Monday March 31, 2008 - 04:06:38 GMT
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FX Thoughts -Asian Morning Breifing
Last day of Financial Year 2007-08 for many countries, especially India. News over the weekend says that the ICAI is making the adoption of AS-30 mandatory from FY07-08 itself rather than from 2011. This will force companies to account for MTM losses on the exotic currency derivatives positions they are running. This could be a huge negative for sentiment.
Asian markets are largely down today ranging from +0.08% to â€“2.31%, with Shanghai being the biggest loser again.
The US markets were down between 0.50-0.95% last Friday. The Dow had closed 86.06 points lower, at 12216.40.
Last week ended on a bad week for commodities in general, with Gold closing a hefty $17.5 down at 936.50. It again opened subdued in the Asian session today however it has reversed those losses. It currently trades near 938.10 on the June-08 contract, which now is the most liquid. Silver has been mirroring gold and currently trades near 17.85 on the spot market. Gold and Silver are likely to stay pressured over the next couple of days, however Support is likely to come in at 920.00.
Crude came off on Friday, broadly along with the commodities pack to close at 105.62, down approx $1.96 on the May contract. It has started with further correction in the Asian session today and currently trades near 104.73 (May Futures).
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The Euro trades strong near 1.5815 and could move up to test 1.59 this week. Dollar-Yen hovers near 100, currently trading near 99.90 and could be ranged sideways this week. Dollar-Swiss trades below 1.0000. Expect a range of 98.50-100.50 for the initial part of the week. The Cable is also expected to trade sideways within a wide range of 1.9850-2.0150.
Dollar-Rupee could open higher near 40.00 on weak equities and negative sentiments regarding forex derivatives losses.
Could US Yields and Libors be bottoming? Be careful out there. Please take a look at
We now expect the RBI to keep Interest Rates unchanged for the rest of the year, which has been revised from a call of 1 rate cut previously. See the reasons for our change in outlook at http://www.kshitij.com/moneymkt/indi...-outlook.shtml
12:30 GMT Jan-08 Canada GDP by Industry (MoM), Exp 0.4%, Prev â€“0.7%
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