India Forex - Forex Trading in India

India Tuesday 18 May 2010 - British telecoms giant Vodafone Group has unveiled its full-year financial results for the twelve-month period ended 31 March 2010, posting revenue growth bolstered by favourable exchange rates and merger and acquisition activity. The group generated a turnover of GBP44.47 billion (USD64.13 billion), an 8.4% year-on-year increase, with exchange rates contributing 5.7 percentage points of growth, although organic revenue fell by 2.3% when excluding the impact of forex gains and M&A activity, with European service revenue falling 3.5% against the same period a year earlier. Reported earnings before interest, tax, depreciation and amortisation (EBITDA) meanwhile rose by 1.7% to GBP14.735 billion, although excluding positive effects from foreign exchange movement organic EBITDA was 7.4% down against FY2008/09. Vodafone also announced that, despite having added around 72 million subscribers at its Indian subsidiary, Vodafone Essar, since entering the market in 2007, recent hyper-competition and increased spectrum costs had led to a GBP2.3 billion impairment charge at the unit. On a more positive note the group did note that it had completed its GBP1 billion cost savings programme a year ahead of schedule, adding that it would now begin a new two-year programme, once again aimed at cutting GBP1 billion in costs.

Looking forward the group said that it expects to return to ‘low levels of organic revenue growth’ in 2010/11, although noted that this would be dependent on the economic environment across Europe. Vodafone forecast free cash flow of between GBP6 billion and GBP7 billion for the three years to 2013, while it said adjusted operating profit would be between GBP11.2 billion and GBP12 billion in the year to March 2011.

In terms of subscribers, at end-March 2010 Vodafone had a proportionate wireless customer base of 341.45 million, up 84.1% y-o-y, with Vodafone Essar accounting for just under 30% of the total, having surpassed the 100 million milestone in the first three months of 2010.

Commenting on the results, Vittorio Colao, Vodafone CEO, noted: ‘Vodafone’s financial results exceeded our upgraded guidance on all measures. Revenue trends have improved again in [fiscal] Q4 driven by growth in mobile data and fixed broadband. Cost reduction targets were delivered ahead of schedule enabling commercial reinvestment to improve market share and further strengthen our technology platforms … We are creating a stronger Vodafone, which is positioned to return to revenue growth during the 2011 financial year, as economic recovery should benefit our key markets.’

India Wednesday 12 May 2010: The euro slipped on Wednesday on nagging worries about the euro zone’s ability to tackle its debt crisis, while sterling trimmed gains made against the dollar after a new coalition UK government was formed.

The euro remained under selling pressure with investors still sceptical about whether the euro zone economies could deliver the drastic spending cuts and tax increases needed to get their fiscal houses in order. Sterling slipped back from highs hit the previous day after Conservative leader David Cameron became Britain’s new prime minister.

“It will take time to solve the fundamental problem of fiscal debt in the euro zone. And the euro is expected to be weighed down although some will probably buy on dips as short positions in the currency have accumulated,” said Mitsuru Sahara, chief manager at the currency derivatives trading department at Bank of Tokyo-Mitsubishi UFJ. “The market will continue to watch the degree of commitment of central banks in the euro zone economies and authorities such as the IMF to the debt problem in the area,” he said.

The euro was trading around $1.2642, down 0.2 per cent from late U.S. trade on Tuesday, having retreated from Monday’s high near $1.3100. One near-term downside target for the euro may be around $1.2580, near Friday’s low, said a trader at a Japanese bank.

In one potentially supportive factor, traders cited talk of a double no-touch option position in the euro with barriers at $1.25 and $1.31. Such a position suggests that the holder would buy euros on any drop towards $1.25 to defend that position until it expires.

The recent market is driven by political factors surrounding the euro and ups and downs of market tension, rather than economic indicators. It is hard to predict what will come next, making it difficult for traders to take risks,” said Satoshi Okagawa, head of the forex and money trading group at Sumitomo Mitsui Banking in Singapore.

On the political front, Conservative party leader David Cameron took over as British prime minister after securing a power-sharing agreement between his centre-right party and the smaller Liberal Democrats. Market players said they were keen to see if the Conservative-led government will take swift action to bring down spending. Sterling slipped 0.1 per cent to $1.4902 after rising above $1.5000 on Tuesday. The euro edged up 0.2 per cent against sterling to 84.80 pence after falling 1.6 per cent on Tuesday. A drop below 84.28 pence would take the euro to its lowest in 11 months against sterling.

