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Market Review - 17/11/2008 22:10 GMT
Japanese yen falls as Japan's economy enters its first recession since 2001
The greenback rose against the Japanese yen from 95.87 to 97.56 after the release of Japan’s GDP data which showed a decrease of 0.1% in the last quarter after the drop of 0.9% in Q2, confirming Japan's economy had entered its first recession since 2001. Euro, aussie and sterling rose versus the Japanese unit from 120.20 to 123.91, from 61.04 to 64.11 and from 140.51 to 146.45 respectively.
Euro rose against the greenback from 1.2512 to 1.2742 as a contraction in the New York State manufacturing index added credence to the view that the U.S. has fallen into a recession. The Empire state manufacturing index fell in November to minus 25.4, the lowest since 2001, from minus 24.6 in October. Readings below zero indicate manufacturing in New York shrank.
The Group of 20 developed and emerging economies urged a ‘broader policy response’ to the global slump after a summit ended in Washington on November 15. The G-20 failed to come up with specific new measures to ease the world's financial strains. The IMF said it needed at least $100 billion in extra funding to help countries survive the economic downturn. The greenback rose briefly against European currencies in Asian trading before falling again after the release of weak U.S. economic data.
The British pound rose strongly from 1.4646 to 1.5082 on short-covering. British Prime Minister Gordon Brown said interest rate cuts with fiscal action was sensible during the current downturn. Brown indicated that the risk in this new environment is not stagflation but rather the impact on the economy of close to zero inflation at the time of a recession.
Tuesday will see the release of U.K. CPI and RPI, U.S. PPI, foreign treasury buys, net LT TIC flows and NAHB housing market index. Investors are focusing on the testimony by U.S. Treasury Secretary Paulson and Fed Chairman Bernanke and the speech from ECB’s Trichet.
Japanese yen falls as Japan's economy enters its first recession since 2001
The greenback rose against the Japanese yen from 95.87 to 97.56 after the release of Japan’s GDP data which showed a decrease of 0.1% in the last quarter after the drop of 0.9% in Q2, confirming Japan's economy had entered its first recession since 2001. Euro, aussie and sterling rose versus the Japanese unit from 120.20 to 123.91, from 61.04 to 64.11 and from 140.51 to 146.45 respectively.
Euro rose against the greenback from 1.2512 to 1.2742 as a contraction in the New York State manufacturing index added credence to the view that the U.S. has fallen into a recession. The Empire state manufacturing index fell in November to minus 25.4, the lowest since 2001, from minus 24.6 in October. Readings below zero indicate manufacturing in New York shrank.
The Group of 20 developed and emerging economies urged a ‘broader policy response’ to the global slump after a summit ended in Washington on November 15. The G-20 failed to come up with specific new measures to ease the world's financial strains. The IMF said it needed at least $100 billion in extra funding to help countries survive the economic downturn. The greenback rose briefly against European currencies in Asian trading before falling again after the release of weak U.S. economic data.
The British pound rose strongly from 1.4646 to 1.5082 on short-covering. British Prime Minister Gordon Brown said interest rate cuts with fiscal action was sensible during the current downturn. Brown indicated that the risk in this new environment is not stagflation but rather the impact on the economy of close to zero inflation at the time of a recession.
Tuesday will see the release of U.K. CPI and RPI, U.S. PPI, foreign treasury buys, net LT TIC flows and NAHB housing market index. Investors are focusing on the testimony by U.S. Treasury Secretary Paulson and Fed Chairman Bernanke and the speech from ECB’s Trichet.
