Good morning everybody. Yesterday we saw the rescue of the AIG by the Federal Reserve because a bankrupt of the AIG would have more dramatic implications as the washout of Lehman Brothers. Today the Washington Mutual, which is the largest bank of their kind in the United States, gets in focus so we can expect new exiting moves in the market. On the other side of the Atlantic Ocean the British HBOS is the next victim of the credit crisis.
Market review
The Australian Central Bank pumps extra cash into the banking system for the fourth day, bringing its injection this week to 11.2 billion AUD. In its regular daily money market operation, the RBA adds 3.015 billion AUD in the financial market. That is well above the market’s estimated cash need of 2.2 billion AUD. The AUD/USD remained in the course of the day unchanged and ended the session at 0.7948.
On Wednesday the USD extended losses versus Sterling and Swissy in choppy trading. The CHF gained 1.6 % at the last session and closed at 1.1035. The GBP rose even more than 1.8 % and close the session at 1.8140. The development was influenced by data, which shows the number of jobless people in Britain. They jumped about 32500 in the financial turmoil and had entered uncharted territory. The EUR/USD rose up to 1.8 %. It was the euros’ best day against the USD since March 12th. The crossing through some technical levels above 1.4250 forced the boost said a trader.
The JPY recovered on Wednesday from the losses on Tuesday. The US government’s rescue of insurer AIG failed to calm down the jittery market that was lifting the currency to a near fourmonth high against the USD. Financial markets remained under considerable stress, with tumbling shares of the Wall Street giants Morgan Stanley and Goldman Sachs. The JPY increased 1.33 % and closed the session over the support level of 104 at 104.53.
EUR/GBP
In the last weeks the EUR/GBP lost all the profits from the end of August but now we have three indicators which might show a turn. The first is the support at 0.7840 which was established in July. The second are the Bollinger Bands where the pair trade actual on the lower line. And the third indicator is the Momentum which is at a 5 month low.
EUR/AUD
Since the middle of July, the EUR/AUD has been trading in an upward trend channel. Today it broke through the upper line of the channel with a gap, but rebounded instantly. The Momentum indicator is also on a very high level, so a correction might be possible. The performance of the last 2 month supports this appreciation.
