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Market Review - 13/11/2007 22:01 GMT
Yen falls on Japan's PM comments and rally in U.S. stocks
The Japanese yen declined early on Tuesday on comments from Japan's Prime Minister Yasuo Fukuda, who said in an interview in the Financial Times that the yen was rising 'too fast'. A rally in U.S. stock markets later in the day also put pressure on the yen, as increasing risk appetite led to accumulation of carry trades. The Dow's 319-point rally was its highest in two months and came on the back of better-than-expected earnings from Walmart and also a statement by Goldman Sachs that it does not expect a substantial writedown on mortgage assets.
The greenback rose to 110.98 versus the yen in late New York trading after the release of U.S. pending home sales, which unexpectedly rose by 0.2% compared to the consensus forecasts of a 1.5% drop. The euro rallied from an intra-day low of 158.70 to 162.11 against the Japanese currency while gbp/jpy and aud/jpy also rebounded strongly from 224.26 to 229.85 and from 95.68 to 99.87 respectively. The Bank of Japan left interest rates unchanged at 0.50 percent as widely expected.
However, the dollar weakened against other major currencies due to lingering concerns over the credit market crisis and also on the expectation that the Fed will cut interest rates by a quarter percentage point to 4.25 percent next month. Euro rebounded versus the greenback to 1.4633 before easing to 1.4600/05.
The British pound rallied to 2.0763 before retreating to 2.0710. The release of stronger-than-expected U.K. inflation data gave some support to sterling due as it lessened the chance that the Bank of England would lower interest rates at its next meeting.
Economic data to be release on Wednesday include German and eurozone GDP, U.K. employment data and Canadian leading indicators. U.S. will release producer prices and retail sales data. In addition, ECB chief Trichet, Fed Reserve Bank of Dallas President Fisher and Fed Chairman Bernanke are scheduled to make speeches.
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Market Review - 13/11/2007 22:01 GMT
Yen falls on Japan's PM comments and rally in U.S. stocks
The Japanese yen declined early on Tuesday on comments from Japan's Prime Minister Yasuo Fukuda, who said in an interview in the Financial Times that the yen was rising 'too fast'. A rally in U.S. stock markets later in the day also put pressure on the yen, as increasing risk appetite led to accumulation of carry trades. The Dow's 319-point rally was its highest in two months and came on the back of better-than-expected earnings from Walmart and also a statement by Goldman Sachs that it does not expect a substantial writedown on mortgage assets.
The greenback rose to 110.98 versus the yen in late New York trading after the release of U.S. pending home sales, which unexpectedly rose by 0.2% compared to the consensus forecasts of a 1.5% drop. The euro rallied from an intra-day low of 158.70 to 162.11 against the Japanese currency while gbp/jpy and aud/jpy also rebounded strongly from 224.26 to 229.85 and from 95.68 to 99.87 respectively. The Bank of Japan left interest rates unchanged at 0.50 percent as widely expected.
However, the dollar weakened against other major currencies due to lingering concerns over the credit market crisis and also on the expectation that the Fed will cut interest rates by a quarter percentage point to 4.25 percent next month. Euro rebounded versus the greenback to 1.4633 before easing to 1.4600/05.
The British pound rallied to 2.0763 before retreating to 2.0710. The release of stronger-than-expected U.K. inflation data gave some support to sterling due as it lessened the chance that the Bank of England would lower interest rates at its next meeting.
Economic data to be release on Wednesday include German and eurozone GDP, U.K. employment data and Canadian leading indicators. U.S. will release producer prices and retail sales data. In addition, ECB chief Trichet, Fed Reserve Bank of Dallas President Fisher and Fed Chairman Bernanke are scheduled to make speeches.
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