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 USD/MYR drop, V2

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cherroy
post Oct 4 2015, 11:01 PM

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QUOTE(Hansel @ Oct 4 2015, 07:07 PM)
Good evening to all.

The jobs report comes out every Friday. So, if the report for next Friday, or the Friday after that improves,... everything will change again.

We need one of the Fed Governors to come out and say that the Feds is STILL ON-TRACK to raise the interest rate this year.... everything will change again.

The SG MAS Monetary Policy Statement will be announced on Oct 14th. or Oct 15th.... If there is a lowering of the GDP again, then Sgp will experience a technical recession. Will the S$NEER Band be lowered ?
*
Job data comes out every first Friday of every month, not every week.

A job data of 100~150K number won't prompt for Fed to raise rate.
The zeroing in wages growth further cool the rate hike significantly.

No wages growth - no inflation threat.

No inflation + slow job creation + no wages growth, Fed may find difficulty to raise rate, as if Fed did raise rate, and economy become sluggish afterwards, they may be blamed for taking a wrong move at a wrong timing.






cherroy
post Oct 4 2015, 11:10 PM

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QUOTE(Showtime747 @ Oct 4 2015, 11:02 PM)
Depends on strategy. If for long term investment, don't time the market. Maybe do some DCA over a period of time

If for trading or short time investment, timing is very important. The point of entry and exit determines the profit or loss.

For forex trading, I have not heard of long term investment.
*
For short term trading, best is riding the trend, not time tomorrow or next week will go down/up or not.

Most professional traders and successful traders often using trend/momentum as their best mate/strategy, not timing which day, which week or when, although timing always plays one of most crucial factor.

It is too "difficult" to time tomorrow or next week will go down or up, or to "time" whatever level is peak or bottom.
cherroy
post Oct 5 2015, 11:00 AM

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QUOTE(AVFAN @ Oct 5 2015, 10:51 AM)
i am pleased to see today what i expected - softening of usd, rise in stocks incl sgreit prices! tongue.gif

well, one swallow does not make a summer, we'll have to see the coming days, weeks and months.
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Reit is sensitive to interest rate.

No rate hike or treasuries yield low, reit price up.

Sg reit, some already quite attractive.
Sgd even may soft due to potential easing measure, it won't plunge like RM one.

So if Sg reit is attractive and could provide stable yield one, I don't see why the need to wait and "time" it perfectly to squeeze every drop out of it.

Nevertheless, it is far from conclusion that rate hike may happen or not.
Always leave room for unpredictable event.

Now, USD is moving in tight range, while equities is "celebrating" potential no rate hike.
cherroy
post Oct 5 2015, 02:14 PM

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QUOTE(Hansel @ Oct 5 2015, 12:50 PM)
When the chances to win in a timing opportunity is high, we should take it. I don't think anybody can say that the SG REITs might anytime soon turn around and shoot into the sky. Tendency is more for the SG REITs to plunge further.

I will wait as I accumulate more USDs to be converted into the SGD.

Today is a good day to convert my RM into the USD and park in Sgp.
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It is not guaranteed that SG reit will plunge further as well.
Too many unpredictable event can occur.

In fact, if Sg adopted easing measure, reit may go higher, due to too much liquidity.
Easing, print money, bond yield lower. Bond yield lower, reit higher.

Instead of playing waiting game or "time" the market, it may be better off investing in trenches from time to time.
We never can assure it will go lower or not.
What if it never goes lower, then all cash may become sitting duck earn zero yield. smile.gif

Current financial market is simply too unpredictable.
cherroy
post Oct 6 2015, 12:35 PM

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QUOTE(Hansel @ Oct 6 2015, 11:11 AM)
If the USD does turn around against the MYR, preferably back to, say 4.00, then we must watch if prices of things go back down as they were earlier,... I don't think so.
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Last time, when Yen surged time, car dealers said Yen surged, so car price needs to be adjusted up.

But when Yen plunged 40% after Abenomics policy just few years ago, did we see car price adjusted downwards?
cherroy
post Oct 7 2015, 10:23 AM

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QUOTE(Showtime747 @ Oct 7 2015, 08:20 AM)
RM appreciated quite a bit !

USD 4.32112
EUR 4.87169
GBP 6.58156
SGD 3.0385

Exception of AUD still at 3.09392

USD sub 4.3000 coming. Window of opportunity is nearer !
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Oil price shooting up last night with potential talk of OPEC and non-OPEC members.

