Russia calls for revision of SDR currency basket

By Gleb Bryanski

YEKATERINBURG, Russia (Reuters) – The International Monetary Fund (IMF) should expand the basket of Special Drawing Rights to include the Chinese yuan, commodity currencies and gold, a senior Kremlin official said on Tuesday.

The SDR is an international reserve asset allocated to member countries with its exchange rate determined by a basket of currencies, at the moment including dollar, euro, yen and sterling. A review of the basket is due in November 2010.

“The rouble, yuan deserve to be included in the SDR basket,” Kremlin economy aide Arkady Dvorkovich told a news conference ahead of the first summit of Brazil, Russia, India and China, known as BRIC, in the Russian city of Yekaterinburg.

“It is important that the composition of the basket also reflects the role of commodities in the global economy,” Dvorkovich said, naming Australian and Canadian dollars as possible candidates.

“We also think that gold has a potential as a possible participant. The price of gold has a negative correlation to the dollar. Therefore it is beneficial to tie these two instruments into one so that investors feel safer,” he said.

Dvorkovich said he doubted Russia would complete its transition to an inflation-targeting regime which implies a freely floating exchange rate for the rouble next year when the IMF basket’s review takes place, as announced by the central bank.

Dvorkovich said BRIC leaders will discuss new reserve currencies at the summit but called for caution in the currency debate, saying it was in no-one’s interest to ruin the dollar.

Russia rattled financial markets last week when a central bank official said Moscow will cut the share of U.S. Treasuries in its forex reserves in favour of IMF bonds and bank deposits.

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Crude Oil Advances in New York Before U.S. Inventory Report

By Grant Smith

June 16 (Bloomberg) — Crude oil rose for the first time in three days as the dollar weakened against the euro and before a report on stockpiles in the U.S.

The U.S. Energy Department will probably say tomorrow that crude stockpiles dropped 2 million barrels last week, according to a Bloomberg survey. Oil lost 2 percent yesterday, extending its decline from last week’s seven-month high of $73.23 a barrel as a stronger dollar made commodities less appealing as a currency hedge.

“The pullback in the dollar is supporting all commodities,” said Andrey Kryuchenkov, an analyst with VTB Capital in London. “Sentiment remains positive, but it’s likely the market will consolidate ahead of the U.S. inventory data tomorrow.”

Crude oil for July delivery rose as much as $1.50, or 2.1 percent, to $72.12 a barrel in electronic trading on the New York Mercantile Exchange. It traded for $72.06 as of 11:37 a.m. London time.

U.S. Crude oil supplies probably dropped as refiners ramped up production and boosted stockpiles of gasoline and heating oil, a Bloomberg News survey showed. Inventories are 11 percent above the five-year average for this time of year.

Gasoline supplies probably rose 550,000 barrels in the week ended June 12 from 201.6 million the previous week. All of those surveyed said supplies climbed. Stockpiles during the same week last year fell 1.2 million barrels amid the peak motor fuel demand season in the U.S.

Brent Crude

Brent crude for August delivery rose as much as $1.34, or 1.9 percent, to $71.58 a barrel on London’s ICE Futures Europe exchange. Yesterday the contract lost $1.56, or 2.2 percent, to $70.24 a barrel.

Iranian opposition supporters plan a fourth day of protests in Tehran against President Mahmoud Ahmadinejad’s re-election, after seven people were killed in violence at a rally in the capital yesterday. Iran is the world’s fourth-largest crude oil producer.

“For the time being, the Iranian situation seems to be neutral,” said Edward Meir, analyst with MF Global Ltd. in Connecticut. “Although the oil markets were unimpressed by the frenzied weekend developments,” events seem “to have picked up a gear over the past 24 hours, in that the size of the opposition protests have become significantly larger.”

The U.S. dollar dropped for the first day in three against the single European currency, losing 0.7 percent to $1.3875 as of 11:06 a.m. London time. Declines in the U.S. currency heighten the appeal of dollar-priced assets that can be used to hedge against inflation, such as crude.

To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.net

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Another Forex Scam: Grand Theft EA III

Are you ready to waste $87 of your money on an EA that’s free? If not, keep reading.

ForexPeaceArmy.com has  seen solid evidence that another commercial EA is just an illegal copies of a free EA

FPA reviewer Robert Morton left a review on June 5th 2009 saying that he knew that the expert advisor from PipsLeader was just a copy of the free EA called Divergence Trader. Before any of our scam investigators had a chance to look into this, an email arrived from our friends at 4xProject with the same information.

4xProject contacted Ron Thomas, the author of Divergence Trader. He was unaware that the EA he freely published had been repackaged and was being sold. Even though Ron freely gave away copies of Divergence Trader, that does not give others the right to rename it and sell it as if they were the original author. We are very happy to report that Ron has contacted ClickBank and filed a complaint against Pips Leader.

