XForex Daily Finance Briefing October 10th 2008
Posted by forextradinganalysis on October 10, 2008
The Yen, Dollar, Soar as Stock Markets Remain Gripped by Panic
Overnight Asian stock markets dived with the Japanese Nikkei index recording its largest one day drop since 1987 after insurer Yamato Life filed for bankruptcy. In the wake of a panic session in Asia, European bourses opened down 9-10% across the board before some retracement of losses occurred. The yen has strengthened across the board as confidence continues to evaporate across financial instruments. The dollar is also benefitting from panic in the markets recording strong gains against all the majors except the yen. At 6am GMT this morning the AUD-USD was down 4.9% on the previous 24 hours, cable (GBP-USD) was down 2.2%, the USD-JPY was down 1.3%, the EUR-USD was down 0.9% and the USD-CAD was up 3.25% all on the same period.
Yesterday there had appeared to be signs of renewed confidence in financial markets following the coordinated interest rate cuts, Wednesday, by six of the World’s leading central banks. This confidence proved misplaced as equities proceeded to dive once more as the Dow Jones went on to drop below 9000 points for the first time since 2003.
During the overnight trading session sterling dived approximately 2% across the board. The main reason for this is the continuing dispute between Iceland and the UK over the bankruptcy of three Icelandic banks which has jeopardized billions of dollar’s worth of UK based assets. A crisis between the two countries appears to be brewing as the UK threatens to retaliate against UK based Icelandic investments.
Oil prices are continuing to decline sharply. Light sweet crude oil is currently trading around $83 per barrel after another day of heavy declines appears to be underway. Gold meanwhile is once more benefiting from its reputation as a safe haven asset and is trading above $915 per ounce. At 6am GMT the gold price was up 2.5% in 24 hours, the silver price was up 3.6% in the same period.
EUR
1.3750 1.3700 1.3620 1.3600 RES
1.3444 1.3500 1.3540 1.3580 SUP
JPY
101.50 101.00 100.60 100.30 RES
97.90 98.30 98.80 99.00 SUP
CHF
1.1400 1.1350 1.1310 1.1200 RES
1.1050 1.1095 1.1140 1.1180 SUP
GBP
1.7050 1.7000 1.6950 1.6900 RES
1.6700 1.6802 1.6850 1.6880 SUP
