[Vnbiz] USD continues to go up, Gold down

[Tran Dinh Hoanh]

Dear brother Binh,

The USD has been gaining strength across the globe since yesterday, when US
Federal Reserve Chairman Ben Bernanke signaled that he would strengthen the
USD.  Please see article below.

I don't think the SBV has anything to do with the current rise of the USD in
Vietnam now.

Here is a site good for keeping new on global foreign exchange rates.
http://www.dailyfx.com

Have a great day!

Hoanh

__________________

US Dollar Jumps as Fed's Bernanke Signals End to Rate Cuts
 Tuesday, 03 June 2008 20:59:12 GMT Written by Terri Belkas and David Song,
DailyFX.com

The US dollar advanced across the majors amidst hawkish remarks from Federal
Reserve Chairman Ben Bernanke at the International Monetary Conference. The
Canadian dollar took the biggest plunge against the greenback as oil prices
pulled backed to stay under $125/bbl, and was followed by the euro as the
currency dipped for a test of 1.5400.  The low yielding Swiss franc and
Japanese yen gave back yesterday's gains, as USD/CHF rose toward 1.0450
while USD/JPY jumped to 105.50, respectively. Meanwhile, the British pound
tumbled for a test of 1.9600. Falling commodity prices weakened demands for
the high yielding Australian and New Zealand dollar, and led the currencies
to drop toward 0.9500 and 0.7800, respectively, against the greenback.

A speech by Fed Chairman Ben
Bernanke<http://www.dailyfx.com/story/topheadline/US_Dollar_Rallies_As_Fed_1212501016119.html>raised
the appeal of the US dollar as he highlighted upside inflation risks
for the US economy, and expressed a hawkish tone as he signaled that the
central bank will keep the benchmark interest rate on hold. Chairman
Bernanke also acknowledged the negative repercussion effects that the weak
dollar has had on inflation expectations, and went onto say that the
stability and strength of the greenback has become a major concern for the
Fed. On the economic front, the Commerce Department announced a better than
expected 1.1 percent rise in Factory Orders for April, however the
unexpected rise in the headline figure did little to move the markets as the
report highlighted growing weakness in consumer spending.

Instability in the financial markets continued to spur bearish sentiment in
the stock markets as market participants forecast Lehman Brothers to report
a $300M loss for the second quarter, and expects the banking giant to raise
an additional $4B in order to stave off liquidity pressures. As a result,
the DJIA fell 100.97 points to 12,402.85 points, with 20 of the 30
components declining. The broader S&P500 dipped 8.02 points to hold off at
1,377.65 points, with 172 stocks falling to a new 52 week low.

Falling stock prices spurred increased demands for US Treasuries, and led
investors to shift their assets into the safe haven of risk free bonds. As a
result, the benchmark 10-Year yield fell to 3.900 percent from 3.967
percent, while the 2-Year yield plunged to 2.423 percent from 2.512 percent.

Looking ahead, the MBA Mortgage Applications index will kick off the morning
at 11:00 GMT; with the ISM Non-Manufacturing index due out at 14:00 GMT will
be the main event risk for the US dollar. Prior to the ISM release, the
Challenger Job Cuts index is scheduled for 11:30 GMT, and will be followed
by the ADP Employment Change index at 12:15 GMT.




On Wed, Jun 4, 2008 at 2:17 AM, Vu The Binh <binh at netnam.vn> wrote:

> [ Vietnam Business Forum ]
>
> Dear a. Hoanh,
>
> It's a kind of a "fever" here, about the USD.
>
> I don't know if the increase of USD price follows the intension of the
> State or it's out of control due to some "playings" in the market while
> stock market is getting drown. Any clue that it's affected by the policy
> of the government for supporting export?
>
> Something strange and dangerous running behind was the feeling, anyone
> has more information than just what is showing in the press publicity?
>
> Best, Binh.
>
> Tran Dinh Hoanh wrote:
> > [ Vietnam Business Forum ]
> >
> >
> >
> > ------------------------------------------------------------------------
> >
> > Dear CACC,
> >
> > USD continues to go up (close to 18,000 VND) and gold continues to go
> > down.  This is good for VN export.
> >
> > It is interesting to see that the official exchange rate among the
> > commercial banks is now about 10% lower than the free market rate
> > outside the banks.  I am not yet sure about SBV's logic for this.  Maybe
> > SBV has some good reason to do that.  I imagine if you are exporter, you
> > receive payment in USD from your foreign customer, you would want to
> > sell your USD in the free market to get the higher VND amount.  But if
> > you are an importer, you would want to bring your VND to a commercial
> > bank (and go through a bit of paperwork hassle) to buy USD to have
> > the highest amount of USD you can get.  Very soon, the commercial banks
> > will be in USD shortage because they only sell USD but couldn't buy USD
> > in the free market.  Then SBV will have to sell USD to commercial banks
> > and withdraw VND back, to reduce the VND circulation to reduce inflation
> > pressure?
> >
> > Have a great day!
> > Hoanh
> --
> Tran Dinh Hoanh, Esq., LLB, JD
> Washington DC
>
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