FX Overnight Briefing

Financial News - US & Far East

• U.S. stocks fell
• Oil Higher
• USD still the main topic in Fx-market
• Nikkei rose in year-end buying

Today's Main Events

• SEK: Retail sales
• CHF: KOF
• USD: Michigan confidence

American Time Zone:

U.S. stocks fell

U.S. stocks dropped for a second day as concern that profit growth will weaken at financial and technology companies overshadowed a bigger-than-forecast gain in consumer spending. Oracle Corp., the world's third-largest software company, or tumbled the most since November after revenue trailed analysts' estimates. Google Inc. slid after receiving fewer ad clicks last month. Lehman Brothers Holdings Inc. lost 9 % as options traders increased bearish bets on the biggest U.S. underwriter of mortgage bonds, while Bank of America Corp. and JPMorgan Chase & Co. fell on reduced earnings estimates for large banks.

USD regained some ground

The dollar rose against the euro after the biggest two-day decline since January 2001 as a government report showed fourth-quarter consumer spending increased more than previously estimated

Oil higher

Crude oil rose after a pipeline explosion in southern Iraq cut supplies to the country's main export terminal.

Far East Time Zone:

USD still the main topic in Fx-market

The dollar fell again towards record lows against the euro and the Swiss franc on Friday as investors remain worried about widening damage to financial firms from the credit crisis.

The dollar slipped back into this week's losing streak as short-covering subsided and rumours on Thursday that Lehman Brothers Holdings Inc could suffer a fate similar to the near collapse of Bear Stearns hurt sentiment, traders said. Lehman called the rumours 'totally unfounded' on Thursday.

The yen showed little reaction news that Japan's core consumer inflation in February rose more than expected and scored the biggest increase in a decade.

Analysts said other data on Friday showed the economy was not improving and the Bank of Japan remained more likely to cut interest rates than raise them amid the global market turbulence.

'The market focus is more on the fate of the dollar, so the Japanese data didn't draw much attention,' said Kengo Suzuki, a currency strategist at Shinko Securities.

The euro edged up to USD 1.5818 from around USD 1.5766 in late U.S. trade on Thursday, turning back towards a record high of USD 1.5905 after making a pause from sharp gains earlier this week.

Nikkei rose on year-end buying

Japan's Nikkei average jumped on Friday as investors bought to raise their portfolio values in the second-to-last session of the financial year, with Mizuho Financial Group and other banks gaining. Oil and gas field developer Inpex Holdings Inc extended gains on a continued rally in crude prices, with buying of some blue-chip exporters also helping to buoy the market.

The benchmark Nikkei was up 2.1 % at 12,872.05, after it had been down almost 1 % in early trade, a rise of more than 250 points. The broader TOPIX was up 1.8 % at 1,247.92.

Jyske Markets - FX Research
http://www.jyskebank.dk/finansnyt

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