RBS Losses Rock European Markets

Daily Forex Fundamentals | Written by Easy Forex | Jan 20 09 01:34 GMT |

U.S. Dollar Trading (USD) enjoyed major gains against the EURO and GBP as bad news out of Europe hurt their respective currencies. European stocks were also hurt by the negative news but follow on effects in the US Session were avoided as the Markets were closed for Martin Luther King Day. Feb Contract Crude Oil closed down $2.11 ending the New York session at $34.40 per barrel. The Euro (EUR) enjoyed buoyancy in early Asia before news of the S&P downgrade of Spain’s credit rating and European banking stocks tanked. EUR/JPY had a dramatic change of sentiment swinging from 2% gains to 2% losses. Also Hurting sentiment was the European Commission slashing growth forecasts for 2009 to -1.9% from -0.1%. Overall the EUR/USD traded with a low of 1.3060 and a high of 1.3381 before closing the day at 1.3090. Looking ahead, German Zew Survey is forecast at -44 vs. -45.2 in January. The Japanese Yen (JPY) gained strength after risk aversion soared in Europe on back of the fresh banking concerns. USD/JPY was under pressure as well but broad USD strength helped the pair to stay above the key 90 level. November Industrial Production was revised lower at -8.5% vs. -8.1%. Overall the USDJPY traded with a low of 90.17 and a high of 91.27 before closing the day around 90.60 in the New York session. Looking ahead, Consumer Confidence for December previously at 28.4. The Sterling (GBP) was the worst performing currency as Royal Bank of Scotland forecast losses of 28 Bn pounds, the largest in UK corporate history. Shares of RBS fell 67% and pressured other banks stocks lower on fear of nationalization. Overall the GDP/USD traded with a low of 1.4360 and a high of 1.4908 before closing the day at 1.4425 in the New York session. Looking ahead, December CPI is forecast at -0.8% vs. -0.1% m/m previously. The Australian Dollar (AUD) traded lower as the USD strengthened and risk aversion pushed the AUD lower. Commodities fell and this also added to downside pressure. AUD/NZD continued to make gains though as the beleaguered NZD continued to plummet. Overall the AUD/USD traded with a low of 0.6656 and a high of 0.6840 before closing the US session at 0.6680. Gold (XAU) fell to broad USD strength although it held up better than Oil on safe haven flows. Overall trading with a low of USD$832.45 and high of USD$842.90 before ending the New York session at USD$834 an ounce Easy Forex http://www.easy-forex.com Easy-Forex makes no recommendations as to the merits of any financial product referred to in this website, emails or its related websites and the information contained does not take into account your personal objectives, financial situation and needs. Therefore you should consider whether these products are appropriate in view of your objectives, financial situation and needs as well as considering the risks associated in dealing with those products