Forex: Pound revived and rose across the board

Cable was the best performer between majors on Tuesday. The pair rose across the board after falling sharply in the last three days. Stocks fell in Europe and the U.S. but rose in Asia. A year after the Dow Jones suffered the biggest point decline in history; markets fell at a moderate pace in Wall Street, following a surprise decline in consumer confidence. The stock index closed lower on five out of the past six sessions.

Cable revives :GPB/USD rose for the first time after four days with losses. The pair posted an intra-day high at 1.5989 and failed to get back above 1.6000 but managed to hold on top of 1.5910. Against the Yen, Cable recovered after falling to a 4-month low on Monday. GPB/JPY rose from 142.50 to 143.90; the pair is facing a strong resistance at 144.00. To the Euro, the Pound posted interesting gains. EUR/GBP continued to pull back from 5-month high and fell to 0.9100.Despite rising across the board, Cable still holds below key levels, suggesting that it could start falling again in the next sessions.

Dollar mixed:With the exception of the Pound, Greenback rose across the board. Dollar appreciated constantly through the Asian and European session but pull back, losing part of the gains during the American. EUR/USD closed below 1.4600 for the first time since mid September. The pair bottomed at 1.4525 posting a fresh 2-week low. The Yen lost ground on Tuesday across the board. USD/JPY rose above 90.00 to 90.36. If Greenback can not break the resistance zone at 90.35 in the next hours, the pair could regain the downside.

EUR/USD Current Price: 1.4588

EUR/USD Current Price: 1.4588. Slowly regaining the upside, pair remains capped under the 38.2% retracement of the last daily up leg 1.4190/1.4842, around 1.4600. with hourly charts slightly bullish, pair needs to clearly confirm above that level to extend the upside rally, thus next strong resistance area came around 1.4650; if the last gives up, pair could regain previous day bullish strength.

Under 1.4550 static support zone, next support came at 1.4515 area, 61.8% of the mentioned rally. Nikkei 225 opened up 0.1% and quickly turned to negative territory, limiting pair rises. “Price broke above 20 SMA yet it still has a bearish slope, while in bigger time frames pair is well under the indicator, yet with no clear bias for next hours,” said Valeria Bednarik, collaborator at FXstreet.com.

JPY crosses slightly higher in pre-Tokyo trade

EUR/USD is a little higher and USD/JPY is unchanged and dealers say that interest so far is muted. As stated earlier, there are said to be a lot of trailing stops above 132 in EUR/JPY which might attract attention. I'll hand over to Sam to guide you through the next few hours of market activity.

Forex: Dollar mixed pointing for more gains

Dollar closed he day mixed against major rivals, mostly gaining ground on fears about economic recovery. With Wall Street down, local shares are expected to fall also, thus limited mostly a consolidative day; watch Nikkei 225 key 10.000 points support level, as under that, risk aversion could gain strength and be reflected across the board. Euro started the day under 1.4600 level, 38.2% retracement of 1.4190/1.4842, with the 50% of that rally around 1.4510, next key support level to watch.

Under that zone, pair could reach key 1.4450 static area, also close to the 61.8% of the mentioned rally. GBP managed to close the day to the upside, yet movement remains mostly corrective after almost 700 pips straight fall in 4 days. As long as under 1.6060, bearish trend remain intact; corrections could even extend to the 1.6110 area, but price should retreat strongly from that zone, to consider bearish trend still healthy.

EUR/USD Current Price: 1.4588

EUR/USD Current Price: 1.4588. Slowly regaining the upside, pair remains capped under the 38.2% retracement of the last daily up leg 1.4190/1.4842, around 1.4600. with hourly charts slightly bullish, pair needs to clearly confirm above that level to extend the upside rally, thus next strong resistance area came around 1.4650; if the last gives up, pair could regain previous day bullish strength.

Under 1.4550 static support zone, next support came at 1.4515 area, 61.8% of the mentioned rally. Nikkei 225 opened up 0.1% and quickly turned to negative territory, limiting pair rises. “Price broke above 20 SMA yet it still has a bearish slope, while in bigger time frames pair is well under the indicator, yet with no clear bias for next hours,” said Valeria Bednarik, collaborator at FXstreet.com.
Support levels: 1.4555 1.4510 1.4480. Resistance levels: 1.4610 1.4645 1.4680

GBP/USD: Pound drops from 4-month high at 1.5160 to levels above 1.5000

The Pound has pulled back from 4-.month high at 1.5160 reached yesterday to levels right at 1.5000 support which has been tested on late Asian session. 1.4990/1.5000 support level remains intact and the Pound attempts to pick op from there.Initial support lies at the mentioned 1.4990/1.5000 level, and below there 1.4950 (Apr 15,17 and 30 high) and 1.4830 (May 4 low).

