* Says well-placed to cope with tough market

* To cut jobs in Ukraine

(Adds detail, background)

PARIS, Feb 19 (Reuters) – BNP Paribas, the French bank embroiled in plans to carve-up struggling rival Fortis , posted an expected fourth quarter loss and said market conditions would remain tough in 2009.

France’s biggest bank by market capitalisation on Thursday reported a net loss of 1.37 billion euros ($1.73 billion) — in line with guidance given last month for a loss of around 1.4 billion euros.

It also cut its dividend by 70 percent from last year to 1 euros per share. Last year, it made a fourth quarter net profit of around 1.01 billion euros.

BNP was hit by losses at its investment banking arm, a 345 million euro exposure to an alleged $50 billion fraud by U.S. financier Bernard Madoff, and by a slump in the economy of Ukraine, where it has operations.

BNP said it would cut jobs in Ukraine and close down 100 bank branches in that country.

BNP expected market conditions for 2009 to remain very difficult but added it was well-placed to cope with the tough climate.

Its results were worse than those posted on Wednesday by French rival Societe Generale.

SocGen reported a fourth quarter net profit of 87 million euros and increased its dividend by 33 percent.

However, BNP’s losses were not as bad as those suffered by many of its rivals, such as Swiss banks UBS  and Credit Suisse  which posted fourth quarter losses of 8 billion and 6 billion Swiss francs respectively.

BNP is currently in talks with the Belgian government over trying to find a solution for Fortis, whose shareholders have voted against state-led deals to carve up Fortis and hand over some of its main assets to the French bank.

BNP Paribas shares closed up 2.6 percent at 24.62 euros on Wednesday, giving the bank a market capitalisation of around 22 billion euros. The stock has fallen around 19 percent since the start of the year, compared to a 22 percent drop in the DJ Stoxx European bank sector .SX7P. ($1=.7941 Euro)

(Reporting by Sudip Kar-Gupta, editing by Marcel Michelson)

Source: Reuters

GM said in August that it intended to sell its plant in Strasbourg and saw possible interest from Asia. French media on Wednesday named Weichai as a potential buyer.

“The board would like to state that the contents of such an article have no basis in fact. The company does not have any intention to make such an acquisition,” the Chinese firm said in a statement.

The struggling Detroit automaker, on life support after obtaining billions of dollars in funds from the U.S. government to stave off bankruptcy, has been seeking buyers for its assets, including for its Hummer SUV line and the Swedish brand Saab, but no deal has been struck so far.

GM has requested $16.4 billion in additional loans from the government for a total of up to $30 billion, and has said it will run out of cash as soon as March without new federal funding. ($1=6.835 Yuan) (Reporting by Fang Yan, Editing by Jacqueline Wong)

 UPCOMING ECONOMIC INDICATORS

GMT                                                              MEDIAN
DATE     GMT/LOCAL INDICATOR                             PERIOD  F/CAST   PRIOR
20FEB    0828/0928 Markit Services Flash PMI               Feb    45.0    45.2
20FEB    0828/0928 Markit/BME MFG Flash PMI                Feb    32.5    32.0
20FEB    0828/0928 Markit Composite Flash PMI              Feb            38.0 

 GENERAL / ECONOMIC EVENTS

 THURSDAY, FEBRUARY 19
 FRANKFURT- ECB Governing Council meeting. No interest rate
announcements scheduled. -

 BERLIN- EU Commission President Jose Manuel Barroso meets German

Chancellor Angela Merkel 1530 GMT, news conference 1615 GMT.

Source: Reuters

EU Economic and Monetary Affairs Commissioner Joaquin Almunia said he was worried about the situation of banks in central, eastern and southern Europe, pointing to EU member Romania as well as non-EU states — Ukraine, Croatia and Serbia.

Presenting the European Commission’s assessments of EU members’ mid-term fiscal plans, Almunia said the bloc was ready to help, although aid would be different in the case of EU and non-EU members.

The comments came as central and eastern Europe emerged as especially hard hit by the global financial crisis, prompting a currency and stock sell-off in the region.

