Tuesday February 5, 2008 - 21:33:26 GMT
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FX Blog: Market Snapshot Far East Open
GVI Market Snapshot-- Far East Open
- Forex markets came to life on Tuesday following the tentative Monday session in the wake of the weak U.S. January employment report. Not only were E-Z Services and Retail Sales data unexpectedly week, but the U.S. January Services PMI was especially soft.
- Despite the soft Services PMI, the USD is ending up sharply against the most of the major currencies. The EUR, CHF and GBP have sold off heavily over the session. The JPY is closing about steady on the day.
- Most are expecting a -25 bp (to 5.25%) rate cut from the BOE on Thursday. Such a move would be seen as positive for that economy. The ECB is seen likely to keep policy on hold. The tenor of the comments by ECB President Trichet will be closely scrutinized
- The commodity currencies (AUD, CAD and NZD) are trading sharply weaker on global recession fears. Gold and oil are lower. Dealers had expected the +25bp interest rate hike in Australia (to 7.00%) today. Some say that additional tightening is in the pipeline.
- U.S. share markets ended sharply lower later. Asian equities closed weaker early in the day. This week sees lunar new year observances. European bourses were weaker as well. Bond prices spiked higher.
- The economic calendar from the U.S. this week is relatively light.
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