Wednesday, April 15, 2009

China keeps hold on commodities reins

(MarketWatch) -- Oil and metals mining shares traded on a mixed note in the Asian markets Thursday, as analysts stressed that China remained a key force that will ultimately decide the fate of demand for most major global commodities.
And while economic growth in China appears to be improving, the outlook remains uncertain.

On Thursday, government data showed that the nation's economy grew a slightly better-than-expected 6.1% in the first quarter from a year earlier, after expanding 6.8% in the fourth quarter.

Overall, "China continues to walk a very thin tightrope" and growth remains "below the optimal level to avoid major civil unrest," said Kevin Kerr, editor of Global Commodities Alert.
But that also means that "demand for key commodities such as energy and agriculture, industrial metals and soft commodities will continue to be brisk in China as they try to stave off a major collapse by continuing to use every means possible to stimulate the economy and create infrastructure projects," he said.
"China will clearly be the driving force in commodities during this cycle and perhaps for decades to come," he said.

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Fiji's central bank devalues currency by 20%

(MarketWatch) -- The Reserve Bank of Fiji said Wednesday that it has devalued its currency by 20%, the same day it appointed a new governor for the central bank, news reports said.

Sada Reddy was named as the new Reserve Bank governor. He said the devaluation was made to the Fijian dollar to cushion the severe effects of the global financial crisis on the nation's economy, according to a report from Agency France-Presse.
The Fiji dollar will now be in line with its major trading partners, such as Australia and New Zealand, the report cited Reddy as saying. The central bank governor also said that correcting the value of the currency will likely benefit exporters and boost tourism.

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