Markets Shrug Off China's 5th Rate Cut Since September, Japan Closed

Daily Forex Fundamentals | Written by AC-Markets | Dec 23 08 10:08 GMT |

Market Brief As Father Christmas approaches, the VIX volatility index falls signaling a slowdown in market activity for year end as market players reflect on a fiscally disastrous year. The pessimistic data out of U.S and EU businesses still a weight on sentiment as 2008 draws to a close. U.S and UK GDP figures are out today, final Q3 numbers expected to confirm the drastic decline in growth in the latter part of the year as the financial world's meltdown hit its climax. The EURUSD continued to strengthen and traded a range of 1.3935 - 1.4019, while the USDJPY barely moved (90.13 - 90.36) as Japan is closed for the Emperor's Birthday holiday. Toyota motor announced that it expected its first-ever (in 68 years) operating loss of $1.7Bn for the year to end-March 2009. The companies' Chairman Fuijo Cho cited a relentless sales slide and crippling rise in the Yen as key reasons. This news hit markets worldwide hard as the world's number one automaker employs over 315'000 people worldwide. The People's bank of China expectedly cut rates by 0.27% yesterday - for the fifth time since September. This failed to spark impetus and Chinese stocks fell almost 3% this morning as sentiment remained low - the same can be said for the rest of Asia as China's sheer size and pervasive nature acts as a bolster in the region. GDP figures are a focus today, while markets will be keeping an eye on Crude's decline - now trading consistently below $40/bbl. While the dollar has dropped somewhat in past weeks it seems this is probably down to abnormal liquidity conditions as opposed to a material shift in sentiment. 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.