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Market Review - 09/09/2009 21:14 All times in GMT
Dollar remains under pressure as risk appetite continues to increase
The greenback remained under pressure on Wednesday as the rise in equities and commodities encouraged further risk appetite and investors continued to purchase high-yielding assets on hopes of global economic recovery.
Cable dropped to 1.6455 in European opening on cross selling versus euro n then rose again in line with dollar's broad-based weakness after Moody's report stated that it was unlikely to downgrade sovereign ratings of U.K. and Spain (despite the worse-than-expected trade data which came out at -6.47 billion pounds versus forecast of -6.29 billion pounds). Price later extended intra-day gain to as high as 1.6592 before retreat due to greenback’s rebound on short-covering in New York afternoon session.
The single currency traded sideways in Asia session initially and strengthened in European morning on dollar's weakness due to options-related buying and renewed concerns over the dollar's long-term status as the world's reserve currency (while CPI and HICP data in Germany came out mixed). Price rose to 1.4605 in U.S. session on strong commodities and positive opening in the Dow before a minor retreat took place.
Three-months LIBOR fell to a record low of 0.299 percent, lowering the borrowing cost of U.S. dollar and encouraged investors to buy risky assets. Oil and gold rose above $72 a barrel and $1000 an ounce respectively before retreating in N.Y. afternoon. On commodity currencies, aussie and kiwi rose to fresh 2009 high of 0.8669 and 0.7009 respectively.
RBNZ kept official cash rate unchanged at 2.50% followed by announcement that the central bank would keep rate at current level until late 2010, and it is 'possible' for further rate cuts as high New Zealand dollar threatened recovery. However, RBNZ said that it will eventually tighten monetary policy 'if economy recovers as projected'.
Economic data to be released on Thursday include:
Domestic CGPI and machine orders in Japan; unemployment rate and employment change in Australia; BOE rate decision in U.K..; trade balance and jobless claims in U.S.; trade balance, imports and exports data in Canada.
Dollar remains under pressure as risk appetite continues to increase
The greenback remained under pressure on Wednesday as the rise in equities and commodities encouraged further risk appetite and investors continued to purchase high-yielding assets on hopes of global economic recovery.
Cable dropped to 1.6455 in European opening on cross selling versus euro n then rose again in line with dollar's broad-based weakness after Moody's report stated that it was unlikely to downgrade sovereign ratings of U.K. and Spain (despite the worse-than-expected trade data which came out at -6.47 billion pounds versus forecast of -6.29 billion pounds). Price later extended intra-day gain to as high as 1.6592 before retreat due to greenback’s rebound on short-covering in New York afternoon session.
The single currency traded sideways in Asia session initially and strengthened in European morning on dollar's weakness due to options-related buying and renewed concerns over the dollar's long-term status as the world's reserve currency (while CPI and HICP data in Germany came out mixed). Price rose to 1.4605 in U.S. session on strong commodities and positive opening in the Dow before a minor retreat took place.
Three-months LIBOR fell to a record low of 0.299 percent, lowering the borrowing cost of U.S. dollar and encouraged investors to buy risky assets. Oil and gold rose above $72 a barrel and $1000 an ounce respectively before retreating in N.Y. afternoon. On commodity currencies, aussie and kiwi rose to fresh 2009 high of 0.8669 and 0.7009 respectively.
RBNZ kept official cash rate unchanged at 2.50% followed by announcement that the central bank would keep rate at current level until late 2010, and it is 'possible' for further rate cuts as high New Zealand dollar threatened recovery. However, RBNZ said that it will eventually tighten monetary policy 'if economy recovers as projected'.
Economic data to be released on Thursday include:
Domestic CGPI and machine orders in Japan; unemployment rate and employment change in Australia; BOE rate decision in U.K..; trade balance and jobless claims in U.S.; trade balance, imports and exports data in Canada.
