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Market Review - 26/11/2008 22:30 GMT
Dollar rises broadly as a safe haven currency on worries of a deepening recession
The dollar rose broadly against major currencies on Wednesday after the release of a series of weak U.S. economic data, adding to worries of a deepening economic recession and prompting investors to buy the greenback as a safe haven. The greenback rebounded against the Japanese yen from 94.60 to 95.95 and the British pound fell sharply from 1.5480 to 1.5173 before recovering.
U.S. durable goods orders declined sharply by 6.2% in October, following a fall of 0.2% in September and business activity in the Midwest weakened to 98.6, the lowest level since the severe 1982 recession. U.S. new homes sales fell by 5.3% in October to an annual pace of 433,000, the lowest level in 17 years. U.S. consumer spending fell 1% last month, after declining 0.3% in September.
Thailand’s baht slid to 35.33 per dollar, the weakest level since February 2007, as anti-government protesters stormed the main terminal at Bangkok’s international airport. The People’s Alliance for Democracy is demanding the resignation of Prime Minister Somchai Wongsawat.
The single currency tumbled from 1.3070 to 1.2819 versus the dollar. after the European Central Bank said falling price pressures in the euro zone have left ‘ample room’ to move on interest rates.
Earlier in the day, China surprised markets with a 108 basis point rate cut, its largest since 1997. The European Commission unveiled a proposed EU-wide stimulus plan, valued around 200 billion euros, following the Tuesday’s announcement of an $800 billion plan by the U.S. to rescue its debt securities markets.
Thursday will see the release of U.K. Nationwide house prices, German unemployment rate, eurozone business climate and economic sentiment. U.S. markets will be closed due to the U.S. Thanksgiving Holiday.
Dollar rises broadly as a safe haven currency on worries of a deepening recession
The dollar rose broadly against major currencies on Wednesday after the release of a series of weak U.S. economic data, adding to worries of a deepening economic recession and prompting investors to buy the greenback as a safe haven. The greenback rebounded against the Japanese yen from 94.60 to 95.95 and the British pound fell sharply from 1.5480 to 1.5173 before recovering.
U.S. durable goods orders declined sharply by 6.2% in October, following a fall of 0.2% in September and business activity in the Midwest weakened to 98.6, the lowest level since the severe 1982 recession. U.S. new homes sales fell by 5.3% in October to an annual pace of 433,000, the lowest level in 17 years. U.S. consumer spending fell 1% last month, after declining 0.3% in September.
Thailand’s baht slid to 35.33 per dollar, the weakest level since February 2007, as anti-government protesters stormed the main terminal at Bangkok’s international airport. The People’s Alliance for Democracy is demanding the resignation of Prime Minister Somchai Wongsawat.
The single currency tumbled from 1.3070 to 1.2819 versus the dollar. after the European Central Bank said falling price pressures in the euro zone have left ‘ample room’ to move on interest rates.
Earlier in the day, China surprised markets with a 108 basis point rate cut, its largest since 1997. The European Commission unveiled a proposed EU-wide stimulus plan, valued around 200 billion euros, following the Tuesday’s announcement of an $800 billion plan by the U.S. to rescue its debt securities markets.
Thursday will see the release of U.K. Nationwide house prices, German unemployment rate, eurozone business climate and economic sentiment. U.S. markets will be closed due to the U.S. Thanksgiving Holiday.
