01 MAY 2010 : FX for the Ringgit

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hi,

The reports on the FX movements for the week ending 1st May, 2010 :


AmBankResearch
The USD gained over major currencies on safe haven flows amid a deepening fiscal crisis in the EU. With risk sentiment being the primary driver of the forex market currently, expect the greenback to remain firm until the EU financial crisis subsides.

EUR/USD fell to a year low of 1.3112 this week following rating agencies' downgrades of the credit risk of Greece, Portugal and Spain. Although there may be a slight recovery on the hopes of an imminent Greece bailout package, the underlying fiscal and economic weakness of the euro zone member states rendered the EUR outlook weak.

The GBP is still trapped by political uncertainty with concerns about a hung parliament at the coming UK general elction on May 6. Expect more consolidation within the 1.5000 - 1.5500 range in the meantime.

European-led risk aversion kept USD/Asia and USD/MYR range bound in the past week. However, USD/MYR's downside bias remains intact on Asia's positive economic outlook and perceived tolerance of a stronger currency. Expected range next week is 3.1600 - 3.2200.
Starbizweek


Foreign Exchange
GBP/USD open 1.5451 close 1.5369
EUR/USD open 1.3344 close 1.3318
USD/JPY open 94.06 close 94.22
USD/CHF open 1.0746 close 1.0774

The USD remained firm against its major rival currencies. Sovereign debt issues continued to dog the EUR which touched a 1-year low of 1.3112/USD. Downgrades on Portugal and Spain followed an earlier move on freece further unnerved investors.

The market had initially been comforted by signs the aid package for Greece could be worth as much as 120 billion euros over 3 years, much more than an earlier reported 45 billion euros. But, lack of details on the package resulted in uncertainties about the timing and implementation of the deal.

Sterling fell as the risk of contagion from Greece's deepening debt crisis put thwe focus back on the UK's fiscal problems and on signs that no single party will win a majority in next week's election.

Meanwhile in the US the Federal Reserve maintained its pledge to keep interest rates low for an extended periiod a the conclusion of its 2-day rate setting meeting despite offering a more upbeat view of the economy.

USD/MYR open 3.1850 close 3.1850
GBP/MYR open 4.8842 close 4.8950
EUR/MYR open 4.3059 close 4.2511
JPY/MYR open 3.4751 close 3.3878
CHF/MYR open 3.0062 close 2.9626

The ringgit held its ground against the dollar despite risk adverse developments from Europe. The ringgit was underpinned by remarks from Bank Negara governor that the central bank sees upside potential to GDP forecast in 2010. The bank will release their latest review by the middle of the year.
Starbizweek


01 May, 2010 : Uncertainties In FOREX Market To Continue
KUALA LUMPUR,  the eurozone debt crisis is expected to continue influencing the direction of the ringgit as well as other regional currencies. RHB Bank forex dealer Badeeudin Mohd Abu Bakar said the crisis had started to stir up concern in the global market and would be a closely-watched factor in the foreign exchange market.

Now, the market was worried about a possible contagion but there was also speculation about a bailout for Greece. Badeeudin expected the US dollar to see a low support level of between 3.1450 and 3.1730 ringgit next week.

For the week just ended, profit taking and the downgrading of Greece and Portugal's credit ratings contributed to the ringgit's movement. It rose to 3.1820/1850 against the US dollar on Friday from 3.1900/1930 a week earlier. It eased against the Singapore dollar to 2.3306/3345 from 2.3227/3283 but rose against the yen to 3.8875/8931 from 3.9165/9233.

The ringgit also gained against the pound sterling to 4.8898/8960 from 4.9252/9342 and the euro to 4.2362/2408 from 4.2683/2753.
BERNAMA