AceTrader 1-wk TRIAL
www.AceTraderFX.com 24-Hr Real-time Signals Consistent Performance Intra-day, Daily, Weekly. with Email Alerts Function Try 1-week for $25 USD
Market Review - 03/06/2009 21:02 All times in GMT
U.S. dollar rebounds sharply on concerns over the strength of recent economy recovery
Dollar rebounded strongly from multi-month lows against the British pound and euro on Wednesday after monetary sources stated that Asian countries, China, Japan, India and South Korea, would continue to buy U.S. Treasuries even though the U.S. may lose its AAA credit rating. In addition, the tumble in European and U.S. stock markets urged investors to buy back the dollar as a safe-haven currency.
Although euro rose to a marginal high of 1.4339 against the greenback in Asian afternoon, the single currency reversed its gains and fell sharply on the remarks from the Asian U.S. Treasury buyers, which traders interpreted as a supportive expression for U.S. dollar-dominated assets. Eurozone service PMI data came out at 44.8 in May, which was slightly better than the reading of 44.7 in April. However, eurozone GDP posted its biggest decrease in the first quarter, contracting by 2.5% Q/Q and 4.8% Y/Y. The worse-than-expected data pressured European stocks (FTSE-100 was down 2.09%, CAC dropped 2.02%, while DAC ended the day 1.74% lower) and increased demand for the less-risky U.S. currency.
Cable also tumbled from a 7-month high of 1.6664 against the dollar on risk aversion in European morning. Investors shifted their risk attitude from aggressive to conservative due to doubts on whether the recent economic recovery is able to support the substantial gains in higher-yielding assets. The British pound accelerated its weakness against the greenback after U.S. ADP employment in March decreased by 532,000 versus the expectation of a fall of 530,000 and ISM non-manufacturing in May came out at 44 against the 43.7 in April. Gbp/usd hit an intra-day low of 1.6243 in late New York afternoon before recovering after U.S. stock markets pared early losses. DJI dropped 66 points or 0.75%, Nasdaq dipped 10.88 points or 0.59% while S&P closed down 12.98 points or 1.37%.
U.S. crude futures and gold price tumbled more than 3.00% and 2.00% respectively after Fed’s chairman Bernanke said that he didn't see inflation risk in the near term. The three commodity currencies, Aussie dollar, New Zealand dollar and Canadian dollar, fell sharply from their multi-month highs against the dollar. Aud/usd dropped from 0.8265 to as low as 0.7933, nzd/usd fell from 0.6595 to 0.6270 while cad/usd rebounded strongly to 1.1119.
Data to be released on Thursday include Japan business capex, Australia trade balance, U.K housing prices, eurozone retail sales, U.S. weekly jobless claims, Canada building permits and Ivey PMI index. The Bank of England, European Central Bank and Bank of Canade are widely expected to widely expected to leave interest rates unchanged at 0.50%, 1.00% and 0.25% respectively.
U.S. dollar rebounds sharply on concerns over the strength of recent economy recovery
Dollar rebounded strongly from multi-month lows against the British pound and euro on Wednesday after monetary sources stated that Asian countries, China, Japan, India and South Korea, would continue to buy U.S. Treasuries even though the U.S. may lose its AAA credit rating. In addition, the tumble in European and U.S. stock markets urged investors to buy back the dollar as a safe-haven currency.
Although euro rose to a marginal high of 1.4339 against the greenback in Asian afternoon, the single currency reversed its gains and fell sharply on the remarks from the Asian U.S. Treasury buyers, which traders interpreted as a supportive expression for U.S. dollar-dominated assets. Eurozone service PMI data came out at 44.8 in May, which was slightly better than the reading of 44.7 in April. However, eurozone GDP posted its biggest decrease in the first quarter, contracting by 2.5% Q/Q and 4.8% Y/Y. The worse-than-expected data pressured European stocks (FTSE-100 was down 2.09%, CAC dropped 2.02%, while DAC ended the day 1.74% lower) and increased demand for the less-risky U.S. currency.
Cable also tumbled from a 7-month high of 1.6664 against the dollar on risk aversion in European morning. Investors shifted their risk attitude from aggressive to conservative due to doubts on whether the recent economic recovery is able to support the substantial gains in higher-yielding assets. The British pound accelerated its weakness against the greenback after U.S. ADP employment in March decreased by 532,000 versus the expectation of a fall of 530,000 and ISM non-manufacturing in May came out at 44 against the 43.7 in April. Gbp/usd hit an intra-day low of 1.6243 in late New York afternoon before recovering after U.S. stock markets pared early losses. DJI dropped 66 points or 0.75%, Nasdaq dipped 10.88 points or 0.59% while S&P closed down 12.98 points or 1.37%.
U.S. crude futures and gold price tumbled more than 3.00% and 2.00% respectively after Fed’s chairman Bernanke said that he didn't see inflation risk in the near term. The three commodity currencies, Aussie dollar, New Zealand dollar and Canadian dollar, fell sharply from their multi-month highs against the dollar. Aud/usd dropped from 0.8265 to as low as 0.7933, nzd/usd fell from 0.6595 to 0.6270 while cad/usd rebounded strongly to 1.1119.
Data to be released on Thursday include Japan business capex, Australia trade balance, U.K housing prices, eurozone retail sales, U.S. weekly jobless claims, Canada building permits and Ivey PMI index. The Bank of England, European Central Bank and Bank of Canade are widely expected to widely expected to leave interest rates unchanged at 0.50%, 1.00% and 0.25% respectively.