Some user configurable settings were changed. It is perfectly legal to sell settings for someone else’s product, but that still does not permit the sale of copies of the software itself.

Under these circumstances, we feel have no choice but to declare that PipsLeader to be a scam. We recommend against buying their products and urge purchasers to seek a refund via clickbank.

We wish to thank Robert Morton, Ron Thompson, the FPA’s AsstModerator and 4xProject for their contributions to this case. More details

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ODL Markets introduces the Forex Auto Trading Selector

ODL Markets would like to introduce you to the revolutionary Forex Auto Trading Selector (“FATS”) system.

FATS is designed to give you access to a number of back tested trading systems which you can run in conjunction with your ODL account. Whether you are an existing account holder or considering opening an account, this service could be what you have been looking for.

Once you have signed up to the service, getting started is as easy as 123.

1. Check over all of the strategies available.
2. Choose a strategy you believe will compliment your trading goals.
3. Activate the strategy.

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WORLD FOREX:Dollar Hits Lows Vs Pound, Aussie As Stocks Rise

TOKYO (Dow Jones)–The U.S. dollar declined in Asia Wednesday, hitting a seven-month low against the British pound and an eight-month low versus the Australian dollar, as gains in regional stocks helped lift investor demand for riskier currencies.

Sterling touched $1.6658 during the session, the highest in seven months. The Australian dollar, partly helped by the country’s surprisingly strong gross domestic product data, reached $0.8265 – a level unseen since September 29.

The euro also gained versus the U.S. currency.

“With recent stock-market rises as well as signs that the (global) economy is bottoming out, players feel like taking risks,” said Yuji Kameoka, currency analyst at Daiwa Institute of Research.

In early Asian hours, higher Asian shares encouraged short-term players in the region to buy riskier, higher-yielding currencies against the low-yielding U.S. and Japanese units, dealers said. Japan’s benchmark Nikkei 225 Stock Average index was up 0.5% at 9754.86 as of 0400 GMT.

Along with the sterling, the euro rose $1.4326 from New York late Tuesday to $1.4330. Traders say it could reach $1.4500 in the near term.

The U.S. dollar, which is seen as a safe-harbor currency during financial storms, took a beating as investor confidence improved. The Dollar Index – which measures the value of the US dollar against six other currencies, including the euro – fell to near a six-month low of 78.34 from Tuesday’s level of 79.16.

Weighing on the greenback were not only rises in Asian shares but also Australia’s first-quarter GDP, which rose 0.4% from the previous three months, beating market expectations for a 0.1% gain.

But the U.S. currency gained against the yen, which traders consider to be even safer than the greenback.

Next on players’ agenda is the European Central Bank’s planned policy meeting on Thursday. However any impact will probably be muted if the outcome of the meeting is in line with market expectations, dealers said.

The markets anticipate that the ECB will keep its interest rate unchanged, but will release details of its plan to purchase around EUR60 billion in covered bonds.

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FOREX-Dollar stays near ‘09 lows as risk appetite grows

TOKYO, June 3 (Reuters) – The dollar hovered above a fresh set of lows for the year on Wednesday after U.S. pending home sales posted their third straight monthly rise, fuelling optimism about the economy and reducing safe-haven demand for the greenback.

Higher-yielding currencies such as the Australian and New Zealand dollars held within sight of eight-month highs against the U.S. dollar, benefiting from the generally bullish tone in equity and commodity markets such as oil.

U.S. pending home sales posted their biggest jump in 7-½ years in April, suggesting the U.S. housing market, which is key to an economic revival, was on the mend and reinforcing optimism about a global economic recovery. [ID:nN02503338]

“The dollar is likely to continue to weaken against the yen and others as questions are raised about the dollar’s standing as a reserve currency,” said Shinichi Hayashi, a currency trader for Shinkin Central Bank.

Comments by Russian President Dmitry Medvedev on CNBC television that the world needs a wider range of reserve currencies weighed on the dollar in New York trade.

Medvedev’s statements, however, were nothing new. In May, he suggested the Russian rouble should be made the new global reserve currency. A repeat of these remarks has highlighted the dollar’s vulnerability as the U.S. government tries to tackle an enormous fiscal deficit. [ID:nL21010092]

“Generally speaking, it’s also hard to think the dollar will strengthen going forward considering the eventual fallout of GM’s bankruptcy on the real economy and the mounting (U.S.) budget deficits,” Hayashi said.

General Motors Corp (GMGMQ.PK) filed for bankruptcy protection on Monday, the third-largest filing in U.S. history and the largest ever in U.S. manufacturing. [ID:nCARS1]

The dollar index fell to 78.334 on Tuesday, its weakest level since mid-December, and stood at 78.525 on Wednesday.

The euro was flat at $1.4303 <EUR=EBS> after hitting a 2009 high of $1.4332 on electronic trading platform EBS.

The dollar fell 0.3 percent to 95.46 yen on EBS <JPY=EBS>.

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