FX Overnight Briefing Financial News - US & Far East
- U.S. stocks rose
- Oil in new record
- New record low USD
- Nikkei in fresh highs
Today's Main Events
- SEK: Consumer confidence
- USD: Durable goods
- USD: New home sales
American Timezone:
U.S. Stocks rose
U.S. stocks rose for a third day as International Business Machines Corp.'s USD 15 billion buyback, higher retail earnings and rising commodity prices bolstered confidence profits will hold up even as the economy slows. IBM, the world's largest computerservices company, climbed to a four-month high and sparked a rally in technology shares. RadioShack Corp. and Macy's Inc. gained after lower costs lifted fourth-quarter profit, overshadowing a report showing a biggerthan- forecast drop in consumer confidence. ConocoPhillips led energy shares to a sevenweek high after the dollar's drop to a record low sent oil prices above USD 100.
EUR/USD at record high
USD sank to a record low against EUR as U.S. home prices tumbled and consumer confidence sank to a five-year low.
Traders pushed USD to the weakest level since EUR began trading in 1999 as producer prices rose more than forecast, fuelling speculation the Federal Reserve will have less room to cut interest rates to bolster the economy.
EUR began its climb earlier after German business confidence rose a second month.
Oil at record high
Crude oil rose above USD 101 a barrel in New York after USD dropped to a record low against EUR, prompting some traders to invest in commodities as a hedge against inflation.
Far East Timezone:
New record low USD
The dollar hit a record low against the euro on Wednesday, breaking through the psychologically crucial USD 1.50 level after weak economic data and comments from the Federal Reserve's No.2 provided more proof that U.S. interest rates will continue to head lower.
The dollar was battered across the board, hitting an all-time low against a basket of currencies a day after U.S. consumer sentiment hit a five-year low, with sentiment expectations at a 17-year low, offering more proof of a struggling economy that will take time to recover.
Helping to drive the dollar lower were comments by Fed Vice Chairman Donald Kohn on Tuesday that a weak U.S. economy was a bigger worry than higher inflation risks, suggesting a willingness to cut the federal funds rate as the central bank tackles 'difficult times'.
In early Asian trade, the euro surged as high as USD 1.5050 on electric platform EBS, hitting its highest level since the single currency was introduced in 1999.
Nikkei hit fresh highs
Japan's benchmark Nikkei touched a fresh sixweek high on Wednesday, boosted by buying of blue-chip shares such as Honda Motor Corp after the announcement of an IBM share buyback lifted Wall Street. Mizuho Financial Group and other financials rose as well, bolstered by growing relief that U.S. bond insurers appeared to be stabilising, while record-high oil prices lifted oil distributors and similar shares.
The Nikkei rose 1.4 % in the morning session to 14,016.44. Earlier it touched 14,078.51, its highest since January 15, before profit-taking kicked in. The broader TOPIX rose 1.3 % to 1,364.26.
Oil keep gaining
Oil continued its rally on Wednesday, after crossing a new peak in the previous session, as lacklustre U.S. economic data forced the U.S. dollar into a deeper slump, sparking a surge across commodities markets. U.S. crude rose 25 cents to USD 101.13 a barrel by 0023 GMT, after gaining USD 2.20 to hit a record USD 101.43 in the previous session, edging closer to the inflation-adjusted peak of USD 102.53 seen in 1980.
Jyske Markets - FX Research
http://www.jyskebank.dk/finansnyt
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