CURRENCY TRADING INFOR

When the dollar is low, you have to spend more dollars to buy a certain amount of foreign currency. Because prices in foreign countries tend to stay in line with their local currencies, a falling dollar generally makes buying things abroad more expensive.

Back home in the United States, the effects are a little more subtle. For domestic businesses that don’t have to import supplies or materials for production, the impact of currency fluctuations is relatively small. On the other hand, for businesses that rely on international trade, changes in the values of foreign currency can have a huge effect on their profitability. Foreign-based businesses find that the prices they charge in dollars translate to a smaller amount of foreign currency. In response, they can either accept lower profits, potentially hurting their stock prices, or increase their dollar prices to compensate for the adverse currency move, which can potentially hurt their sales.

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The increase is despite the company facing strong headwinds from both the currency and soaring fuel prices. Chairman Bruce Cole told the shareholders meeting the high exchange rates “continue to inflict a baleful influence.” The company’s average currency rate in the latest six months was $US0.77.2 compared with $US0.68.9 in the same period a year earlier and its fuel costs rose 24% – the latter increase was contained by efficiency gains since fuel prices rose an even steeper 50%.

Barratt still doesn’t think the first- half result was adequate. “I would like to see further improvement.”

If the analysts are correct, such an improvement is likely. Betting on continuing strong fish prices and a decline in the New Zealand dollar, just about all of them have a buy recommendation on the stock, despite the heady share price gains already achieved.

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Logue added, “In these markets, we continue to experience strong year-over-year results in securities finance and trading, as well as net interest revenue. We are pleased to achieve positive operating leverage on both a quarter-to-quarter and on a year-over-year basis, the fifteenth consecutive quarter as measured on a year-over-year basis.”

Logue concluded, “Our strong results of the quarter, plus the benefit of the $2.8 billion in equity capital that we issued in early June, enhanced the Corporation’s solid capital position. Given the strength of the first half of the year, we now expect both growth in operating earnings per share to approach the high end of the 10 to 15 percent range and achievement of operating return on equity to approach the high end of the 14 percent to 17 percent range in 2008.

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However, Glynos said the higher interest rate differential between South Africa and trading partner countries would support the local currency. The US Federal Reserve’s target Fed funds rate is 2 percent, while the South African Reserve Bank’s official repo rate is 12 percent. .

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On May 1, 2008 BBVB finished successfully switching of the users to a new trading and settlement system. Almost all the member of the BBVB currency section have been connected to it through more than 50 trade and information terminals. For study of new capacities of e-system and improvement of work skills in its new interface BBVB has organized special training courses.

Being the first exchange electronic trading system in the Trans-Caucasus region, for the past six years from the day of its commissioning BEST has become an integral part of currency and money market of Azerbaijan. The system built on the basis of principle of universalism in rendering exchange services is a kind of modern platform for complex management with liquidity and risks of banks. BEST allows domestic banks not only to carry out converting transactions with foreign currencies, but also to conduct placement/borrowing finances, operating settlements on exchange deals, re-distribute limits and monitor segments of country financial market on-line.

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If this is related to the current crisis in the credit markets, not to mention the currency markets, all we can say is, this is a time when the markets need to be at their freest.

We’re tempted to propose that the government be permitted to go ahead and restrict short selling in shares of Goldman, Lehman, Merrill, and Morgan Stanley  so long as those four firms disgorge all of the billions in profits that they earned over the past decade on the short end of trades. But why should those firms be allowed to pay out money to insulate themselves from the price signals the market wants to send in respect of their equity? It’s bad enough that Goldman, which earned $11 billion in profits last year and paid its chief executive $74 million, got a $650 million taxpayer subsidy for its new headquarters.

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