Tuesday June 3, 2008 - 20:08:59 GMT
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FX Blog- Market Snapshot Far East Open for 3 Junel 2008
GVI Market Snapshot- Far East Open for June 3, 2008
Profile of Key Markets:
- The USD was trading on the back foot early on Tuesday heading into comments by Fed Chairman Bernanke and ECB President Trichet. The markets appeared to have set up for neutral comments by Fed Chairman Bernanke and hawkish comments by ECB President Trichet, but got blindsided by surprisingly strong comments by Bernanke in support of the USD. His comments were surprising in that forex policy is under the purview of the Treasury Secretary (Paulson). Mr. Bernanke indicated that the value of the USD would play a role in future monetary policy decisions. This new attention to USD strength gave the U.S. currency a lift.
- The EUR/USD is now trading back below the neutral 1.5500 line, and although the GBP has eased, the EUR/GBP cross has weakened.
- The USD/CHF had been in a leadership position on the USD downside earlier. The CHF is now weaker vs. the USD, but still up against the EUR.
- USD/JPY delinked from the S&P and gained, while the JPY is steady vs. the EUR.
- Oil is closing off sharply after the USD recovery. Gold is down as well. The AUD eased following the unchanged RBA monetary policy decision, as expected. The policy statement was neutral, but kept the door open for future rate hikes, if needed.
- Asian equities closed lower and European bourses are mixed. European equities rallied. U.S. equities are lower on a new round of sub-prime concerns. JGBs rallied earlier, while the prices on E-Z bonds fell. U.S. bond prices are higher on a flight to safety.
- U.S. data releases include Factory orders at 14:00 GMT, and a speech by Bernanke at 13:00 GMT on the economy. Key data releases Wednesday include the various Services PMI reports and the ADP private jobs survey. See the GVI Calendar for the full schedule of key data.
CHART: 2s (EZ-U.S.) vs. EUR/USD:
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