New York Session Recap

Daily Forex Fundamentals | Written by Forex.com | Nov 11 08 22:23 GMT |

The Veteran's Day holiday and subsequent US bond market close had traders focused squarely on the goings on in the equity market in the NY session. Disappointing corporate earnings and talk of US automakers on the brink of insolvency helped nudge stocks lower. US equities closed the day down -2.2% as the brief afternoon rally which almost saw stocks climb back into positive terrain could not be sustained. This saw the risk trades in FX get pared as well with the USD the main beneficiary once again as traders look for a safe haven. EUR/USD plunged more than -200 pips to a close near the 1.2520/25 zone. The 1.2500 mark looks like the next key trigger for downside and with Euro-zone GDP numbers due up later this week (and likely to disappoint) we would not be surprised to see the pair test well below here. The JPY crosses were expectedly lower as well. EUR/JPY plunged more than -220 points and was sitting near 1.2220/30 after making a session high by the 125.00 level. The pullback in USD/JPY was limited due to the strength in the greenback and the pair shed a modest -20 pips towards the 97.60/70 area. Commodities also encountered some sharp selling and dropped more than -3.5% on the day as concerns about slowing global demand prevailed. Oil dropped more than $3.50 to a close of $58.80/bbl. The downside remains in place while below the critical $60/bbl level. The declines in commodities helped nudge USD/CAD higher. The pair surged about 150 pips and was sitting near 1.2070/75 at the NY close. The path of least resistance here looks to be higher and we would not be surprised to see a move back into the 1.30/35 zone if oil prices continue their leg-down. Upcoming Economic Data Releases (Asia Session) Prior Estimate 11/12/2008 0:30 GMT AU Westpac Consumer Confidence NOV -11.00% - - 11/12/2008 0:30 GMT AU Wage Cost Index QoQ 3Q 1.20% 1.00% 11/12/2008 0:30 GMT AU Wage Cost Index YoY 3Q 4.20% 4.20% 11/12/2008 1:00 GMT AU Treasury Secretary Ken Henry to address National Press Club 11/12/2008 5:00 GMT JN Consumer Confidence OCT 31.8 - - 11/12/2008 5:00 GMT JN Consumer Confidence Households OCT 31.4 30.1 Forex.com http://www.forex.com DISCLAIMER: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase of sale of any currency. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.