Currency and Stock Markets Weekly Outlook

Oil scares investors

Fri, May 9 2008, 15:28 GMT
by Przemysław Kwiecień

X-Trade Brokers, XTB


Last week started in fairly upbeat moods. After slightly better than expected data from the US and overall decent results from the global companies, stock indices were moving up and the dollar gained versus the major currencies. At certain stage we even witnessed a break through the resistance level of 1,5350 at the EURUSD, which could lead to a further decline. This, however, didn’t happen partly because of hawkish comments from the ECB’s President and partly because of a rise in oil prices. Since the May 1st oil gained as much as 15% in the dollar terms sparking an unrest about prospects of the World economy and leading to a significant correction on the stock markets. Should high oil prices persist, not to mention a further rise, the prospects of a rapid recovery in the US economy would be gone and stock indices would sink further, together with the USDJPY, which so far stopped at the 102,60 support. A fall on USDJPY would to some extend support the euro and the frank.

Published on  Fri, May 9 2008, 15:29 GMT

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X-Trade Brokers Dom Maklerski SA  | Robert.kosowski@xtb.pl; 00-876 Warszawa
http://www.xtb.com/ | Robert.kosowski@xtb.pl

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