The US Dollar was again a beneficiary of the prevalent risk aversion amidst the reality that no new plans would come out of the G20 meeting. With global economies facing certain recession and US stocks on the receiving end of a bashing, the speculation is that investors are buying safer haven US assets, thus pushing the Buck higher versus the Euro and the Yen. USD/JPY bottomed out early in Asian trading at 96.22, and slowly but surely drove to 96.79 high in very light trading. EUR/USD began the session near its highs of 1.2667 and slid to just above 1.2600 at the lows. The Euro still seems to be destined for a fall as the result of deleveraging and risk aversion, as well as the fact that the ECB looks to be behind the bell curve as far as rate cuts go. The Euro was also pinned to moves in EUR/JPY and EUR/GBP again, as we saw EUR/JPY extend losses for a third straight session, hitting a 121.47 low as investors bought back the Yen and jumped ship from riskier assets.       
      
The RBA minutes were released this session and the Aussie Dollar took it on the chin as it was stated that a 50bp cut was on the table, but the RBA opted for the more aggressive 75bp cut to bring rates to 5.25% and further hinting from the minutes showed the possibility for future cuts. AUD/USD dropped from 0.6497 to lows of 0.6432 and AUD/JPY was knocked from 62.78 to 62.00 as many feel that the higher yielding currencies such as the Aussie have farther to fall, some even insist up to 200bp cut is inevitable in the near future.


Upcoming Economic Data Releases (London Session):

  • 11/18/2008 8:15 SZ  Retail Sales (Real) (YoY)  SEP  0.00% - -
  • 11/18/2008 9:30 UK  CPI (MoM)  OCT  0.50% 0.10%
  • 11/18/2008 9:30 UK  CPI (YoY)  OCT  5.20% 4.80%
  • 11/18/2008 9:30 UK  Core CPI YOY  OCT  2.20% 2.20%
  • 11/18/2008 9:30 UK  Retail Price Index  OCT  218.4 218.7
  • 11/18/2008 9:30 UK  RPI (MoM)  OCT  0.60% 0.00%
  • 11/18/2008 9:30 UK  RPI (YoY)  OCT  5.00% 4.50%
  • 11/18/2008 9:30 UK  RPI Ex Mort Int.Payments (YoY)  OCT  5.50% 5.20
  • 11/18/2008 10:00 EC  Construction Output SA MoM  SEP  0.10% - -
  • 11/18/2008 10:00 EC  Construction Output WDA YoY  SEP  -2.50% - -