The Polish zloty <EURPLN=> fell to near all-time lows against the euro this week before regaining some ground on Wednesday while the Hungarian forint <EURHUF=> set a new record low. The Czech crown has also been under pressure.

“I am …concerned about the volatility of the exchange rate in EU countries with floating regimes,” Almunia told a news conference in a reference to Poland, Hungary, Romania and the Czech Republic.

He urged authorities in those countries to stop making public statements that might be harming investor sentiment and the financial market.

“I am also concerned by the possibility that some public statements have accelerated this evolution,” he said.

“I would ask all the authorities … to be careful when they make public statements because the markets are very nervous, and sometimes they don’t understand very well some of the statements,” he said.

Almunia did not elaborate.

SURPRISING STATEMENTS

In Poland, central bank governor Slawomir Skrzypek has publicly questioned the government’s goal to join the euro zone in 2012 and to lock the zloty in the ERM2, a two-year currency stability test, in the first half of 2009.

Polish Prime Minister Donald Tusk took a rare step on Tuesday of disclosing the level of the zloty exchange rate at which the government would be ready to defend the currency. [ID:nLH310660]

On Wednesday, a senior ruling Polish party official surprised the markets by saying Poland had already started official talks joining the ERM2 with the European Central Bank, negotiations that are usually very discreet.

Almunia said he shared the concern of Austria about the deteriorating economic situation of some central and eastern European countries, which is putting pressure on local units of some big Western banks, such as Austria’s Erste.

“I fully share their concern, everybody shares their concern about the risks involved in the situations of countries such as Ukraine, or Serbia, or Croatia, or Romania,” he said. He added he heard of no official plan from Austria to help those countries and their banks. Diplomats say Austria has been lobbying for such aid, but has not won much support.

Deputy Czech Prime Minister Alexandr Vondra, whose country holds the EU’s rotating presidency, said the situation of eastern banks would be discussed an emergency EU summit on March 1 — but only as part of a wider debate.

“The crisis is a huge problem, in particular for the banks active in this region… We need to approach the issue in a coordinated way,” he told reporters in Brussels.

Almunia said the EU was ready to help those countries, although he did not elaborate how.

“We cannot give to all of them the same kind of support. We have to differentiate in terms of the different positions of each one of these member states regarding our own instruments,” he said.

Source: Reuters

* Euro hits fresh 2-½ mth low vs dlr on regional bank fears

* Yen buying on risk aversion may wane on Japan political woes

* U.S. auto restructuring plans fail to move market

By Kaori Kaneko

TOKYO, Feb 18 (Reuters) – The euro hit a fresh 2-½ month low against the dollar on Wednesday after warnings from ratings agencies fuelled fear that a deep recession in Eastern Europe would cause more damage to European banks.

Moody’s Investors Service threatened to downgrade euro zone banks with significant exposure to the weakening economies in Eastern and Central Europe and Standard & Poor’s also said it may review emerging Europe bank ratings.

“With growing credit concerns in Europe, investors seem to be continuing to unwind their positions and securing cash in dollars,” said Saburo Matsumoto, senior manager at Sumitomo Trust Banking.

The euro fell as low as $1.2558, its lowest since Dec. 4 although it later edged up 0.1 percent from late U.S. trade on Tuesday to $1.2595 <EUR=>.

The euro was little changed at 116.18 yen.

Currency market players said they were watching how Asian stock markets would perform but falls may not prompt yen purchases on risk aversion as much as they have done in the past due to concerns about Japanese political turmoil and the weakening Japanese economy.

Tokyo’s Nikkei share average .N225 fell 1.6 percent.

Japan’s finance minister resigned on Tuesday after being forced to deny he was drunk at a G7 news conference, although the move may be too late to save unpopular Prime Minister Taro Aso or the long-ruling party from voters’ wrath. [ID:nT79787]

The dollar fell 0.2 percent to 92.22 <JPY=> after it rose to a more than one-month high of 92.75 yen on Tuesday.

The market showed little reaction to restructuring plans submitted by U.S. auto giants as they yielded no surprises, traders said.

