Daily Market Outlook

Tue, Jul 22 2008, 00:35 GMT
by AceTrader Team

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Market Review -21/07/2008 20:43 GMT

Dollar falls as worries increase over the U.S. financial sector

The greenback gained initially versus the yen on Monday as Bank of America posted better-than-expected second-quarter earnings (net income fell to $3.41 billion, or 72 cents a share versus the forecast of 54 cents), however, the dollar dropped afterwards in U.S. session as fears over the U.S. financial sector persisted and investors remained wary ahead of a flurry of bank earnings due this week, including Wachovia on Tuesday and also focused on the rescue plan for troubled U.S. mortgage finance giants Fannie Mae and Freddie Mac. Although the DJI pared some of its losses, the index still ended down 29 points and closed at 11,467.  
  
In late New York afternoon trading, the euro and sterling rose versus the dollar and closed near its session high of 1.5932 and 2.0039 respectively. Against the Japanese yen, the dollar slipped and fell from its intra-day high of 107.16 to 106.42 whilst the euro hit a record high at 169.91 versus the yen before easing. The Australian dollar also rose as much as 0.7 percent to an eight-month high of 104.46 versus Japanese yen on speculation the nation will retain its interest-rate advantage over Japan.   
  
Elsewhere, the weakness of the dollar across the board on Monday pushed the price of its currency lower against the Swiss franc and Canadian dollar to 1.0171 and 0.9990 respectively. Crude oil prices for August futures also rose $2.39 to $131.27 per barrel as a tropical storm gained strength in the Gulf of Mexico, where oil rigs are located. Leading economic indicators dropped 0.1 percent in June after a revised 0.2 percent decline the prior month, the Conference Board reported yesterday.  
  
On Tuesday, economic data releases include Japan all industry index, Switzerland trade balance, Canada retail sales, U.S. house price index and Treasury Secretary Paulson will make a speech about the U.S. markets in New York at 20:10GMT.

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Published on  Tue, Jul 22 2008, 01:09 GMT

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