UPDATE 2-Baer in $1.7 bln share buyback as profit jumps

(Reuters) - ZURICH, July 27 - Swiss wealth manager Julius Baer said it would buy back 2 billion Swiss francs of its shares after first-half net profit rose by 28 percent, in line with market expectations.



Net new money inflows into Baer's private banking unit, a key gauge of future income, were a healthy 5.3 billion francs, in a sign its recent push into fast-growing Asia was bearing fruit. The number was in line with expectations. "We have further improved the overall profitability of the group in spite of our accelerated growth initiatives," Chief Executive Officer Hans de Gier said in a statement.


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S. African Rand Posts Third Weekly Gain as Interest Rate Spurs Carry Trade

(Bloomberg) -- South Africa's rand posted its third
week of gains against the dollar as expectations of higher
interest rates spurred investor appetite for so-called carry
trades.

The rand traded near the highest in almost two weeks,
supported by investors seeking out South Africa's 9.5 percent
interest rate in trades funded by borrowing the Japanese yen or
Swiss franc more cheaply. A report yesterday showing quicker-
than-expected manufacturing growth added to speculation the
Reserve Bank will raise borrowing costs further.


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Dollar Falls to Two-Month Low Versus Euro on Outlook for Interest Rates

(Bloomberg) -- The dollar fell to the lowest level in
almost two months against the euro and dropped against the yen on
speculation the Federal Reserve will keep borrowing costs
unchanged while other central banks extend their increases.

Investors also sold the dollar against the Japanese currency
and Swiss franc after terrorists targeted central London and
Glasgow, Scotland, prompting them to pare holdings of riskier
assets such as equities and emerging-market assets funded by
loans in yen, a practice known as the carry trade.


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Swiss Franc Gains After Central Bank Says Further Rate Increases `Likely'

(Bloomberg) -- The Swiss franc rose after the
country's central bank said it may raise interest rates further
``in coming months'' should the currency's slide to a record low
versus the euro earlier this month fuel inflation.

Switzerland's currency is benefiting from speculation a
higher benchmark rate will prompt investors to cut so-called
carry trades, by making it less profitable to borrow the franc to
fund higher-yielding purchases elsewhere. Further interest-rate
increases are ``likely,'' the Swiss National Bank said today. The
bank's use off the phrase ``in coming months'' may indicate a
willingness to move before scheduled quarterly meetings.


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Swiss Franc Gains as Central Bank Says More Interest-Rate Increases Likely

(Bloomberg) -- The Swiss franc gained versus the
euro after Swiss National Bank President Jean-Pierre Roth said
more interest-rate increases are likely to be needed to prevent
inflation quickening.

The Zurich-based SNB raised its three-month Libor target
rate by 25 basis points to 2.5 percent, the highest since
September 2001, matching the forecast of all 25 economists in a
Bloomberg News survey.


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Swiss Franc Falls to Three-Week-Low Against Euro on Interest Rate Outlook

(Bloomberg) -- The Swiss franc fell to a three-week
low versus the euro as speculation the central bank won't raise
interest rates after this week's meeting spurred the so-called
carry trade.

The franc fell for a fourth day as investors continued to
borrow in Switzerland's low-interest-rate currency to fund
purchases of other higher-yielding assets. The Swiss National
Bank will probably raise borrowing costs a quarter-point to 2.5
percent on June 14, according to a Bloomberg News survey.


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Dollar Rises to Two-Month High Against Euro as Treasuries Draw Investors

(Bloomberg) -- The dollar surged to a more than two-
month high versus the euro and rose against the yen as benchmark
Treasury yields attracted international investors, boosting the
U.S. currency's appeal.

The dollar also strengthened against the British pound and
Swiss franc as the yield of the 10-year U.S. note rose as high
as 5.25 percent. A government report showing the U.S. trade
deficit narrowed in April added to evidence that the world's
largest economy is gaining strength.


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Swiss Franc Set for 6th Weekly Drop on Global Interest Rate Expectations

(Bloomberg) -- The Swiss franc headed for a sixth
weekly decline versus the dollar as expectations of higher
interest rates around the world fuel the so-called carry trade.

Low-yielding currencies such as the franc and Japan's yen
have fallen in recent months because their low interest rates make
them favorites for investors to borrow in to fund purchases of
higher-yielding assets. The franc slumped the most versus the
dollar in six months today as traders pare bets the U.S. Federal
Reserve will cut borrowing costs this year.


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Swiss Franc Records Weekly Gain as SNB Signals Increase in Interest Rates

(Bloomberg) -- The Swiss franc posted a weekly gain
against the euro and the dollar, snapping a four-week losing run,
as central bank policy makers indicated they may raise interest
rates to curb inflation.

The franc held near a two-week high versus the euro after
Swiss National Bank President Jean-Pierre Roth and policy maker
Thomas Jordan said they're watching the impact of the franc's
weakness on inflation. The currency stayed higher on the week
after a report showed the country's leading economic indicators
rose for a fourth straight month in May.


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Swiss Franc Set for Weekly Gain as SNB Signals Increase in Interest Rates

(Bloomberg) -- The Swiss franc headed for a weekly
gain against the euro, snapping a four-week losing run, as central
bank policy makers indicated they may raise interest rates to curb
inflation.

The franc held near a two-week high versus the euro after
Swiss National Bank President Jean-Pierre Roth and policy maker
Thomas Jordan said they're watching the impact of the franc's
weakness on inflation. The currency stayed higher on the week
after a report showed the country's leading economic indicators
rose for a fourth straight month in May.


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Swiss Franc Gains Versus Euro for First Time in Week as Retail Sales Surge

(Bloomberg) -- The Swiss franc gained versus the euro for the first day in a week after a government report showed retail sales increased in February by more than forecast, boosting the case for higher interest rates.

Sales, adjusted for inflation and the number of shopping days, gained 4.5 percent from a year earlier after 5.1 percent in January, the Federal Statistics Office in Neuchatel said today. Economists in a Bloomberg News survey forecast a rise of 4 percent. The currency rebounded yesterday after central bank President Jean-Pierre Roth said its fall was unjustified.


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