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Currency market review (weekly) after 6th January, 2012.


This week EURO was near its 16 month low but later it recovers some ground. Some traders must be disappointed by the reverse movement of the EURO in the later part of this week. I think EURO has more chance to drop, especially in these circumstances. One of the causes of this week drop of EURO was Spanish minister’s manifestation about the future higher bad loans of their banks.

Currencies
6th Jan, 2012
12/30/2011-1/6/2012 (%)
12/23/2011-12/30/2011 (%)




USD
81.26
1.34
0.23
EURO/USD
1.27
-1.85
-0.77
AUD/USD
1.022
0.19
0.59
USD/JPY
77.11
0.22
-1.46
USD/RUPEE
52.78
-0.9
1.02
Swiss FRANC
0.956
2.25
-0.17
S.African RAND
8.163
1.08
-0.83
Brazilian REAL
1.849
-0.7
0.05
Mexican PESO
13.726
-1.46
0.76

EURO’s this type of drop is making life very hard for those exporters who trade with Euro zone countries, but it is a good opportunity for German exporters.



Currency market forecast for coming week.

As better economic reports are coming from some nations, so it is expected that some investment may shift away from US dollar but Asian currencies like South Korean WON and Philippines PESO are not showing any indication of that trend, it is little surprising !
I have already said in my earlier reviews that what I think about EURO, so I will be waiting for EURO to test that levels.
For AUD, I was still looking that it will break that 1.07 level but looks like it is dropping far from it. Right now it is making higher highs and higher lows for short-time of period, so if it breaks out from that pattern it may test lower levels may be around 0.96. But unless it goes below 96, I will be looking for 1.07.
USD is again going to test 81.5 levels, as I was expecting in my last weekly review. What I think that it can go up to 87. But if somehow it reverses its trend then first 79.5 and then 78 are good supports.
Gradually Japanese YEN is dropping from 78 levels, but considering the situation in Japan I still think that it has more chance to go in the upside than downside. In the downside it has good support at 76.
In my weekly review last year I was expecting that Brazilian REAL may test lower levels, so now I think that it may move around the range of 1.78 – 1.90. Though its came up from its lower level but last two days closing were not good. So it is expected that REAL will break 1.90 but it may take some more times.
South African RAND was flat so I am still holding that levels of my last week.

Euro area countries like France, Italy were successful in their debt auctions this week. So that can be little positive for EURO, but higher yields is reducing all good things.




NOTE :  Please see the disclaimer of this blog. 

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