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Free Fall in Yen Crosses Continues

Another round of massive yen buying was seen in late European session to early US session and this time, USD/JPY also tumbled sharply lower and tapped even into 113 territory, the lowest level since Jul 2006.

Focus Back to Risk Aversion, Yen Crosses Tumble

From Europe, French bank BNP Paribas said three of its funds were hit by US subprime mortgage problems and decided to temporarily suspend redemptions from the funds. Yen is sharply higher across the board. Momentum of the yen continues into early US session as US stocks headed for a sharply lower open.

Could FOMC Send Dollar Down Further?

The main event of this week is undoubtedly the FOMC meeting. Fed is expected to keep rates unchanged at 5.25% for sure. The focal point will again be on the accompanying statement.

Yen Sharply Higher on Massive Carry Trade Unwinding

The forex market was dominated by massive carry trade unwinding last week. The Japanese yen, and to a lesser extend the Swissy, surged sharply across the board on risk aversion, that was triggered by concern on worsening of the subprime mortgage problems.

Can Q2 GDP Save the Dollar?

The major dollar mover was still the concern of subprime mortgage problems which sent the greenback to another record low against Euro on Friday.

Strong NY State Index Provides No Support to Dollar

Downside momentum in the greenback is limited so far as traders are holding their bets on some key events in the week. Producer and consumer inflation will be featured in the coming two days with another round of housing data. More important, Bernanke will have his semi-annual testimony on Wed and Thu, together with the release of FOMC minutes.