General Motors Corp requested up to $30 billion more and Chrysler LLC CBS.UL asked another $5 billion from U.S. government aid for their survival. [ID:nLH575804] (Editing by Edwina Gibbs)

Source: Reuters

* Yen buying on risk aversion may wane on Japan political woes

* U.S. auto restructuring plans fail to move market

By Kaori Kaneko

TOKYO, Feb 18 (Reuters) – The euro hit a fresh 2-½ month low against the dollar on Wednesday after warnings from ratings agencies fuelled fear that a deep recession in Eastern Europe would cause more damage to European banks.

Moody’s Investors Service threatened to downgrade euro zone banks with significant exposure to the weakening economies in Eastern and Central Europe, and Standard & Poor’s said it may review emerging Europe bank ratings. [ID:nLH423223]

“With growing credit concerns in Europe, investors seem to be continuing to unwind their positions and securing cash in dollars,” said Saburo Matsumoto, senior manager at Sumitomo Trust Banking.

The euro fell as low as $1.2558, its lowest since Dec. 4, though it later inched up 0.1 percent from late U.S. trade on Tuesday to $1.2598 <EUR=>.

The euro was down 0.2 percent at 116.04 yen <EURJPY=R>.

Currency market players said they were watching how Asian stock markets perform but falls may not prompt yen purchases on risk aversion as much as in the past due to concerns about Japanese political turmoil and the weakening Japanese economy.

Tokyo’s Nikkei share average .N225 fell 1.2 percent.

Japan’s finance minister resigned on Tuesday after being forced to deny he was drunk at a G7 news conference, though the move may be too late to save unpopular Prime Minister Taro Aso or the long-ruling party from voters’ wrath. [ID:nT79787]

Japan’s economy shrank sharply in the fourth quarter of 2008, confirming the world’s second-biggest economy is in a severe recession, data showed this week. [ID:nLG472278]

The dollar fell 0.2 percent to 92.15 <JPY=> after it rose to a more than one-month high of 92.75 yen on Tuesday.

The dollar index, a gauge of its performance against six major currencies, slipped 0.1 percent to 87.671 but stayed near a nearly three-month high of 87.864 hit the previous day.

The market showed little reaction to restructuring plans submitted by U.S. auto giants as they yielded no surprises, traders said.

General Motors Corp  requested up to $30 billion more and Chrysler LLC CBS.UL sought another $5 billion in U.S. government aid for their survival. [ID:nLH575804]

The White House said on Tuesday it would carefully review the plans but said it was clear more would be required of the companies and stakeholders.

“The market is waiting for the U.S. government’s assessment of the automakers’ plans. There is a risk of dollar selling but the dollar’s reaction will depend on the review results,” said Yuji Saito, head of the FX sales department at Societe Generale.

Investors will be monitoring U.S. economic data including housing market and industrial production figures later on Wednesday for incentives.

Also on Wednesday, U.S. Federal Reserve Chairman Ben Bernanke is scheduled to make a speech on the central bank’s lending programmes and its balance sheet, while the minutes from the Fed’s January meeting will be released. (Editing by Chris Gallagher)

* Moody’s, S&P warn of deterioration in Eastern Europe

* Dollar index nears 3-month high on safe-haven flows (Updates prices, adds comment)

By Steven C. Johnson

NEW YORK, Feb 17 (Reuters) – The dollar gained broadly on Tuesday, hitting a 10-week high against the euro after warnings from two credit ratings agencies sparked fear that a deep recession in Eastern Europe would cause further damage to banks in the euro zone.

The yen also fell after earlier data showed Japan’s economy shrank in the fourth quarter at its fastest clip in 35 years and the country’s finance minister resigned, putting pressure on the government.

The euro fell below $1.26 for the first time since early December after Moody’s Investors Service threatened to downgrade euro zone banks with significant exposure to the weakening economies in Eastern and Central Europe.

Standard & Poor’s also said it may review emerging Europe bank ratings now that the credit crisis has limited Western European banks’ ability to fund subsidiaries in the region.

“That’s pretty negative for the European economic outlook and certainly implies that the (European Central Bank) has more work to do,” said Robert Blake, senior currency strategist at State Street Global Markets in Boston.

“It’s a pretty significant story that’s not going away and may only get worse. That’s certainly a negative for the euro,” he said.

