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Market Review - 06/04/2009 21:40 GMT
U.S. dollar surges as falling equity markets increases safe-haven bids
The greenback rose against most currencies on Monday as investors returned to the safe-haven U.S. dollar on the back of declining European and U.S. equities markets after a warning from a prominent analyst, Mike Mayo of Calyon Securities, revived concerns about the health of the U.S. banking sector and also concerns over potential collapse of a takeover of Sun Microsystems. The ICE futures dollar index ended up 0.53 percent to 84.618, while the single currency reversed its early gains versus the greenback and fell from its session high of 1.3582 to as low as 1.3357.
Earlier in the day, the Japanese yen dropped against the dollar and euro to 101.45 and 137.42 respectively (lowest in nearly six months), however, the fall in stock markets increased risk aversion and the yen pared losses against the dollar and turned higher versus the euro. In late New York session, dollar traded around the 101 level against the yen while euro declined from 137.42 to as low as 134.44 before stabilising.
The British pound also retreated from multi-month highs against the dollar and yen later in the day, falling from 1.4960 and 151.52 to as low as 1.4670 and 147.73 respectively. In late New York afternoon session, the sterling was last trading around 1.4730 and 148.90 versus the dollar and yen respectively.
Among the commodity currencies, the Canadian dollar weakened the most versus the U.S. dollar on Monday on speculation that the Bank of Canada Governor, Mark Carney, may join Japanese, Swiss, U.K. and U.S. central bankers and dilute the nation’s currency by embracing quantitative easing in a report due out on 23 April. Usd/cad rebounded strongly from 1.2225 to as high as 1.2242.
Economic reports from European Union’s statistics office in Luxembourg showed the production price index in eurozone fell 1.8 percent on a year-to-year basis in February, the most since April 1999 and more than the consensus forecast of 1.5 percent, while the 4 percent decline in annual retail sales in the region last month also exceed economists’ 2.5 percent forecast and was the biggest slide since the data began in January 1996.
On Tuesday, economic data releases include Japan BOJ rate decision, Australia RBA rate decision, U.K. industrial production and manufacturing production, and eurozone gross domestic production. The consensus forecasts from economists for BOJ target rate and RBA cash target are to remain at 0.10 percent and 3.25 percent respectively.
U.S. dollar surges as falling equity markets increases safe-haven bids
The greenback rose against most currencies on Monday as investors returned to the safe-haven U.S. dollar on the back of declining European and U.S. equities markets after a warning from a prominent analyst, Mike Mayo of Calyon Securities, revived concerns about the health of the U.S. banking sector and also concerns over potential collapse of a takeover of Sun Microsystems. The ICE futures dollar index ended up 0.53 percent to 84.618, while the single currency reversed its early gains versus the greenback and fell from its session high of 1.3582 to as low as 1.3357.
Earlier in the day, the Japanese yen dropped against the dollar and euro to 101.45 and 137.42 respectively (lowest in nearly six months), however, the fall in stock markets increased risk aversion and the yen pared losses against the dollar and turned higher versus the euro. In late New York session, dollar traded around the 101 level against the yen while euro declined from 137.42 to as low as 134.44 before stabilising.
The British pound also retreated from multi-month highs against the dollar and yen later in the day, falling from 1.4960 and 151.52 to as low as 1.4670 and 147.73 respectively. In late New York afternoon session, the sterling was last trading around 1.4730 and 148.90 versus the dollar and yen respectively.
Among the commodity currencies, the Canadian dollar weakened the most versus the U.S. dollar on Monday on speculation that the Bank of Canada Governor, Mark Carney, may join Japanese, Swiss, U.K. and U.S. central bankers and dilute the nation’s currency by embracing quantitative easing in a report due out on 23 April. Usd/cad rebounded strongly from 1.2225 to as high as 1.2242.
Economic reports from European Union’s statistics office in Luxembourg showed the production price index in eurozone fell 1.8 percent on a year-to-year basis in February, the most since April 1999 and more than the consensus forecast of 1.5 percent, while the 4 percent decline in annual retail sales in the region last month also exceed economists’ 2.5 percent forecast and was the biggest slide since the data began in January 1996.
On Tuesday, economic data releases include Japan BOJ rate decision, Australia RBA rate decision, U.K. industrial production and manufacturing production, and eurozone gross domestic production. The consensus forecasts from economists for BOJ target rate and RBA cash target are to remain at 0.10 percent and 3.25 percent respectively.
