessors reported $76 million in operating income - about half the amount it earned a year ago, but up from a loss of $72 million last quarter. AMD's revenue fell 22 percent to $1.4 billion. Analysts were expecting a steeper 30 percent decline, according to Thomson Reuters. Shares fell 11 cents, or 1.8 percent, to $6.08 in extended trading after the release of results. Earlier, it closed down 6 cents, or 1 percent, at $6.19 in regular trading.

    Pakistan China cooperation to rise in trade, defence


    Pakistan and China will explore further opportunities to strengthen their strategic cooperation in various areas, including trade, defence and energy sectors during meetings of Prime Minister Yousaf Raza Gillani with the top Chinese leadership. Gillani will arrive here Monday (today) on a four-day visit to China, Pakistan Ambassador Masood Khan told a press conference here. He said the primary purpose of the prime minister’s visit is to attend the meeting of the Council of Heads of Government of Shanghai Cooperation Organisation (SCO) that will be held here on October 14. The Pakistani envoy told media that in Beijing, Prime Minister Gilani, in his meetings with President Hu Jintao and Premier Wen Jiabao, would explore the possibility of strengthening Pakistan-China cooperation in the areas of defence, investment, trade and people-to-people relations. Both the countries will examine ways to minimise the adverse impact of the international financial crisis. They would also coordinate their positions on UN reforms, climate change and international trade. A strong bilateral component has also been added to Prime Minister Gillani’s visit, Ambassador Masood Khan said. He pointed out that during his visit, Gillani will meet and hold talks with Premier Wen Jiabao and President Hu Jintao. He will also meet Wu Bangguo, Chairman of the National People’s Congress. He will address the SCO Council of Heads of Government and attend a banquet hosted by Premier Wen Jiabao in honour of the delegates attending the meeting.

    Founded in 2001, SCO is a regional organisation focusing on security, confidence building and economic development. Its members are China, Russia, Kazakhstan, Uzbekistan, Kyrgyzstan, and Tajikistan. Pakistan, India, Iran and Mongolia are observers. Pakistan is an integral part of the geographical footprints of SCO neighbourhood. We would very much like to be a full member, the Pakistani Ambassador said emphasizing that Prime Minister Gilani’s participation in the SCO meeting in Beijing will give an opportunity to share the challenges Pakistan is facing in countering militancy and terrorism and in bringing stability to the region. Prime Minister Gillani would highlight that regional peace and social stability are prerequisite and essential for economic development and collective prosperity. Pakistan is committed to working towards these goals, Ambassador Khan said. Pakistan supports One China Policy and would continue to oppose any attempts to undermine its unity and territorial integrity. In the recent past, Pakistan had supported China’s policy towards ethnic harmony and social stability in Xinjiang, Ambassador Khan observed. China, he said, has always expressed its full support for Pakistan’s efforts to preserve its sovereignty, independence, and territorial integrity and expressed appreciation for Pakistan’s important role in promoting peace and stability in the region.

    Dollar Versus Pak Rupee


    Almost 40 per cent devaluation of Pak rupee after the much-trumpeted democratic revolution has not only squeezed country's economy but has also tightened the noose around the common person's neck. The high-ups of the ruling and opposition parties after hushing up the issue of sugar prices are now busy in dissecting the Kerry-Lugar bill. Those who have mercilessly ravaged this country are seen these days making uneducated analyses of the bill in TV reality shows. Being generally devoid of economic and financial acumen, none of the democratic stalwarts appear concerned about the implications of Pak rupee's war against the dollar. Even our economic managers and monetary regulators do not seem concerned about the situation. They even can't give a cogent reason for this uncalled for sliding of rupee in the face of an improving economy and a comparatively better reserves position. They fail to explain how the previous government succeeded in keeping the dollar within a narrow band of 58-62 for almost eight years, and that why they are unable to keep the slide of rupee within a reasonable and manageable limit.

