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tv   Bloomberg Markets Middle East  Bloomberg  November 23, 2016 11:00pm-12:01am EST

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>> the dollar climbs to its highest in more than a decade. and a right hike next month is all but certain. marching seventh to the dollar, emergent markets continuing their declines. >> the latest fed minutes show more policymakers agree the case were in -- case for an increase has strengthened. >> opec input has improved.
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>> it has gone to aid across i am across the emirates. 4:00 a.m. in london. >> we are in hong kong, where it has just gone midday here. welcome to "bloomberg markets: middle east." we have a lot happening on the currency front when it comes to asia. what about where you are sitting? >> when you take the dollar story and to talk about our surge, what is it doing two markets? the longest winning streak since 1990. president-elect potentially went into the isis. this is the personification of fear. it is hitting a nine-month low. stocks are on a ripper -- i love that word. has dropped.ex
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is it overboard? is it overdone? are we too complacent? i am the grinch of bloomberg. nothing ever is as shiny is it ever seems. 0% rates, 25 basis points, i think we should always put our money in u.s. stocks. europe good look better value than the u.s.. >> with the momentum and exuberance we are seeking, it is based on model whole lot looking on what trump will or will not do. maybe spreading a bit of fear is not the kind of thing you can do right now. look how we are faring in the asian session. we have been trading about 20 minutes. we have hung calling falling the most in a week. energy, despite
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optimism. that puts the deal right and center in front of news flow. tokyo back with a vengeance. you have the dollar strength story playing on the yen. forident-elect trump thanksgiving, a nice hamper perhaps. that is boosting exports, a 10th straight day of gains with tokyo. >> we picked up the equity rally yesterday in the middle east. if you want to know who is the best performing market of them globally. rocking at 1.75%. up nearly 3%.
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all but six members were higher. trade is up 5%. this is the strongest performing equity market. egypt is up another quarter of 1%. keep an eye on dubai. traded on shares tech. all of our middle eastern markets are having a nice total to them. there is a world beyond the markets called first word headlines. sources have told bloomberg 1/5 as much as $2 million to buy stakes in hedge funds. the bank capital partners unit is aiming for minority of states . owning part of a hedge fund let's banks profit from higher post financial crisis regulations determine just from
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using their own money to trade. a right healing service close to raising $300 million in a new round of funding. sources say the dubai-based uber rival provided for statistics providers. careem raising $500 million, or it at 4.5 billion. pressure,s remain although the government says the economy will probably avoid recession. annual extension of 1.1 for 5%. gdp down 2% from the previous three months. the trade ministry projected a 4.1% decline. another earthquake briefly disrupted some services following monday's 7.2 magnitude tremor, shaking also felt in a
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tokyo. no tsunami warning was issued, no abnormalities reported in any fukushima plants. global news powered by 2400 journalists in more than 120 countries. >> chances of a rate hike next month remains at 100%. policymakers are increasingly of the same view. bonds are falling in australia. kathleen hays has the latest from new york. good to see you. the language, the nuances, it is my mission at this stage. in december, is it a lockstep? -- is it a lockdown? to see is interesting the markets moving in asia.
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people were pretty sure that the fed was pointing in this direction. what this has done is underscore that they are ready to go. rates and communications consistent with like. that comes directly from the meaning minutes of that first and second december meeting. some have said to preserve credibility, the fed must hike in december, probably because so many fed speakers have pointed in the direction. the fed emphasizes that the move will be data dependent. i think that this was before the election, before donald trump talked about growth and tax cuts , the markets might stimulate inflation. that is why this will have an impact on the markets now.
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i don't know how you can move your odds above 100%. -- 100%, can say 100% that is what people would be better. 110%, that is what people would be betting. >> good to see the human version of you rather than on tape. did they even mentioned the election? that the going where political move, where they tell us they don't care about anything but markets. >> is the federal reserve wanting to be independent of political oversight as much as they underscored that any rate hikes are going to be gradual. of janet so critical yellen and the fed.
