TRADERS´ Blogs

The Chinese yuan spiked up to a new record high against the U.S. dollar in the Asian session, as investor improved following upbeat domestic trade data. China's export growth accelerated to 11.6 percent in October from 9.9 percent in the previous month.

Gold for immediate delivery gained 0.5% to $1,725.10 an ounce. It rallied as much as 0.9% to $1,731.83 an ounce, the highest since Oct. 23. Gold for December delivery rose 0.6% to $1,724.90 an ounce on the Comex in New York. Gold futures climbed 1.9% yesterday, the most since Sept. 13. It jumped 4.2%, the day Obama was elected for his first term, and more than doubled during the four years of his presidency.

Indian gold futures are likely to fall past their lowest level in more than 10 weeks over the next fortnight, weighed by a stronger dollar, considered as an alternative to the yellow metal, and falling crude oil prices, but recovering physical demand could help limit the downside. Strengthening of the dollar and strong US economic data will likely remove the bullion's safe-haven appeal. The most-active gold for December delivery on the Multi Commodity Exchange was 1.23% higher at 30,873 rupees per 10 gram, not far from the last week's lowest level in 10 weeks of 30,366 rupees, a level last seen on Aug. 14. Selling is advised in gold on rallies to 31,000 rupees, for a target of 30,000 rupees, with a stop loss of 31,250 rupees.

German government bonds rose, pushing 2-year note yields below zero for the first time in two months, as Greece prepared for a vote as soon as this week on austerity measures needed to keep the nation in the euro. 10-year bund yields fell to the lowest level in more than four weeks. Spanish 10-year yields reached a two-week high before the country sells bonds on Nov. 8. Investor confidence in the euro-area economy improved this month.

Gold prices held near $ 1,720 an ounce as stock markets climbed, indicating better appetite for assets seen as higher risk. US stocks rose at the open, the dollar also surrendered gains against a currency basket after jobless claims data beat expectations. Spot gold was at $ 1,719.19, little changed from the previous session, while US gold futures for December were up 90 cents at $ 1,720. Gold prices rallied to nearly $ 1,800 an ounce earlier in October after the Federal Reserve announced new monetary stimulus measures, which tend to help gold by fueling fears of inflation and maintaining pressure on interest rates.

India's central bank left its key interest rate unchanged but trimmed the cash reserve ratio, resisting growing pressure to cut rates even as it slashed its growth forecast and raised its inflation projection for Asia's third-largest economy. Though the Reserve Bank of India (RBI) left the policy rate at 8.0% because of inflation concerns, it did support the government's reform initiative by trimming the cash reserve ratio, the percentage of deposits commercial banks must keep on hand, by a quarter of a point, to 4.25%, effective November 3. This will inject 175 billion rupees ($3.2B) into a cash-constrained banking system. RBI again slashed its growth outlook for the year ending March, from 6.5% to 5.8%. Its initial projection was 7.3%. Headline inflation will likely hit 7.5% in March, up from an earlier forecast of 7.0%, and far above the bank's medium term target of 3.0%.

Brent futures rose above $108, as positive economic data out of the world's top oil consumer, the United States, revived hopes of a recovery in demand growth, although a worsening outlook for Europe capped gains. A surge in new US single-family home sales in September suggested the economy is gaining traction and closely followed data that showed #2 oil consumer China making a slow and steady recovery. Additional support for oil came from continued delays in the restart of the Buzzard oilfield, Britain's largest. Brent crude had climbed 22 cents to $108.07 a barrel, snapping a 7-day losing streak, the longest since July 2010. US oil gained 13 cents to $85.86, after settling down for the fifth straight session.

Singapore's consumer price inflation accelerated in September, driven mainly by a marked gain in housing costs and transportation expenses, making it difficult for authorities to engage in policy adjustments to tackle the city state's slowing growth. Inflation increased sharply to 4.7% in September from Augusts' 3.9%, which represented a 21-month low. Economists were looking for a more modest rise to 4.3%. In July, inflation was at 4%.

Switzerland's broad money supply M3 grew at a faster pace of 8.9% YoY in September, following last month's 8.3% increase. Meanwhile, the narrow measure of money supply, M1 growth slowed to 11.1% from 11.3% a month ago. Currency in circulation, sight deposits, savings deposits and time deposits are included in the M3 indicator.

The rupee fell to a fresh one-month low at 53.9750 versus its previous close of 53.41/42 on the back of heavy dollar buying by oil firms, the largest buyers in the domestic currency market. Traders say some dollar sales were seen from exporters, but the demand from oil firms was too strong. The breach of the 53.80 level paves the way for further fall towards 54.20 but resistance is expected around the psychological level of 54.