Daily Market Outlook

Tue, May 13 2008, 03:24 GMT
by AceTrader Team

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Market Review -  12/05/2008 22:10 GMT

Dollar rises versus Japanese yen on WSJ report and the rally in U.S. stocks

The greenback rose against the Japanese yen on Monday due to the Wall Street Journal report (U.S. edition) published on Friday, which showed the Bush administration was taking the leading effort of stopping the long-term slide in the U.S. dollar at last G7 meeting, together with the rally in U.S. stocks as crude oil prices retreated and the release of unexpectedly strong earnings from HSBC.  
  
U.S. currency rebounded from 102.57 to 104.04 versus the Japanese yen on Monday due to active cross selling in jpy. Euro, aussie and sterling rallied against the Japanese currency from 158.65 to 161.53, 96.45 to 98.40 and from 200.25 to 203.72 respectively. Jim Rogers said the U.S. currency is due to rebound as declining home sales and mortgage losses curbed economic growth. The greenback rose versus Swiss franc from 1.0405 to 1.0512 and then retreated in late U.S. session.  
  
The single currency fell initially to 1.5365 in reaction to the WSJ report and then rallied to 1.5571 on active cross buying in euro. Euro rallied versus sterling and Swiss franc from 0.7878 to 0.7953 and from 1.6097 to 1.6234 respectively. The British pound fell initially to 1.9441 in Asian morning on report that HSBC would need to make further bad debt provision, however, cable rebounded in European session to 1.9635 as HSBC posted unexpectedly strong first-quarter earnings.  
  
Interest-rate futures showed an 84% chance the Fed will keep its borrowing rates unchanged at 2% next meet on June 25. However, the ECB is expected to lower its 4% main refinancing rate to 3.75% by the end of September and 3.50% by year-end.  
  
Tuesday will see the release of U.K. RICS house prices, BRC retail sales, CPI, DCLG house price and RPI, U.S. retail sales and business inventories.

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Published on  Tue, May 13 2008, 05:26 GMT

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