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Market Session Recaps

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Asia Session

Tue, Dec 2 2008, 07:41 GMT
by Forex.com Research Desk

FOREX.com

A new week and a new direction for the equity markets.....Down. Last week's equity gains in the US were quashed as the DOW dropped over 7%, the ISM manufacturing survey hit a 26 year low, and the National Bureau of Economic Research let it be known that the US has been in a recession since December 2007. With the Yen initially hitting highs of 92.86 as the Nikkei predictably collapsed, USD/JPY losses were pared by demand for Dollars by Asian investors, pushing the pair to 93.81. However the USD/JPY was not able to maintain its highs as Yen profit taking wore thin and the pair reconvened back near the 93.15 levels.
EUR/YEN followed the USD/JPY moves, a drop to 117.18, pop to 118.51, and a reversal to bring the pair back to its starting point. EUR/USD was again pushed around by the moves in EUR/JPY, but ultimately was higher on the back of EUR/GBP buying up to 0.8489 as investors fear an over dramatic rate cut by the BoE latter this week. EUR/USD touched a 1.2580 low before just touching under 1.2650. GBP/USD traded in a 1.4855 – 1.4937 range.

In Australia, the RBA cut rates a little more aggressively than the expected 75 basis points, and chopped a full point off the cash rate to bring it to 4.25%, a level not witnessed since 2001. The AUD/USD initially rallied on the cut to hit highs near 0.6410, but the festivity was short lived as the pair then slid back to the 0.6360 levels. The Australian Dollar has lost over 25% against the US Dollar since September.

On deck later this week are RBNZ, BoE and ECB rate decisions.

Upcoming Economic Data Releases (London Session):

Published on  Tue, Dec 2 2008, 07:48 GMT