Market Review - 24/08/2015 22:38GMT
The Japanese yen and euro strengthen broadly on Monday on risk-off trades
The Japanese yen rose against other major currencies on Monday as widespread fears of a China-led global economic slowdown and currency war kicked in, triggering active buying of yen of risk aversion.
Stocks across the globe tumbled on Monday. Chinese stocks plunged more than 8 percent, in their biggest one-day loss since the height of the global financial crisis in 2007 after Beijing held back expected policy support at the weekend following last week's 11-percent slide. European stocks slumped after a rout in Chinese markets, wiping hundreds of billions of euros off leading shares, whilst Dow Jones industrial average lost more than 1,000 points to 15,370 at one point before staging a strong intra-day recovery above 16,000 points.
During the day, the greenback came under renewed selling pressure versus the Japanese yen after meeting renewed selling at 122.06 ahead of Asian open on Monday and then fell to 121.19. Later, dollar ratcheted lower to 119.55 in European midday and then nose-dived to a fresh 7-month trough at 116.67 in New York morning before recovering above 119.00 level at New York midday as U.S. stocks pared most of their losses.
The single currency took advantage of U.S. dollar's weakness against the Japanese yen due to tumble in Asian bourses and rose to 1.1499 before selling interest due to profit-taking pressuring price down to 1.0420 at European open. Later, price regained support when European traders entered the market and rallied to a fresh 7-month peak at 1.1715 in New York morning before coming off to 1.1518 at New York midday.
The British pound fluctuated wildly on Monday as despite retreating from New Zealand high of 1.5700 to 1.5630 in European morning due to active cross-selling in sterling versus Japanese yen and euro, renewed buying interest emerged there and lifted price to 1.5727, then further to a fresh near 2-month high of 1.5804 in New York morning before retreating due to broad-based rebound in the greenback.
In other news, Prime Minister Shinzo Abe said on Monday, 'BOJ missing its promise to hit 2% inflation in 2 years cannot be helped given sharp fall in oil prices; we accept BoJ's explanation that hitting its price target within self-imposed deadline has become difficult given sharp oil price falls; I completely trust BOJ Kuroda's decisions on monetary policy.'
Data to be released on Tuesday:
New Zealand inflation expectations, Germany GDP, Ifo reports, UK BBA mortgage approvals, U.S. monthly home price, Redbook, Markit service PMI, consumer confidence, and new home sales.
The Japanese yen and euro strengthen broadly on Monday on risk-off trades
The Japanese yen rose against other major currencies on Monday as widespread fears of a China-led global economic slowdown and currency war kicked in, triggering active buying of yen of risk aversion.
Stocks across the globe tumbled on Monday. Chinese stocks plunged more than 8 percent, in their biggest one-day loss since the height of the global financial crisis in 2007 after Beijing held back expected policy support at the weekend following last week's 11-percent slide. European stocks slumped after a rout in Chinese markets, wiping hundreds of billions of euros off leading shares, whilst Dow Jones industrial average lost more than 1,000 points to 15,370 at one point before staging a strong intra-day recovery above 16,000 points.
During the day, the greenback came under renewed selling pressure versus the Japanese yen after meeting renewed selling at 122.06 ahead of Asian open on Monday and then fell to 121.19. Later, dollar ratcheted lower to 119.55 in European midday and then nose-dived to a fresh 7-month trough at 116.67 in New York morning before recovering above 119.00 level at New York midday as U.S. stocks pared most of their losses.
The single currency took advantage of U.S. dollar's weakness against the Japanese yen due to tumble in Asian bourses and rose to 1.1499 before selling interest due to profit-taking pressuring price down to 1.0420 at European open. Later, price regained support when European traders entered the market and rallied to a fresh 7-month peak at 1.1715 in New York morning before coming off to 1.1518 at New York midday.
The British pound fluctuated wildly on Monday as despite retreating from New Zealand high of 1.5700 to 1.5630 in European morning due to active cross-selling in sterling versus Japanese yen and euro, renewed buying interest emerged there and lifted price to 1.5727, then further to a fresh near 2-month high of 1.5804 in New York morning before retreating due to broad-based rebound in the greenback.
In other news, Prime Minister Shinzo Abe said on Monday, 'BOJ missing its promise to hit 2% inflation in 2 years cannot be helped given sharp fall in oil prices; we accept BoJ's explanation that hitting its price target within self-imposed deadline has become difficult given sharp oil price falls; I completely trust BOJ Kuroda's decisions on monetary policy.'
Data to be released on Tuesday:
New Zealand inflation expectations, Germany GDP, Ifo reports, UK BBA mortgage approvals, U.S. monthly home price, Redbook, Markit service PMI, consumer confidence, and new home sales.
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