The start of a new week has brought with it the news that North Korean leader Kim Jong-Il has passed away; an announcement that initially coincided with a short burst higher for USDJPY to highs of 78.17, but which has otherwise had a limited effect on FX markets. Concerns surrounding the future of Eurozone continue to hamper risk sentiment, with ratings agency Fitch putting a number of Eurozone countries on negative watch late on Friday. France, Spain, Italy, Ireland, Slovenia and Cyprus were all targeted for the outlook downgrade, not more than 2 weeks after another ratings agency (Standard & Poors) put 15 Eurozone countries on review.
Against this worrisome backdrop, the dollar has made some modest gains against its major peers, and Asian equity indices are broadly lower on the day. The Nikkei has closed -1.3%, the Hang Seng is trading -1.2%, and the Shanghai Composite is -0.3%.
Former IMF chief Strauss-Kahn was quoted on the newswires this morning saying that the collapse of the Eurozone would not solve the debt crisis – however, his words will do little to appease investors and speculators that holding Eurozone assets is any safer or more attractive.
In spite of an incredibly light economic calendar today, there are a number of Eurozone policymakers scheduled to speak; including ECB President Draghi, and France’s Noyer. Later in the week we have central bank decisions from Sweden’s Riksbank as well as the Bank of Japan. Given the spate of rate cuts and easing measures from other major central banks over the past few weeks, it is highly likely that we see further stimulus and easing to come from the Swedish and Japanese authorities this week.
By
Against this worrisome backdrop, the dollar has made some modest gains against its major peers, and Asian equity indices are broadly lower on the day. The Nikkei has closed -1.3%, the Hang Seng is trading -1.2%, and the Shanghai Composite is -0.3%.
Former IMF chief Strauss-Kahn was quoted on the newswires this morning saying that the collapse of the Eurozone would not solve the debt crisis – however, his words will do little to appease investors and speculators that holding Eurozone assets is any safer or more attractive.
In spite of an incredibly light economic calendar today, there are a number of Eurozone policymakers scheduled to speak; including ECB President Draghi, and France’s Noyer. Later in the week we have central bank decisions from Sweden’s Riksbank as well as the Bank of Japan. Given the spate of rate cuts and easing measures from other major central banks over the past few weeks, it is highly likely that we see further stimulus and easing to come from the Swedish and Japanese authorities this week.
By
M.Zohaib Gadit
Forex Trading Consultant
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