You will find... Forex Capsule Expert Commentaries Interactive Forex Charts Live Forex Quotes	You will find... Daily Video Archives Chartist's Corner Archives	You will find... Currency Calculator Pip Calculator Customizable Forex Charts

Video for May 9th, 2008 (4 min 15 sec): Global Stocks Tumble, Yen and Swiss Franc Gain Big on Euro, Dollar, & Pound 

European and US Stocks Weaker Increase Risk Aversion

European stocks came under pressure, as news that American International Group reported a $7.81 billion dollar loss refreshed concerns about the credit crisis, especially as oil surges near $125-a-barrel. Citigroup said it was going to shed 500 billion of assets. Shares of financials like HSBC and Barclays led the decline in the UK and European stock indexes, where shares were down 1.3 and 1.7 percent, respectively. The Dow Jones followed suit sinking more than 1% as of 1:30 PM.

GBP/JPY - Huge Slide For Pound This Week vs Japanese Yen

 

The atmosphere in stock markets increased risk aversion for carry trade positions. The Pound-Yen pair continued its steep fall that started at the beginning of the week. The pair slid nearly 800 pips since the week's open, breaking through support at 205.50 and 202.50. Finally the pair found support just below the 200 level during the NY session.

EUR/JPY - Yen Reaches 159 vs Euro

 

The Euro-Yen pair was weaker as well, touching below 159 during the NY session. The Yen did most of its damage in a 370 pip fall in the middle of the week.  

EUR/CHF - Franc Stregnthens With Risk Aversion

 

Another benefactor of this increase in risk aversion was the Swiss Franc. In the last 3 sessions the Euro-Franc pair has slipped 250 pips in the Franc's favor. In addition to weaker stocks, the Euro-zone and Germany released data showing the economy losing its momentum. Thursday's ECB meeting stemmed the tide shortly, but the end week brought further declines for the pair. The Pound-Franc pair fell almost 250 pips in today's session alone.

US Trade Balance Shows Deficit Narrowing, Both Exports and Imports Shrink

The only significant US release today was the trade balance. The deficit for March narrowed to $58.2 billion. Imports declined close to 3%, the biggest fall since December of 2001. Exports were also down, but to a smaller degree.

EUR/USD - Euro Stronger vs Dollar Since ECB Meeting

 

The Euro-Dollar pair continued its rally that started after it set a low near 1.53 prior to the ECB decision on Thursday. The pair is slightly above the level at the beginning of the week. Despite losing to the Yen on risk aversion, the Euro did gain on the greenback.

USD/JPY - Dollar Slides 300 Pips Before Find Support

 

The Dollar was not spared by the Yen's gains today. The pair slid almost 300 pips the last 3 sessions, as it found support at 102.60 in NY trading. As we mentioned earlier US stocks were lower on the day, while oil surged to new record highs. The Yen and the effects of risk behavior should play a strong role in currency markets next week as global stocks had been better in the last 3 weeks coming into this one.

CAN Employmnet Improves by 19.2K, More Wokers Enter Labor Force

The Canadian economy added 19.2K jobs in April, beating forecast. Jobs grew more than 40,000 in January and February, so the last two months have seen somewhat subdued, though still positive, job creation. The unemployment rate inched up to 6.1% as more Canadians workers entered the labor force.

CAN Trade Surplus at C$5.5 for March

In Canada, trade balance data showed the surplus increased C$5.5 billion.  Exports rose 1.6%, the third straight of growth. Higher prices were the main factor in the improved trade balance as  volume generally lower. The trade surplus with the US rose to 8.6 billion, compared to a 3.1 billion deficit with the rest of the world.

USD/CAD - Loonie Firms vs Greenback To End the Week

 

The Canadian Dollar strengthened 100 pips against the greenback, with most of those gains coming overnight. The positive data from Canada helped support the Loonie during NY trading and the pair was trading near 1.0060 by noon NY time.

Next Week's Releases

Next week will start with Producer prices from the UK on Monday and consumer prices on Tuesday. The US releases retail sales on Tuesday and its CPI on Wednesday.

Thursday will be busy as the markets digest 1^st quarter GDP numbers and CPI data from the Euro-zone along with a slew of US releases - including the NY empire and Philly fed indexes, industrial production, and foreign flows.