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Yen Soldoff, Dollar Strikes Back, Sterling Hammered

Posted 08-22-2008 at 10:29 AM by ActionForex.com (Action Insight)

The Japanese yen is sharply lower into early US session on speculation that Lehman Brothers could be acquired by a group of Korean Development bank. US stock futures jump sharply such such speculation and lure investors back to the stock markets. The Japanese yen is thus sold off sharply on return of risk appetite. Meanwhile, the greenback is also supported by retreat in oil prices and strikes back against majors currencies. Particular weakness is seen in Sterling which is hammered by unexpected downward revision in Q2 GDP to 0% qoq, 1.4% yoy growth.

Technically Speaking, yen crosses should have made a short term bottom and more upside is expected in EUR/JPY and GBP/JPY. Meanwhile, USD/JPY looks set to resume recent rise. Dollar's...

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Yen and Oil Driving Forex Markets

Posted 08-21-2008 at 04:02 AM by ActionForex.com (Action Insight)

Dollar is broadly weaker as the day goes, led by selling in USD/JPY and pressured by strong rebound in oil prices to above $116 level. . Reactions in other dollar majors are so far mild as Euro and Sterling are both pressured in respective yen crosses. As mentioned earlier this week, risk aversion seems to be a stronger theme in the markets comparing to volatility in commodity prices and such bias is still in force as seen in today's price actions so far. In addition to worry on US credit market losses, markets are concerned with slowdown in the Eurozone economy and deeper recession in UK.

Note that the tricky relationship with commodity prices. On the one hand, rebound in commodity prices will put pressure in the stock markets...

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Mid-Day Report: Dollar Remains Firm after Strong Inflation and Weak Housing

Posted 08-19-2008 at 05:02 PM by ActionForex.com (Action Insight)

Dollar remains firm in early US session after mixed data which continues to show deepening recession in the housing markets and skyrocketing inflation. Housing starts dropped -11.0% to 0.96M annualized rate in Jul, inline with expectation. Meanwhile,building permits dropped much more than expected by -17.7% to 0.94M annualized rate. The data argues that surprised rebound in Jun was just a false dawn. Headline PPI growth doubled markets forecasts by 1.2% mom in Jul, pushing yoy rate to 27 years high of 9.8% yoy in Jul. Core PPI jumped 0.7% mom versus expectation of 0.2%, pushing yoy rate much more than expected to 3.5%.

After all, the outlook in the forex markets remains unchanged. Dollar's intraday upside momentum is seen diminishing...

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