The NY session was all about digesting the BOE and ECB rate cuts and accompanying press statements. The market did not take it well. US stocks plunged more than 5% on a slow and painful grind lower the entire session. Meanwhile EUR and GBP, which looked relatively unscathed following the rate cuts, began to sink. Risk trades were pared and the USD was buoyed once again.
EUR/USD ended the session roughly -60 pips lower and was sitting near the 1.2710/20 area after posting a high by the 1.2870/80 mark. GBP/USD was decimated about -270 pips as the economic realities sank in. The pair closed by 1.5620/30 after posting a session high near the 1.5950/60 area. Risk aversion meant lower JPY crosses as well and EUR/JPY dipped about -60 pips towards 1.2420/30 after posting a 1.2675/80 high. Commensurate moves in EUR/USD and EUR/JPY left USD/JPY unchanged for the session.
The other major story was in USD/CAD. Oil prices plunged about -7% on the day and the commodity was sitting just above $60/bbl at the close. USD/CAD surged more than 250 pips on this and is now well on its way to testing the 1.2000 zone. The $59/bbl mark has been touted as the next critical support level and thus a break here should see USD/CAD push into fresh highs for the week.
Upcoming Economic Data Releases (Asia Session) Prior Estimate
- 11/7/2008 0:00 US Fed's Warsh Speaks to Investors, Economists in New York 6-Nov
- 11/7/2008 5:30 AU Foreign Reserves OCT 36.0B - -
