FOREX AND GOLD

Forex Update:
KARACHI, Oct 22: The Pakistani Rupee was traded at 83.70 to the US Dollar in the open market. (Bureau Report) (Updated @ 15:30 PST)

Spot rates for public per unit of currency
October 21, 2009
Countries		Selling	Buying	Buying
		T.T & O.D	T.T Clean	O.D/T.Chq
U.S.A.		83.4	83.2	83.02
U.K.		136.53	136.2	135.89
Euro		124.35	124.06	123.78
Canada		79.41	79.22	79.01
Switzerland		82.26	82.07	81.85
Japan		0.9189	0.9167	0.9143
Saudi Arabia		22.24	22.19	22.13
Source:-APP

Exchange Rates for Currency Notes
Countries		Selling	Buying
		Rs.	Rs.
Japan		0.9281	0.9051
Euro		125.6	122.55
U.A.E		22.93	21.01
U.S.A		84.23	82.19
S.Arabia		22.46	21.91
U.K		137.89	134.53
Source: -APP

Bullion rates in Rupees per 10 grams
on October 21, 2009
KARACHI
Gold Tezabi (24-ct)	Rs 28,671
Silver Tezabi (24-ct)	Rs 437.14
NOTE: Rates from Hyderabad, Lahore and Multan not received.—APP

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WORLD FOREX: Dollar Remains Stronger On Recovery Concerns

NEW YORK (Dow Jones)--The dollar remains stronger late Thursday morning as U.S. stocks slipped and disappointing U.S. economic data added to concerns over a global economic recovery.

The Institute for Supply Management, a private research group, reported Thursday that the U.S. manufacturing activity expanded more slowly last month than economists expected.

The ISM index of manufacturing activity moved to 52.6 in September, remaining above the key level of 50, anything above which indicates expansion. But September's reading was below the 54.0 figure expected by economists polled by Dow Jones Newswires.

Earlier Thursday, modest gains in U.S. personal income and spending were offset by a worse-than-expected weekly jobless report, leading the euro to hit an intraday low against the dollar before retracing some of its losses by late morning. The common currency remained down on the dollar for the day. The Dow Jones Industrial Average had slipped more than 140 points by late morning in New York.

Overnight comments by an E.U. official had sparked a euro decline, as E.U. Economic and Monetary Affairs Commissioner Joaquin Almunia said the euro group will be discussing the euro's appreciation to prepare its position ahead of the G-7 meeting in Istanbul this weekend.

That prompted a sharp sell-off, pushing the euro back under $1.46.

"Data from the euro zone continues to confirm that the economies have bottomed, but that the recovery is fragile and that the consumer is still under the pressure of rising unemployment," said Camilla Sutton, currency strategist at Scotia Capital in Toronto.

Late morning, the euro was at $1.4527 from $1.4636 late Wednesday. The dollar was at Y89.62 from Y89.75. The euro was at Y130.27 from Y131.36. The U.K. pound was at $1.5972 from $1.5990, while the dollar was at CHF1.0430 from CHF1.0369.

Currencies are likely to continue trading in tight ranges for the rest of the New York session as markets wait for Friday's September non-farm payrolls number, considered a key indicator of economic health. The payrolls number is expected to improve, but a disappointment could spook the market.

The market is "nervous" ahead of the week's remaining data, especially considering Wednesday's disappointments, Sutton said.

Meanwhile, the Brazilian real continued to show strength, though it was off its 12-month high against the dollar hit Wednesday. The dollar traded recently at BRL1.7767, from opening at BRL1.7720.

Brazil announced Thursday its foreign trade surplus narrowed in September as imports gained ground amid an expanding economy.

The Brazilian Central Bank also may increase its benchmark Selic interest rate before the end of 2009 to eliminate any inflation risks, local newspaper Folha de Sao Paulo reported Thursday.

According to the newspaper, Central Bank President Henrique Meirelles told Brazilian President Luiz Inacio Lula da Silva this week that an early rate hike might be necessary to make sure inflationary pressures don't get in the way of Brazil's 2010 economic recovery. The newspaper cited unnamed sources in its report.

Contacted by Dow Jones Newswires, central bank and presidential press officers made no comment on the report.

A signal that its central bank may increase key interest rates fuels investors funneling into the real just as much as Brazil's strong economy, said Stuart Bennett, senior currency strategist at Calyon in London.

Separately, U.S. Federal Reserve Chairman Ben Bernanke told lawmakers Thursday that the dollar's status as a global reserve currency isn't at risk in the near term, but warned that could change if fiscal deficits aren't brought under control.

When asked during Congressional testimony about comments by World Bank President Robert Zoellick that the dollar will face increasing competition as a reserve currency, Bernanke said he agrees with two points.

He agreed with Zoellick that "there's no immediate risk to the dollar, it's a relatively long-term issue," Bernanke said.

"I also agree with him, though, that if we don't get our macro [economic] house in order that that will put the dollar in danger, and that the most critical element there is long-term fiscal stability," he said.

(Rogerio Jelmayer in Sao Paulo and Tom Barkley and Maya Jackson Randall in Waashington contributed to this article.)

-By Bradley Davis, Dow Jones Newswires; (212) 416-2654; bradley.davis@dowjones.com

Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=6adYHPR%2BcBp1XAN9MyupeA%3D%3D. You can use this link on the day this article is published and the following day.

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Dollar remains near 14-month low vs euro

* Dollar struggles, euro not far from 14-month high

* Analysts say Fed thought likely to keep rates low

* Market watches euro zone meeting for FX comments (Updates prices, adds comment, adds detail, changes byline)

By Nick Olivari

NEW YORK, Oct 19 (Reuters) - The dollar hovered near a 14-month low against the euro on Monday as investors bet the Federal Reserve will hold U.S. interest rates near zero well into the coming year.