The euro was last down 1.3 percent at $1.2602 <EUR=> after earlier falling as low as $1.2564, its lowest level since Dec. 4. It fell 0.7 percent to 116.31 yen <EURJPY=>.

The dollar rose 0.6 percent to 92.30 yen <JPY=>, not far from a one-month peak at 92.75 hit earlier. The ICE futures’ dollar index, a gauges of the greenback against six major currencies, rose 1.3 percent to 87.637 .DXY after earlier hitting 87.864, its best showing since November.

The strong yen and the deep recession in the United States and other markets for Japanese exports has rattled Japan’s economy, which in the fourth quarter contracted at its fastest pace since 1974.

“The yen is acting like a hostage with a bag over its head and a noose around its neck, and that’s because without U.S. consumption driving global growth forward, Japan’s in big trouble,” said Andrew Wilkinson, senior market analyst at Interactive Brokers Group in Greenwich, Connecticut.

With the Japanese and euro zone economies floundering, the dollar becomes just about the only short-term alternative, analysts said.

“The dollar’s been the big winner today and I can’t see any reason not to keep holding the world’s major reserve currency,” Wilkinson said, who said he expects the euro to keep grinding lower toward $1.15 over the coming quarters.

Investors’ demand for safety that fed dollar gains on Tuesday also pushed U.S. government bond yields down and sent spot gold to a seven-month high.

That came even as U.S. economic data painted a grim picture, with the New York Federal Reserve reporting its manufacturing activity index plunged to a record low this month.

A separate Treasury Department report was more encouraging, showing foreigners bought a net $34.8 billion in long-term U.S. securities in December, reversing outflows in the prior month. That too was tied to safe-haven flows, analysts said.

* Moody’s says east European crisis weighing on bank ratings

* Yen pressured vs dlr as Japan’s finance minister to quit

* Eyes also on U.S. automakers’ restructuring plans

(Updates quotes, prices, adds data)

By Kirsten Donovan

LONDON, Feb 17 (Reuters) – The dollar rose broadly while the euro hit a more than two-month low on Tuesday, pressed by concerns over a recession in eastern Europe and the knock-on effect on European banks.

However, the single currency pared some losses after data showed a surprise pick up in the German ZEW economic sentiment survey in February.

The greenback rose against the yen after Japan’s finance minister said he would resign following criticism of his behaviour at a weekend Group of Seven meeting.

And ongoing concerns over the global economy, banks’ balance sheets and corporate results kept investors wary, with European shares down on the day, boosting flows into the dollar, which is currently perceived as a safe-haven currency.

“The main reason for the euro weakness is the worries not only about the European economy but also especially in Eastern Europe where currencies are falling rapidly across the board,” said Nordea rate strategist Niels Christensen.

“That’s reason to worry about European companies that have some engagement in the region, such as banks which could face further losses.”

Credit rating agency Moody’s said the recession in emerging Europe was likely to be more severe than elsewhere and would put financial strength ratings of local banks and their Western parents under pressure, fuelling simmering investor jitters about the region. [ID:nLG25344].

Moody’s said the combination of higher provisions for bad debt, the rise in bank borrowing costs and falling currencies would weigh on the profitability of the banks concerned and erode their capital base.

The euro dropped as low as $1.2602 <EUR=> on Tuesday, its lowest since early December on trading platform EBS.

By 1035 GMT, it was down 1.1 percent at $1.2633, according to Reuters data.

The euro was down 1.1 percent at 88.56 pence <EURGBP=R> after data showing British consumer price inflation fell much less than expected in January.

Concerns over the euro zone economies were also reflected outside of the currency markets, with intra euro zone bond spreads widening and the cost of insuring against a sovereign default reaching new highs for many countries including Austria, Germany and Ireland.

The dollar rose to its highest since early December against a basket of currencies .DXY at 87.685 and was last 1.0 percent higher at 87.386.

RISK AVERSION

The European currency was also under pressure on growing expectations that the European Central Bank will ultimately have to play catch up on rate cuts made by the Federal Reserve and Bank of England.

Figures derived from Eonia rates show the market anticipating euro zone interest rates will fall below 1.0 percent later this year, with a cut to a record low of 1.5 percent in March.

