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Market Review - 16/02/2009 18:40 GMT
Dollar and Japanese yen rise as Japan’s economy shrinks sharply in Q4 of 2008
The greenback fell briefly against the Japanese yen to 91.12 after finance ministers from the Group of Seven nations said the ‘severe’ global slump will persist for most of 2009. The G-7 repeated its message that ‘excess volatility’ and ‘disorderly movements’ in exchange rates must be avoided. The G-7 statement over the weekend mentioned the need for the Chinese yuan to appreciate in value, there was no special mention about the Japanese yen and G-7 officials avoided making any statement in support of efforts by Japan to weaken its currency.
Japan’s economy shrank by 12.7% in the fourth quarter of 2008, the most since 1974 and the third consecutive quarter gross domestic product has contracted. There was also news that opposition parties were demanding the Japanese Finance Minister Shoichi Nakagawa to be fired for his behaviour at the G-7 news conference in Rome, however, Nakagawa denied he had been drunk at the news conference and he said Prime Minister Taro Aso had asked him to stay on in the job. The dollar was able to rebound to 92.08 later in the day before moving sideways with U.S. markets closed for Presidents' Day.
The Confederation of British Industry said the U.K. gross domestic product will shrink by 3.3% this year, almost twice the 1.7% pace previously forecast and the economy will have contracted for six consecutive quarters by the end of 2009. Articles in the U.K. Sunday Times and U.K. Telegraph over the weekend highlighted the risks to U.K. banks from the credit market crisis in the Europe. Although Rightmove house prices showed a month-on-month rise of 1.2% and prices have declined by 9.1% compared to February '08, economists expected the U.K. housing market to remain weak. The British pound tumbled from 1.4348 to 1.4150.
European Central Bank president Jean-Claude Trichet said the central bank has to prepare for exceptional situations and did not rule out further action to support the eurozone economy. He urged governments around the world to keep a medium-term view focused on securing financial and economic stability. The single currency also dropped against the dollar from 1.2880 to 1.2727 on Monday after G7 meeting.
Tuesday will see the release of Japan’s tertiary industry index and machine orders, U.K. CPI, RPI and DCLG house prices, German and eurozone ZEW index, eurozone trade balance, U.S. Empire state manufacturing index, foreign treasury buys and NAHB housing market index.
Dollar and Japanese yen rise as Japan’s economy shrinks sharply in Q4 of 2008
The greenback fell briefly against the Japanese yen to 91.12 after finance ministers from the Group of Seven nations said the ‘severe’ global slump will persist for most of 2009. The G-7 repeated its message that ‘excess volatility’ and ‘disorderly movements’ in exchange rates must be avoided. The G-7 statement over the weekend mentioned the need for the Chinese yuan to appreciate in value, there was no special mention about the Japanese yen and G-7 officials avoided making any statement in support of efforts by Japan to weaken its currency.
Japan’s economy shrank by 12.7% in the fourth quarter of 2008, the most since 1974 and the third consecutive quarter gross domestic product has contracted. There was also news that opposition parties were demanding the Japanese Finance Minister Shoichi Nakagawa to be fired for his behaviour at the G-7 news conference in Rome, however, Nakagawa denied he had been drunk at the news conference and he said Prime Minister Taro Aso had asked him to stay on in the job. The dollar was able to rebound to 92.08 later in the day before moving sideways with U.S. markets closed for Presidents' Day.
The Confederation of British Industry said the U.K. gross domestic product will shrink by 3.3% this year, almost twice the 1.7% pace previously forecast and the economy will have contracted for six consecutive quarters by the end of 2009. Articles in the U.K. Sunday Times and U.K. Telegraph over the weekend highlighted the risks to U.K. banks from the credit market crisis in the Europe. Although Rightmove house prices showed a month-on-month rise of 1.2% and prices have declined by 9.1% compared to February '08, economists expected the U.K. housing market to remain weak. The British pound tumbled from 1.4348 to 1.4150.
European Central Bank president Jean-Claude Trichet said the central bank has to prepare for exceptional situations and did not rule out further action to support the eurozone economy. He urged governments around the world to keep a medium-term view focused on securing financial and economic stability. The single currency also dropped against the dollar from 1.2880 to 1.2727 on Monday after G7 meeting.
Tuesday will see the release of Japan’s tertiary industry index and machine orders, U.K. CPI, RPI and DCLG house prices, German and eurozone ZEW index, eurozone trade balance, U.S. Empire state manufacturing index, foreign treasury buys and NAHB housing market index.
