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Market Review - 27/04/2009 21:13 GMT
The dollar and yen rise on risk aversion as fears increase over the swine flu outbreak
The U.S. dollar and Japanese yen gained broadly on Monday as concerns that the outbreak of swine flu in Mexico could become a global pandemic and may interpret a delay of global economic recovery. Equities slid worldwide and sent the yen to a one-month high of 96.43 versus the dollar. The yen also strengthened against most of the other major currencies and rose to session highs of 125.65, 68.54, 54.60 and 140.18 against the euro, Australian dollar, New Zealand dollar and sterling respectively.
In New York afternoon, the single currency extended losses versus the dollar and sterling to as low as 1.2999 and 0.8881 respectively after comments on monetary policy by European Bank governing council member Ewald Nowotny, who said eurozone rates will stay low for a long time and ECB is ready to used quantitative easing measures if needed.
Meanwhile, increasing worries over the U.K. economy and country’s ballooning debt weighed on the British pound on Monday and it dropped to as low as 1.4515 against the dollar and 0.8955 versus the euro in early trading before stabilising to end the day around 1.4630 and 0.8900 respectively.
The flight to safety dented currencies seen as higher risk such as Australian and New Zealand dollars and pushed the Mexican peso down 3 percent versus the U.S. dollar. The Australian and New Zealand dollars declined to session lows of 0.7089 and 0.5623 versus the greenback respectively in New York trading, while the Mexican peso tumbled by nearly 4.7 percent against the greenback on the day to around 14.700.
On the data front, German consumer confidence unexpectedly held steady for a third month as slower inflation boosted household purchasing power and the recession showed first signs of easing. GfK index for May was unchanged from April at 2.5 percent compared to median economists’ forecast of a decline to 2.3 percent. April’s result was revised up from 2.4 percent.
Economic data releases on Tuesday include Japan retail sales, U.K. distribution trades survey, and U.S. consumer confidence. The U.K. Confederation of British Industry’s April survey on retail sales is expected to show the distributive trades balance rising to –40.0 from -44.0 in April.
The dollar and yen rise on risk aversion as fears increase over the swine flu outbreak
The U.S. dollar and Japanese yen gained broadly on Monday as concerns that the outbreak of swine flu in Mexico could become a global pandemic and may interpret a delay of global economic recovery. Equities slid worldwide and sent the yen to a one-month high of 96.43 versus the dollar. The yen also strengthened against most of the other major currencies and rose to session highs of 125.65, 68.54, 54.60 and 140.18 against the euro, Australian dollar, New Zealand dollar and sterling respectively.
In New York afternoon, the single currency extended losses versus the dollar and sterling to as low as 1.2999 and 0.8881 respectively after comments on monetary policy by European Bank governing council member Ewald Nowotny, who said eurozone rates will stay low for a long time and ECB is ready to used quantitative easing measures if needed.
Meanwhile, increasing worries over the U.K. economy and country’s ballooning debt weighed on the British pound on Monday and it dropped to as low as 1.4515 against the dollar and 0.8955 versus the euro in early trading before stabilising to end the day around 1.4630 and 0.8900 respectively.
The flight to safety dented currencies seen as higher risk such as Australian and New Zealand dollars and pushed the Mexican peso down 3 percent versus the U.S. dollar. The Australian and New Zealand dollars declined to session lows of 0.7089 and 0.5623 versus the greenback respectively in New York trading, while the Mexican peso tumbled by nearly 4.7 percent against the greenback on the day to around 14.700.
On the data front, German consumer confidence unexpectedly held steady for a third month as slower inflation boosted household purchasing power and the recession showed first signs of easing. GfK index for May was unchanged from April at 2.5 percent compared to median economists’ forecast of a decline to 2.3 percent. April’s result was revised up from 2.4 percent.
Economic data releases on Tuesday include Japan retail sales, U.K. distribution trades survey, and U.S. consumer confidence. The U.K. Confederation of British Industry’s April survey on retail sales is expected to show the distributive trades balance rising to –40.0 from -44.0 in April.