On the upside, the Pound could find resistance at 1.5065 (Apr 16 high) , and above there, 1.5095 and 1.5160.GBP/JPY rally from 139.00 low on Apr 28 has capped at 149.90 high yesterday and the Pound has dropped to 146.93 low on Asian session. Support levels for the Pound lie at 146.95 and 146.55. On the upside, Pound might find resistance at 147.80, and 149.90.

USD/JPY: The Dollar drifts lower; attempts to remain above 98.00

Failure to break above 99.60 resistance level has brought the dollar to intra-week low at 97.90 so far, and the pair attempts to remain above 97.90/98.00 levels.Initial support remains at the mentioned 97.90/98.00 level, and below there, the Dollar might find support at 97.45 and 97.15 (Apr 29 high).

On the upside, resistance levels remain at 98.35 and 98.60; above there, 99.20 (May 5 high).According to Nicole Elliott, senior technical analyst at Mizuho Corporate Bank, affirms that the pair is shaping a “heat and shoulders” pattern: “Tricky as prices are supported by a large Ichimoku ‘cloud’ yet a potential (if crooked) ‘head-and-shoulders’ pattern is forming. Expect more hesitation between 96.00 and 99.00 for the rest of this week

Today's Trading Signals

The trading strategies are based exclusively on technical analysis and are short term with a maximum time horizon of 3 to 5 days.The philosophy behind the Today's Trading Signals (TTS) is to take low risk, high return positions with tight stops.

That means Financial Trend Analysis (FTA) focus the most on placing the right stops.Every morning FTA reviews the market and the specific strategy, recalculates the risk/reward and then determines the strategy regardless of previous strategy in the specific security. FTA can change the strategy from SHORT to LONG and vice versa regardless of the previous (day’s) strategy.

That means that even though the original target in the “old” strategy has not been met FTA can close down a position and wait to re-enter, or reverse the strategy, if the signals have changed. FTA determine every strategy individually. For more explanation on the strategies please check out the Reading Guide on page two in the publication

Daily FX Forecast

Forex: EUR/USD: Euro at 1.37 will not be seen again in 2009; 1.18 low in Q4 says BBH

The Euro has dropped to 1.3115 low so far on its withdrawal from 10-week high around 1.3740 reached on Mar 19, 20 and 23; According to the Second Quarter Report from Brown Brothers Harryman, 1.3740 would be the 2009 high.The Euro will decline continuously the whole year through. From 1.37 high on the first quarter, BBH forecasts the Euro to drop to levels around 1.29 in the 2Q and 1.22 in the 3Q, reaching the year low on the fourth quarter at 1.18. next year, BBH forecasts the Euro to pick up slightly to reach levels around 1.౨౧

EUR/GBP: Euro bounces from 0.9240 support

The Euro seems to be picking up strongly from support level at 0.9240, reaching levels above 0.9300 on its way to Mar 30 high at 0.9340.Resistance levels stand at 0.9240, and above here, 0.9416 (Mar 27 High) and 0.9430 (Mar 23 High). On the downside, below 0.9240, the Euro could find support at 0.9175, 0.9155 (Mar 24 low) and below here, 0.9145 (Mar 16 low). Once below here, next support could lie at 0.9072.According to Varengold Bank Research Team, further decline beyond 0.9240 should not be discarded:

“The EUR/GBP trades near to its support level at 0.9241 and it seems that the Bollinger bands narrows each other like a bottleneck as same as on March 24th. Comparative to this paradigm could this be a sign that the currency pair may test the support again. Should the EUR break clearly through this line, this could accelerate the downward trend

European stock markets open with gains; Euro and Pound continue recovery

European markets have opened Tuesday’s sessions with gains reversing partially declines posted on Monday; Euro and Pound remain trading higher after having bottomed yesterday.European markets are posting gains around 1.0% on Tuesday following news by Mark & Spencer, UK’s biggest retailer, obtaining better than expected results. Eurostoxx 50 adds 1.04% and German DAX Index is up 1.02%, with French CAC Index 1.12% up after 1 hour of trading.On the macroeconomic front German Unemployment has increased at a larger than expected extent in February.