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trump on bloomberg television 00 as he gets ready for his new plans, maybe you will start seeing that the fed is more of a friend than a fellow. than a foe.f a friend >>, companies the fed as an ally rather than an enemy. somebodyan is you need that keeps interest rates relatively low. he will also need the fed as an ally to prevent an overshoot of the dollar. i think there is a risk that the dollar appreciates too much. >> donald trump may find he needs all the help he can get. >> we have been talking a lot about certainty when it comes to fed policy. what about the risks to the outlook? we have heard janet yellen being
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cautious about china. what did the fed see? >> just the list you would expect. pretty comprehensive. brexit, howed about the uncertainty turns out. east tradingdle gets underway. debt. jump into china"s the white bars on this chart show you you was corporate data as a percent of gdp. the turquoise bars is china's debt as a percentage of gdp. 155% in china. -- 165% in china. people are carrying high levels of debt. people are wondering if the government will bail them out. .e have to watch japan
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30 year yield building its highest levels since march. about megabanks moving into u.s. bonds. this is something that boj will have to counter. getting complicated. the japanese will be happy to see a stronger dollar and weaker yen. >> thanks for staying behind in new york. it has been a divergent market in asia. markets across asia looking mixed right now. of course we get positive momentum from wall street as vidal extended its high.
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high.the dow extended its overdone against certain emerging markets like malaysia. the nikkei up 1% after the young tumbled. -- the yen tumbled. highest levels since january, rising7 six consecutive sessions. we are seeing a weaker korean ofn, the cost down 1/10th 7%. new zealand is up half a percent. it is a mixed picture. we are not seeing clear direction in asia. this is all about the dollar story. this surge still seeing the dollar at a high. the highest levels since march
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2013. this is putting pressure on currencies such as the japanese yen, which is tumbling down one quarter percent. not so great for the malaysian ringgit, weakening for 12 consecutive sessions. not surprising the bank has to keep the rate steady. >> premarket roundup. -- great market roundup. let's bring in senior director , joiningof sovereign us from the global ratings company. kathleenistened to wrapping up the federal reserve not mentioning donald trump. you come from one of the biggest rating companies in the world. all of the noise about trump, tell us about what you have heard and what concerns you the most, or what emboldens us the
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most. saidring the campaign he potential growth more at 4.5%. which is an interesting perspective. from our view, we are looking at of this fiscal program is actually going to make it into reality. it seems like the tax cuts probably could be implemented quickly from support of congress. buffer structure spending however, the so-called $1 trillion spending on public parks -- i think may never see the light of day. certainly not the entirety of that. that is a lot of money, and there is no obvious funding for that. i think the republican majority of congress will question this. how concerned are you about
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not just trump, but what 2016 has brought us? we had these black swan event that materialized, brexit, president elect trump, a flurry of geopolitical risks coming from europe. starting with the italian referendum next year. is this the new normal? what does it say about the structural integrity about these economies, and policy, injury, going forward? and trades in policy going forward? >> it raises a lot of questions. to the extent that protectionism is on the rise, not just in the u.s. but in europe, that is another possible negative for growth.
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we are looking at the busy elect world calendar. of course presidential elections in france and parliamentary elections in germany. to the extent that we had unexpected political outcomes in brexit and donald trump, that is something to keep an eye on. we will get deep into the european. that is director and.head sovereigns at s&p global ratingshe stays with us. ' later ins the show, indiawar on banknotes -- later in the show india's more on banknotes is the best for its economy. >> on the post-brexit economy, more analysis up next. this is bloomberg.
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>> forecast for growth to be 2.1%, higher than march. the forecast growth has slowed to 1.4%. they interviewed to lower investment and weaker consumer demand, driven respectively by greater uncertainty and by higher inflation resulting from sterling depreciation. >> the chancellor of the exchequer was a pretty somber view about what a post-brexit brittain looks like. >> i'm going back to it. i will give you the reality check when i get there. directorined by senior global ratings. frexit, i don't know where the next shoe is to drop
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.looks like the chancellor of the exchequer went for 110 billion pounds. this is the extra borrowing over the next four years. isr 50 billion pounds specifically because of brexit. brexit may add 100 million pounds/ how does that concern you as a ratings company? >> so that is a reflection or acknowledgment of weaker potential growth connected to the risks from means trend growth is closer to 1. the country is settling for a weaker growth perspective. >> we saw s&p downgrade. this is post-brexit. given the present risk, what is the next fever that he looked at
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when you assessed the u.k. credit rating? >> we are on a stable outlook. look at what happens to the reserve status of sterling. today sterling is the third most widely held currency by central banks. that is an impressive 17thrmance for what is the largest economy in the world. u.k. has a very large massive trade deficit, large surplus. brexit could put at risk the services surplus. sorry. >> i did not mean to interrupt.
