Equities Collapse Gives Usd Strength

Daily Forex Fundamentals | Written by AC-Markets | Oct 16 08 07:57 GMT |

Market Brief The Usd was considerable stronger in the Asian session, as the equity markets continued to tumble. The EurUsd traded down from 1.3550 to 1.3350 session lows, while the UsdJpy traded from 101.50 to 99.27 session lows. The AudUsd fell at the open to 0.6497, before recovering to 0.6800. As risk aversion defined the session price activities, carry trades and EM continued to come under significant selling pressure, with the GbpJpy at 170.41 and the UsdTry traded higher to 1.5060. VIX spiked higher trading up to 69.25 and crude slipped as fears of a global recession intensified. Weak retail sales in the US and beige book, which reinforced the weakness in US economic activity, prompted another dismal day on Wall Street (largest daily decline since the 1987 stock market crash) with S&P 500 down -9.03% . The indiscriminate, panic like selling carried over into Asia, with the Nikkei currently crashing -11.40%. We don't expect any break in FX trend with Usd & Jpy as gainers and Gbp, Eur, Aud, NZD bearing the brunt of the selling. In Japan, the October's Tankan survey of business conditions significant fell in manufacturer sentiment, with the manufacturing industry index declining to -25, against the prior reading of -14. The deterioration was located in the raw materials & exporting sectors, a signal of slow global demand. In addition, the forecast remains dreary at -21 in 3 months. There was some reference to the effects of the financial market turmoil during the survey period. However, it was the real Japanese economy itself that emerged as the main area of apprehension. As we have stated in the past, as the risk aversion eases we expect the Jpy to come under selling pressure. No major events or data releases scheduled in European session. 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.