Good morning from wonderful Hamburg. A lot of investors are waiting impatiently for the final decision of the U.S. bail-out plan. There are a lot of expectations of huge movements in the financial markets after the decision.
Market review
The U.S. Senate does pass the amended financial rescue bill of $700 bln to bail-out the US financial sector. According to analysts, there will be more relief until the measure is passed in the House of Representatives. The House is expected to vote on the measure on Friday. Higheryielding currencies and stocks could get a boost on this news some traders said. Equities of Asia are mixed so far, with Nikkei climbing up 0.2% even as the TOPIX fall broader. Before the vote, the USD was going up broadly while market players were still scrambling for the USD in the spot FX market due to the money market freeze. The EUR/USD dips 0.4% to 1.3962 after touching a session low of 1.3936 as stop-loss orders were taken out. Even if the House does approve the measure, the reality of economic recession will not change, analysts say. The bail-out will help to reduce the volatility, but the markets will then have to find the way back to the reality of the cooling U.S. economy, market analysts say.
August trade balance of Australia is a surplus of 1.364 bln AUD, with lower-than-expected forecasts of 300 mln AUD surplus. Exports rose 6% on the month, as imports fall 2%. After that data the AUD/USD hits a session high of 0.7935 before recovering to 0.7914 on the news of the U.S. bail-out plan.
Commodity prices of New Zealand had their biggest monthly fall in 21 years in September, an ANZ bank survey shows. The fall was caused by a decrease in dairy prices. Prices of dairy products fell 7.9% which is the account for around a quarter of New Zealand‘s export earnings.
EUR/USD
From the middle of July to September the EUR/USD has traded in a bearish trend channel. After breaking trough the upper trend line the market touched the 1.49 resistance level and rebounded back to the 1.40 support line. If the Market breaks the 1.40 point we could assume a continuing bearish development.
GBP/CAD
Since the beginning of August the GBP/CAD has been trading in two downward trend channels with a resistance at 1.95 and a support line at 1.87. If the currency pair breaks the 1.87 level it could continuing its downward movement in the channel.
