Deleveraging Continues as US Stock Market Futures Limit Down, European Shares Down Nearly 9%

Daily Forex Fundamentals | Written by DailyFX | Oct 24 08 13:15 GMT |

Deleveraging continues as funds flow away from stocks, commodities, and carry trades into the US dollar, Japanese yen, and Treasuries. Indeed, the US dollar has rocketed versus most of the majors, but the Japanese yen has proven to be even stronger as the low-yielder has surged nearly 5 percent against the greenback and over 10 percent versus high-yielders like the New Zealand dollar and Australian dollar. Why? Risk aversion remains high as UK GDP figures signaled recession while OPEC cut production by 1.5 million barrels. This has also triggered massive losses for European stock markets, which are down nearly 9 percent at the time of writing. Even worse, DJIA and S&P 500 futures have stopped trading limit down, with the former down 550 points and the latter down 60 points. This does not bode well for the market open at 9:30 ET, and as long as this sort of sentiment persists, the odds remain in favor of US dollar and Japanese yen strength. DailyFX Disclaimer Investment in the currency exchange is highly speculative and should only be done with risk capital. Prices rise and fall and past performance is no assurance of future performance. This website is an information site only. Accordingly we make no warranties or guarantees in respect of the content. The publications herein do not take into account the investment objectives, financial situation or particular needs of any particular person. Investors should obtain individual financial advice based on their own particular circumstances before making an investment decision on the basis of the recommendations in this website. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. All intellectual property rights are the property of Daily FX. Daily FX and its affiliates, will not be held responsible for the reliability or accuracy of the information available on this site. The content herein is provided in good faith and believed to be accurate, however, there are no explicit or implicit warranties of accuracy or timeliness made by Daily FX or its affiliates. The reader agrees not to hold Daily FX or any of its affiliates liable for decisions that are based on information from this website. Daily FX highly recommends that before making a decision, the reader collects several opinions related to the decision and verifies facts from at least several independent sources.