USD/JPY

The dollar rose broadly on Thursday, recovering some losses made the previous day against higher-yielding currencies as investors covered short dollar positions. The euro tumbled broadly after a newswire report saying that Greece is not hopeful of receiving aid from other euro zone members. A Greek official quoted in the report said the country was growing increasingly pessimistic about the prospect of help at a European Union summit on March 25 and may seek IMF aid during the April 2-4 Easter weekend. Euro selling was sparked after the report and dropped as far as $1.3657, down 0.5 percent, from a five-week high of $1.3819 the previous day. The euro was struggling as other euro zone nations have yet to give concrete details on how they would help Greece resolve its financial woes. Against the yen, the dollar was unable to make gains versus the lowyielding Japanese yen, trading with losses of around 0.2 percent to 90.10 yen as concern of escalating trade tension between the US and China regarding China's yuan policies.

Forecast:

Market players will closely watch on US consumer inflation readings for February on Thursday. Expected range: 89.50 - 90.30

USD/IDR

The pair was opened at 9120 level, and traded in narrow range between 9120-9135 level. The pair was dragged to 9135 level in the day, after a report said Greece is not hopeful of aid from the March 25 European Union summit. Besides that, investors still continued to eye growing friction between China and the US and other Western powers who are pressing Beijing to allow the yuan currency to rise. Market closed at 9123. In addition, the finance ministry explains that Indonesia aims to raise 5 trillion rupiah ($ 549.1 million) from an auction of government debt paper on March 23. The proceeds will be used to help plug the budget deficit this year, which is forecast at 2.1 percent of gross domestic product (GDP) and to repay maturing bonds.

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FOREX DAILY REPORT

Mar 17, 2010

USD/JPY

Yen was down against the dollar toward London open after BOJ acted doubling the scale of a three-month fund supply to banks to Y20 trio, in regards to ease its monetary policy to beat deflation. It fell to 90.69 level, reversed its gain earlier from 90.02 hit before BOJ announcement. Some yen option-related selling also seen from hedge fund since 90 low level. Yen also down against the euro, hit 125.00 from 124.07 earlier, dragged by lower yen against the dollar. News of S&P removed its credit negative watch to Greece also seen to put Yen even under pressure against the euro.

Forecast:

Yen might be kept under pressure in overnight trade, but range will be limited with repatriation flows remain intact capping the currency's loss against the major currencies. US data released later on the day is Producer Price, but with unchanged outlook from Fed on its monetary policy, we suspect effect from this data will be marginal. Expected range: 90.30-91.30

USD/IDR

The pair was opened at 9155, in line with dollar weak elsewhere IDR is also benefitted from the sentiment, it got stronger since early trade triggered by aggressive offshore players' selling. Most inflows still went to local stocks (JKSE +3.25%), bonds and also SBI market. While BI decision to shift from short term SBI to longer ones doesn't seem to ease demand for SBI. BI data showed, offshore holdings on SBI hit IDR 66.03 trio, which was the highest since January 2010. IDR hit the high of 9100 in midday trading before coming back to 9117 toward market closing. It seemed state banks defended IDR's gain in order to prevent the currency moved rapidly; some corporate demands also seen limited IDR's gain around 9100 low level.

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USD/JPY

The dollar fell to its lowest in more than two months against the yen, as the dollar slid broadly.

However, in Asia markets, the dollar was flat against the yen,

The yen has been strengthening across the board in the past weeks, hitting a year high against the

euro, as the yen benefits from general risk aversion.

The potential for fund repatriation by Japanese corporates and investors before their end-March book

closing may also boost the yen and the drive the dollar lower against the Japanese currency in the near

term.

Furthermore, before the Friday's payroll, investors also await US ADP employment report due

tonight, which is forecast 20,000 jobs were lost in February vs a loss of 22,000 January.

Forecast: Markets are awaiting announcement from Greece later. It seems positive but the support for euro could be limited as Greece still faced some debt issues. Expected range: 88.20-89.20

USD/IDR

The dollar was opened lower at 9270 from yesterday's close 9300, in line with the weakening of the dollar against major currencies. Yet, there was no follow trough selling, and it rose back to 9295. Some were focusing on the bailout inquiry, but it should remain tentative until the bailout inquiry is resolved. Moreover, the central bank is expected to keep rates unchanged at 6.50% tomorrow, as the price pressures are likely to remain manageable due to a strong rupiah which helps to reduce imported inflation. Therefore, there will be no market impact seen if the rates are kept on hold.

Closing market on Mar 3, 2010 Jakarta market at 04:30 pm. on Mar 3, 2010

Nikkei : 10253.14 (+31.30) USD/JPY : 88.65/88.75

JGB : 1.330 (0.00) EUR/ USD : 1.3645/1.3655

JSI : 2567.089(-9.502) USD/IDR : 9277

Closing market on Mar 2, 2010 EUR/JPY : 121.10/121.30

DJI : 10405.98 (+2.19) BTMU JIBOR 1 mo. : 7.25%

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