Thursday April 10, 2008 - 20:29:41 GMT
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FX Blog- Market Snapshot Far East Open for 11 April 2008
GVI Market Snapshot- Far East Open
- Market Sentiment for the USD had turned significantly more negative from early in the week through the N.Y. Open. The latest USD slide, especially vs. the EUR appears to have caught many in the markets flat-footed.
- Neither the BOE nor the ECB surprised the markets. The BOE cut is repo rate by -25bps to 5.00% and the ECB kept policy steady. The main focus following the policy decisions was the press conference of ECB President Trichet, who continued to toe a hawkish line on interest rates. Following the ECB press conference, the USD rebounded on a âbuy the rumor sell the factâ reaction.
- Earlier, the Icelandic central bank raised its overnight target rate by +50bps to 15.50% to support its battered currency and Singapore announced that it would pursue a strong currency policy to contain inflation.
- Many are looking ahead to the G7 on the weekend, but officials have been sending signals that no consensus has been reached that action in support of a stronger USD is being contemplated.
- The USD is now higher vs. its depressed Wednesday close vs. the EUR. The GBP is softer as well. The carry trade financing currencies, CHF and JPY, are mixed.
- The Shanghai Composite and Hong Kong exchanges closed higher. The Nikkei fell. Key European bourses closed weaker. Eurozone bond prices are mixed. U.S. equities are now seen opening higher. U.S. bond prices are lower.
- The commodity currencies (AUD, CAD and NZD) are mixed ti weaker vs. the USD. Gold and oil are lower.
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