iFC Markets market overview (http://www.ifcmarkets.com/en/overview/)
The recent dynamics in the currency markets remains and is still determined by the risk. Understanding that the Dubai World problems will not affect the global economy allowed highly yielding currencies to recover but put the Dollar and Yen down. A supporting factor was also UAE authorities' willingness to open a credit line to the country's banking system which has immediately reduced the risks level over a possible Dubai World bankruptcy. EURUSD got back up above 1.50. Economic data is helping the European currency too. November's Consumer Prices showed the first since April increase by 0.6% in Euro zone outbeating the optimists with their +0.4%. US data came rather positive too. Chicago's ISM said that Business Sentiment went up to 56.1, being a maximum since August 2008. Dallas Fed's Manufacturing Activity has also bloomed. Business Activity grew from -3.3 a month earlier to 0.3 although the employment sector remained weak, it improved from October's -15.1 to this month's -11.9.
The Pound felt much worse as the Dubai fund's problems are a partly its own as long as about 40% of the fund's debts belong to British banks. Apart from that, the British consumers' confidence fell for the first time in more than a year. Another bad news came from the Bank of England saying that the net retail lending level fell by 579 million GBP in October. A disastrous figure comparing to the economists' forecasts of 300 million.
The USDJPY's decline has halted. A possible intervention from the Japanese authorities' side is having a preserving impact on Yen buyers. Although the commentaries are mixed, the fact that it's being talked around, points at a high probability of such an outcome. The Minister of Finance, Mr. Fuji said he would not exclude a declining Yen scenario. Bank of Japan's head, Mr. Sirakawa confirmed the central bank is ready to act.
The recent dynamics in the currency markets remains and is still determined by the risk. Understanding that the Dubai World problems will not affect the global economy allowed highly yielding currencies to recover but put the Dollar and Yen down. A supporting factor was also UAE authorities' willingness to open a credit line to the country's banking system which has immediately reduced the risks level over a possible Dubai World bankruptcy. EURUSD got back up above 1.50. Economic data is helping the European currency too. November's Consumer Prices showed the first since April increase by 0.6% in Euro zone outbeating the optimists with their +0.4%. US data came rather positive too. Chicago's ISM said that Business Sentiment went up to 56.1, being a maximum since August 2008. Dallas Fed's Manufacturing Activity has also bloomed. Business Activity grew from -3.3 a month earlier to 0.3 although the employment sector remained weak, it improved from October's -15.1 to this month's -11.9.
The Pound felt much worse as the Dubai fund's problems are a partly its own as long as about 40% of the fund's debts belong to British banks. Apart from that, the British consumers' confidence fell for the first time in more than a year. Another bad news came from the Bank of England saying that the net retail lending level fell by 579 million GBP in October. A disastrous figure comparing to the economists' forecasts of 300 million.
The USDJPY's decline has halted. A possible intervention from the Japanese authorities' side is having a preserving impact on Yen buyers. Although the commentaries are mixed, the fact that it's being talked around, points at a high probability of such an outcome. The Minister of Finance, Mr. Fuji said he would not exclude a declining Yen scenario. Bank of Japan's head, Mr. Sirakawa confirmed the central bank is ready to act.
