QUOTE(deodorant @ Jul 25 2011, 03:10 PM)
The person i replied to said the FX rate will drop
because lots of people sell SGD and buy MYR during CNY. I did not dispute his observations of the FX trend, I disputed his reasoning.
Agree, he means the actual money changer exchange rate drop not the FX rate. His reason may be this
At year end, a money changer have that much of RM stock and he know his targeted customers:
1) many people just got the bonus
2) Xmas and CNY are within a month from their bonus payout
3) many families in MY depend on their money, they die die must change money to RM only.
4) they are in festive mood (once a year never mind lah)
5) they are in rush. Project closing, festive preparation, travelling rush etc
6) other money changer will chop these people too. (observed)
7) they willing to pay more for a CNY hair cut and CNY seafood, so they should be ok even I chop their carrot head.
8) number of money changer remain the same during that time if not lesser due to vacation.
If we only look at money changer which most of us use, how can an increase in demand for his stock will not drive his rate down?