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Week ended 1st April, 2011 – Currencies this week


Due to higher interest rate overseas investors are putting their money on those places where interest rate is higher . Countries such as South Korea , India , Indonesia and Philippines have tightening their policy rates  due to inflation . Malaysia’s Ringgit is in the strongest level as foreign investors raise holding of  local currency debt to a record level , and still it is going strong  .  Not only in Malaysia but places like China , Indonesia also see appreciation in their currencies .


CURRENCY
1st-Apr-2011
3/25/11 - 4/1/11
3/18/11 - 3/25/11
3/11/11 - 3/18/11





EURO
1.423
1.06%
-0.70%
2.01%





AUD
1.038
1.16%
3.01%
-1.87%





YEN
84.05
3.35%
0.95%
-1.57%





RUPEE
44.65
0
-0.97%
-0.26%





SWISS FRANC
0.928
1.53%
1.21%
-2.69%





S.African RAND
6.69
-2.19%
-2.08%
1.68%





Brazilaian REAL
1.6
-3.03%
-1.19%
0.24%





Mexican PESO
11.83
-1.25%
-0.49%
1.26%




It is interesting that though US$ depreciated this week against the  EURO , YEN , SWISS FRANC but for other currencies especially the currencies like  Mexican PESO , Brazilian REAL , South African RAND , it appreciates , in fact  Mexican peso strengthened for 5th consecutive day . On the other hand Brazilian REAL has gained 45% against the US$ in last 2 years . Though Brazilian government is trying to control their currency appreciation as it is making their export more uncompetitive , but things are not coming under their control .

AUD’s up move was good this week , as such the move was very strong . It is very hard right now to predict it’s move as it is breaking all the boundaries .

If  YEN crosses the initial resistance of 84.5 then it will be testing the level of 86 . But I think once the money starts to come in Japan , may be for constructional work ,  it will definitely move downwards . In this moment the G-7 factor may be working .

US$  could not able to move same way against EURO in the last day as it moves against the Swiss Franc and YEN . Actually Euro Area is facing the threat of rising interest rate &  now some manifestation from some FED officials made  US$ also vulnerable for that . $1.43 is still acting as a resistance for EURO and in coming days it will be the testing time .

On the other hand EURO-YEN rate roses to more than 119 . Though during couple of week this gap has reduces but I think in long run it will ultimately increase , unless suddenly  matters deteriorates in Europe . But there has a German factor in Europe which is missing in Japan .


NOTE :  Please see the disclaimer below this blog .


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