Daily Market Outlook

Fri, May 9 2008, 08:53 GMT
by AceTrader Team

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Market Review -  08/05/2008 21:41 GMT

Euro rebounds from 8-week low of 1.5285 on Trichet’s hawkish comments

The single currency rebounded from an eight-week low of 1.5285 to 1.5443 against the dollar after European Central Bank President Jean-Claude Trichet said Inflation will stay high ‘for a rather protracted period’, following the ECB's decision to keep its main refinancing rate at 4%. His comments suggest inflation remains the bank's top priority and signal policy makers won't cut interest rates soon.  
  
U.S. currency fell sharply from 104.95 to 103.40 versus the Japanese yen on active cross buying in jpy due to the concerns of slowing global growth. Euro, sterling and aussie tumbled against the Japanese currency from 161.26 to 159.05, from 204.71 to 202.44 and from 98.75 to 97.38 respectively.  
  
Australian dollar fell briefly to 0.9348 against the U.S. currency before rebounding strongly after the release of better-than-expected jobs report as the employment change in April came in at 25,400 versus the forecast of 10,000 and the reading of 14,800 in March. However, New Zealand dollar tumbled versus the U.S. currency from 0.7824 to 0.7691 on the release of much weaker-than-expected report as New Zealand’s employment change declined by 1.3% in first quarter of 2008 versus the expectation of a decrease of 0.1% and the downwardly revised 0.9% rise in March.  
  
The British pound traded inside 1.9503-1.9623 range on Thursday as the Bank of England kept its lending target unchanged at 5% as widely expected. The greenback rallied initially against the Swiss franc to 1.0625 and then retreated strongly to 1.0482 due to dollar’s broad-based weakness.  
  
The Chinese yuan fell 0.2% to 7.0052 against the U.S. currency on Thursday as investors are waiting for a report to be released next week that may show export growth slowed to 20.3% in April, from 26.8% in the year-ago period.   
  
Friday will see the release of Japan’s leading indicators, German WPI and U.S. trade balance. 

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Published on  Fri, May 9 2008, 09:07 GMT

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