Foreign Exchange Market Daily Update

The US dollar weakened vs. most major currencies as a boost in global equities helped boost risk appetite. Data from the US wasn't favorable as existing home sales fell 3.1% in October. Third quarter GDP was revised downward to a decline of -0.5% percent from -0.3%. Consumer confidence improved from a record low of 38.8 in October to 44.9 in November. Meanwhile, the Federal Reserve announced a $600 billion program to buy mortgage-related debt and securities and a $200 billion facility to support consumer debt securities. Investors remain cautious as data continue to show the fragility of the global economic health.

The euro strengthened sharply against the dollar as the US government agreed to inject $20 billion of new capital to rescue Citigroup. German corporate sentiment fell more than expected in November as firms remained gloomy about future prospects. The Munich-based Ifo economic research institute said its business climate index fell to 85.8 in November from 90.2 in October. Many companies have slashed production in face of the sharp global economic downturn.

The British pound appreciated against the dollar as British Finance Minister Alistair Darling unveiled a stimulus plan to jump-start the economy. The news helped the pound as investors looked for the government to be proactive in helping the struggling economy.

The Japanese yen strengthened against the dollar as Japanese financial markets were closed on Monday for a national holiday. The yen is mainly tracking global economic news.

The Canadian dollar appreciated against the dollar as rallies in global equity markets help investor risk appetite. Canadian Finance Minister Jim Flaherty said the country's economic picture is not improving and that the economy could soon fall into recession.

The Australian and New Zealand dollars rose against the dollar after the US government's rescue package for Citigroup increased risk appetite. Investors expect the Reserve Bank of New Zealand to have a 100 basis point interest rate cut from 6.5%. Gloomy data from the US and Euro-Zone kept gains in check.

The Mexican peso rallied against the dollar after the US Federal Reserve announced programs to buy mortgage-related debt and securities as a measure to support the financial system.

Union Bank of California
The Bank of Tokyo-Mitsubishi Group
http://www.uboc.com

Disclaimer: This market comment is prepared by Union Bank of California's Global FX &amp Derivatives Department for the general information of its customers. It is based of the most accurate information currently available, but should not considered investment advise or a guarantee of future exchange rate or trends.