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we were talking about the potential with infrastructure investment, fiscal spending. it seems like the fiscal side is taking front and center with donald trump. he is not alone. packagesabout fiscal from other major economies like japan. debtdoes this do for the side? look at china with its blowout spending. you also look at the whole it is in in terms of the soundness of its economy. is the rest of the world falling into that same trap potentially? >> we think the u.k. and the u.s. have considerable flexible
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physicals. that is good news the extent that this is going to help growth. there are other pressures on growth, especially external ones. most of the fiscal deviation is on the revenue side. it will improve growth prospects, which we view as positive. >> frank, you will stay with heidi and myself. sovereign of s&p ratings. ♪
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>> still with us is head of sovereign set s&p ratings.
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in arench and italians are bad suit -- that was written in 1949. not much has changed from them. how would he react to the italian credit rating? >> it would have no effect on the rating. we don't think that the rating. is completed referendum -- it is a complicated referendum question. to the extent that it means: stability and a reversal of his timid, but still important reforms, that could start to hit the rating. >> look at the smorgasbord of the electorate risk -- germany, france, and perhaps more political hubris and italy. how tentative are the ratings right now in europe?
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who is most at risk? >> it is difficult to reflect the possibility expected outcome into the reading. le pen seems to be in favor of france leaving the union. would be enormous risks to europe. that is not her baseline. tashawn our baseline. -- not our baseline. these things are more difficult to predict. the heart risks and there is week growth in italy and france. there is no job creation in italy and france. >> thanks for joining us. rising optimism of an ok deal after iraq agrees to cut production.
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is an agreement finally insight? this is bloomberg. ♪ ways wins. especially in my business. with slow internet from the phone company, you can't keep up. you're stuck, watching spinning wheels and progress bars until someone else scoops your story. switch to comcast business. with high-speed internet up to 10 gigabits per second. you wouldn't pick a slow race car. then why settle for slow internet? comcast business. built for speed. built for business.
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iraq said it will shoulder some of the proposed opec cuts, reversing the previous demand for an exemption. opec has been struggling to reach an agreement with producers. iran wants to raise oil production to pre sanction levels. policymakers rates rising close to relatively soon, held by a strong labor market. defenseman before the was election. donald trump's policies have not
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shaken expectations of a hike in december. hikes will be gradual and data dependent. the boc says the yuan reached the six-point well since june 2008. cap was after the dollar surged to the highest level in 2003 on wednesday. wideningnk says the space shows rising bets on depreciation. asian currencies at a seven-year low against the dollar. a sign that central banks will move away from easing policies. policymakers focused on protecting the ringgit. the philippines climbed above $.50 november 2008. india's be is on the brink of an all-time low.
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this is bloomberg. just when opec against look like it is making progress, it seems yet another setback. set to cut production, russia is showing reluctance to curb outflow. . >> this reversal clears significantly for the market. iraq's willingness to cut means that the deal will be better. what is the likelihood of a deal at this point. they were very cagey about it.
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they would not tell us the limits for iran. there is still a lot of known unknowns. >> there are a lot of unknowns. opec for you. is beinglike the deal inched towards ever so slowly. $30 oil has been thrown around. incentives lot of for opec to get a deal done. >> i am going to rest easy this christmas if i hear that the fed ates 25 basis points. i will rejoice at the end of the year. more on the proposals for an opec deal. ceo withto the
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woodside petroleum. >> we are still early on. things generally close at the 11th hour. positioning is where the starting point will be. we will have to wait a couple weeks to see that. kind of market are you preparing for going into 2017? clearly we had oil and gas prices. what is the tone of discussion looking ahead to 2017? we are affected by oil price, then on the other side, where in a situation where we are
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fundamentally changing and the market. we have an inflection point, new supply flowing into the market. at the same time, we are seeing business models change in a positive way. we are seeing a lot more new buyers coming into the market. they are going to take thinkicant volumes we 2017 will look a bit like this year. not a lot of change in pricing. onwards, you should start to see pickup. we are seeing some megaprojects on that side. do you expect greater
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collaboration within the industry given the current ?nvironment >> it is not clear there will be more collaboration. ? they already have widespread collaboration between structures -- we need to see new projects coming in. different types of financing coming in. people investigating infrastructure type focus. that will be the next change in the business.we will see type of investor co. invest down the line. >> that was the woodside petroleum ceo speaking to heidi a little bit earlier. from the lngo come producer conference later on on bloomberg.
