FXstreet.com (Barcelona) - Asian stock markets have posted on Friday their fourth negative day during the current week, with Japan and Hong Kong losing more than 2% as Wall Street fell to levels of November last year, the peak of the current economic crisis.
Wall Street's closed on Thursday at its worst level since Oct 9 2002, the lowest level of the last crisis period, arising fears of a deep economic slowdown ahead. Risk aversion returned to Asian stock markets and Tokyo Nikkei index has dropped 2%, Hong Kong's Hang Seng Index went 2.5% down and South Korean Kospi Index lost 3.7%
Euro and Pound tumble
The reaction in Forex markets has been an strong wave of risk aversion which has favoured the Dollar which has rallied against Euro and Pound.
EUR/USD has dropped from intra-day high at 1.2760 at Thursday's U.S. session opening all the way down to 1.2575, the area between 1.2560/75. The Euro has posted the largest weekly decline ever against the Dollar from 1.2824 on Monday. EUR/JPY followed a similar pattern; attempt to break resistance at 120.00 (Feb 9 high) did not succeed and the Euro has dropped to levels around 118.25.
GBP/USD has turned down from 1.4445 (50% Fib. Retracement of the 1.5353 in Jan 9 to 1.3500 in Jan 23 fall) all the way down to 1.4210. USD/JPY remains above 94.00 support level on its way up to important resistance level at 94.65 (Jan 6 high).