| Dollar Up Vs Euro, Rebounding From Sharp Drop Overnight
NEW YORK (Dow Jones)--The dollar is stronger against the euro early Friday in New York, even after some huge swings in holiday-thinned overnight trading that pushed the euro to within touching distance of the key $1.50 level. Continued credit markets fears and worries of more Federal Reserve rate cuts pushed the single currency as high as $1.4968, a record high, during sparse Asian trading Friday in which Japanese markets were closed for a holiday. But profit-taking quickly ensued, allowing the dollar to reverse course, and then some. The euro fell to as low as $1.4784 before the North American session began. "It is difficult to find much rhyme or reason in (Friday's) wild price action in the foreign exchange market," said Marc Chandler, global head of foreign exchange at Brown Brothers Harriman.
Mugabe says 'Zimbabwe will not collapse'
ZIMBABWEAN President Robert Mugabe said on Thursday that the country would soon boost agricultural production to survive what he said was a plot by "Western destructive forces" to bring about its collapse. Speaking as his government launched a $6 million bio-diesel refinery built as a joint venture with a South Korean firm just outside of Harare, Mugabe said his land reforms -- blamed for Zimbabwe's economic crisis -- would soon begin to bear fruit. "Zimbabwe was never there to collapse and shall never be there to collapse," he said. Mugabe's critics say his controversial policy of seizing white-owned farms to resettle landless blacks with little farming experience has brought the economy to its knees. Zimbabwe suffers from the world's highest inflation rates and chronic food, fuel and foreign currency shortages.
Yuan rises 0.34 percent on journal report
The yuan rose the most since China ended its fixed exchange rate to the US dollar in 2005 as the government signaled faster gains to cool the economy and curb inflation. The currency climbed as much as 0.43 percent after the official China Securities Journal cited Ba Shusong (ƪQ), a Cabinet researcher, as calling for a stronger yuan to curb prices of imported fuel and food. Last Friday, the central bank called for the market to play a greater role in setting the exchange rate. "The economy is overheating in at least some regions," Yu Yongding (Eéw), the director of the World Economics and Politics Institute in Beijing and a former central bank monetary policy committee member said in an interview yesterday. "The central bank now has more room to let the yuan rate float with more flexibility." The yuan strengthened 0.34 percent to 7.3192 per dollar as of 2:52pm in Shanghai, according to the China Foreign Exchange Trade System.
More Declines in Asian Holdings of US Tsrys
Foreigners were net sellers of US long term securities in September at $14.7b after $150.7b in net selling in August. But foreign net long-term purchases showed a rebound to net buying of $26.4 bln after a net selling of $70.6 bln in August, which was the first net negative figure since August 1998, a month characterized by sharp declines in US stocks and treasuries when markets plunged following the LTCM collapse and Russia 's decision to drop its currency peg. US equities received $2.5 bln in net buying after sustaining the biggest net selling in history in August at $40.7 bln. The rebound in net purchases of US corporates and Agencies did help the overall balance. Japanese and Chinese Treasury holdings continued on the decline, as Japanese holdings reach $582 billion, the fourth consecutive monthly decline, and a 17% decline off the all time high reached in 2004.
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