Weak economic reports from the US has kept markets in the red as Dollar, Yen, Franc gain against most currencies and Gold reached new records. The currencies advanced as stocks extended a worldwide rout amid speculation European banks lack sufficient capital, boosting demand for safer assets. Fed’s Dudley said yesterday that the central bank always keeps an eye on the performance of U.S. and foreign banks, not monitoring one group more than the other. The Philadelphia Fed manufacturing index dropped to 30.7, weakest since March 2-009, renewing concerns of a recession risk after President Obama said US economy is growing and doesn’t need exceptional measures while existing home sales unexpectedly dropped 3.5% to 4.67 Million units, reflecting an increase in cancellations due to strict lending rules and low appraisals while US inflation report was higher than expected at 3.6% which could see it being more difficult for the Fed to announce any further round of QE.
The EURJPY slid for a fourth day to 109.02 lows as traders bet that the ECB will cut its benchmark rate, AUDUSD fell to 1.0315 as Citigroup cut forecasts for U.S. growth amid concern about a global slowdown, damping demand for higher-yielding assets. Citigroup cut US’s 2011 GDP growth forecast to 1.6% from 1.7% and lowered its 2012 GDP growth estimate to 2.1% from 2.7%. The MSCI Asia Pacific Index slid 3.1% while Stoxx 600 fell 1.3% and the S&P 500 Index tumbled 4.5% yesterday and Treasury yields tumbled to record lows as investors sought the safest assets. Gold jumped to an all time high of $1869 as escalating concerns the global economy is slowing down, equities are dropping everywhere and investors are buying the metal as a safe investment.
The USDJPY briefly gained to 76.97 as Japan’s Finance Minister Noda signaled he’s ready to make another “surprise” intervention in markets to curb currency gains. Noda said yesterday he would “keep monitoring markets carefully” and that intervention “is a measure of last resort -- it would be meaningless if it were not a surprise.” He also said today that Japan’s government may include measures to help companies cope with a stronger yen in its third earthquake relief package.
There are no major economic releases today but Fed members Dudley, Pianalto speak and BOC’s Carney speaks.
By
M.Zohaib Gadit
Forex Trading Consultant
The EURJPY slid for a fourth day to 109.02 lows as traders bet that the ECB will cut its benchmark rate, AUDUSD fell to 1.0315 as Citigroup cut forecasts for U.S. growth amid concern about a global slowdown, damping demand for higher-yielding assets. Citigroup cut US’s 2011 GDP growth forecast to 1.6% from 1.7% and lowered its 2012 GDP growth estimate to 2.1% from 2.7%. The MSCI Asia Pacific Index slid 3.1% while Stoxx 600 fell 1.3% and the S&P 500 Index tumbled 4.5% yesterday and Treasury yields tumbled to record lows as investors sought the safest assets. Gold jumped to an all time high of $1869 as escalating concerns the global economy is slowing down, equities are dropping everywhere and investors are buying the metal as a safe investment.
The USDJPY briefly gained to 76.97 as Japan’s Finance Minister Noda signaled he’s ready to make another “surprise” intervention in markets to curb currency gains. Noda said yesterday he would “keep monitoring markets carefully” and that intervention “is a measure of last resort -- it would be meaningless if it were not a surprise.” He also said today that Japan’s government may include measures to help companies cope with a stronger yen in its third earthquake relief package.
There are no major economic releases today but Fed members Dudley, Pianalto speak and BOC’s Carney speaks.
By
M.Zohaib Gadit
Forex Trading Consultant
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