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half past 10:00 in dubai. daybreakterview during in london. >> let's get a quick check of the is business headlines. after hours,g beating expectations in the third quarter. forecast chairs of 12% this year. ctrip agreed to buy a startup for $1.7 billion. airbnb is assisted be in talks to expand its presence in china. the to have a separate meetings, and talks will advance with a deal likely. local is facing
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challenges. the company has $75,000 and properties in china, and staffing has increased tenfold. >> the giant will cut its capital spending, including filing additional cost savings by $2 billion by the end of 2017. mining companies continue to streamline operations are it earlier this year, it's worst since 2004. >> thailand is selling an investment company or, a wider effort to control state-controlled enterprises. beneficial to bloomberg's work in the same way -- the enterprises are planning $12.5 billion of investment in 2017, the equivalent of 3% of gdp.
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is saudi arabia the thumbs-up. that is up next. this is bloomberg. ♪
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>> a quick check of airlines -- air arabia confirms -- the carrier says delivery of original contracts be completed next year. the planes will enter service in the second quarter. a 46320's.operates the turkish president has
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bankers morning the risk of provoking his intervention. the lira sunk to a new low. erdogan outlined the stark dilemma fishing monetary officials, packed with the currency, or submit to a powerful leader that has attacked many adversaries since its coup. >> saudi arabia on track to rein in its budget deficit to come in line with forecasts. the shortfall will narrow to 30% of gdp, down from 16% last year. -- narrow to 13% of gdp. oil prices recover. discuss what's going on in the region.
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simon, welcome to bloomberg markets. i was thinking of the list of countries, you are doing a bit better than me. give me your assessment of where we are. the imf talks about the propensity for this reason. they use the word tax. how is the gcc looking? wo yearsil prices fell t ago. when i look at the real economies of the region, they have just begun to adjust. trade policy is still playing catch-up. deficits the regions are facing is huge. there is a recognition of how daunting the challenge is. thisirates nbd brexit on show each month.
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-- breaks it odwn on the show each month. i don't think it was prophetic to wave the national flag. this feeds into a perspective. 2017 is going to be more difficult than this year. posterity and liquidity continues to pressure. global developments will not help the region either. a stronger dollar is that for the gcc. gcc. bad for the a pick up in oil prices will help, but it needs to be $60 a barrel before we see a turnaround. >> looking through your notes, it is disconcerting how bearish the tone is. both the economies that you cover in the middle east and africa, it is not just the prospect of slow growth, but
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also for equality growth. you touched on oil. also geopolitics, there is a perfect storm over the next couple years. outlook.a typical gross has been weak and poor quality. i see no evidence of productivity growth. that has been unbalanced as well. inflation was tolerable while global conditions were supportive. take that support way, and the outlook gets more difficult. >> i come back from three days in egypt. we spoke to the finance minister, talking about4% growt h. switched?ial >> i think the story has begun.
