Market Review -   23/10/2008 22:14 GMT

Dollar rebounds versus Japanese yen on the late rise in U.S. stocks

The greenback fell initially to a 7-month low of 95.94 versus the Japanese yen, just hovering above the low of 95.77 made in March, and then rebounded to close at 97.39 on Thursday on renewed cross selling in jpy on back of the late rally in U.S. stock markets. 
 
The ICE Futures U.S. dollar index climbed to a fresh two-year high of 86.120 and then retreated after aggressive dollar selling by Brazil's central bank helped lend some stability to emerging market currencies. Brazil's central bank intervened twice in the spot market to offer dollars and said it was ready to sell up to $50 billion of dollar swap contracts . 
 
Former U.S. Federal Reserve Chairman Alan Greenspan told Congress that he is 'shocked' at the breakdown in U.S. credit markets and said he was 'partially' wrong to resist regulation of some securities. Greenspan said despite concerns he had in 2005 that risks were being underestimated by investors, 'this crisis' has turned out to be much broader than anything he could has imagined. 
 
Euro tumbled against the Japanese yen to 123.13, the lowest level since 2002, as global economic turmoil led investors to sell higher-yielding assets and pay back low-cost loans in Japan's currency. However, the pair rebounded strongly to close at 126.00 in late U.S. session on the rally in U.S. stock markets. The Dow Jones Industrial Average advanced 172 points or 2.02% to end at 8691. The Standard & Poor's 500 Index rose 11.34 points or 1.26% after falling as much as 4.3%. 
 
The British pound fell to a five-year low of 1.6043 as a government report showed retail sales in the U.K. dropped by 0.4% in September after rising 1.1 percent in the prior month. Cable rebounded and pared most of its losses on the late rise in U.S. stock markets to end the day at 1.6224. 
 
Friday will see the release of German and eurozone services and manufacturing PMI respectively, U.K. GDP, Canada’s CPI and U.S. existing home sales.

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AceTrader M-T-D Intra-Day performance summary  (as of 23 Oct)

USD/JPY  +184  | EUR/USD +231 |  USD/CHF +193 |  GBP/USD +307 |


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