Forex Investment and Currency Trading

Not a lot of activity seen today. $Asia started biddish but we did not see any notable rush to buy US Dollars. Stock markets mostly in the black.

Ranges before London open: $JPY: 101.41-102.18; EUR$: 1.3401-1.3498; EURYEN: 135.93-137.89; GBP$: 1.7290-1.7397 $CHF: 1.1320-1.1370 AUD$: 0.6860-0.7013; NZD$: 0.6060-0.6170 A very quiet start to the week in Asia with almost no new breaking news out over the weekend. In relation to recent Asian Mondays the trading session could be described as lacklustre. Recent additional rate cuts from some Australian banks outside of the RBA move could mean that the RBA cuts by less than expected or not at all at their next meeting in Nov. This provided a bid tone to AUD from the open. Order book is still very light either side and flows limited.

KRW: Open 1370. Another crazy open with the next trade at 1230 then about 1260. Climbed back up steadily after that. Custodials started buying and because of absymal liqudity, spot got driven up to 1330 easily on that spurt. Despite significant joint measures announced over the weekend, the market sentiment remains patchy, and worries persist over the dollar shortage onshore. Range 1230~1330 and close 1315. 1mth NDF pts -5/-3. Kospi open +2.28%. BoK will hold an auction on Tuesday to supply up to $2.5bn in 3mth swaps to local banks.

USD/SGD: Spot start 1.4770/75. Uneventful day. Range 1.4755~1.4800 and last 1.4770/75. Reckon SGD is currently about 1.57% weaker the mid-band. Stock market +3.23%. Trade Minister Lim said that Singapore’s economy is expected to be weak for the next several quarters as the city-state feels  further spillover from the financial crisis. One wonders if MAS had been too “cautious” in not re-centering the SGD basket.

USD/THB: Spot start 34.19/22, range 34.19~34.30, last 34.27/29. Market did try to nudge higher in the afternoon, but looked like BoT was there to cap at 34.30. Offshore points tom/next (1day) +0.3/+0.5 and 1mth +9/+12. Stock market +0.84%. Thai FinMin said he wants to see interest rates at a low level and the baht “to be kept undervalued by around 5%” as these will help bolster economic growth.

USD/MYR: Open 3.5150/5200. Looks  like BNM is at 3.5250 again. It stepped away briefly and 3.5265 traded, but soon it came back to cap at 3.5250 again. Range 3.5190~3.5265 and close 3.5200/40. 1mth NDF pts abt -15/par. Stock mkt +0.47%.

USD/HKD: Spot start 7.7580/90 and 1yr fwds -230/-210. Spot steady but forwards dropped after HKMA injected liquidity. Last spot 7.7570/75 and 1yr fwds -270/-240. Stock mkt +5.28%. HKMA bought HKD 4bn agst dollar to offset new EF Bills to be issued on 28Oct and 4Nov.

USD/TWD: Open 32.540/570. CBC said to have bids below 32.480 and offers above 32.600 today. Slow day and low volumes. Range 32.541~600 and close 32.580. NDFs open 1mth -60/-40 and 3mth -170/-130. Points drift left today more due to lack of bidding interest. Stock market -0.58%. The authorities has extend till end of this week, down limit of 3.5% compared to usual of 7%.

USD/IDR: Open 9790/9820. Spot steady, but calmer sentiment prompts NDF pts to compress a little. Range 9800~9830 and close 9810/40. 1mth NDF pts about +400/+500. Stock market +1.97%. Local bonds weak in the morning, with yields about 30bp higher, but almost no liquidity to trade. By the end of the day, the bonds were about flat on the day.

USD/PHP: Open 48.05. Biddish open and started to push higher slowly. BSP suspected to have sold some dollars at 48.10 but quickly backed off. Range 48.00~48.27 and close 48.08. Stock market -1.69%.  BSP Gov said they are studying the possibility of a cut in bank reserve requirements to improve liquidity. He also said falling inflation would allow the central bank additional flexibility in setting interest rates. The Philippines posted a PHP 21.6bn budget deficit in Sep as the govt stepped up spending to boost economic activity.

USD/CNY: Opening levels 1mth 6.8450/6.8600, 3mth 6.8650/6.8850, 6mth 6.8900/6.9100 and 1yr 6.9000/6.9300. Spot fixed today at 6.8297 vs last Fri’s 6.8340 close and 6.8311 fix. Spot USD/CNY open 6.8350 and last 6.8299. Spot fixing and trading continued sideways. NDFs softer at open, but not much trading at all in the morning. NDFs last 1mth 6.8550/6.8650, 3mth 6.8700/6.8800, 6mth 6.8850/6.9000 and 1yr 6.9050/6.9200. Shanghai A-shares +2.24%, Shanghai B-shares +3.47%. China’s Sep indus output +11.4%yoy vs expected 13.7%.

USD/VND: SBV today fixed $VND official rate at 16520 vs last Fri’s 16517. Grey spot level pushed higher to 16700-16800, and NDF levels 1mth 16400/17400 and 6mth 16900/18900. Onshore sellers of local bonds late last week, plus ongoing unwinding of TRS, plus corp dollar demand, all contributed to pushing USD/VND higher despite SBV dollar supply. SBV today cut base lending rate 100bp to 13%. This moves follows easing onshore liquidity conditions and isn’t unexpected. The base rate sets the max lending rate (which is 150% of the base rate) which nows becomes 19.5% from 21%. However, this may not give a lift to local bonds as global risk reduction sentiment continues to dominate.

USD/INR: Open 48.72. Steady at first but soon pushed higher again. Mostly equity-related dollar buying. Overall nothing drastic and it has been fairly tame. Range so far 48.70~88 and last 48.85/87. NSERO 6.73%. Sensex +2.59%. RBI cut repo rate by 100bp to 8%. Market was expecting RBI to move only at its next policy meeting on 14Nov and only by 50bp. So in that sense, this move was a surprise. It caused a jump in the stock market but it could not sustain the gains.