German adjusted unemployment rate reached 8.1% in Feb from 8.0% in Jan.Euro and Pound at resistance levelsEuro and Pound are struggling with potential key levels at the minute. EUR/USD rally from 1.3110 low on Monday has reached resistance zone at 1.3275/85 level, which is being tested right now.GBP/USD has suffered a slight reversal at 1.4340; the level has been tested twice, and the Pound has been rejected so far. GBP/USD is trading above the 50 day SMA, although rally from 1.4110 low yesterday seems to be losing strength.USD/JPY rally from 95.95 low yesterday has reached 98.35/45 resistance level (Mar 29 High) although the Dollar has not been strong enough to break it yet.

EUR/USD: The Euro breaks support at 1.2700; 1.2550 next

The Euro has dropped dramatically in Tuesday’s Asian session breaking support at 1.2720/1.2700 to levels about 1.2620, the lowest since early December. Concerns about Eastern European economies and their Banking system affecting European Union have weighted heavily upon the Euro.The Euro has lost about 200 pips during the Asian session from above 1.2800 falling to 1.2622, in the cross looks bearish on the hourly chart and next important support levels could be tested at 1.2550 and 1.2424. Resistance around 1.2700/1.2730 next resistance area at 1.2800 and above there 1.2850.EUR/JPY has also dropped heavily on Asian session, rejected by the 117.30 resistance line, EUR/JPY has dropped to 116.70 so far and looks on its way to test support at 116.50.

Australia to extend short selling ban on financials

Australia's market regulator will extend a ban on covered short-selling of financial securities until March 6, citing increased volatility in financial stocks overseas, it said on Wednesday.

The Australian Securities and Investments Commission (ASIC) had originally said the ban would remain in place until at least Jan. 27.

"As many factors are at play in these overseas markets, ASIC needs time to examine these latest developments. ASIC will therefore, over the next few weeks, assess the markets more carefully to determine the role of short selling and aggressive or predatory practices and whether there are similar risks for Australia when the ban is lifted," it said.

Malaysia car sales seen down more than 12 pct in 2009

Vehicle sales in Malaysia is
projected to drop by 12.4 percent in 2009 as consumers cut back
on purchases in view of the deepening economic crisis.
The projection takes into account the full impact of the
global financial crisis and the resulting weak consumer
sentiment, the Malaysian Automotive Association said on
Wednesday.

Despite the economic downturn, it is hoping that the
introduction of new models and higher demand for small vehicles
as consumers cut their purchases will sustain interest.

Automakers sold a total of 548,115 vehicles last year, an
increase of 12.5 percent over 2007, and are expected to sell
480,000 units this year, the association said.

"Total industry volume in 2008 was the second highest
achieved for the industry after the all-time high in 2005," MMA
said, referring to the 552,316 units recorded three years ago.

Passenger car sales rose 12.3 percent to 497,459 and
commercial vehicles sales increased 14.4 percent to 50,656 in
2008.
The country's biggest carmaker Perodua retained its top spot
last year, with a total market share of 30.5 percent, followed by
Proton's 25.9 percent.

2008 2009
(actual/units) (forecast/units)
Passenger cars 497,459 436,800
Commercial vehicles 50,656 43,200
- - - - - - - -
Total 548,115 480,000

Pakistan economic indicators - Jan 21

====== DAILY INDICATORS ======

TUESDAY PREVIOUS :
Floating Interbank Rate (Rs/$) 80.10/80.20 79.60/79.65
Rupee/US $ (kerb market) 79.30/79.70 79.20/79.50
Karachi 100-share index 5,258.28 5,280.75
Gold (Karachi) Rs/10 gm 21,26

======CENTRAL BANK AUCTIONS======
Treasury Bills Auction Results:
Cut-off Yield (pct) at auction on: Jan 14 Dec 31
Three-months bills 13.8549 13.9750
Six-month bills 14,0108 13.9959

