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June 14, 2011 We head north (PHP43.

390-420) at the onset brought about by S&P downgrading Greece to CCC from B, making Greece the country with the lowest credit rating in the world. Moreover, risk was really pushed aside as Christchurch once again suffered some very frightening quakes/aftershocks which will delay any rebuilding process well into next year and will see a mass exodus out of New Zealands second biggest city as houses will become uninsurable. However, the PHP43.400s level once again stood its ground and drove dollar bulls down as Chinese CPI accelerating to a 34-month high of 5.5%, while retail sales came in marginally higher than forecast had a huge impact on risk rebound across all currencies. Majors and regionals bounced back against the USD as the inflation data suggested Chinese price rises were not out of control and that growth is being managed. We soon traded at the PHP43.310-340 levels with some attempts of foreign banks to break the PHP43.300 psychological support early in the session. We ended at PHP43.360 mark as players were believed to trim down on their shorts following the impending Greek default.

June 15, 2011 April OFW remittances picked pace to rise 6.3% y/y vs March's 4.1% to $1.62B. Moodys lifted the countrys sovereign ratings to Ba2 from Ba3 citing progress on fiscal consolidation and sustained macro stability. USD/PHP trading started out slow at the onset as mixed data failed to give directions on the local pair. DJIA printed healthy gains of +123.14 points and the EUR raced up to 1.4490s level despite the S&P slap in the face to Greece. A very similar trading range (PHP43.330-420) was again seen and perhaps the handwork of a torn market whether to pause or hike interest rates in the policy rate meet tomorrow. Action took place midway in the morning session as Moodys lifted the countrys sovereign ratings to Ba2 from Ba3 citing progress on fiscal consolidation and sustained macro stability. Bidders were caught off guard on the positive news as they were given for volume at the AM highs of PHP43.380-395. Buyers then resurfaced at the PHP43.330-340 levels for a quick buck. However, USD bears retreated as the EUR tumbled down during London open. The ratings upgrade was completely brushed aside and the Greek episode was again tuned in.

Peso Exchange Rate

June 30, 2011 BSP expects annual inflation in June to be between 4.6% and 5.5%, due next week Wednesday. Generally, USD was sold against most currencies as an affirmative Greek parliamentary votes signing off on an austerity plan a scheme including tax hikes, spending cuts and government asset sales paved the way for additional EU/IMF aid for the beleaguered Mediterranean nation. The outcome eased fears of an imminent sovereign default within the Euro Zone, boosting market-wide confidence and weighed on safe-haven demand. US equities also expressed relief about the successful Greek vote as DJIA rose again by 72 points and the VIX or "fear gauge" fell another 10.4pct. In the local FX market, month-end flows lent a hand to dollar bears as the local pair submerged slowly to close month of June at PHP43.330. We saw buying interest at the PHP43.360 mark early in the session but eventually submitted to the contagious risk-on mood of global markets. Clearly, the world is a better place - FOR NOW. The Greek government must now win approval later tonight for legislation detailing specific implementation measures for the EUR28B austerity package. If the second vote passes,

release of the loan tranche could be approved by finance ministers on Sunday.

30-June-11 OPEN: HIGH: LOW: CLOSE: AM WT AVERAGE: AM VOLUME (in millions): PM WT AVERAGE: PM VOLUME(in millions): PDS WT AVERAGE: TOTAL VOLUME(in millions): 43.410 43.420 43.330 43.330 43.376 $ 370.90 43.346 $ 262.98 43.364 $ 633.88

29-June-11 43.500 43.530 43.460 43.480 43.507 $ 478.40 43.478 $ 384.50 43.494 $ 862.90

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