Foreign Currency Update

Foreign Currency Update.

The US Dollar has lost some ground of late but the moves have been modest. The DXY index, an index that measures the dollars strength compared to a basket of other currencies, hovered between 100.40 and 100.92. Donald Trump’s brief comment that the dollar was “too strong” was not met with a raft of selling, but buyers are also in absence currently. Against the Thai Baht the Dollar has also weakened, fetching 34.36 Thai baht, down from slightly above 35. Look for possible further weakness as the flight to safety may take hold leading to USD funds flowing into gold and the Yen. A drip below 100 on the DXY index will be telling and also significant as it remains as a support for traders currently.

The British pound remained at the 1.25 level to the USD and did not move much on the much-anticipated handover of the article 50 document triggering Britain’s formal exit from the European Union. However the news of a snap election being called by Theresa May lead to a surge of the GBP of more than 2.5% in a day with the pound finding support at 1.28 to the USD. This equates to a move from 42.90 Thai baht to 44.10 Thai baht. With this level breaking recent resistances it seems that it may hold and be built on with some currency analysts touting the 1.35 to the USD as a potential target. Yet much remains uncertain and the Pound will no doubt be buffeted around based on political events and the continuing Brexit saga.

The Japanese Yen, as suggested in the previous update, put on a textbook performance breaking the important 111.59 support level to the USD and dropping to the 108 area, putting in a low at 108.12 to the greenback. Recovery has since taken place and the Yen hovers around the 108.40 to 109.23 range. Important to note is that there is very little in the way of support levels between 108 and 104 and so a quick drop may happen. Against the Thai baht the Yen is fetching 0.315 slightly higher but generally muted.

The Russian ruble has managed to climb to the highs of the recent range of 1 ruble buying 0.595 to 0.615 Thai Baht, resting at the latter level. The unit continues to be gently appreciating though is still only a little over half of its former value before the plunge little over 2 years ago. The only spanners in the works are a possible political or military spat with the US over Syria and/or other disagreements over North Korea or Iran, both of which are on the agenda currently. The ruble has been little affected by the happenings in Europe or the UK.

The euro dropped back from the 1.07 area to the USD to 1.055 however the low point held again as it has done on previous occasions. The UK election announcement also saw the Euro post gains but not as much as the British pound. The single currency has returned to the 1.07 level against the dollar and may make headway to go higher based on dollar weakness and continuation of the momentum of the recent moves. Against the Thai currency the Euro is fetching 36.75 Thai baht, somewhat within its recent tight range.