======ANNUAL INDICATORS======
FISCAL YEAR 2007/08 2006/07
Population (millions) **160.9 156.77
Per capita income **$1085 $925
External debt (billion dlr) **45.0 $40.5
Total F.Debt as pct of GDP **24.7 27.1
Domestic debt (billion rupees) **3,020 2,610
Total domestic debt as pct of GDP **30.3 30.0
Gross domestic product growth **5.8 pct 6.8 pct
Manufacturing sector growth **5.4 pct 8.2 pct
Services sector growth **8.2 pct 9.6 pct
Agricultural sector growth **1.5 pct 3.7 pct
Commodity Producing sector growth **3.2 pct 6.0 pct
Average consumer price inflation 12 pct 7.77 pct
Fiscal deficit (pct of GDP) **7.0 pct 4.3 pct
Trade balance (FBS July-June) $-20.74 bln $-13.56 bln
Exports $19.22 bln $16.98 bln
Imports $39.96 bln $30.54 bln
Current a/c balance $-14.016 bln $-6.878 bln

* = revised
** = provisional
SBP= State (central) Bank of Pakistan
FBS= Federal Bureau of Statistics
12-months bills 14,2857 14,2595

Pakistan Investment Bond (PIB) Auction Results:
Cut-off Yield (pct) at auction on: Aug 29 (2008) June 28(2008)
11.25 pct coupon, three-Year PIB 13.6973 12.2964
11.50 pct coupon, five-Year PIB B/Rejected B/Rejected
11.75 pct coupon, seven-year PIB 14.3398 -------
12.00 pct coupon, 10-Year PIB 14.5493 13.4201
12.50 pct coupon, 15-Year PIB 14.7500 13.6104
13.00 pct coupon, 20-Year PIB No B/Received 13.9399
13.75 Pct coupon, 30-Year PIB 14.9384 14.2496 8 21,345

======WEEKLY INDICATORS======
Week ending Jan 10 Jan 03
Total liquid frx reserves $10.002 bln $10.004 bln
Forex held by central bank $ 6.656 bln $ 6.601 bln
Forex held by other banks $ 3.346 bln $ 3.403 bln

Thai economy unlikey to contract this year-c.bank

Thailand's economy is unlikely to shrink this year following interest rate cuts, the Bank of Thailand said on Wednesday.

Central bank Chief Economist Amara Sriphayak said recent interest rate cuts by the central bank and commercial banks should help reduce funding costs and boost spending.

"After the policy rate cuts, major commercial banks have also cut rates. That should help reduce costs and make consumers confident to spend. So the economy this year should not be negative," she said.

The central bank is due to releases new economic growth projections on Friday.

It cut its policy rate by a combined 175 basis points to 2.0 percent in December and January to ward off recession.

Last week Finance Minister Korn Chatikavanij said economic measures -- including tax breaks, especially in the property sector -- and cash handouts for poorer Thais, should ensure economic growth of 2 percent this year.

That would still be the lowest in a decade and down from an estimated 4 percent in 2008.
In comparison, the Thai economy shrank 10.5 percent in 1998 because of the Asian financial crisis. The weakest performance since then was 2.1 percent growth in 2001.

Amara has said previously that unemployment could rise to 1 million this year, or 2.8 percent of the workforce, if the economy did not grow at all.

UPDATE 2-S.Korea state agency cuts 2009 growth forecast

South Korea's economy will grow
just 0.7 percent this year, the slowest since the Asian financial
crisis a decade ago, hit by the deepening global downturn, the
country's top government research agency said on Wednesday.

The Korea Development Institute's (KDI) latest forecast, the
lowest among the big government agencies, was a sharp downgrade
from its previous projection for 3.3 percent growth set in
November and stood below the central bank's 2 percent growth
forecast made in December.

Separate data showed exports shrank about 30 percent in the
first 20 days of January, more evidence that the worldwide
downturn is battering the country.

The forecast and the export indicator deepened fears Asia's
fourth-largest economy was heading for its first contraction
since the 1997/98 Asian financial crisis, analysts said.

"The KDI's figures seem too optimistic as the economy
definitely appeared to contract in the fourth quarter, and given
other economic data," said Park Sang-hyun, chief economist at HI
Investment & Securities.

"Stimulus packages at home and abroad may take effect from
the second half, but they are expected to be a just short-term
pain killer, not a fundamental solution," he added.

