Record low borrowing costs spurred investors to sell off the US dollar for higher-yielding assets.

  • The greenback traded near the weakest level in almost a year against its major counterparts as investors became more comfortable with risk.  This week the US dollar became the cheapest funding currency in London, making it more attractive as a means of financing purchases of higher-yielding assets.
  • The dollar trimmed losses after a Federal Report said in its Beige Book business survey that US consumer spending remained soft.  However, 11 of the Fed's 12 regional banks reported signs of a stable or improving economy in July and August.
  • The Dollar Index, which tracks the currency against six major currencies, was at just above 77 earlier in the Asian session, coming off the lowest level since September 26, 2008.  The index declined 14% from its high in 2009 at 89.6.
  • The Australian dollar fell for the first time this week after employers cut 27,100 jobs last month compared to the expected figure of 14,300, easing pressure on the central bank to raise interest rates. 
  • Asian stocks climbed with the MSCI Asia Pacific Index hitting a one-year high as earnings outlook improves.  The Japanese yen fell for a sixth day against the euro as stocks rallied spurring optimism ahead of reports forecasts to show China's industrial production gained and exports fell at a slower pace.

Currency to watch out for: EURUSD & GBPUSD

  • The EURUSD pivot point is at 1.4500 with the preference to enter into long positions at 1.4510
  • The GBPUSD pivot point is at 1.6500 with the preference to enter into long positions at 1.6510

Today's calendar and market movers:

  • UK Rate Announcement expected to remain unchanged at 0.50%
  • US Unemployment Claims expected to drop to 560,000
  • US Crude Oil Inventories expected to drop to -1.5 million barrels

Stocks:

  • US equities managed to close up about 0.5 to 0.7%, closing higher for a fourth straight day, sending the S&P index to its best finish so far this year as industrial and technology companies gained from a weak dollar.
  • As of 06:20 GMT the Nikkei is trading at 1.95% and the Hang Seng at 2.13%