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U.S. Dollar and Japanese yen fall broadly as risk appetite returnsMarket Review - 29/06/2009 21:20
All times in GMT
By www.acetraderfx.comU.S. Dollar and Japanese yen fall broadly as risk appetite returns
greenback and Japanese yen dropped against most of their major
counterparts as rising oil prices and U.S. stocks reduced the demand
for U.S. dollar and yen as safe-haven assets. The president of the
Federal Reserve Bank of Boston Eric Rosengren said on Monday that U.S.
gross domestic production is expected to turn positive in the second
half of this year and the unemployment rate is likely to lag, so that
the peak in the unemployment rate would be sometime early next year.
Dow Jones industrial average index added 90.99 points or 1.08%, while
Nasdaq and S&P's 500 closed up 5.84 points or 0.32% and 8.33 points
or 0.91%. respectively.
Although euro fell to as low as
1.3982 against the dollar after Chinaâ€™s central bank Zhou Xiaochuan
said the greenback may keep dominating global trade and ruled out
'sudden' changes in the foreign-exchange reserve policy of China
earlier in the day, the single currency found buying interest on dips
after the release of better-than-expected eurozone economic sentiment,
which strengthened for the third month running in June (73.3 versus
consensus forecasts of 71.0). This upbeat data reduced demand for the
U.S. currency as a safe haven and sent European stocks higher as hopes
grew that the worst economic crises in decades may be easing. CAC and
DAX index closed up more than 2% while FTSE gained 1.25%. The single
currency extended intra-day rise to 1.4103 in New York afternoon before
easing due to profit taking.
The British pound fell to as
low as 1.6430 against the U.S. currency after comments from Zhou,
however, it rose in tandem with the euro and hit an intra-day high of
1.6587 in late New York afternoon. The dollar also weakened against the
Swiss franc and dropped from 1.0912 to 1.0809. Crude oil prices rose
more than 2% on Monday as Nigeriaâ€™s main militant group said that its
fighters had attacked an oil facility belonged to Royal Dutch Shell in
In early Asian trade, Japanâ€™s Trade Ministry
said retail sales slipped 2.8% in May from a year earlier. Another
report indicated that industrial production dropped 29.5% in May from a
year earlier. On cross trading, aud/jpy jumped from 76.16 to 77.76,
gbp/jpy surged from 156.75 to 159.32 and eur/jpy rallied from 133.36 to
Data to be released on Tuesday includes Japan
unemployment rate, housing starts, German unemployment rate, U.K. Gfk
survey, current account, GDP, eurozone CPI, Canada GDP, PPI, and U.S.
Chicago PMI and consumer confidence.
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