A rising number of private-sector experts expect South
Korea's economy to contract by as much as 3 percent this year,
with ratings agency Standard & Poor's on Wednesday setting its
growth forecast at zero.

The government has introduced fiscal stimulus and tax cuts
worth around a combined $100 billion, some 15 percent of the
country's annual gross domestic product. The central bank has
also cut the policy interest rate to a record-low 2.5 percent
from 5.25 percent where it was at the beginning of October. For a
chronology of South Korean rate.

The Bank of Korea is expected to lower rates further,
probably to as low as 1.5 percent in the first quarter, and it
may cut them more in the second half, analysts said.

After the KDI forecasts, the March treasury bond futures rose as much as 30 ticks.
"The economy is seen entering a recession phase on weaker
domestic demand and as the impact of a sharp slowdown in the
global economy bites into exports," the KDI said in a statement.

JOBS AT RISK
The slowing economy, along with corporate restructuring, is
expected to hit the job market hard as the economy needs to grow
about 5 percent to prevent further job loss, economists said.

"The employment environment will get much worse until next
year as job markets usually lag the overall economy. We may see a
jobs recovery in 2011 at the earliest," said Oh Suk-tae, an
economist at Citigroup.

South Korea's economy was estimated to grow 3.7 percent in
2008, the central bank said in December, after expanding an
average of 4.4 percent a year between 1998 and 2007.

The economy has expanded for the past 10 successive years
after shrinking a some 7 percent in 1998 in the aftermath of the
Asian financial crisis, which had pushed the country to the brink
of economic collapse.

Underscoring the impact of global recession in Asia,
Singapore's government slashed its economic growth forecast for
2009 to as low as minus 5 percent on Wednesday from the previous
projection for as low as minus 2 percent.

The KDI's revised forecasts came a day before the Bank of
Korea is due to release its first official GDP growth estimate
for the fourth quarter of 2008 on Thursday.

Economists polled by Reuters estimated South Korea's GDP to
have contracted a seasonally adjusted 2.7 percent in the
October-December period from the third quarter, which would mark
the biggest quarterly loss since early 1998.
($1=1373.4 Won)

US STOCKS-Wall St hits session lows after Obama's speech

U.S. stock indexes extended losses and hit session lows on Tuesday after President Barack Obama's inauguration speech provided few new details about measures to tackle the growing economic crisis.

"I think people were looking for something, new plans, new hopes," said Joe Saluzzi, co-manager of trading at Themis Trading in Chatam, New Jersey.

"They didn't hear something new."

President Obama's speech came on the heels of news that State Street Corp, the world's largest money manager for institutions, posted a $6.3 billion unrealized loss in its investment portfolio.

JPMorgan was the top drag on the Dow, pulled lower by fresh fears about the health of the global banking system and after the State Street news. For details, see
Since his Nov. 4 election, Wall Street has bet that Obama will put plans in place to help stabilize the sliding economy and stem rising unemployment.

But stocks started the session lower on Tuesday, pushed down by the ailing banking sector and grim earnings expectations.

The Dow Jones industrial average fell 178.65 points, or 2.16 percent, to 8,102.57. The Standard & Poor's 500 Index stumbled 25.70 points, or 3.02 percent, to 824.42. The Nasdaq Composite Index dropped 52.07 points, or 3.40 percent, at 1,477.26.

Why Currencies Should Recover in Obama's First 100 Days

In yesterday’s Daily Currency Focus we warned that investors should not bank on an Obama bounce. Based upon 5 decades worth of data, the Dow Jones Industrial Average fell more often than it rose on Inauguration Day.

In fact stocks fell more on Barack Obama’s Inauguration Day than any other President over the past 50 years outside of Lyndon Johnson’s first Inauguration in 1963.

Since currencies are taking their cue from equities, we have seen a sharp slide in almost all of the major currency pairs. The dollar has outperformed the Euro and British pound but its decline against the Japanese Yen indicating that the dollar’s rally is a reflection of pessimism and not optimism.

We are seeing a flight to safety into US dollars but bonds are the instruments of choice and not equities. Obama inherits a very troubled economy and he certainly has his work cut out for him over the next few years. However brighter times may lie ahead for US stocks baseCurrencies:

What to Expect in Obama’s First 100 DaysThe first 100 days of an Administration can define a President.

