China's Yuan Has Biggest Weekly Advance Since 2005; Government Bonds Rise

(Bloomberg) -- The yuan had its biggest weekly
advance since the end of a dollar link in 2005 on speculation
pressure from the U.S. for quicker currency gains will increase
as the trade gap between the two nations widens.

China's trade surplus grew to a record in June, driving
foreign-exchange reserves to an all-time high, boosting excess
cash in the financial system and making it more difficult for
the government to cool economic growth. The U.S. trade deficit
with China widened in May, the Commerce Department said
yesterday.


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Blue chip - US consumer spending growth to slow

(Reuters) - After a pickup in business inventories and a narrowing of
the trade deficit, the economy is expected to have grown by a
more robust 3.0 percent annual pace during the second quarter,
following an anemic 0.7 percent rate in the first three months
of the year, the consensus found.




"That would mark a sharp improvement over the lackluster
0.7 percent rate registered in Q1 and represent the fasted pace
of growth since Q1 2006," the newsletter wrote.


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Australian Dollar Gains as Record Exports Improve Economic Growth Outlook

(Bloomberg) -- The Australian dollar rose after a
government report showed exports surged to a record in May,
bolstering the outlook for economic growth.

The currency climbed as the report showed the trade deficit
unexpectedly narrowed to the lowest in nine months, helped by
higher commodity prices. The local dollar has increased 15
percent in the past year, the second-biggest gainer among the 16
most-traded currencies, amid rising demand for the raw materials
Australia ships overseas such as gold, iron ore and nickel.


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Don't press us on yuan, China tells U.S. Senate

(Reuters) - The bill reflects growing frustration in Congress over the billowing U.S. trade deficit with China, which hit a record $233 billion in 2006.




Many lawmakers believe China's currency practices contribute to the deficit by giving Chinese companies an unfair edge in global markets.


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Indian Rupee May End Three Weeks of Gains on Central Bank Currency Sales

(Bloomberg) -- India's rupee may decline, ending three
weeks of gains, on speculation the central bank will sell the
currency to stem an advance that pushed it to the strongest in
nine years, a survey of traders showed.

The rupee, Asia Pacific's best performing currency this year,
pared gains last week on concern the central stepped up dollar
purchases after the trade deficit widened to a record. The Reserve
Bank of India may seek to protect exporters' earnings being eroded
by a stronger currency.


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Yuan Little Changed After China's Wu Warns Against Blame for U.S. Deficits

(Bloomberg) -- The yuan was little changed after
Vice Premier Wu Yi said the U.S. shouldn't blame its record
trade deficit on China, damping speculation policy makers will
seek faster currency appreciation.

A stronger yuan would help raise Chinese export prices,
narrowing the trade gap. The central bank last week said it
would allow wider exchange rate swings, strengthening Wu's
position in two days of talks with Treasury Secretary Henry
Paulson that started yesterday.


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