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Week ended 15th April, 2011 – Currencies this week .

This week foreign investors have sold more shares in South Korea than they bought, as such the Korean currency declines much this week. Inflation is a bigger problem in Korea in spite of that Bank of Korea left interest rate unchanged in this week.


S.African RAND
Brazilian REAL
Mexican PESO

Moody’s cut Ireland for it’s both local and foreign currency debt as it fail to cut it’s budgetary deficit. Many are expecting that in spite of bailing out Greece is going to default in it’s payment. This week Euro was in pressure due to this cause.

But lower economic growth and higher wages are the main problem for Portugal & they have also the limitation when thinking about raising taxes. So things are very hard for Portuguese authority to make much improvements. On the whole , what I think about Euro Area is, the problem what they are facing is not something which suddenly appears. So it will take time to recover from this debt infection or whatever they are facing.

Currency in coming week

Swiss Franc made some up movement in the last day of the week, it is very much needed. It is making some lower tops and lower bottoms for long. Now it is to look at that whether it can  past the 0.93 resistance mark.
1.45 is acting as a good resistance for EURO. If it breaks this level then we can expect it’s move toward 1.50 level but last day’s move was quite disappointing.

AUD is getting a resistance around 1.058, last 3 days move was very positive and if things go this way it will easily cross this resistance in coming week. 83 is working as a good support for YEN. In coming days if it breaks it then we may see further low on it may be around 81.5 level.
Mexican PESO is in the level from where it can go in further lows, may be around 2008 level.
Brazilian REAL is heading towards it’s life low, so why shouldn’t it be the headache of the Brazilian Government. This week it tried to go past 1.59 level but it couldn’t able to carry it’s move.
The move of South African RAND this week is quite quick but it couldn’t beat the 4.8 level convincingly so it is again going to test this level. Unless it beats this  6.8-6.9  level it will be wrong to predict any positive up move from here.
USD fell to a record low of 74.61 the lowest level since 2007. Things those are going on in US is quite hard to understand.
These days most of the Emerging market currencies are appreciating, as such more foreign inflows are coming in these countries. That is making their export more uncompetitive comparing to the others. When thinking about currency appreciation  a good example of that is Brazil. But these countries need to look at fiscal and other instruments to tackle these things. Sometime I think if these huge inflows of moneys go into constructional work then they may get some benefit, may be in long-term !

NOTE :  Please see the disclaimer below this blog.

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