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egypt has had a rough 546 years since the revolution. has had a rough five or six y ears since the revolution. it has no choice but to change its policy settings. fiscal adjustment was key to get to feel done. i am encouraged the story has moved on. difficult. will be the weakening of the currency will not bring an early recovery. the plane will be have to be carried by domestic demand. it was tough to get that process going, even tougher to keep it going six months from now. that is when the real test will come for policymakers. >> there is no magic bullet, is there? you're looking at asian economies, a weaker economy is
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not the boon that it used to be. is that internal demand going to come through? how much added pressure will we see from these inward looking policies from the u.s. and europe? >> i would agree. for each of it is particularly difficult. a weaker currency gives some support to domestic manufacturing. tourism my recovery bit. their portfolio will take some time to turn around. it is a problem in the gcc as well. most developed market currencies have weakened. we expect the dollar to strengthen over the next three to six months. riyadh, wek i was in work -- we were talking to the
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economy minister there. i wanted to know, what extra are they going to do with fdi for egypt? changed your perspective? will the rest of the world looked toward fdi in a more favorable light? >> there is some substance to this reform program. -- i contrast with saudi arabia is doing with turkey, south africa. i'm impressed by what the saudis are trying to do, also how much has changed in the past few months. the situation seemed unthinkable , salaries being the most big example. i can see things of substance beginning to emerge. you are talking about a root and
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branch change of the entire domestic economy, trying to move the economy away from the oil sector. that has been the prime driver of growth in the last 40 years. >> help me understand my time perspective. it doesn't happen like that. it is like american infrastructure spending. 2030 does not happen overnight. this is a long-term plan. >> markets have a much more aggressive presumption on it, don't they? >> looking at the past few months, i am impressed with the propriety work. i have seen more change in the last nine months than in the previous two decades. that process is incredibly difficult to deliver on. it is a huge management challenge.
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there will be resistance inevitably. this reform creates windows, but it creates losers, and tends to create losers before it establishes the winners. i have seen what structural reform can deliver. choice.abia has no region,graphics of the time is short. >> there has been discussion about the emboldened nature of isna, where perhaps the u.s. a bit more inward looking. with africa, it is a multitudinous and not easily measurable relationship. is this a panacea for that region? >> it is not a panacea, but clearly the middle east is calling to that story as well.
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dominant source of energy coming from dubai. the region is very much part of that story. >> let me take you to russia. you mentioned we sometime gets sucked into the vortex of abu dhabi. with important for putin opec, whether there is a freeze or a cut. there is a whole new era, trump, putin, things are shifting? >> we will see how it plays out. russia's fiscal outlook was not terribly optimistic. there are structural problems russia will have to work through. we don't see a convincing plan to address those underlying structures. they have been there for such a long time. gcc, that does not
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turn the story around. you need a much higher oil price. i don't see that coming through. >> simon, thank you so much. go home until david bloom what you just told me about trading currency, and see what comes out in regards to the will thing. that is the chief economist for hsbc. coming up on "bloomberg markets: middle east," the currency ban in india is turning out to be a boon for digital. who is making money out of the dash from cash. this is bloomberg. ♪
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>> welcome back, you are watching "bloomberg markets:" from on high's ban
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denomination notes has been a problem for some that are queing in atm's, but for others it presents an opportunity. quickly becoming very -- our guest joins us from mumbai. we have a fantastic story of credit cards being policy winners out of this. it is an unexpected windfall out of these two. >> you bet it is an unexpected windfall for digital payment companies. the 5000 rupee note, it was to squeeze out black money from the system. you will see people grumbling for cash, which is why you are seeing long queues. and the consequent is a people moving toward plastic and digital payments.
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companies have thrown around some numbers. pay tm has seen one million daily transaction users. merchandise value of at least $5 billion. 75,000 transactions in the past one week according to some. roadside food vendors have also started signing up for digital payments. $600 million in bank accounts. >> what does this mean for investors in the digital payment companies? is it a one-way trip? >> it is a one-way trip. bynkly, paytm is thanked
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alibaba. they would not have seen this kind of evaluation event. the entire market for digital payment is skyrocketing nearly 10 times. india willthat likely regenerate has redrawn the entire calculations. having said that, we don't know if this is a transition. i have to jump in because we have a little bit of break before the end of the show. we have the indian officials from the rbi say they are prepared to take action with the rupee. the philippine peso falling to the dollar for the first time in 2008. there is a new word ringing in my ear: potential intervention.
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pleasure.been a more on stories and market movers in the asian second
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>> is what rpm here in hong kong there i am haidi lun with an update on the top story. asian currencies are at seven-year lows against the u.s. dollar. the philippine peso has fallen --t his due to the dollar past 50 to the dollar for the first time in a decade. indian officials have come out that the r.b.i. needs to take action to deal with the declines in the ruby. -- rupee. the you and also under pressure trying to fix for the first time since june 2008 after the dollar index rose to its highest


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