Forex Market Update: Dollar Under Selling Pressure on Risk Appetite
Written by DailyFX Research
The dollar came under steady selling pressure as currencies posted steady strong gains in Asia, along with a rise in JPY crosses. Increased risk appetite bolstered the currencies with factors seen fostering the increased risk appetite including the Senate approval of the $350 bln TARP tranche, the House Democrats $825 stimulus package, the positive close on Wall Street and subsequent rally in the Nikkei. The news late in the session of the bail-out support for the BofA Merrill purchase aided sentiment as well as DJIA futures rose on the news, treasury yields extending gains and Asian stocks extending their rally. EUR-USD, which fell to a low of 1.3025 in NY trading, had opened in Asia around 1.3100 and traded as high as 1.3254. USD-JPY, on the back of the cross flows, recovered from the lows of 88.49 on Thursday, to open in Asia around 90.00 and trade to highs of 90.57. Cable traded to highs of 1.4849 on short-covering with strong gains in AUD, CAD and NZD ignoring fairly downbeat commodity developments from overnight trading. Nymex crude remained soft in Asia, at $35.50, gaining only 10 cents. Gold rallied on the back of the weaker USD, rising $13.50 to trade to $820.80. Another sign of renewed risk appetite was the biggest daily gain in the KRW in almost three weeks.
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