Get a fix on use of forex, first

The need for massive investments -- $320 billion, or more over the next five years -- in infrastructure to support the 8-10% growth envisaged for the economy is no longer a matter of debate. If we assume that all our public agencies are able to quickly prepare properly structured and designed infrastructure investments of this magnitude (and that is indeed a big assumption, as the capacity required to prepare many projects -- particularly of the PPP type -- is indeed a major constraint within the public sector), one of the big concerns is the ability to finance such massive investment.
The massive financing of infrastructure projects assumes an extra dimension since a significant part of it (perhaps $75-100 billion) is to be executed through public partnerships. Even in public investment projects, financing issues need to be critically examined as the government has accepted a fiscal responsibility framework.

State Street buys online forex trading platform

State Street, one of the world's largest financial services groups, has stepped-up its efforts to attract more business from hedge funds and other active traders by buying Currenex, an online foreign exchange trading platform, for $564m in cash.
Currenex provides electronic currency trading primarily for the rapidly growing $1,300bn hedge fund industry where State Street, which is primarily known for its money management and custody businesses, has been trying to boost its presence.
"This acquisition diversifies State Street's trading customer base beyond traditional asset managers to include more active currency managers and hedge funds," said Joseph Hooley, vice-chairman.
State Street, which has $1,700bn in assets under management and $11,900bn in assets under custody, said Currenex would augment its FX Connect foreign exchange trading platform, which last month topped $108bn of trading volume in one day.

Malaysian currency soars to new high against greenback

Malaysian currency on Wednesday continued the upward momentum against the greenback, further breaking the nine-year high set on Tuesday.
It closed at 3.4930/4940 against the U.S. dollars on Wednesday, jumping from the 3.4955/4980 in the previous day. The ringgit on Tuesday breached the 3.50 barrier, the highest record since the early 1998.
Local media reports said strong foreign fund flows into the stock market and friendly comments from the central bank supported the further strengthening of the local currency.
Malaysia pegged the ringgit against the U.S. dollar at 3.80 since 1998. Beginning from July 2005, it was de-pegged and floated against a basket of currencies. It has appreciated gradually since then.
Local think tank Asian Strategy and Leadership Institute (ASLI) said the currency is expected to further appreciate with the ringgit at 3.4 against the U.S.

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Daily FX Commentary

The decision to leave interest rates at 0.25% will maintain the risk of yen selling on yield grounds. There will be the risk of yen losses towards 122.0 in the short term before a potentially sharp correction.
The yen weakened to lows around 120.85 against the dollar on Wednesday before regaining some ground later in US trading ahead of the Bank of Japan decision. The yen came under fresh pressure after the Bank of Japan interest rate decision with a move beyond 121.0.
The Bank of Japan left interest rates at 0.25% following the latest policy meeting. There was, however, a split decision with a 6-3 vote for unchanged rates, the tightest vote for three years. There will be a strong suspicion that the bank bowed to political pressure in the decision to leave rates on hold and this will undermine Bank of Japan credibility.

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