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 have tightening their policy rates due to inflation . Philippines ’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 Malaysia but places like China , also see appreciation in their currencies . Indonesia
3/25/11 - 4/1/11
3/18/11 - 3/25/11
3/11/11 - 3/18/11
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
$ 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 . US
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
, may be for constructional work , it will definitely move downwards . In this moment the G-7 factor may be working . Japan
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 .