Barack Obama is expected to usher in a number of reforms that may help to reinvigorate the American economy and boost consumer confidence. The fact that stocks have fallen more than 8 percent since the beginning of the year provides a low base for any bounce.

More importantly however we typically see the Dow rise in the first 100 days of a new President’s Administration as investors become optimistic about new policies. Stocks rose in the first 100 days of a President’s term 11 out of 16 times.

Political party doesn’t really matter but of the 5 times that equities dropped in the first 100 days, 4 out of the 5 was during Republican Presidencies. So even though President Obama is handed an ailing economy, the silver lining is that history is on his side and most likely he will be celebrating a stronger stock market after his first 100 days in office.

A stronger stock market should mean a recovery of risk appetite, which could help reverse some of the losses that we have seen today in the EUR/USD, GBP/USD and USD/JPY. It is important to keep in mind that a rally is not guaranteed as the recession in the US economy is the worst since the Great Depression.

The economic outlook can weigh on equities which would diminish the significance of the historical price pattern.d upon the performance of the Dow in the first 100 days on a President’s term.

TREASURIES-Edge up in Asia as economic gloom hits stocks

U.S. Treasury futures pushed higher in Asia on Monday, with stocks taking a hit after dismal U.S. data showing more than half a million jobs being slashed for a second straight month underscored the recession's severity.

* While the payrolls report was close to expectations, the figures reaffirmed some economists' forecasts for an annualised contraction of 5-6 percent in the fourth quarter and offered little hope of a near-term let-up in the heavy layoffs.

* Asia stock indexes fell in line with the drop on Wall Street late last week. South Korea's KOSPI and Hong Kong's Hang Seng both shed about 2 percent.

* Activity was limited, with Japanese financial markets closed for a holiday.

* March T-note futures edged up 6/32 to 125-23.5/32 on trade of a little more than 3,000 lots. S&P 500 futures were down 0.6 percent, pointing to a weaker open.

* Cash Treasuries slipped. Two-year notes dipped 1/32 in price to yield 0.779 percent, up 2 basis points from late U.S. trade. Ten-year notes lost 2/32 to yield 2.405 percent, up about a basis point.

* In swaps, spreads were little changed. The two-year spread was quoted at 54.75 basis points and the 10-year spread at 14.5 basis points.

* Swap spreads have shrunk sharply as mortgage portfolios hedge against an expected wave of refinancings as the Fed's purchases of mortgage paper have dragged down rates.

Hefty Treasury debt issuance has also driven up yields relative to swaps, compressing spreads.

PRESS DIGEST - New York Times business news - Jan 12

The following were the top stories in the New York Times business pages on Monday. Reuters has not verified these stories and does not vouch for their accuracy.

* Mary L. Schapiro, president-elect Barack Obama's choice to lead the U.S. Securities and Exchange Commission, has been accused of making misleading statements to quickly complete a merger of regulatory bodies.

* Federal banking regulators are pressing Citigroup Inc to shake up its board and replace its chairman in an effort to restore confidence in the beleaguered financial giant.

* Honda is bringing out three short films to be launched online, under the rubric of the "Dream the Impossible documentary series."

* Google Inc, whose chief executive endorsed Barack Obama during the campaign, is having an inaugural ball in Washington to welcome the new administration.

* Toyota Motor Corp plans to introduce its plug-in hybrid electric vehicle late this year, a year earlier than originally planned, and a year ahead of the Chevrolet Volt.

* YouTube is aiming to raise its profile in American politics by helping deliver a glimpse of life on Capitol Hill to its large online audience.

* The board members of the Federal Reserve Bank of New York weighed who will become its next president over the weekend,

Auckland Airport launches NZ$50 mln retail bond

New Zealand's Auckland

International Airport Ltd has launched a NZ$50 million
($30 million) five-year bond issue for retail investors, it said
on Monday.

The offer will pay an interest rate of 7.25 percent and will
close on March 21.

ASB Bank, First NZ Capital Securities and Goldman Sachs
JBWere are jointly managing the issue with proceeds to be used to
pay down debt.

The bonds are rated A by Standard & Poor's and will mature on
Feb. 28, 2014.

($1=1.690 New Zealand Dollar

S.Korea studied yuan as FX reserve currency -media

South Korea's central bank had studied expanding its foreign exchange reserves into yuan assets, a local online media outlet quoted an official at the Bank of Korea as saying on Monday.

