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Weekly Currency market review after 30th September, 2011.



I don’t like EURO’s movement in the last day of the week against US dollar. There were legitimate causes behind EUOR’s move in last week and week before, but after that German vote, situation is better now. What I think some unnecessary selling is coming from certain side of the market.

CURRENCY
30th-Sep, 2011
9/23/2011-9/30/2011
9/16/2011-9/23/2011




USD
78.553
0.06%
2.48%
EURO
1.339
-0.81%
-2.10%
AUD
0.966
-1.22%
-5.59%
YEN
77.08
1.07%
-0.79%
RUPEE
48.92
-1.50%
4.65%
SWISS FRANC
0.908
0.55%
3.20%
S.African RAND
8.092
-0.16%
8.67%
Brazilian REAL
1.88
2.62%
5.46%
Mexican PESO
13.878
2.44%
3.96%

Most of the Asian currencies are losing their value due to global turmoil. Currencies of Brazil, Mexico and South Africa are following same type of trend, look like all the Emerging market economies are doing the same thing. Unless there is some change in the situation, this trend will continue.
Let see quarterly currency movements from July to September this year.


CURRENCY
30th-Sep, 2011
1st-July-2011
9/23/2011-9/30/2011




USD
78.553
74.349
5.65%
EURO
1.339
1.452
-7.78%
AUD
0.966
1.077
-10.30%
YEN
77.08
80.89
-4.71%
RUPEE
48.92
44.58
9.73%
SWISS FRANC
0.908
0.849
6.94%
S.African RAND
8.092
6.72
20.41%
Brazilian REAL
1.88
1.558
20.66%
Mexican PESO
13.878
11.605
19.58%

Here also we can see that Emerging nations have lost much of their values. Where as USD gained though things are different for AUD.



Currency forecast for coming week

 

As I said in last week 1.30 is a good support for EURO, last day’s move was bad. In spite of positive result from German vote, EURO’s move was flat. In 1.36 area it is getting good resistance. It may follow the bearish pattern which I talked in last week. But I think the activities of different countries may effect it’s move.
As I said in last week USD follows the same thing, now it is ready to test 78.5 level. But last day’s move was not too much to cheer. What I think that even if it tests higher levels it will be limited. On the downside it has support around 77.5 level.
0.96 is acting as a good base for AUD, but unless it breaks 0.99 it is hard to expect any up move. Last day’s move was not good, I will not surprise if it tests 0.96 level again.
Japanese YEN is making some base in this 76 level. Next immediate level to watch is 77.8 in the upside. Now if it breaks this 76 level in the downside then it can drop more.
Brazilian REAL is trying to test 1.90 level and last day’s move was better. Now if it cannot break this 1.90 level then it’s support is at 1.72 area.
14 level is acting as a good resistance for Mexican PESO. It’s move was quite similar with REAL, now if it doesn’t able to break 14 level then it will test 13 level in the downside. Same thing also goes with South African RAND, for it the next level to test is 8.50 and support is at 7.40.
There is a chance that Japan may help Euro-area by buying bonds, so I expect some activities in EURO for this reason. Many of the Central banks of Emerging countries have already intervened in their respective currency market and some countries like India, South Korea and Thailand are due for it. What I think that after 3rd October, US may face gradual hike in liquidity level and that is going to effect USD.



[Rise and drop in currency (under heading currency forecast for coming week)  means rise & drop in chart figure, not currency’s rise & drop.]

NOTE :  Please see the disclaimer of this blog .



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