    The impact of a weakening rupee on the economy is multi-dimensional with a number of negatives and a few dubious positives. The increased cost of inputs pushes the consumer goods prices to a high that is unmanageable even for the middle class, let alone the lower middle class and below-poverty-line hapless masses. GDP goes up, but so does the external debt liability in rupee terms. Since ours is an import based economy, any benefits enjoyed by the exporters are more than offset by a higher import bill in rupee terms. The higher export proceeds are not in dollar terms. For the exporters too, the gain is not an unmixed blessing; the increased cost of production wipes off most of the gains on proceeds side. The increase in GDP and GNP is not reflected in per capita GNP in dollar terms. During 2008-09, GNP recorded an increase of 29 per cent, but when seen in dollar terms, the per capita GNP showed a marginal increase of 1.2 per cent. Even this increase becomes unreliable when the GNP is measured against the current exchange rate of Rs.83.3 a dollar.

    GNP AND DOLLAR EXCHANGE RATE FOR THE LAST NINE YEARS
    YEARGNP (MILLION
    PAK RUPEES)
    POPULATION
    IN MILLION
    PER CAPITA GNP
    IN PAK RUPEES
    $ EXCHANGE
    RATE
    PER CAPITA
    GNP IN $
    2000-014,155,391140.3629,60558.44507
    2001-024,476,319143.1731,26661.43509
    2002-035,027,460146.7534,26058.50586
    2003-045,765,058149.6538,52457.57669
    2004-056,634,243152.5343,49559.34733
    2005-067,773,106155.3750,03059.86836
    2006-078,830,638158.1755,83060.63921
    2007-0810,494,181160.9765,19362.551,042
    2008-0913,502,906163.7682,45578.241,054
    The export side benefits are dubious because of falling rupee, which propels the input cost to higher levels making the manufacturing business quite expensive and thus leaving little room for product competitiveness in the global markets. Higher import costs bring in import based inflation. Energy shortage is a huge drag on the economy. Limited and expensive options like rental power projects do little to move the industrial wheel. In this scenario, whatever is produced is short on quality and long on production cost. More than halved oil prices have given respite to the economy. The global oil situation is pretty uncertain. The prices can move either way, yet the probability of northwards movement is higher. Unfortunately, we have developed a habit of shrugging off inertia in the midst of a crisis. We are not used to taking timely actions and making anticipatory moves. We got a chance when the oil prices were moving in the band of 32 - 40 dollars a barrel. We could have made use of forward fixed or option contracts to ensure cheaper crude supply for a certain period. But, we were then busy in settling more important political scores and had little time for mundane economic issues. An upward trend in oil prices will magnify our foreign trade distortions to the detriment of an already weak economy.
    FOREIGN TRADE AND CURRENT ACCOUNT POSITION DURING THE LAST FIVE YEARS
    BALANCE OF PAYMENT - US $ MILLION2004-052005-062006-072007-082008-09
    1. Export f.o.b14,40116,38817,11920,20719,212
    2. Import f.o.b18,75324,64726,61435,10231,668
    3. Trade Balance (1-2)(4,352)(8,259)(9,495)(14,895)(12,456)
    4. Services Receipts3,8374,7185,2395,4104,043
    5. Services Payments9,67812,02213,20715,7267,325
    6. Services Net (4-5)(5,841)(7,304)(7,968)(10,316)(3,282)
    7. Workers remittances4,1684,6005,4946,4517,811
    8. Other Income & Private Unrequited Transfers4,2725,3144,6084,597(934)
    9. Total Income & Private Unrequited Transfers (7+8)8,4409,91410,10211,0486,877
    10. Current Account Balance (3+6+9)(1,753)(5,649)(7,361)(14,163)(8,861)
    The most damaged single entity of our economy, in consequence of the rupee free fall triggered mainly by the political upheaval, was the stock market. After touching the 16,000 level, the KSE-100 index breached the 5,000 mark to completely shatter the investor confidence. The common small investors, as usual, were the main casualty; yet the avalanche took some stock bigwigs to the ground as well. Foreign portfolio investment vanished within a short period of one year. The omnipresent political uncertainty still deters the foreign portfolio investment from entering our stock market. The depreciated rupee has, however, started to attract foreign buyers, albeit in a very small way.

