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MARKET UPDATES
- Spotlight China: Electricity Consumption Drops Sharply; Central Bank Vows Housing Support; Oil Imports From Iran Fall Again; Asia Real-Estate Bull Turns Bearish
- Postponed Due to "Political Suicide"; Flag of Germany Burned, Could This be a Trigger?
- Banks Paying as Much as $35,000 Cash to Homeowners in Short Sales; Why and How Many?
- Rise of the High Frequency Trading Robots
- New Merkozy Proposal "I will Give You Money If You Give It Right Back"; Mathematical Scam to Prevent CDS Triggers
- Fewer Nonfarm Employees Now Than December 2000; Unemployment Rate: Some Things Still Don't Add Up; Obamanomics?
- Is Romney to Blame for Paying Low Taxes or is 72,536 Pages of Tax Code to Blame? What's the Real Solution? Thanks to AMT, Man Pays 102% Tax Rate
- Huge Plunge In Petroleum and Gasoline Usage
- Country Specific Blog Censorship by Google; Twitter Employs Censorship as Well; Echo Comments Not Working on Redirects
- Postponed Till "Tomorrow"; Juncker Issues ultimatum "Comply or Default"
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Market Updates
October 27, 2010
Dollar surges against yen on speculation of BOJ's intervention
The greenback rallied against yen on Tuesday as Japanese Finance Minister said yen's movement seemed one-sided and warned authorities might weaken yen's strength. Dollar also rose sharply against euro on short-covering due to speculation that further monetary easing by U.S. Fed might accelerate inflation.
Although dollar edged lower to 80.61 against the Japanese yen in Asia, dollar rebounded strongly on active short-covering together with wariness about another round of BOJ's intervention. The pair eventually rallied to 81.66 in NY afternoon on dollar's broad-based firmness.
Earlier in Asia, Japanese Finance Minister Noda said that Monday's movement in yen following the weekend's G-20 meeting seemed one-sided and he was watching market moves with great interest. When asked if there was a chance of joint forex intervention, he replied 'Japan hopes to seek other countries' cooperation if needed.'
Despite euro's fall to 1.3907 in Australia, the single currency rebounded to 1.3982 in Asian mid-day on short-covering. Later, euro dropped again and extended its weakness after the release of U.S. consumer confidence data (which came in at 50.2, stronger than the expectations of 49.2). The pair tumbled to an intra-day low of 1.3825 in NY afternoon.
The British pound dropped briefly to 1.5691 in tandem with euro in Australia, however, cable staged a strong rebound and rose sharply after the release of stronger-than-expected U.K. GDP for the third quarter of 2010, which came in at 0.8% q/q and 2.8% y/y versus the economists' expectations of 0.4% q/q and 2.4% y/y respectively. Sterling climbed to an intra-day high of 1.5897 in European session as Standard and Poor's revised the outlook of U.K. to 'stable' from 'negative'. Cable then retreated in NY session on dollar's broad-based firmness together with profit-taking. Eur/gbp tumbled from 0.8879 to 0.8728.
Economic data to be released on Wednesday include:
Australia CPI, Germany CPI prelim, HICP prelim, U.S. Durable goods, ex. Defense, ex. Transport, Building permits, New home sales, Midwest manufacturing.
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