Deleverages Continues From Friday

Daily Forex Fundamentals | Written by AC-Markets | Oct 27 08 09:06 GMT |

Market Brief After last week action, we are advising our clients not to fall in love with a direction and keep their perspective fluid. The outlook looks very hazy from our vantage point and we are bracing for anything. The Usd was stronger in the Asian session, as deleveraging intensifies. At the start of the week, we are seeing a continuation of last week trends with Usd, Jpy & Chf buying and EM, commodity currencies, carry trades and G10 all under significant selling pressure. The EurUsd traded down to 1.2469 from 1.2700, while the UsdJpy bounced around the 94.49 and 91.91 levels. Sterling, once again, took the brunt of markets fears, with the GbpUsd falling to 1.5423 from 1.5900. The UsdTry spiked upwards to 1.7200, while UsdKrw climbed to 1448.00 as the mass exodus from emerging markets continues. Commodities are under pressure, with Crude wti falling, despite OPECs supply 1.5 million barrel cut last week and gold is finding few buyers. Asian regional indexes have started this week on a gloomy note, with the Hang Seng down a whopping -12.15% and the Nikkei reaching a 26 year low. European futures are pointing to a lower open. With the Yen trading well below the 100 lvl, markets are beginning to question when Japanese officials conduct physical fx interventions. While we don't believe Jpy pricing currently warrants a proactive approach…it is getting close. Verbal intervention has already started, with Finance Minister Nakagawa stating this morning that, 'Currencies are having excessive movements. Excessive and disorderly FX moves may have negative effect on the economy. The MOF monitors the exchange market with a great interest.' While the comment is very close to wording of G7 past statements we expect the volume and language of rhetoric to pick up markedly. In reverse is the RBA, which was confirmed to have already intervened to buy AUD. While no official statement has been released, a RBA spokesman said that they '...were in to support the illiquid market...' Historically the RBA has intervened on the Aud behalf not to reverse the trend, but to slow the course. ACM FOREX Disclaimer: This report has been prepared by AC Markets (thereof ACM) and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Salesperson or Traders of ACM at any given time. ACM is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.