    FOREIGN PORTFOLIO INVESTMENT DURING THE LAST FOUR YEARS (MILLION US$)

    FOREIGN PORTFOLIO INVESTMENTFy-06FY-07FY-08FY-09Jul-09Aug-09
    Private3521,82019(510)(4)65

    Public

    6131,46821(544)--

    Rupee's Weekly Report


    This article reveals in a flash for you, the currency trading trend for the Rupee against the top most traded currencies at close of the markets as on Saturday 10 th October, 2009
    RUPEE VS. DOLLAR
    Rupee remained under tremendous pressure against the US currency amid significant rise in its demand on the local desk this week. The US dollar commenced new week's trading at Rs.83/05, posted gains and was trading at Rs.83/30 at close of markets on Friday. Thus, rupee gave up 0/25 paisas versus dollar in the kerb dealings.


    RUPEE VS. POUND STERLING
    The cable incurred mere losses versus rupee in the kerb market. Pound Sterling started off new week's trading at Rs.132/50, shed grounds in the local market and was changing hands at Rs.132/14 on Friday. Thus, rupee scored a gain of 0/36 paisas versus the British currency.



    RUPEE VS. EURO

    Euro continued to observe negative trend versus rupee in the kerb this week. The 16 nation currency opened new week's trading Rs. 121/75, shed mere grounds and was changing hands at Rs. 121/54 at close of markets on Friday.


    RUPEE VS. YEN Japanese Yen continued to show appreciation against the local currency in the kerb market this week as well. Yen set off trading at 0/9114, posted more gains and was trading at 0/9139 at close of markets. Thus, rupee ended the current week on a negative trend versus Japanese currency.

    Gold Rebounds From Biggest Drop in Three Weeks as Dollar Slides


    Gold climbed, rebounding after its biggest decline in three weeks, as the dollar’s five-day slide boosted investor demand for the precious metal. Bullion is on course for its third weekly advance, having reached an all-time high of $1,070.80 an ounce on Oct. 14 as investors bought physical assets to hedge against the weaker dollar and the threat of inflation. Commodity-based exchange- traded funds have almost doubled assets under management since the end of 2008, Barclays Global Investors reported yesterday. “The dollar’s downtrend remains intact and so does gold’s uptrend,” said Hwang Il Doo, a senior trader with KEB Futures Co. in Seoul. “A pause in the dollar’s loss may provide an excuse for investors to take profits which won’t of course alter the bullish outlook for precious metals.”
    Gold for immediate delivery rose as much as 0.4 percent to $1,053.88 an ounce and traded at $1,053.05 at 10:10 a.m. in Singapore. Prices slumped 1.2 percent yesterday as record prices and a recovery by the dollar prompted selling. December gold futures gained 0.3 percent to $1,053.90 an ounce on the New York Mercantile Exchange’s Comex division. The Dollar Index, a six-currency gauge of the greenback’s value, fell 0.2 percent to 75.34. Commodity assets in exchange-traded funds jumped to $19.7 billion in the third quarter from $9.9 billion at start of the year, Deborah Fuhr, head of ETF research at Barclays, said yesterday. Assets climbed 20 percent from the second quarter.
    Outlook
    Gold may decline next week as record prices erode jewelry demand and prompt some investors to sell, a survey showed. Nine of 16 traders, investors and analysts surveyed by Bloomberg said bullion would fall. Five forecast higher prices and two were neutral. Bullion may decline to $1,025 an ounce then slide further toward the psychologically important $1000 mark, Commerzbank AG said yesterday, citing recent trading patterns. “We can see that the market is coming off and the daily relative strength index has registered a bearish divergence,” Karen Jones said in a report. “We remain wary of failure” of a weekly close above $1,057 an ounce. Among other precious metals, silver rose 0.7 percent to $17.48 an ounce and palladium gained 0.2 percent at $326.25 an ounce. Platinum fell 0.1 percent to $1,349.50 an ounce.

