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Week ended 13th May, 2011 – Currencies this week .

This week currency market was concern because of selling that is going on in commodity market and for European debt crisis.

5/6/2011- 5/13/2011
4/29/2011- 5/6/2011

S.African RAND
Brazilian REAL
Mexican PESO

Euro fell to 6-week low against Dollar. There is big concern about Greece and Portugal, because Greece which may need to restructure it’s debt and this may spread in the other countries like Ireland. But in Friday, Euro gained as EU growth rate expanded faster than predicted.

Tension and fear about global economic growth and European debt crisis are making investor to push the USD to its one month high level. But in Wednesday it was simply the Commodity sell-off that triggered the increase. In later part of the week volume in USD have reduced from its prior days, that is an important matter to be looked.
Worse than expected job report made AUD to drop in currency market, experts are saying that this will give more time to Reserve bank of Australia to consider its rate move.
Korean WON dropped to 3rd week low figure after bank of Korea left interest rate  unchanged. Fitch ratings rose it’s outlook on Thailand’s local currency and  BHAT rose 0.1% this week. Philippine PESO declined 0.2%, Malaysia’s RINGGIT dropped 0.2% this week, where as Taiwan dollar gained 0.5% and Indonesia’s RUPIAH gained 0.35 as interest rate kept unchanged in Indonesia.

Morgan Stanley may announced YUAN fund in next week, this thing  reveals the growing importance of Yuan.
Chile’s PESO is one of the best performer among the Emerging market currencies, as central bank raised borrowing cost and improvement copper price helps its trade.

Coming week

This week AUD went to test 1.08 level  but it couldn’t maintain its move as it again dropped for support level of 1.05-1.06 level. As I told during last week that 1.04 level is the  main support for it. AUD fell against the YEN as PBC raised bank’s reserve requirement.

This week USD broke its minor resistance level of 75 now it will test better resistance at 76. Experts are telling that USD will fall, but I think even it falls it will be limited around 74 level in short-term because it looks to me that it may go up to 78 level. Though it is sure that its medium to long-term trend is negative.

South African rand broke its crucial resistance of 0.68-0,69 level, as data showed the jobless rate increased to 25% in first quarter of this year. Now it can easily go up to 7.1 level where it will face its next resistance.
Brazilian REAL will find its resistance at 1.66, right now it looks to me that last week support of 1.56 has worked good for it.
YEN is moving around 80-81 level this week, it cannot get out from this 80-82 level. Swiss Franc broke its resistance of 0.88 level now it may test 0.895 level. Mexican PESO broke its resistance at 11.65 and now it will test 11.75-11.90 level.
Euro is looking for some support at around 1.42 level but I think better support it has in 1.38-1.40 level. Next important trigger for Euro can be rate hike.

NOTE :  Please see the disclaimer below this blog.

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