Previously everyone expected
1. oil may go even lower.
2. Fed hike rate.

Both do not materialise. That's why history always tell us, event doesn't must occur within everyone expectation.
cherroy
post Oct 7 2015, 02:09 PM

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QUOTE(MGM @ Oct 7 2015, 02:04 PM)
Wonder this reversal is cos by TPPA or Templeton's statement or something else?

http://www.bloomberg.com/news/articles/201...n-the-spotlight

http://www.bloomberg.com/news/articles/201...ket-opportunity
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May be more due to oil price, as latest news about Russia and OPEC members may hint about talk about oil price issue, which sent oil price up nearly 5% on yesterday.
cherroy
post Oct 7 2015, 03:42 PM

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4.2270

Stock market also "partying"
cherroy
post Oct 7 2015, 03:51 PM

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Many are scratching head now with the drastic movement.

Apart from possible short position covering, it is hard to explain such a magnitude move.
cherroy
post Oct 7 2015, 04:49 PM

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RM/SGD once goes to 2.96 as well.
cherroy
post Oct 7 2015, 09:38 PM

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QUOTE(AVFAN @ Oct 7 2015, 09:09 PM)
opps... i think i got it wrong...

i think it means the "reserves" are actually in rm. so when the rate goes unfavorable, the rm becomes less in usd.

but this is strange... if i buy 1kusd at 3.5, my reserves is 1kusd and when rate goes to 4., i still hv 1kusd and gets bloated to 4k rm, right?

we are missing something here...

"fx reserves" are in rm and subject to rate changes? hmm.gif
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You don't measure foreign currency reserves in RM, as it is primary USD denominated.

Those USD reserves is essential for any money outflow and repayment of foreign debt that is in USD denominated.

Yes, if RM depreciated, means less USD needed for every RM outflow.

Eg.
If there is RM 4.4 billion money want to flow out, at exchange rate 4.40, BNM only needs to fork out USD 1 bil.

While if exchange rate is at 4, if there is RM4.4 bil want to exchange to USD, BNM needs to fork out USD 1.1 bil.

If the foreign currency reserves drop USD 2 bil, means there is equivalent USD 2 bil of RM are exchanged with BNM that, which could be outflow already or stay in foreign currency account in domestic bank.

So if rate was Rm4.40 means RM8.8 bil was being changed to USD in this period of time.

That's why analysts or BNM published how much foreign currency reserves in USD.
Because if you have 100 bil USD, it will stay forever as 100 bil USD, as this is what you have.

Just like if you have Sgd 100 in hand, you know you have Sgd 100, not RM310 last week or Rm297 today.
cherroy
post Oct 7 2015, 09:42 PM

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QUOTE(wil-i-am @ Oct 7 2015, 09:28 PM)
My view:-
1. 5 mths import pymt : Now can finance 8.6 mths -v- 7.3 mths. Tis means lower import in 2nd half Sep 15?
2. Short term external debt : Now 1.2x -v- 1.1x. Tis means repymt of debt took place in 2nd half Sep 15?
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1. Import figure starts to shrink recently.

2. Yes, some debt may be due and already being paid off.
A lower reserves figure, but have higher coverage from 1.1x to 1.2x, means short term debt figure become less.
cherroy
post Oct 8 2015, 12:44 PM

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The trade surplus for Aug surged to Rm10.19 bil in Aug, as compared to 2.37 bil in July.

Export grew 4.1% while import is shrinking 6.1%.

This explains why despite a drop in foreign currency reserves, it covered more months of import.


cherroy
post Oct 9 2015, 07:57 AM

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USD may continue to trend down for near term, as Fed minutes last night disclosed that rate hike may not as soon as previously taught.

The moment many and more people bullish about USD, suddenly it turns due to Fed.

Sgd is going up against USD as well.
cherroy
post Oct 9 2015, 09:12 AM

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QUOTE(Hansel @ Oct 9 2015, 09:04 AM)
An interview with another fund mgr at CHannel News Asia this morning mentioned that the Feds is still on-track for a rate hike come-December 2015. The ten-year bond yields are signalling that.

A possible situation now could be the Feds dare not talk too much about a rate hike because they just don't now when to do it,... but at the mtg in December, they just hike it.

Chna is putting a lot of stimuli to strengthen the economy.

All said, now is still a good time to buy-in into the USD gradually.