    Oil Set for Biggest Weekly Gain in 2 Months as Stockpiles Fall

    Crude oil rose above $78 a barrel, capping its biggest weekly gain in two months, on an unexpected decline in U.S. gasoline stockpiles and refinery utilization. Oil advanced for a seventh day after the Department of Energy reported U.S. inventories of the motor fuel tumbled 5.23 million barrels last week, almost five times the decline forecast by analysts and the biggest drop in a year. The dollar continued its descent against the euro, bolstering the investment appeal of commodities. “We’ve got the fundamental drivers that are needed -- a positive DOE report and further softness in the dollar,” said Mark Pervan, a senior commodity strategist at ANZ Banking Group Ltd. in Melbourne. “It certainly has got some upward momentum. The upside is being justified.”

    Crude oil for November delivery climbed as much as 59 cents, or 0.8 percent, to $78.17 barrel in electronic trading on the New York Mercantile Exchange. That’s the highest intraday price since Oct. 15, 2008. The contract was at $78.03 a barrel at 12:23 p.m. Singapore time. Futures are poised to gain 8.7 percent this week, the biggest increase since the week ended Aug. 21, amid signs of a recovery in global energy demand. U.S. gasoline inventories fell to 209.2 million barrels in the week to Oct. 9, a four-week low, the Energy Department said yesterday. Distillate fuel stockpiles also dropped more than forecast. The stockdraw “completely reverses the cumulative effect of the previous two weeks of softer data,” analysts at Barclays Capital, led by Paul Horsnell, said in a report. “The transition to a $70-to-$80 range is now in full cry.”

    Refinery Runs
    U.S. refiners reduced processing even as imports decreased, according to the Energy Department. Operating rates averaged 80.9 percent of capacity, down 4.1 percentage points from the previous week, to the lowest since mid-April. Refiners often idle plants in October for repairs and upgrades as gasoline demand eases and before heating-oil consumption picks up with the Northern Hemisphere winter. “The market now will swing toward looking at the refinery runs as an indicator of demand,” Pervan said. “It’s at a fairly critically low level. We need to see that turn around because we can’t blame it all on the seasonal slowdown.” The dollar’s weakness buoyed speculative demand for commodities, including gold. The U.S. currency fell to as low as $1.4967 per euro from $1.4947 in New York yesterday, when it slipped to $1.4968, the lowest since Aug. 13, 2008.

    Nigerian ‘Hostilities’
    The main rebel group in Nigeria said it resumed “hostilities” against the country’s oil industry and armed forces. The Movement for the Emancipation of the Niger Delta, which seeks more local control of the region’s oil wealth, started attacking at midnight, spokesman Jomo Gbomo said in an e-mailed statement. He didn’t elaborate. Rebel attacks on oil infrastructure have curbed Nigeria’s exports by more than 20 percent since 2006. The country, Africa’s most populous nation and a member of the Organization of Petroleum Exporting Countries, is the fifth-largest crude oil supplier to the U.S. Brent crude oil for December settlement rose as much as 54 cents, or 0.7 percent, to $76.77 a barrel on the London-based ICE Futures Europe exchange. The contract was at $76.53 a barrel at 12:19 p.m. in Singapore. The November contract expired yesterday at $74.45 a barrel.

    Google Blowout Wall Street

    Google earnings blow out Wall Street estimates on cost control, click growth

    Neither snow, nor rain, nor heat, nor gloom of night, nor the winds of change, nor a nation challenged, will stay Google (GOOG) from the swift completion of its seemingly inexorable march toward world domination. Google may not be the Postal Service, but it could be nearly as ubiquitous. In fact, if Google is acting like any government agency, it's the Federal Reserve, which prints money. Google continued to print money last quarter, according to Wednesday's earnings report, which handily topped Wall Street estimates, sending the company's stock price nearly three percent higher in after-hours trading.

    Google's results give credence to the company's argument that it is better positioned than its rivals to handle economic turmoil. Taken with the results delivered by IBM (IBM), the blue-chip tech giant that also beat Wall Street expectations, Google's strong profit haul is further evidence that the technology sector is shaking off the recession. The search juggernaut reported net income of $1.64 billion, or $5.13 a share, up from $1.29 billion, or $4.06 per share, a year earlier. Total third quarter revenue was $5.94 billion, up from $5.52 billion in the second quarter and $5.54 billion a year ago. UBS internet analyst Brian Pitz called the results a "solid beat" in a note to investors shortly after the announcement. Pitz called the results "above our and Street estimates...on continued cost control" while earnings per share "came in better due likely to lower than expected hedging costs." Pitz said the increase in paid clicks was "likely due to better pricing in categories such as retail and auto."

