Yen Surges as Asian Stocks Continue to Dwindle on Growth Concerns

Daily Forex Fundamentals | Written by AC-Markets | Sep 05 08 08:19 GMT |

The EURUSD dropped away yesterday in end of day trading as U.S Stocks ended their trading day 3% lower. The Euro Dollar pair subsequently traded range bound from 1.4297 to 1.4253 after initially dropping to 1.4214 on first move - a 1 year low. ECB's downgrading of the Euro zone’s growth prospects increased downside risks and sentiment weakening the currency further. This offset the weak US jobless claims and sluggish same-store retail sales. Oil continues to be weaker despite EIA inventory showing definite demand resilience.

Asian markets continue to feel the full grunt of the global economic crisis. Nikkei dropped another 2.75% as the Japanese economy sees it's industries suffer from weak public sentiment the state of the global economy. The Yen rose against the dollar at the NY close, USDJPY pair dropping to 105.72 before retracing to 107.30 levels before settling and trading a range from 106.5 to 107.3 in Asian trading session.

The Hangseng fell below 20'000 level for first time in 1 year as the Korean economy fails to buck the current bearish trend in Asian markets.

Today the focus is very much on the US Nonfarm payrolls at 12:30 GMT, the market expects a -71K (47% lower in one month) decline to hit home the severity of the global economy. Continued dollar strength to be driven by weak outlook on growth outside the US - namely European equities underperforming in comparison to their U.S counterparts - and lower oil prices.

AC Markets
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