I maintain my earlier position : no way no hike - only that the timeline needs to be stretched slightly. If the Feds can stretch, so can I,...  smile.gif

In the meantime, talks about Sgp's economy going into a technical recession is slowing. MAS mtg is approaching - ann't is due on next Wednesday morning.
*
Since Bernanke took over era, Fed never had a sudden or surprise move in rate decision, or even QE.
They always "communicate" with the market, and let the market has "hint" before next move one to avoid sudden shock to the market.

Fed's minutes already mentioned they are data depended, so next month or 2 job data and inflation figure may hold the key card.

cherroy
post Oct 9 2015, 09:13 AM

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QUOTE(Hansel @ Oct 9 2015, 09:11 AM)
Another good point to watch-out for... After the MYR has dropped so much against the SGD and the USD, now's a good time to watch how far will it recover against both, after all these negative news against the USD and the SGD have been priced-in.

What is THE NEW NORMAL for the SGD-MYR and the USD-MYR ? Can the MYR recover ALL the way back to 2.70 and 3.85 respectively ?
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Unlikely.
2.90 and 4.0 is considered good enough already for near term.



This post has been edited by cherroy: Oct 9 2015, 09:41 AM
cherroy
post Oct 9 2015, 11:59 AM

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QUOTE(Hansel @ Oct 9 2015, 11:38 AM)
I noticed that you edited your posting by removing the statement : Unless the political situation changes.
» Click to show Spoiler - click again to hide... «


I'm okay with 2.90 and 4.00 for the SGD and the USD respectively,... it will maintain my wealth position at such currency levels, with the major portion of my wealth outside of Msia. I hoped you are right !
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This is finance section and and it is best interest that no political issues being raised so that it won't be derailed into others, this is the reason why the post being edited.

Actually, how the forex movement won't affect you too much if you are already diversified well.

So we don't need to be too obsess the rate is at what level. smile.gif
And also don't need to be too obsess with one particular currency, asset nor asset class.
No single class of asset blossom forever.
cherroy
post Oct 9 2015, 12:02 PM

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QUOTE(Hansel @ Oct 9 2015, 11:52 AM)
The prb with the SGD is we can't easily predict how much it will weaken and for how long will it remain weak. In very brutal words : it's bloody strong.

Unlike the RM, when the RM was weakening continuously the last few months, we can tell that easily and it weakened for A FEW MONTHS all the way down.

Look at this graph : http://finance.yahoo.com/echarts?s=USDSGD%...ing":true}

The MAS eased the SGD on Jan 15 this year. Do you really see the SGD weakening that badly against the USD immediately after that ? I think it's not worth the spread.
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From the history,
SGD is always stay at the "strong" side one.

Even MAS may adopt easing bias, SGD may not be too weak one.
cherroy
post Oct 9 2015, 02:24 PM

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QUOTE(Hansel @ Oct 9 2015, 02:01 PM)
Looks like myself and Mr Murata has quite similar opinions with regards to hiking rates and to the coupling of the RM with the price of oil. However, I wouldn't say that the coupling is directly 100%.
*
Another factor is the trade surplus, a RM 10 bil surplus per month is a boost in sentiment to RM as well.

cherroy
post Oct 9 2015, 05:03 PM

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QUOTE(Showtime747 @ Oct 9 2015, 04:36 PM)
At the height of the scandal (1st half of the year), even oil price rise from 40+ to 60+, there is not much effect on RM because of the "Trust Deficit" (we all seemed to forget this term liao)

Oil price Jan 2015 $40+, RM3.56
Oil price May 2015 $60+, RM3.60  (+1%)

Now oil price increased just $5 and RM the appreciation is +8%.

Not saying that the rumour is true. Just that the huge volatility is not just about data or fundamental but many non-financial related factors
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It has a lot to do with foreign money movement.

When they want to repatriate their fund, nothing can stop them.
Mind that there were plenty of hot QE money flowing in previously.

Just like when funds pile up on commodities back then, the commodities bull non-stop.
Same when oil price plunged time, funds exiting fast.
Futures market and financial market nowadays are not only based on actual demand and supply, but can be skewed by big money movement.

We can't coorelate 1 to 1 cause and effect one.
In today financial market, the movement of money is huge, can drive the market very fast.

Somemore, prior before this reversal, there may be plenty of short position, and with the reversal trend, they may want to cover the short position fast, which make the movement volatile.

As said before, RM fundamental is not as weak as 1997, so in theory, it doesn't deserve a rate that worst than 1997.
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