FXstreet.com (Barcelona) - Financial markets are moving in a climate of scepticism about the effectiveness of Geithner's stimulus plan; Asian markets have traded downward on Thursday for fourth consecutive day, while South Korean Central Bank trimmed rates to 2%, in this context traders seek for shelter in safe haven currencies as Dollar and Yen.
Investors do have serious doubts about Timothy Geithner's stimulus plan released on Feb 10 to revitalise credit flow and the banking sector in general. Such fear has caused the fourth consecutive decline in Asian stock markets with the MSCI Asia Pacific Index falling 1.7%, and Tokyo Nikkei Index 3% Down.
South Korean Central Bank has cut interest rates for the sixth time in four months, to a record low 2%, and the Bank leaves the door open for further rate cuts as the country heads towards its first recession in 11 years.
Majors sideways in Asian session, Yen and Dollar at higher levels
The Yen and Dollar have been the most favoured currencies among the majors on Wednesday, in this climate of uncertainty. The Dollar gained positions against Pound and Euro, while it lost some of the value gained previously against the Yen.
EUR/USD has been trading within a low of 1.2860 and a high around 1.2920 in Asian session after having dropped from levels close to resistance at the 1.2990/1.30 area. The Euro found support at 1.2850 on its way down approaching the downward trending channel it had been trading since the 18th of December.
The GB/USD has been moving between 1.4335 to a higher level 1.4397/1.44 after drop from 1.4550 on Wednesday's European level, weighed by the BoE's grim economic outlook depicted at its Monthly Inflation Report.
The USD/JPY has continued appreciating against the Dollar, reaching 90.00 level , down from 90.50 at te beginning of the Asian session. At the moment, the USD is trying to bounce from 90.00 towards next key level at 90.75. On the downside, break of 90 level would set focus on 88.80.