(11-01-2008 8:00GMT) Mr. Bernanke's speech yesterday gave the awaited trigger to markets to surge against the weak dollar as he took an extreme dovish stand expressing we stand ready to take substantive additional actions needed to support growth and to provide adequate insurance against downside risks, we are ready to act in a decisive and timely manner, while inflation expectations are reasonably well anchored. That now gives it markets have taken the 25 and the 50 basis points cut for granted this month and now probably are assessing the 75 basis points cut!!!
The euro was the star yesterday as now its trading in a higher range; first was Trichet's hawkish bias and then Bernanke's opposite stand. Breaching the 1.4750s took the pair to 1.48s consolidating well above the mentioned level the euro started a quiet Asian session trading in a tight range recording a high of 1.4815 and a low of 1.4774.
Cable suffers from low levels of volume and has continued its downside trend since early Asian trading hours reaching to the strong support level at 1.9525s which might halt the downside trend, and from there expected to bounce back which would be confirmed if industrial and manufacturing data comes better than the steep falls expected, other than that that the trend will be confirmed despite that the pair is excessively sold. Sterling recorded a high of 1.9635 and a low of 1.9501.
The Japanese yen gained ground on back of a weak dollar and reduction of risky positions funded by the currency as investors indulged into a yen buyback wave. The pair recorded a high of 109.70 then falling to set the lowest at 108.62.
Join the Discussion