Jun 13, 2008
Friday the 13th: Latvian Lat loses 0.5%
Today is the first time since September 26, 2007, when Latvian currency returned to its unpleasantly low position against Euro. However, if in autumn momentum was rising, this time it is the sharpest one day price drop of Lat against EU currency. In one day LVL depreciated more than 0.5%. Is it only a mystery happening each Friday the 13th or financial markets started to doubt in Lat?
Technically 0.7060 level is important for Lat, as it is a second 1-year lowest LVL-EUR rate. If it is broken, we should expect further depreciation until another important limit to test – 0.7074, which is 0.2% higher than Friday’s closing price. This point was reached when Latvia was flooded with SMS’s containing rumors about Lat devaluation. On short term-graph, resistance line is broken, and probably does not already play any significant role. Technically, the question is whether another 0.7060 is a strong resistance level. Economically, not necessarily.
Monday’s, opening price shall judge this interesting case.
Rate opinion
UPD:
0.7061. Short-term support line is broken. However, there were cases when the price held for several sessions (see first days of December 2007, for instance).
Anyway, the pressure continues. Let’s wait.
UPD:
0.7028. Well, traders still believe in CB intervention capacity, which drove the price of Lat up. A false signal this time.