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FX Update: Asian Summary

Posted:21/11/2008 7:14 by Peter Burnside
The USD traded to session highs in Asia early in the Sydney session, with the currency bolstered by the sharp fall in the DJIA on Thursday. However, a sharp turnaround in Asian stocks took the USD off the highs, with the USD ending the session weaker overall. One factor that stalled USD gains was early intervention on the AUD At 0.6075. Asian stocks, though weak at the open, found little follow-through selling and some started to bounce back, including S. Korea and Hong Kong. This was followed by bounces in Japan, Australia and Taiwan and by the afternoon, Asian stock markets turned positive. Some attributed gains to comments from Japan Fin Min Nakagawa offering to address weak stocks but the gains in S. Korea and Hong Kong emerged before the bounce in Japan. Rumors of a rate cut in China were said to help the recovery. DJIA futures rallied over 200 pts. AUD rallied to highs of 0.6243 on the bounce. EUR/USD which hit lows of 1.2422 rallied as high as 1.2524. Low yield currencies such as JPY and CHF weakened with USD/JPY rising from 93.56 to highs of 95.03. Nymex crude dropped under $49 during the morning, but turned positive after the stock bounce, to rise to $49.85. US treasury yields extended their decline to record lows during the morning, but began to bounce back in the wake of stock developments. Fresh confidence in the stock markets could bode for a much larger bout of USD weakness. click here to return to the top of the page
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