Skip to main content

Week ended 6th May, 2011 – Currencies this week .

Reserve bank of Australia left it’s interest rate unchanged , probably they are preferring to AUD to do this job . Most of the currencies decrease this week .

4/29/2011- 5/6/2011
4/22/2011- 4/29/2011

S.African RAND
Brazilian REAL
Mexican PESO

ECB’s decision of not to increase the interest rate is one of the important topic this week . Most are explaining this interest matter of ECB is the cause behind  USD’s sudden rise this week .
I think to some extent ECB’s decision is right because if they rise interest rate then PIGS countries will suffer more as their  economic growth may hamper with that increase in interest rate . When they have a weapon to control inflation with the appreciation of Euro then they must depend on it rather than rate hike .

Most of the currencies of Asian countries close weak this week , as bad  news came from US recovery . Currencies were in pressure due to the outlook about their exports . Thailand’s BHAT slid the most this week due to the political tension , Malaysia’s RINGGIT also decreases lot this week . YEN was 7 week high against the US$ on Thursday . Japanese authorities think  fall in commodity prices ( which trades in US$ )  is the cause of rise in YEN , so the situation is different from past when G-7 intervened in the market to control the YEN . Somewhere I was reading that Japanese authorities have not reacted to  YEN’s  strength unless it has impacted on their share prices .

Coming week

Mexican PESO bounced back from 11.5 level as it finds support there , but it is getting some resistance in 11.75 level . EURO closes below it’s support level of 1.44 , as such market has not take the interest rate thing of ECB rightly . Now it gets support at around 1.42 level .
Unless YEN breaks 81-82 level on the up side , there is not chance of it’s depreciation . AUD is getting support around 1.06 level . If it breaks 1.04 level then it can go down more . Swiss Franc got support at 0.86 level and it has a resistance at 0.88 level .

Brazilian REAL is bouncing back from it’s 1.56 level though it is finding some resistance at around 1.62  level but it may take time to overcome this level . South African ran also get previously tested support of 6.6 level .  Most of the Emerging market currencies bounce back this week .

Now what can be the cause of this increase in USD . As I said that one cause may be the statement from ECB that interest rate will not be raised  during next month  !  And the second one is there may be some insiders buying dollars suspecting that since QE2 is going to end so printing of moneys will stop and so there can be damage in the markets . But some experts are sure that this sudden strength in US$ is not going to stay for long .

NOTE :  Please see the disclaimer below this blog .

Popular posts from this blog

DAX forecast for coming week ended 15th March, 2013.

This week was very good for Dax, though it is getting resistance at 8100 range. Now it has a chance to test downside again. I think even if Dax tests lower levels, it has more chance to bounce back from around 7800 range and therefore it will again test upside.

On the other hand if it shows flat movements around 8000 range in initial days of the coming week then there is a chance that it may take a decisive call in later days. Considering the recent trends it has the chance to test higher levels may be around 8200 but that will be a very aggressive call after taking in to account the movement from last December. I will worry about the downside when Dax will be testing levels below 7600 ranges.
NOTE: Please see the disclaimer of this blog.

Fed’s rate hike Vs Sovereign rating up gradation

Financial market is very much worried about the rate hike in US, probably this is going to come in coming December. But I think that is not going to change much of the things. Even Fed hikes rate in December it will be not so much, because we are forgetting one thing that interest rate in US is around zero so even they hike rate by 0.25-50% basis points (at most) in this year that will not be enough cause for Dollars to change their locations around the world especially markets have already discounted this coming rate hike in US.

A new disaster is coming in EU banking sector, whom to blame, big Audit firms!

First I was thinking what should be the title of this posting? Will it be good if I write that big audit firms set the time for EU bank collapse! If someone is thinking that financial crisis is over then think twice because the coming EU banking crisis is no way less than 2008 financial crisis. The time bomb will explode at some point of time in future, the time has not yet set for it. In that tsunami, forget about the smaller if any major banks collapse then I will not be surprise.