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Market Review - 18/03/2009 22:13 GMT
The greenback tumbles as Fed keeps rates unchanged and announces it will buy Treasuries
The Fed and BOJ left official benchmark rates unchanged on Wednesday but the U.S. dollar declined broadly after the Federal Reserve said it will buy up to $300 billion of long-dated Treasuries over the next six months to help boost the economy, in addition to $750 billion more of mortgage debt to ease credit conditions. Investors feared the central bank's move would flood the market with dollars and increase the already large U.S. deficits. The single currency rallied and posted its biggest one-day gain versus the dollar since its 1999 inception to trade up 3.7 percent at 1.3476 in late New York session.
The dollar fell to as low as 95.66 versus Japanese yen before stabilising and last traded down 2.5 percent at around 96.20. It also shed 3.5 percent to 1.1403 against the Swiss franc, staging its biggest daily decline since mid-December. Cable rose above the 1.4300 level, rebounding from losses seen after data showed that the number of Britons filing for jobless benefits last month rose by a record amount.
Benchmark Treasury yields posted a biggest one-day drop since 1987 and U.S. stock markets rallied as risk appetite returned. The Dow Jones industrial average gained more than 90 points or 1.23 percent and ended at 7,486. The Standard & Poor’s 500 index surged 2.09 percent to 794 while Nasdaq Composite index added nearly 2 percent to 1,491.
Commodity currencies such as the Canadian and Australian dollar rose sharply against the greenback. In late New York trading, the Canadian dollar jumped by 1.7 percent while Australian dollar posted a 2.3 percent gain versus the dollar. New Zealand dollar also rose 2.7 percent to 0.5447 against the U.S. currency.
On Thursday, economic data releases include Japan all industrial index and Bank of Japan report, Switzerland’s trade balance and ZEW survey, U.K. PSNCR and CBI industrial trend, eurozone industrial orders, Canada CPI data, and U.S. jobless claims, leading indicators and Philadelphia Fed survey.
The greenback tumbles as Fed keeps rates unchanged and announces it will buy Treasuries
The Fed and BOJ left official benchmark rates unchanged on Wednesday but the U.S. dollar declined broadly after the Federal Reserve said it will buy up to $300 billion of long-dated Treasuries over the next six months to help boost the economy, in addition to $750 billion more of mortgage debt to ease credit conditions. Investors feared the central bank's move would flood the market with dollars and increase the already large U.S. deficits. The single currency rallied and posted its biggest one-day gain versus the dollar since its 1999 inception to trade up 3.7 percent at 1.3476 in late New York session.
The dollar fell to as low as 95.66 versus Japanese yen before stabilising and last traded down 2.5 percent at around 96.20. It also shed 3.5 percent to 1.1403 against the Swiss franc, staging its biggest daily decline since mid-December. Cable rose above the 1.4300 level, rebounding from losses seen after data showed that the number of Britons filing for jobless benefits last month rose by a record amount.
Benchmark Treasury yields posted a biggest one-day drop since 1987 and U.S. stock markets rallied as risk appetite returned. The Dow Jones industrial average gained more than 90 points or 1.23 percent and ended at 7,486. The Standard & Poor’s 500 index surged 2.09 percent to 794 while Nasdaq Composite index added nearly 2 percent to 1,491.
Commodity currencies such as the Canadian and Australian dollar rose sharply against the greenback. In late New York trading, the Canadian dollar jumped by 1.7 percent while Australian dollar posted a 2.3 percent gain versus the dollar. New Zealand dollar also rose 2.7 percent to 0.5447 against the U.S. currency.
On Thursday, economic data releases include Japan all industrial index and Bank of Japan report, Switzerland’s trade balance and ZEW survey, U.K. PSNCR and CBI industrial trend, eurozone industrial orders, Canada CPI data, and U.S. jobless claims, leading indicators and Philadelphia Fed survey.
