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Market Review - 11/11/2008 22:02 GMT
The greenback and yen surge due to worries of global economy slowdown
The dollar surged to a two-week high against a basket of six currencies on Tuesday as worries about a deepening slowdown in global economy prompted investors to sell riskier assets against the greenback. In late trading in New York, the ICE Futures U.S. dollar index was up 1.37 % at 87.151, after rising to as high as 87.268, the strongest level since October 28.
Against the U.S. dollar, the euro fell earlier to a two-week low at 1.2507 and last traded down 1.6 % at 1.2535 while the British pound weakened to as low as 1.5360 before stabilising. Sterling fell to a record low against the euro at 0.8215 as U.K. home sales declined to the lowest in at least three decades, raising market's concerns that the U.K. economy will suffer even more than the eurozone.
U.S. stocks tumbled as faltering demand expectations for aluminum maker Alcoa, fears of a cash drain at automaker General Motors and dismal outlook from Tyco International heightened fears of a global economic slump. The Dow Jones Industrial average fell 176 points, or 1.99 % and ended at 8,693 while the Standard & Poor’s 500 index and the Nasdaq Composite Index dropped 2.20 % to 898 and 2.22 percent to 1,580 respectively.
Risk aversion due to a sell-off in stock markets worldwide boosted demand for the Japanese yen versus other high-yielding currencies. The dollar last traded down 0.3 % at 97.68 yen and the euro fell 1.8 % to 122.45 yen.
Other currencies such as Australian dollar and New Zealand dollar also tumbled versus the greenback and Japanese yen. In late U.S. session, the Australian dollar was trading down 1.5 % at 0.6580 versus the U.S. dollar and 2.4 % lower at 64.30 against the yen while New Zealand dollar fell 1.5 % to 0.5733 and 1.6 % to 59.80 respectively.
On Wednesday, economic data releases include Australia Westpac consumer confidence, Japan consumer confidence index, U.K. average earnings, claimant count, ILO unemployment and Bank of England quarterly inflation report, and eurozone industrial production. At 15:30GMT, U.S. Treasury Secretary Paulson will give an update on the government's $700 billion financial rescue plan.
The greenback and yen surge due to worries of global economy slowdown
The dollar surged to a two-week high against a basket of six currencies on Tuesday as worries about a deepening slowdown in global economy prompted investors to sell riskier assets against the greenback. In late trading in New York, the ICE Futures U.S. dollar index was up 1.37 % at 87.151, after rising to as high as 87.268, the strongest level since October 28.
Against the U.S. dollar, the euro fell earlier to a two-week low at 1.2507 and last traded down 1.6 % at 1.2535 while the British pound weakened to as low as 1.5360 before stabilising. Sterling fell to a record low against the euro at 0.8215 as U.K. home sales declined to the lowest in at least three decades, raising market's concerns that the U.K. economy will suffer even more than the eurozone.
U.S. stocks tumbled as faltering demand expectations for aluminum maker Alcoa, fears of a cash drain at automaker General Motors and dismal outlook from Tyco International heightened fears of a global economic slump. The Dow Jones Industrial average fell 176 points, or 1.99 % and ended at 8,693 while the Standard & Poor’s 500 index and the Nasdaq Composite Index dropped 2.20 % to 898 and 2.22 percent to 1,580 respectively.
Risk aversion due to a sell-off in stock markets worldwide boosted demand for the Japanese yen versus other high-yielding currencies. The dollar last traded down 0.3 % at 97.68 yen and the euro fell 1.8 % to 122.45 yen.
Other currencies such as Australian dollar and New Zealand dollar also tumbled versus the greenback and Japanese yen. In late U.S. session, the Australian dollar was trading down 1.5 % at 0.6580 versus the U.S. dollar and 2.4 % lower at 64.30 against the yen while New Zealand dollar fell 1.5 % to 0.5733 and 1.6 % to 59.80 respectively.
On Wednesday, economic data releases include Australia Westpac consumer confidence, Japan consumer confidence index, U.K. average earnings, claimant count, ILO unemployment and Bank of England quarterly inflation report, and eurozone industrial production. At 15:30GMT, U.S. Treasury Secretary Paulson will give an update on the government's $700 billion financial rescue plan.