India Tuesday 11 May 2010: Excitement over the euro zone’s mammoth $1 trillion rescue package gave way on Tuesday to doubts whether its weakest economies can meet their end of the bargain and deliver drastic debt cuts, driving the euro and stocks lower. The emergency plan — the biggest since G20 leaders threw money at the global economy following the collapse of Lehman Brothers in 2008 — impressed markets with its sheer size and sparked a spectacular rally in world stocks and the euro.

Yet financial markets turned cautious when they reopened for business in Asia on Tuesday, with investors concerned that the plan was not a long-term solution to problems plaguing the 11-year old single currency area. In a sobering note, the International Monetary Fund said that even though Greece’s public debt was sustainable over the medium term, the nation whose debt woes spurred the unprecedented euro zone action, faced plenty of risks. Moody’s credit ratings agency also warned it might downgrade Portugal’s debt rating and further cut Greece’s to junk status, noting the contagion effect of Greece’s crisis on other euro zone members. “Contagion has spread from Greece — historically a weaker credit in the context of the euro zone — to sovereigns with stronger credit metrics like Portugal, Ireland and Spain,” Moody’s said.

MORE PROBLEMS AHEAD?
Stock markets started with modest gains, but turned negative with Tokyo shares down 0.9 percent and markets elsewhere in Asia-Pacific down 1 percent, a far cry from a nearly 4 percent jump in Wall Street blue chips overnight. The euro slipped 0.5 percent against the yen and traded 0.2 percent down from late U.S. trade against the dollar after it climbed as much as 3 percent on the rescue news. “Even though one of the worst scenarios — a Greek default — has been avoided for now, in many ways solving the bigger problems have simply been postponed and new issues could emerge in places such as Portugal and Spain,” said Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Morgan Stanley Securities.

In another sign of market caution, safe-haven U.S. Treasuries stabilised in Asian trade after Monday’s plunge. Markets initially cheered the rescue plan as a sign that for the first time in the six months of a deepening debt crisis, European leaders appear to have got ahead of the curve with decisive action. But the deal left many longer-term questions about whether Europe’s weakest economies can manage their debt and how the European Union can develop more coherent economic and fiscal policies to underpin the single currency. With many nations saddled with record deficits after they pumped trillions of dollars into their economies during the global crisis, officials from Washington to Beijing applauded Europe’s efforts to keep the crisis contained within its bounds.

WAKE-UP CALL

In Japan, the world’s most indebted industrialized nation, government officials warned Tokyo could no longer take investors’ willingness to bankroll its spending for granted. Japan so far has had no trouble financing its deficits, even as its public debt is forecast to reach 200 percent of GDP within a year or so, thanks to a vast pool of domestic savings and reliance on domestic investors to foot the bill. But this could change, Strategy Minister Yoshito Sengoku warned, saying financial markets may start taking note of Japan’s debt burden, while Finance Minister Naoto Kan said next year’s new borrowing should not exceed this year’s new bond sales. “Japan needs to draw a lesson from Greece’s problems and to take steps on fiscal discipline with a stronger sense of crisis than before,” he told a news conference on Tuesday.

European leaders sprung into action and cobbled together a package that dwarfed the 110 billion euro rescue for Greece after interbank lending started freezing up on Friday in an ominous reminder of the Lehman crisis. With memories still fresh of how the U.S. subprime market’s collapse spiralled into a global financial and economic crisis, Europe acted out of concern that after pummelling profligate Greece, markets could take aim at other fiscally weak nations, threatening the stability of the whole euro area. Concerns that credit markets could freeze again also appeared to have forced the European Central Bank’s hand, which joined the rescue with a pledge to buy government bonds — a “nuclear option” it had resisted for months.

Euro zone central banks immediately began implementing the ECB’s part of the deal, buying government bonds in the open market. The move impressed analysts just as much as the size of the 750 billion euro package of standby funds and loan guarantees that could be tapped by euro zone governments shut out of credit markets. That amount includes 250 billion euros that the IMF could contribute, even though its No. 2 official John Lipsky said his institution had not earmarked any money for euro zone countries and help would be provided on a case-by-case basis.

Fears that the crisis could spread well beyond Greece, helped overcome initial resistance in Germany and other nations to a bailout after Athens had for years misled its EU peers about the true state of its finances. “This package serves to strengthen and protect our common currency,” German Chancellor Angela Merkel told reporters in Berlin.