ECB President Jean-Claude Trichet said on Monday the economic situation was extremely difficult but policymakers must avoid laying the ground for future disorder, while another ECB official described the outlook for 2009 as “dismal” [ID:nLG40157].

UBS strategists said the ECB’s refusal to discuss alternative monetary easing tactics could further hurt the euro.

“All other central banks in the G10 have frontloaded cuts one way or another and are openly discussing aggressively adopting unconventional measures,” said UBS strategist Geoffrey Kendrick in a note.

“We believe the ECB’s refusing to consider other options will continue to cast the euro zone in a negative light and sentiment on the euro will suffer accordingly.”

The yen briefly weakened to its lowest in more than a month, at 92.75 per dollar <JPY=>, after Japanese Finance Minister Shoichi Nakagawa said he would resign after being forced to deny he was drunk at a G7 news conference. [ID:nT79787].

The dollar was last up 0.2 percent at 91.87 yen <JPY=>.

Later this evening I hope to issue amyofficial EUR/USD Forecast once I complete a solid study. Currently I have a schedule conflict but I hope to share more later.

PMTP:

Feb. 11th 7:25 p.m. – 8:15 p.m. ET for 1.5 hours duration, medium-to-strong

Feb. 12th 2:50 a.m. – 3:10 a.m. ET for 2.5 hours duration, medium+ productivity

Feb. 12th 8:50 a.m. – 9:15 a.m. ET for 3 hours duration, strong productivity

Lastly — I rarely concern myself with fundamentals to make trading decisions; if ever at all. I am a price action technical trader. That said — I want to share my opinion that the impact of fundamental news to currency valuations is building and ‘trigger-finger’ news out of Europe or Asia is overdue and must be considered. Technically — I see a whipsaw building and breakout potential.

Source: forextradersdaily

(Adds quotes, updates prices)

By Tamawa Desai

LONDON, Feb 6 (Reuters) – The yen fell versus the dollar and euro on Friday, reversing gains as rises in stocks renewed appetite for riskier assets but caution prevailed before U.S. jobs data which will show another grim sign for the economy.

The dollar recovered against the yen from levels seen in late U.S. trade on Thursday but was still below a nearly one-month high hit as Wall Street rallied.

But traders were wary of chasing prices sharply higher ahead of data that is expected to show more than half a million U.S. jobs likely lost in January.

The U.S. unemployment rate was likely to have climbed to 7.5 percent in January, compared with 7.2 percent a month earlier, with 525,000 jobs forecast to have been shed. [ID:nN04455795]

“Payrolls are the big focus for the day,” said analysts at Citigroup. “Bad news still means good news for the dollar.”

At 1004 GMT, the dollar was up 0.3 percent on the day at 91.46 yen <JPY=> after climbing above 92 yen on Thursday. The euro was at 117.20 yen <EURJPY=R>.

European shares rose 0.4 percent in morning trade .FTEU3.

Data on Friday is expected to show German industrial output fell 2.5 percent in December from the previous month.

The euro was up 0.2 percent against the dollar at $1.2812 <EUR=> after the European Central Bank kept interest rates unchanged on Thursday but indicated more easing next month, as widely expected.

But analysts pointed out the euro will remain under pressure as the Russian rouble’s decline has prompted Russian authorities to sell euros for dollars to maintain the balance of their reserves portfolio.

The rouble tested its new trading floor against a euro-dollar basket for the first time on Thursday. It was trading just above the trading floor of 41 <RUS=MCX> on Friday.

The dollar was also supported on expectations for the Obama administration’s bank rescue plan to be unveiled on Monday.

“The market already expects a weak jobs report, so the financial plan on Monday will be the main driver,” said Lee Hardman, currency economist at Bank of Tokyo-Mitsubishi UFJ.

Meanwhile, sterling pared some early gains after UK industrial output weakened more than expected. It was up 0.4 percent to $1.4676 <GBP=D4>, after climbing upward after the Bank of England cut interest rates on Thursday. The euro was down 0.1 percent at 87.25 pence <EURGBP=>. (Editing by Andy Bruce)

Source: Reuters