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Market Review - 02/04/2009 21:05 GMT
U.S. dollar and yen decline sharply as world stocks rally on G-20 news
The greenback and Japanese yen dropped broadly on Thursday as investors were encouraged to buy more risky assets after leaders of the G-20 nations agreed to pump an additional $1 trillion dollars into the ailing global economy through extra funding for groups like the IMF and also on a change in U.S. accounting standards that should help troubled banks. In late New York afternoon session, the ICE futures U.S. dollar index shed 1.13 percent to 84.457, after dropping to as low as 84.051.
The single currency surged to a session high of 1.3518 and 134.23 versus the dollar and Japanese yen respectively, boosted by the ECB’s rate cut which turned out to be smaller than expected (ECB lowered rates to 1.25% instead of the forecast of 1.00%), however, ECB President Jean-Claude Trichet refused to rule out additional rate cuts in future. Meanwhile, euro also extended its gains against the Swiss franc after SNB reiterated its pledge to intervene in currency markets to prevent the franc from appreciating, eur/chf rose to as high as 1.5285.
Sterling jumped to as high as 1.4750 and 141.96 versus the dollar and yen respectively as the U.K. Nationwide Building Society said house prices in Britain unexpectedly rose month-on-month for the first time since October 2007 in March because of the interest rate cuts by BOE that attracted buyers to the property market. .
The improvement in investors' risk appetite also sparked a rally in commodity currencies like the Australian dollar, New Zealand dollar and the Canadian dollar, which were up 2.6 percent to 0.7155, 2.1 percent to 0.5780 and 1.7 percent to 1.2593 against the greenback respectively.
U.S. stock markets rallied on Thursday and the Dow Jones Industrial average closed up 2.79 percent, or 216 points to 7,978, while Standard & Poor’s 500 index and Nasdaq Composite index also jumped 2.87 percent and 3.29 percent to 834 and 1,602 respectively.
Data from U.S. showed that jobless claims last week rose to the highest level in 26 years to 669,000 in the week ended March 28, while a report from the Commerce Department stated that orders to factories improved in February for the first time in seven months (posting a 1.8 percent gain versus the fall of 1.9 percent in the previous month).
On Friday, economic data releases include German import price index and PMI (services), U.K. Halifax house prices and Switzerland’s CPI data. U.S. will release the closely-watched non-farm payrolls along with average earnings, unemployment rate and ISM non-manufacturing. At 16:30GMT, Fed’s chairman Ben S. Bernanke will give the closing keynote address at the Richmond Fed’s bank’s third annual Credit Markets Symposium.
U.S. dollar and yen decline sharply as world stocks rally on G-20 news
The greenback and Japanese yen dropped broadly on Thursday as investors were encouraged to buy more risky assets after leaders of the G-20 nations agreed to pump an additional $1 trillion dollars into the ailing global economy through extra funding for groups like the IMF and also on a change in U.S. accounting standards that should help troubled banks. In late New York afternoon session, the ICE futures U.S. dollar index shed 1.13 percent to 84.457, after dropping to as low as 84.051.
The single currency surged to a session high of 1.3518 and 134.23 versus the dollar and Japanese yen respectively, boosted by the ECB’s rate cut which turned out to be smaller than expected (ECB lowered rates to 1.25% instead of the forecast of 1.00%), however, ECB President Jean-Claude Trichet refused to rule out additional rate cuts in future. Meanwhile, euro also extended its gains against the Swiss franc after SNB reiterated its pledge to intervene in currency markets to prevent the franc from appreciating, eur/chf rose to as high as 1.5285.
Sterling jumped to as high as 1.4750 and 141.96 versus the dollar and yen respectively as the U.K. Nationwide Building Society said house prices in Britain unexpectedly rose month-on-month for the first time since October 2007 in March because of the interest rate cuts by BOE that attracted buyers to the property market. .
The improvement in investors' risk appetite also sparked a rally in commodity currencies like the Australian dollar, New Zealand dollar and the Canadian dollar, which were up 2.6 percent to 0.7155, 2.1 percent to 0.5780 and 1.7 percent to 1.2593 against the greenback respectively.
U.S. stock markets rallied on Thursday and the Dow Jones Industrial average closed up 2.79 percent, or 216 points to 7,978, while Standard & Poor’s 500 index and Nasdaq Composite index also jumped 2.87 percent and 3.29 percent to 834 and 1,602 respectively.
Data from U.S. showed that jobless claims last week rose to the highest level in 26 years to 669,000 in the week ended March 28, while a report from the Commerce Department stated that orders to factories improved in February for the first time in seven months (posting a 1.8 percent gain versus the fall of 1.9 percent in the previous month).
On Friday, economic data releases include German import price index and PMI (services), U.K. Halifax house prices and Switzerland’s CPI data. U.S. will release the closely-watched non-farm payrolls along with average earnings, unemployment rate and ISM non-manufacturing. At 16:30GMT, Fed’s chairman Ben S. Bernanke will give the closing keynote address at the Richmond Fed’s bank’s third annual Credit Markets Symposium.
