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Market Review - 06/10/2009 20:16 All times in GMT
Dollar falls broadly as RBA's rate decision boosts recovery hopes
The greenback declined against it's major counterparts (except sterling) on Tuesday as RBA became the first central bank among the Group of 20 nations to raise interest rates since the financial crisis began by raising the cash rate by 25 basis points to 3.25%. The RBA statement showed the global economy is resuming growth and unemployment has not risen as far as had been expected. Housing credit growth has been solid and dwelling prices have risen appreciably over the past six months. Aussie dollar rose to 0.8920, the highest since August 2008 while gold rallied to its fresh record high of $1042.20 as traders are flocking into the safety of gold as a dollar hedge and inflation hedge.
The single currency advanced in Asian morning as dollar weakened broadly after the U.K.’s Independent newspaper said Persian Gulf states and Japan, Russia and China held discussion of dropping the U.S. currency for oil trades, price rose to 1.4750 before retreating in part due to comments from Saudi Arabia's central bank chief who said that the newspaper report was
'absolutely incorrect'. However, euro met renewed buying as U.S. stocks opened higher on hopes that global economy would follow Australia's pace to recover, price rose to as high as 1.4763 before retreating in U.S. afternoon.
Sterling gained in Asian and European sessions in line with dollar's weakness and also cross unwinding in eur/gbp, however, price fell sharply from 1.6049 to 1.5875 after the release of the weak U.K. industrial (-2.5% versus forecast of 0.2%) and manufacturing production (-1.9% versus forecast of 0.3%, also the lowest in 17 years) in August. Sterling then traded sideways in U.S. session, ending up as the only major currency not to strengthen against the dollar.
Economic data to be released on Wednesday include:
U.K. Nationwide consumer confidence index, Japan leading indicators, Switzerland jobless rate, eurozone GDP and German factory orders.
Dollar falls broadly as RBA's rate decision boosts recovery hopes
The greenback declined against it's major counterparts (except sterling) on Tuesday as RBA became the first central bank among the Group of 20 nations to raise interest rates since the financial crisis began by raising the cash rate by 25 basis points to 3.25%. The RBA statement showed the global economy is resuming growth and unemployment has not risen as far as had been expected. Housing credit growth has been solid and dwelling prices have risen appreciably over the past six months. Aussie dollar rose to 0.8920, the highest since August 2008 while gold rallied to its fresh record high of $1042.20 as traders are flocking into the safety of gold as a dollar hedge and inflation hedge.
The single currency advanced in Asian morning as dollar weakened broadly after the U.K.’s Independent newspaper said Persian Gulf states and Japan, Russia and China held discussion of dropping the U.S. currency for oil trades, price rose to 1.4750 before retreating in part due to comments from Saudi Arabia's central bank chief who said that the newspaper report was
'absolutely incorrect'. However, euro met renewed buying as U.S. stocks opened higher on hopes that global economy would follow Australia's pace to recover, price rose to as high as 1.4763 before retreating in U.S. afternoon.
Sterling gained in Asian and European sessions in line with dollar's weakness and also cross unwinding in eur/gbp, however, price fell sharply from 1.6049 to 1.5875 after the release of the weak U.K. industrial (-2.5% versus forecast of 0.2%) and manufacturing production (-1.9% versus forecast of 0.3%, also the lowest in 17 years) in August. Sterling then traded sideways in U.S. session, ending up as the only major currency not to strengthen against the dollar.
Economic data to be released on Wednesday include:
U.K. Nationwide consumer confidence index, Japan leading indicators, Switzerland jobless rate, eurozone GDP and German factory orders.
