FOREX-US dollar trims rise vs yen as stocks clip gains

The U.S. dollar trimmed gains against the yen on Thursday, after Wall Street shares surrendered some of their gains led by financial stocks.

The dollar cut gains to 104.78, coming off session peaks at 105.57 yen . The euro has also come off about 200 points from its highs of the session. It last traded at $1.4377 , still up though by half a percent from late on Wednesday.

Shares of Morgan Stanley tumbled on Thursday, dragging overall U.S. equities lower and weighing on the dollar.

Reserve Bank Cautions On Forex Fraud

The Reserve Bank of India (RBI) has advised the people not to fall in the traps of fly-by-night operators. These operators are offering fraudulent offers to the people through e-mails, posts and couriers. The all also engaged in providing fictitious offers of winnings in lottery and money in the stock market. The bank has received number of complaints from various organizations, schools, exchange entities and individuals.

In a usual practice, such fraudulent operators’ demands account details of the individuals. They generally inform internet users and mailed them in their inbox. They also provide them some proofs of legal documents and account details.

The apex bank has already banned participation in lottery schemes under the Foreign Exchange Management Act, 1999. The bank has also scrapped the price of printing paper for currency notes. The per-unit printing cost is likely to fall significantly following the decision of the apex bank.

Asia's forex intervention may be a losing game

Asian central banks have sold U.S. dollars in recent sessions in an attempt to rescue their battered currencies, but their efforts may prove futile against a resurgent greenback that has caught fire after a seven-year decline.

Many Asian currencies, which enjoyed a good run last year, have been hammered since late July, as the dollar soared amid concerns over capital outflows and slower economic growth in the region.Authorities in Thailand, Malaysia, Indonesia, India and the Philippines were spotted selling dollars in the foreign exchange market this week. South Korea intervened on Friday for a third day to defend the struggling won,

But so far, these attempts have been unsuccessful as the dollar's surge is just too strong to overcome, analysts say.

"At this point, they're (central banks) not trying to reverse it," said Win Thin, senior currency strategist at Brown Brothers Harriman in New York. "There is no way they can do it. The dollar is gaining across the board, But they are trying to sort of slow the move," Thin said. "They just want to make sure the market remains orderly."

Plunging oil prices, worsening global prospects, and expectations of eventual U.S. interest rate increases have underpinned a month-long recovery in the dollar.

Forex Battered sterling helps

Sterling dropped to its lowest level against the dollar in more than two years on Monday after the UK's finance minister issued a pessimistic view of the economy, helping the dollar to extend broader gains.
The dollar index crept towards an eight-month high, but broad falls on global stock markets capped gains, allowing the Japanese currency to rise on cooling demand for risky carry trades that involve selling the low-yielding yen, Markets also braced for the onslaught of a strong hurricane on the Gulf of Mexico, which has shut down activities at oil companies in the region and pushed oil prices more than a percent higher.
Sterling dropped to its lowest level against the dollar since late April 2006 and hit a record low against the euro on comments from UK Chancellor of the Exchequer Alistair Darling that the economy was facing its worst downturn in 60 years.
In the case of cable, the dollar was at extreme undervaluation levels ... so from a longer term view the pair could be in for more adjustment," said Ian Stannard, senior currency strategist at BNP Paribas. Given that U.S. markets are closed for a national holiday on Monday, market participants said that the UK currency could be in for more losses when New York traders return to work on Tuesday.Gains against the UK currency helped to push the dollar index .DXY up 0.3 percent to 77.428, approaching 77.619 touched last week for the first time since late December.