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Daily Market Outlook

Thu, Sep 25 2008, 08:43 GMT
by AceTrader Team

AceTrader

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Market Review -  24/09/2008 21:52 GMT

The greenback rises against the Japanese yen on increased risk appetite

The U.S. dollar edged up for a second day on Wednesday, helped by the view that the credit crisis was not just a problem for the U.S. economy and its currency, but would spill over to the rest of the world. However, uncertainty about the U.S. Treasury's bailout plan, being debated by Congress this week, restricted the greenback's advance.  
  
The Japanese yen fell as investors' confidence in the U.S. dollar returned on the news that U.S. billionaire Warren Buffett will invest $5 billion in Goldman Sachs, and after the Federal Reserve extended currency swap lines to more central banks (including Australia, Denmark, Sweden and Norway). In late New York trading, the dollar was up 0.6 percent against the yen at at 106.11 as traders sold low-yielding yen to finance riskier investment while the euro gained 0.4 percent to 155.14 yen. Japan's currency also weakened versus the Australian dollar and New Zealand dollar by 0.5 percent to 88.39 and 0.6 percent to 72.34 respectively.  
  
The ICE Future Exchange U.S. dollar index, which tracks the dollar's performance against a basket of six currencies, dropped initially to 76.400 but ended up 0.3 percent at 76.994 due to better market sentiment towards the greenback in late New York session. The single currency fell 0.2 percent against the dollar to a session low of 1.4610 while sterling declined to as low at 1.8460 before recovering in late New York afternoon.  
  
Earlier in the day, Federal Reserve Chairman Ben Bernanke testified before the U.S. Congress and urged immediate approval of the U.S. Treasury's rescue proposal to thwart "serious consequences" for the U.S. economy and financial markets.   
  
U.S. existing home sales dropped to 4.91 million units in August, from 5.02 million in the prior month, the National Association of Realtors said in Washington. The median forecast of economists was for a fall to a 4.94 million pace from a previously reported 5 million.   
  
On Thursday, economic data releases include Japan CSPI and trade balance data, German Gfk index, U.S. durable goods data, weekly jobless claims, new home sales data and revised data for building permits in August.

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Published on  Thu, Sep 25 2008, 09:01 GMT