Market Update - 1 August 2012

USD/MYR retreated after breaking the strong support of 3.1400 level yesterday. With expectations for a dovish outcome from FOMC and ECB to do more to boost the euro, it is possible for USD/MYR to track back close to the 3.1000 level.

The euro climbed yesterday and touched 1.2390 on intra-day trading, suggesting that Draghi’s comment last week has continued to fuel expectations of an aggressive easing by the ECB.

Wall Street falls for the second day as the FOMC commenced: the Dow -0.49%, S&P -0.43% and Nasdaq -0.21%.

Asian stocks fell, with the regional index heading for the first drop in five days, as investors await monetary policy decisions by the Federal Reserve and the ECB. Japanese shares led declines on disappointing earnings reports

China reiterated its growth priority and said it will pursue a prudent monetary policy and proactive fiscal policy.    

KLCI edged lower 0.05% to 1,631.6 as the market probably adopted a wait and see approach ahead of the FOMC and ECB meeting. KLCI will likely see more profit taking today as markets await for more clarity on the FOMC outcome.

It is now August and Datuk Seri Mustapa Mohamad, minister of Internal Trade and Industry has commented that Malaysia is on track to achieve the official target growth rate of 5 – 6% this year.