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Currencies up against the dollar while Asian markets continue to dwindle as the U.S Senate’s approval of the new rescue bill fails to quell fears of a global economic slowdown
Market Brief
All the Asian equity markets were down this morning as continued fear of a global recession brought on by the economic woes of the U.S financial markets. The Nikkei finished yesterday’s session at a 3 year low as risk aversion drives the Yen higher. The
Dollar remains resilient in light of the NFP figures due out today. The consensus is for a continued decline in the NFP number as the U.S economic crisis bares down on the U.S job market. The dollar strengthened across the board in yesterday’s session as the amended $700Bn rescue bill is one step closer to being ratified by the House of Representatives. The only exception to this rule was the Yen, reaching a session low of 104.84 – risk aversion being a major factor at play here.
The EURUSD currency pair traded 250 pips lower (to a low of 1.3747) in absolute moves yesterday as both the comments of the ECB’s Trichet on the state of the European economy and the imminent ratification of the rescue bill spurred on the dollar’s attractiveness. Trichet mentioned the lack of a unified and collective front in the EU with regards to monetary policy and possible rescue packages like in the U.S – sending the euro tumbling. The price action in Asian markets this morning saw the Euro drop further after fighting back in the end of trading yesterday. The yen giving back some of it’s gains many short sellers taking their profits. The USDJPY has risen from this morning’s 104.84 low, rising consistently to 105.30 levels as Europe opens.
There is a lot in store for today’s trading session, the NFP’s in the U.S and an expected “Yay” from the house of representatives. We expect an accrue in volatility today as the markets are uneasy for both economic and political data ahead. Continued risk aversion and dollar demand are strong market movers.
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