Germany and the Netherlands, sticklers for budget discipline, insisted the rescue programme was linked to the same kind of draconian austerity measures already imposed on Greece. Dutch Finance Minister Jan Kees de Jager told parliament Spain and Portugal had made a commitment to cut their budgets substantially in 2010 and 2011 as a condition for the safety net. EU Monetary Affairs Commissioner Olli Rehn said both states must commit themselves to further savings this year too. Spain said it had no intention of drawing on the funds.

India Wednesday 21 April 2010 - Currencies closely tied to global growth stole the limelight from the dollar and euro Tuesday as a number of central banks around the world signaled a return to normal market conditions, indicating greater confidence in the pace of the global recovery.

Central banks in Canada, Australia, Sweden and India highlighted a global recovery that continues to gain traction, increasing the likelihood other central banks will also begin the path to tighter monetary policy.

“The global recovery is broadening, and the aggressive monetary easing doled out in 2009 will give way to continued policy normalization in 2010″ across major economies, said analysts at Mizuho Corporate Bank in New York.

The Canadian dollar soared 1.5% against the greenback in its biggest one-day move since November–with the U.S. currency dipping below parity with the Canadian dollar–after the Bank of Canada stood pat on key interest rates, but signaled monetary policy could soon tighten based on a steadily improving economy. The greenback was quoted at C$0.9993 late Tuesday.

The Reserve Bank of Australia pushed the Australian dollar higher after minutes from the central bank signaled further rate hikes lie ahead. Also buoyed by rising commodity prices, the currency rose 0.8% against the dollar. India’s central bank also increased key interest rates, helping the Indian rupee strengthen nearly 0.6% against the greenback.

In Sweden, the Riksbank left its interest rates unchanged at 0.25% as expected, but said that increases toward a “more normal level” will begin in the summer or early autumn. The Swedish krona gained around 0.3% against the dollar and more than 0.6% against the euro by late afternoon trading.

Inching toward policy normalization “goes with what we think is going to be the theme for 2010,” said Jacob Oubina, currency strategist at Forex.com in Bedminster, N.J., with the high-yielding currencies of countries that are tightening policy outperforming the euro and yen, whose central banks are expected to stand pat on key rates.

The euro surrendered its earlier gains as relief after a better-than-expected auction of short-term Greek debt gave way to longer-term concerns over fiscally strapped euro-zone nations.

Late Tuesday, the euro was at $1.3445 from $1.3469 late Monday, according to EBS via CQG. The dollar was at Y93.15 from Y92.38, while the euro was at Y125.23 from Y124.42. The U.K. pound was at $1.5372 from $1.5316. The dollar was at CHF1.0682 from CHF1.0641.

The ICE Dollar Index, which tracks the greenback against a trade-weighted basket of currencies, was at 81.029 from 81.015.

The Bank of Canada firmly stated that rate hikes are coming by explicitly removing its year-old conditional commitment to keep the overnight target rate at the lowest possible level of 0.25%. In a signal it could raise rates in June, the Bank of Canada said that with recent improvements in the economic outlook, the need for its low-rate pledge is now passing and it is appropriate to begin to lessen the degree of monetary stimulus.

Slow-growth economies and debt-laden peripheral countries continued to weigh on the euro, which earlier hit a peak of $1.3523 after Greece raised EUR1.95 billion of three-month funds with a yield comfortably below its 4% pain threshold, though the yield was much higher than the 1.67% at the previous auction in January.

The common currency slipped against the dollar by late afternoon as lingering questions remained over the longer-term prospects for Greek financing and over the mechanics of an International Monetary Fund-European Union bailout plan. EU and IMF officials meet Wednesday in Athens to begin discussions on a rescue package.

On a day when global central banks took center stage inching toward monetary policy normalization, the yen declined broadly, as the Bank of Japan is seen as lagging its peers; some officials have suggested the bank will actually loosen policy further to stimulate an economy that struggles with deflation.

The dollar gained nearly 1% against the yen, and even the beleaguered euro gained more than 0.5% against the Japanese currency.

With the ICE Dollar Index slightly higher, Deutsche Bank’s PowerShares U.S. Dollar Index Bearish exchange-traded fund was down 0.08% from late Monday, while its PowerShares U.S. Dollar Index Bullish was up 0.17%. The two exchange-traded funds are based on Deutsche Bank currency futures indexes, whose composition mirrors that of the ICE’s Dollar Index.