World markets tumbled last week amid a global sell-off as investors fled risk assets due to concerns about Dubai's debt rescheduling.
Dubai, part of the oil-exporting United Arab Emirates, said on Wednesday it would ask creditors of state-owned Dubai World and Nakheel to agree to a six-month standstill on billions of dollars of debt as a first step towards restructuring.
Asian and European markets fell sharply on Thursday and Friday as investors reacted strongly to concerns about bank exposure to the debts.
The U.S. dollar fell sharply against the yen in Tokyo on Friday, hitting a fresh 14-year low in the upper 84 yen range at one point before it rebounded to the lower 86 yen zone.
In an effort to save confidence, Dubai said in an announcement that international ports operator DP World, which operates 49 ports around the world, is not included in the debt restructuring plan.
But the announcement had little effect on holding up investor confidence, and fears that creditors of Dubai World might turn down the government's proposal, forcing Dubai to sell its assets, lingered.
Perry Li, a senior analyst of the currency broker company Forex Signs Inc., said the shadow of Dubai's debt rescheduling may fade out partly this week, as investors wait for Friday's U.S. non-farm payroll data amid rising speculation sentiment.
Events This Week
The Reserve Bank of Australia will announce its new interest rate decision on Wednesday.
The European Central Bank will announce its new interest rate decision on Thursday.
Currency Market Analysis
Pound vs. U.S. Dollar
The British pound tumbled against the U.S. dollar last Friday, but a rebound at the end of the day indicates resurgence this week. Graph shows that the rebound is expected in limited scale and buying below 1.6575.
U.S. Dollar vs. Swiss Franc
The U.S. dollar rebounded against the Swiss franc last week, closing at 1.0055. The support level of 0.9900 should be noticed as the U.S. dollar may continue its decline if this support level is lost. It is recommend to sell U.S. dollars before Wednesday and then buy in dollars to fit in the fluctuating markets this week.