| Soros on the cheap
BETTING on currencies may have helped George Soros get rich, but for most people it is a mug's game. Forecasters often get the direction of foreign-exchange movements wrong, never mind their magnitude. But there is evidence that investing in currencies can add value to a portfolio, even though it may seem to be a zero-sum game (because as one currency rises, another must fall). The chance of earning an extra return arises thanks to the presence in the market of what economists might call "non-profit-maximising" participants—in other words, people with motives other than the best currency rate. Tourists are an obvious example: they tend to buy and sell during (or just before) their holidays and have to take exchange rates as they find them. Portfolio investors usually buy foreign assets because they like an individual security, not on the basis of expected currency movements.
Australia Dollar Falls After Central Bank Keeps Rates Unchanged
April 4 (Bloomberg) -- The Australian dollar declined the most in a month after the central bank refrained from raising interest rates from a six-year high of 6.25 percent. Government bonds rose. The currency retreated from a decade-high reached yesterday fueled by traders raising bets the Reserve Bank of Australia would lift the cost of borrowing to a 10-year high. Australia's dollar declined as much as 0.9 percent as it triggered preset orders to prevent greater losses. ``The market was sitting on stops just above 81.10, so it's not surprising we've seen such a violent reaction,'' said Ray Attrill, director of foreign exchange research at Forecast Ltd. in Sydney. Australia's dollar dropped to 80.82 U.S. cents at 10:22 a.m. in Sydney after trading as low as 80.65, from 81.16 cents immediately before the announcement and 81.34 cents in Asia yesterday.
FOREX: Ringgit Closes Higher Against US Dollar
KUALA LUMPUR, April 6 (Bernama) -- The ringgit closed higher against the US dollar today due to the inflow of foreign funds into the local market, dealers said. At 5.00pm, the local currency was traded at 3.4480/4500 against the greenback compared with yesterday's closing of 3.4500/4510. The ringgit has been seeing good support due to the strong economic prospects in the region, contributing to the inflow of foreign funds into the market, the dealers said. They said the ringgit also took an advantage of the weaker dollar in the global market and moved in line with its regional peers. On Wednesday, Bank Negara Malaysia's governor Tan Sri Dr Zeti Akhtar Aziz, in commenting on the ringgit's performance, said the currency movement had always reflected a two-way flow. In today's trading session, the ringgit was mixed against major currencies.
Fuel Prices Tumble
FUEL prices that had shot up to about $25 000 a litre have tumbled to at least $15 000 per litre and this has been attributed to the plunge in the foreign currency exchange rate on the black market. A survey by The Herald in the city centre yesterday showed that most service stations were selling a litre of both petrol and diesel at between $15 000 and $19 600. .
|