    During a conference call after the results were announced, Google Chairman and CEO Eric Schmidt called the results "all good news from our perspective" and said, "We believe the worst of the recession is behind us." He said the company, which has 20,000 employees worldwide, had slowed its hiring during the recession, but would be looking to increase its headcount moving forward. The company appears to have managed its expenses very well during the downturn, while continuing to innovate in its core business, rolling out new features on its myriad web advertising products. Schmidt said the company's performance -- aggregate paid clicks up 14 percent year over year -- has "given us the business confidence to invest heavily in the future as we see it." He said the company would continue its philosophy of 70-20-10, in which engineers spend 70 percent of their time working on Google's core search ad business, 20 percent on ancillary projects, and 10 percent on their own projects. Schmidt went on to say that despite the company's ventures into mobile and cloud computing, Google remains focused on its core business of web search advertising. "We want to get to the perfect search engine," Schmidt said.

    The company certainly has the resources to throw around: It is sitting on a mighty cash hoard of roughly $20 billion. Schmidt said Google is "open for business in making strategic acquisitions both large and small." But for large acquisitions, there would have to be "some strategic rationale" such as a revenue boost or "large user base." Twitter anyone? Turning to the company's mobile efforts, Schmidt predicted that "Android adoption is literally about to explode. All the necessary conditions are there." Schmidt noted that Android had gone from being offered by one carrier on one device in one country to 12 devices in 26 countries on 32 carriers in less than a year. Google's Android market currently has 10,000 applications available. One of the key questions facing the company is how YouTube, Google's giant video site, intends to add to its parent's bottom line. "We're really pleased about YouTube's performance, and it's completely in line with what we said in the last call," said Patrick Pichette, Google's CFO. He said YouTube is on "a path to profitability in the not to distant future," adding that the video site is currently monetizing more than a billion video views per week.

    Open Market Currency Exchange Rates (Forex Rates) in Pakistan

    Updated on: Sat, October 17, 2009, 16:49 (PST)
    Arrows of currency trend in the chart show forex exchange rates compared with the latest forex exchange rates
    Following are indicative forex exchange currencies rates
    Courtesy : ECAP


    Remittance
    Buying Selling Trend
    US Dollar DD 0.0 0.0 forex-rates-nochange
    US Dollar TT 0.0 0.0 forex-rates-nochange
    Currency Notes
    US Dollar 83.20 83.40 forex-rates-up
    Kuwaiti Dinar 287.44 295.25 forex-rates-up
    Malaysian Ringgit 0.0 0.0 forex-rates-nochange
    Norwegians Krone 14.63 14.76 forex-rates-down
    UK Pound Sterling 134.30 137.50 forex-rates-nochange
    Saudi Riyal 22.11 22.20 forex-rates-up
    Singapore Dollar 0.0 0.0 forex-rates-nochange
    Swedish Korona 11.80 11.92 forex-rates-down
    Swiss Franc 81.02 82.65 forex-rates-down
    U.A.E Dirham 22.54 22.67 forex-rates-up
    Bahrain Dinar 218.64 220.52 forex-rates-up
    NewZealand $ 43.5 43.8 forex-rates-nochange
    Omani Riyal 214.81 216.10 forex-rates-up
    Australian Dollar 75.38 76.09 forex-rates-down
    Danish Krone 16.47 16.61 forex-rates-nochange
    Euro 122.47 124.39 forex-rates-down
    Thai Bhat 0.0 0.0 forex-rates-nochange
    Canadian Dollar 79.33 80.08 forex-rates-down
    Hong Kong Dollar 10.54 10.74 forex-rates-up
    Qatari Riyal 22.62 22.93 forex-rates-up
    Indian Rupee 1.58 1.68 forex-rates-nochange
    China Yuan 0.0 0.0 forex-rates-nochange
    Japanese Yen 0.9051 0.9117 forex-rates-down