"(The Bank of Korea) carried out research into whether to include the Chinese yuan in foreign exchange reserves to reflect recent trends (in other countries)," MoneyToday quoted an unnamed official at the central bank as saying.

But the South Korean central bank has put the study on hold after judging regulatory issues in China remained and on concerns about the ability to promptly withdrawal invested money when necessary, the official was also quoted as saying.

Spanish stocks - Factors to watch on Monday

The following Spanish stocks may be affected by newspaper reports and other factors on Monday. Reuters has not verified the newspaper reports, and cannot vouch for their accuracy:

MARTINSA FADESA SANTANDER BBVA

Martinsa-Fadesa, the Spanish property developer in administration since July, is putting land up for sale at a price 10 times cheaper than how it had been valued to reduce debt, El Pais reported, citing a viability plan.

Separately, Expansion reported Saturday, citing legal documents, that Martinsa has sold 443 million euros worth of property assets to creditors BBVA, Banco Santander and savings bank Caixa Galicia, reducing its debt to the institutions.

SACYR VALLERMOSO ACCIONA ENDESA REPSOL

Spain's Socialist government is attempting to prevent Sacyr's planned sale of its 20 percent of oil group Repsol coinciding with Acciona's possible sale of its stake in Endesa in order to lessen the negative publicity from both energy group's coming under foreign control, ABC reported Sunday citing government sources

UPDATE 2-Chrysler says gets $4 billion U.S. government loan

Chrysler LLC said on Friday it has received an initial $4 billion emergency loan from the U.S. government.

"This initial loan will allow the company to continue an orderly restructuring," Chrysler Chief Executive Bob Nardelli said in a statement.

But Chrysler later said its statement that talks continue between the U.S. Treasury Department and Chrysler Financial about a loan should have been omitted. Its earlier press release said a closing was expected in due course.

Two spokeswomen for the company could not immediately be reached by Reuters to clarify.

General Motors Corp received $4 billion in emergency loans on Dec. 31. Both Chrysler and GM have said they need the government cash to meet payouts to suppliers at a time when a plunge in auto sales has drained their cash holdings.

Under terms of the government bailout, Chrysler and GM will have to submit restructuring plans by mid-February and demonstrate that they are viable by the end of March.

UK looks at new steps to encourage lending-report

Fresh evidence of the severity of the credit squeeze has forced British finance minister Alistair Darling to consider new measures to get lending flowing again, The Times reported on Saturday.

The newspaper said Darling would decide "within weeks whether to pump billions more into the economy" amid signs that a 37 billion pound ($53 billion) recapitalisation of top British banks, announced last October, had failed to get credit flowing.

The options under consideration included cash injections, offering banks cheaper state guarantees to raise money privately or buying up so-called "toxic assets," The Times said, without giving its sourcThe grim news came as a deluge of data suggested the economy was plunging deeper into recession.

A survey from Halifax, the country's biggest mortgage lender, showed that house prices fell a record annual 16.2 percent last month. Bank of England figures showed mortgage approvals slumped to a record low in November and a survey of purchasing managers showed manufacturing activity contracted in December for an eighth month running.

The pound resumed its slide on the foreign exchanges and two-year gilt yields fell below 1 percent for the first time as traders bet the Bank of England will deliver another hefty rate cut next week.

British interest rates have already been slashed to 2 percent, their lowest since 1951.

The Times said the Treasury planned to focus on state-backed guarantees to encourage private finance, but a wide range of interventions was on the table, including further injections of taxpayers' casheA Bank of England survey released on Friday showed the credit squeeze for British families and businesses looked set to intensify into 2009 despite unprecedented measures to recapitalise the banking system and get lending flowing again.

The Times said the Treasury planned to focus on state-backed guarantees to encourage private finance, but a wide range of interventions was on the table, including further injections of taxpayers' cash.

Under one option, a "bad bank" would be created to dispose of bad debts, it said. The Treasury would take bad loans off the hands of troubled banks, perhaps swapping them for government bonds. The toxic assets would be parked in a state vehicle or "bad bank" that would manage them and attempt to dispose of them while "detoxifying" the mainstream banking system, it said.

Ministers were expected to take the final decision on what extra help to give the banks by the end of this month, it added.