Though the U.S. economy is expected to have exited recession in the third quarter, investors expect rising unemployment will keep the Fed from lifting interest rates quickly. That would diminish the dollar's appeal and encourage investors to buy higher-yielding, higher-risk currencies and assets instead.

The euro traded within half a cent of $1.50, a level not seen since August 2008.

"The dollar remains a victim of U.S. fiscal and monetary policies," said Andrew Bekoff, chief investment officer for Family Office Group in New York. "The current Federal Reserve policy remains accommodating. This serves to keep rates low and spending by the government high."

High-yielding currencies such as the Australian and New Zealand dollars hovered near multi-month highs against the greenback while U.S. earnings optimism lifted Wall Street.

The euro rose as high as $1.4965, according to Reuters data, and was last at $1.4944, up 0.3 percent from late Friday. Analysts said a test of $1.50 was still likely in the days ahead.

"The global growth story is getting better. The U.S. economy has improved, so everyone is selling dollars and buying emerging markets. The data justifies the risk," said Sebastien Galy, senior currency strategist at BNP Paribas in New York.

Traders were on the lookout for possible remarks on euro strength and dollar weakness at a gathering of euro zone finance officials in Luxembourg, although analysts said the group was unlikely to significantly talk down the euro.

"Maybe we will discuss the euro, but it's not the main focus point this evening," said Austrian finance minister, Josef Proell.

On a trade-weighed basis, the euro jumped to 118.82 on Friday, close to historic highs, though it eased to 117.00 on Monday. The euro has appreciated nearly 7 percent against the dollar this year.

YEN, AUSSIE GAIN; STERLING STRUGGLES

The dollar was down 0.3 percent at 90.63 yen and slipped 0.5 percent lower to 1.0126 Swiss francs. The Australian dollar rose 1.2 percent to $0.9267, near a 14-month peak, after a central bank official said a return to normal monetary policy was appropriate.

The Reserve Bank of Australia raised rates to 3.25 percent this month, the first major central bank to hike rates since the global economic crisis began.

Sterling climbed to a four-week high against the dollar on Monday, with market positioning, strength in global stocks and a report on the UK housing market all helping the pound claw back earlier losses.

Sterling had traded lower against the dollar and euro for most of the European session on Monday after a Bank of England policymaker said the central bank should continue its quantitative easing programme because the financial system has yet to fully recover.

Sterling last traded up 0.3 percent against the dollar atr $1.6403 GBP=>.

The New York Fed added to dollar woes on Monday when it said reverse repo tests did not mean it was ready to use this tool to drain money from the banking system. ID:nNYS005510 In a reverse repo, the Fed sells assets such as Treasuries for cash with an agreement to buy them back later, effectively tightening policy by draining money from the banking system.

The Fed has also been buying assets such as mortgage-backed debt, and some analysts said it could lend the dollar modest support by winding down those purchases while still holding rates near zero.

"Such a move would steepen the yield curve and make the dollar more attractive versus the yen on an interest rate differential basis, possibly pushing the pair to 95 yen," said Boris Schlossberg, research director at GFT Forex in New York.

Comments from Federal Reserve Chairman Ben Bernanke had little impact on currency markets.

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Gold finds new range between $990 and $1020

During the last week we saw the gold price see-saw between $990 and $1020, while the value of the dollar weakened and then strengthened and oil prices went higher and then lower. The correlation between the US dollar and the gold price is very interesting. A falling dollar usually pushes gold prices up, so when the dollar falls, gold usually rises. For instance, the dollar is down 15% in 2009, while gold is up 15% in 2009.

The one thing that caught my eye was a report by the IMF. In their semiannual report the Global Financial Stability Report (GFSR).,released on September 30, the GFSR calculates that actual and potential write downs from bad assets such as loans and securities have fallen by some $600 billion over the past six months-from about $4 trillion to $3.4 trillion, as a lessening in financial stress has narrowed spreads. Although write down estimates are subject to considerable uncertainty, the analysis shows that the financial system is on the mend. However, the GFSR estimates that commercial banks have already recognized $1.3 trillion through the first half of 2009, but face another $1.5 trillion of potential asset write downs ahead. Hence, overall, banks have recognized slightly less than half of their expected losses. U.S. banks have recognized slightly more than have those in the United Kingdom and euro area.

According to Peter Dattels and Laura Kodres of the IMF Monetary and Capital Markets Department, banks will still have to raise more capital, and that there may well be another large round of losses ahead. The global recovery, and especially the recovery in the US, has been hampered by an ongoing lack of access to credit. Another round of bank losses could make that problem worse and, in the process, tighten the credit markets again. That could break the back of an economy that is improving in very small increments.

When the U.S. Labor Department released its latest U.S. Nonfarm payroll figures for September which fell 263'000, (economists expected a decrease of 175, 000), the gold price first dropped to 987.50 offered, the day's low, before being bought straight back up as the euro gained strongly against a faltering US dollar, trading eventually back above 1.4600. Gold pushed all the way up to 1007.50 bid, the day's high. Later, the U.S. Commerce Department reported U.S. factory orders fell 0.8%, more than the 0.6% drop predicted by analysts. Gold lost some momentum and settled into trading around 1002 bid, eventually closing around $1003.

Technicals

Towards the end of August, the gold price broke to the up-side of an ascending triangular pattern, and then rallied to just under $1030. Since then, it seemed as if the price ran out of momentum and has been trading gradually lower. Technically speaking this is not uncommon, and it is possible for the price to trade back to the level of the previous resistance which is around $980. However, at this point, it could very well find major support and then begin it's next leg upwards.

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