Ringgit Falls as China’s Growth & US Recovery Slows

Asian currencies, the Malaysian ringgit among them, were down today as negative data from China on the weekend followed poor macroeconomic reports from the United States on Friday.

China’s Purchasing Manufacturing Index fell to 55.2 in May from 56.1 in April. The report followed Friday’s US non-farm payrolls that showed employment growing by just 69,000. The data signaled that global economic recovery is slowing and that had a negative impact on assets of emerging economies. The MSCI Asia-Pacific Index of stocks fell for a fourth session.

USD/MYR rose from 3.1961 to 3.2018 as of 14:18 GMT today.

Euro Rebounds, Is Rally Sustainable?

The rebounded today, posting the second day of gains, but sustainability of the rally is highly questionable. Earlier, the currency declined as European leaders struggled to find a solution for the debt problems of the European Union.

Concerns about the potential breakup of the eurozone grow as politicians cannot provide anything that resembles a meaningful plat to contain the crisis. Germany still objects implementation of joint euro-bonds, arguing that it would not help to resolve the issues. Such indecisiveness may cost Europe dearly as Spain is likely to request a bailout, but the sheer size its economy means that it would be much harder (compared to Greece) to rescue the country.

EUR/USD climbed from 1.2415 to 1.2484 as of 13:44 GMT today, following the earlier decline to 1.2385. EUR/JPY was up from 96.95 to 97.58.

Canadian Dollar Mixed as Traders Consider Bank of Canada

Canadian dollar is mixed today, turning in a spotty performance, as Forex traders weigh the week ahead. Commodities are lower, which affects the loonie, but there is also a small element of risk appetite, which is helping.

Right now, loonie is higher than the greenback, gaining ground on the idea that the Canadian economy is better off than the US economy. Against the UK pound, though, loonie lower. European currencies are getting a bit of a boost from the latest retail sales data out of Germany, which shows an increase.

However, there are still some questions about what’s next for the loonie. The Bank of Canada is expected to keep interest rates the same, rather than raising them, later this week. This points to concerns about economic growth, and the fact that it is slowing. Lower oil prices also won’t represent much help to the loonie in forex trading, since Canada relies a great deal on oil prices for support.

For now, Forex traders seem to be looking for direction, and trying to decide what is next for the Canadian dollar — and other currencies.

At 12:12 GMT USD/CAD is down to 1.0391, lower than the open at 1.0393. GBP/CAD is higher, heading up to 1.5981 from the open at 1.5966.

Won Drops as Traders Skeptical About G7 Meeting

 June 05th, 2012 at 13:36
The South Korean won declined today as members of the Group of Seven meet today. Forex market participants do not believe that the meeting will bring anything new and expect only more talks about how bad the crisis is.

Risk aversion rules the FX market and riskier currencies suffer from it. Commodities also reacted negatively to pessimism among traders, hurting prospects for emerging economies that are usually dependent on export of raw materials. The Standard & Poor’s GSCI Index of commodities fell 0.4 percent.

USD/KRW went down from 1,179.7000 to 1,180.2999 as of 13:35 GMT today.